4)1) Relevant Bodies Flashcards
1.1 Who are the Panel on Takeovers and Mergers?
Independent body
Main functions inc to issue and administer the City Code on Takeovers and Mergers and to supervise and regulate takeovers and other matters to which the City Code applies in accordance with the rules set out in the City Code
Its statutory functions are set out in Chapter 1 of Part 28 of the Companies Act 2006
Function is to ensure that the shareholders of an offeree company are treated fairly and not denied an opportunity to decide on the merits of a takeover, and that offeree shareholders of the same class are afforded equivalent treatment by a bidder (offeror)
1.1 Who deals with matters regarding financial and commercial advantages of a takeover?
The offeree company and its shareholders
1.1 Who deals with wider questions of public interest?
Department of Business, Energy and Industrial Strategy (BEIS)
1.1 What is the PTM’s role in takeovers?
- provide advice and guidance on the application and interpretation of the relevant rules to offerors, offerees, advisers and, where relevant, other market participants
- monitor the progress of an actual, or contemplated, takeover bid for breaches of compliance with the relevant rules
- enforce the Code through decisions on issues arising, or seeking enforcement through the courts
The PTM may impose sanctions where necessary, through private warnings, public censure and/or reference to other regulators
Can ‘cold shoulder’ offenders, blocking market access for some time
1.2.1 What is the role of competition authorities in M&A?
Investigate the effect on suppliers, customers and competitors in an industry, and establish whether the txn should be permitted, blocked, or permitted only on certain conditions
1.2.2 How does the CMA ensure consumers get a good deal when buying goods and services?
- investigating mergers that could restrict competition
- conducting market studies and investigations in markets where there may be competition and consumer problems
- investigating where there may be breaches of UK prohibitions against anti-competitive agreements and abuses of dominant positions
- bringing criminal proceedings against individuals who commit the cartel offence
- enforcing consumer protection legislation to tackle practices and market conditions that make it difficult for consumers to exercise choice
- cooperating with sector regulators and encouraging them to use their competition powers, and considering regulatory references and appeals
- providing info and advice to individuals and businesses about rights and obligations under competition and consumer law
- provide advice, reporting and monitoring in relation to government subsidies
1.2.2 What is the ambition of the CMA over the next three years?
- people can be confident that they are getting great choices and fair deals
- competitive, fair-dealing businesses can innovate and thrive
- the UK economy can grow productively and sustainably
1.2.3 Who are the Competition Appeal Tribunal?
Independent body established under the Enterprise Act.
It hears appeals against decisions of the CMA, or against fines imposed by them
1.2.4 When does the National Security and Investment Act 2021 apply to a merger?
When the target has either of the following:
- GBP1 mill or more annual turnover in the UK
- A 25% share of supply or purchase in a substantial part of the UK. Crucially, this test is met even if the share of supply does not increase as a result of the merger; in other words, this can be triggered by the relevant enterprise alone
1.2.5 What are the objectives of The Pensions Regulator (TPR) as per The Pensions Act 2004?
- protect the benefits of, or in respect of, members of occupational pension schemes
- reduce the risk of situations arising that may lead to claims for compensation from the Pension Protection Fund (PPF)
- promote, and improve understanding of, the good administration of work-based pension schemes
- maximise employer compliance with employer duties, and the employment safeguards introduced by the Pensions Act 2008
- minimise any adverse impact on the sustainable growth of an emplyoery
1.2.5 What did the TPR note as priorities in the 2023-24 corporate plan?
- Security - savers’ money is secure
- Value for money - savers get good value for their money
- Scrutiny of decision-making - decisions made on behalf of savers are in their best interest
- Embracing innovation - the market innovates to meet savers’ needs
- Bold and effective regulation - the Pensions Regulator (TPR) is a bold and effective regulator
1.2.5 What is a Type A event?
Where the TPR considers that companies entering into txns (including acquisitions or disposals) may weaken their financial position to the detriment of a defined benefit pension scheme
1.2.5 What may TPR do when it considers their is material cause for concern and to protect underfunded pension schemes and influence stakeholders to corporate txns?
- Contribution notice
- company must make a payment to the pension scheme
- may do this if TPR feels the txn makes a pension deficit less likely to be recovered
- Financial support direction
- financial support arrangements must be made for the scheme
- may be required where a company may be unable to fund its pension scheme, and believes a connected person should be made responsible for the scheme
- Restoration order
- if there has been a txn at an undervalue involving the scheme’s assets
- allows for action to be taken to have the assets restored to the scheme
1.2.5 Sometimes the Regulator will require a cash payment (including an upfront payment) before providing clearance. What is the maximum the cash payment can be?
The highest amount required across alternate methodologies for calculating pension deficits (FRS17/IAS19, section 179 valuation, technical provisions, ongoing basis)
1.2.5 What will the TPR clearance statement provide assurance of?
Based on the info provided, TPR will not use its anti-avoidance powers to issue to the applicants either contribution notices or financial support directions. The powers fall into 3 categories:
- investigating schemes
- putting things right
- acting against avoidance
