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The Companies (Amendment) Bill 2003 introduced in the Parliament on May 7 2003, seeks to ensure better corporate governance practices and promote investor protection. The Bill restricts subsidiaries from becoming a holding company of another company. It makes identification of promoters mandatory to prevent occurrence of vanishing companies, thereby making it easier to trace assets. It raises the minimum subscription of application amount of shares from 5% to 25%. If the minimum subscription is not reached, the amount must be refunded within eight days of closing with interest at bank rate. The Bill bans auditors from simultaneously providing other services such as actuarial services, accounting/book-keeping and internal audit services. It adds grounds for the disqualification of auditors found to be linked to a client's financial interest.

With a view to further protecting investors in Hong Kong, the Hong Kong Stock Exchange and the Securities and Futures Commission (SFC) recently published a Consultation Paper on Regulation of Sponsors and Independent Financial Advisors.

Since January 1 2002, the purchaser of at least 30% of the stated capital of a listed German stock corporation has been obliged to submit an offer to the remaining shareholders to acquire their shares. Since January 1 2002, if a purchaser owns at least 95% of the stated capital, the German Stock Corporation Act offers the possibility of squeezing out the minority shareholders by way of a resolution of the general meeting on payment of an adequate cash compensation.

Since the enactment of The Provisional Regulations on Foreign-Funded Mergers and Acquisitions of Onshore Enterprises on April 12 2003, the restrictions on foreign investors who wish to acquire a company or the assets of a company that is wholly-owned by the People's Republic of China (PRC) have been relaxed.

One of the most tricky aspects of an M&A transaction involves the transfer of information during the due diligence stage. In Canada, this process has traditionally occurred through the use of a physical data room. But this method of due diligence is not without its problems and inconveniences. Since 2000, electronic data rooms (EDRs) have been increasingly used internationally in a variety of types of transactions. But M&A practitioners have been cautious in adopting EDRs to support their due diligence processes. This may be attributable to the sensitivity of information in M&A deals, security concerns and perceived costs associated with the new technology.

The Finnish Parliament in February 2003 approved a new Act on Statutory Limitations (ASL). The aim of the ASL is to harmonize the several different periods of limitation in the current Finnish legislation. But the ASL will be a general act (lex generalis) and as such will be superseded by any special act (lex specialis) containing special limitation periods. The ASL is expected to become effective during the first part of 2004.

Merger activity in Austria is booming as global companies search for bargain assets in central Europe. Michael Evans reports

Securities regulation in Hong Kong is failing to meet the needs of international business. If it doesn’t change soon, investors may look to Singapore instead. By Andrew Crooke

The Austrian Ministry of Justice has published a draft bill on financial collateral arrangements (Financial Collateral Act, www.justiz.gv.at/gesetzes/). Comments are to be submitted until June 30 2003. This is the first step to implement the rules set forth in the Financial Collateral Directive (Directive 2002/47/EC of the European Parliament and of the Council of June 6 2002 on Financial Collateral Arrangements) into domestic Austrian law. It is planned that the Financial Collateral Act will enter into force on December 1 2003.

The Investment Services Directive (ISD), now the subject of high level debate by politicians in Brussels, will shape the structure of Europe's capital markets for years to come. But bankers say plans to force brokers to quote prices openly to the market could lead them to take their business outside the EU in search of more bank-friendly share trading regimes abroad. IFLR brought together a group of London-based regulators, lawyers and industry representatives to discuss the issues