India – SEBI Issues Rules for Takeovers

On 16 August, SEBI issued rules for acquisition of shares, takeovers.

  • Acquisition of shares by lenders in debt restructuring implemented by guidelines.
  • Share acquisition via allotment by target company or purchase from lender made
    when selling shareholding, change under an approved debt restructuring scheme.
  • Acquisition by share purchase from lender, exempt subject to specified conditions.

Conditions

  • The purchase price has been determined in accordance with guidelines set by RBI.
  • Purchase price certified by two independent qualified valuers, registered in S. 247.
  • Specified securities purchased are locked-in at least three years of purchase date.
  • Lock-in equity shares acquired per conversion, of convertible securities purchased
    from lenders will be reduced to the extent convertible securities already locked-in.
  • A special resolution was passed by shareholders of the issuer before the purchase.
  • Issuer to disclose information on the proposed acquirer, in explanatory statement.

Germany – BaFin MiFID IIPs Investment

On 17 August, BaFin issued statement on investing in IIPs per MiFID.

  • MiFID and PRIIP have created a new form of insurance-based investment product (IIP).
  • Whether insurance contract qualifies as IIP will be decisive for the regulation applicable.
  • Insurance products will need basic information sheet produced in accordance with PRIIP.
  • BaFin classifies IIPs in the German market as all capital forming life insurance products.
  • Classification of IIP is independent of whether premium is paid continuously or one-off.
  • But annuity insurance with or without possibility to withdraw are not classified as IIPs.
  • Products which do not offer the prospect of a capital appreciation will also not be IIPs.