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The overhaul of the Takeover Code makes schemes of arrangement even more attractive

Reaction to proposed oversight of UK's FSA

Given recent concern about mortgage-backed and asset-backed securities and SIVs, it is surprising that investors had any energy left to attack another market segment. Still, in December 2007, the Credit Roundtable issued a white paper proposing that model protective covenants should be included in investment grade securities documentation. The Credit Roundtable is comprised of fixed income investors. The provisions are intended to address issues in investment grade securities documentation. The group believes that documentation fails to protect investors against credit deterioration. In particular, the suggested provisions would safeguard investors in the event of buyouts, recapitalisations and other fundamental corporate deals. The provisions require change-of-control puts (including puts that would be triggered by public-to-public buyouts) and step-up coupons. They limit liens and priority debt, such as unsecured debt incurred by subsidiaries, and they improve reporting obligations, and bring in voting rights by series. Most of these covenants do not now feature in investment grade securities documentation.

FSA gets new head of wholesale

Real estate development and construction are considered the flagships of the Turkish economy. They support nearly 200 other sectors. Yet Turkish real estate finance has traditionally been carried out through simple lending operations of financial markets and banks. This was mainly because of the lack of large institutional players in real estate development. Institutional players were reluctant to enter the market in the presence of economic and political risks, and the lack of an organised legal infrastructure.

On November 1 2007, the European Markets in Financial Instruments Directive (Mifid) replaced the Investment Services Directive (ISD). The act implementing Mifid in Dutch legislation also came into force on November 1. One of the main objectives of Mifid is to obtain a more harmonised regime for investment firms in all jurisdictions of the European Economic Area (EEA). Contrary to the ISD, most provisions in Mifid feature the concept of maximum harmonisation, which means that individual member states do not have the right to exceed the terms of Mifid. Implementation of these harmonised rules in the Dutch financial regulations has led to a number of changes to the regulatory regime for investment firms providing services in the Netherlands.

If the parties in a prospective acquisition try to realise the acquisition in the course of an asset deal, certain issues need to be considered. Hungarian law does not recognise the concept of the sale of a business unit (Teilbetrieb) as such. The sale of a business is possible only through a sale of the assets and the transfer of contracts and employees of the business unit.

According to the reports of the Macedonian Stock Exchange, in 2007 October was the month with record turnover and most foreign investments. The highest percentage of the total turnover came from the sale of a milk factory and a bank. The turnover in November was below average as a result of the security situation, which caused stagnation of the capital market. The only highlight was the entering of five Macedonian companies into the new Balkan stock exchange index prepared by Dow Jones methodology. Moreover, December was marked by record low turnover.

Investment banks and other financial institutions structuring cross-border finance involving the Czech Republic are facing the unusual exterritorial effect of the Czech legal regulations prohibiting chains of single shareholder companies. The prohibition may also affect the legal affairs of entities domiciled outside the Czech Republic.

For background, see December 2007 international briefing