Indecent disclosure

Author: | Published: 1 Dec 2007

Disclosure of cash-settled equity swaps has been the subject of international regulation for a number of years. In 2005 the English Takeover Code was amended to require greater offer-period disclosure of derivatives-linked interests in shares of companies subject to an offer. In November 2007 the UK Financial Services Authority released a consultation paper on disclosure of economic positions in listed securities held through contracts for differences (and other similar derivatives).

Until recently, the pace of change in Australia has been somewhat slower. After the completion of the Austral Coal litigation (reported in the May 2006 issue of the IFLR), it seemed that the courts supported the Australian market practice of non-disclosure of purely synthetic positions. Since then, the Australian Corporations Act has been amended. It now provides the Takeovers Panel with wider powers to declare circumstances unacceptable. The Panel has released a draft Guidance Note and a discussion paper for...