On May 6, 2008, the U.S. Securities and Exchange Commission (the “Commission”) proposed certain changes to the rules governing cross-border business combination transactions adopted in 1999. The proposed changes in large part codify existing staff interpretive and no-action positions and exemptive orders and address recurring areas of conflict or inconsistency between the U.S. rules and foreign regulations and practice. By proposing the rule amendments, the Commission hopes to encourage bidders for shares of foreign companies to open their offers to U.S. shareholders of those companies. Currently, many bidders exclude U.S. shareholders from offers to avoid the application of the U.S. rules, and they do not take advantage of the 1999 exemptions even when they might be available. While the proposed amendments solve some technical problems with the existing exemptions, in a number of areas they do not go as far as some practitioners had hoped.
The comment period for the proposed rule changes ends on June 23, 2008.