Takeovers Panel issues discussion paper on treatment of equity derivative holdings

The Takeovers Panel has released a draft Guidance Note, and discussion paper, seeking public discussion and comment on the approach which the Panel proposes as to when, and in what circumstances, the use of equity derivatives may constitute unacceptable circumstances.

The Panel proposes that for control and substantial holding disclosure purposes, at least, long equity derivatives (cash settled or deliverable) should be treated the same as physical holdings of the relevant securities. The Panel's discussion Guidance Note indicates that: when considering whether or not unacceptable circumstances exist, the Panel will normally treat a person's long equity derivative interests and voting power in listed entities in a combined manner.

Responses are due by 7 December 2007.