SFC amends takeovers rules

13 Jul 2018

The Securities and Futures Commission (SFC) today released consultation conclusions  (Note 1) on proposed amendments to the Codes on Takeovers and Mergers and Share Buy-backs (Codes). The amended Codes, gazetted today, will apply with immediate effect (Note 2).

Respondents were generally supportive of the proposals, the majority of which were adopted with some modifications taking into account the responses received during the consultation process. Measures introduced to enhance investor protection included empowering the Takeovers Panel to require compensation be paid to shareholders who have suffered as a result of a breach of the Codes as well as increasing the threshold for independent shareholder approval of a whitewash waiver to 75% (Note 3).

Other changes included amendments to clarify the power of the Takeovers Executive (Note 4), the Takeovers Panel and the Takeovers Appeal Committee to issue compliance rulings and that persons dealing with them must do so in an open and cooperative manner.

"The changes to the takeovers rules aim to protect shareholders and ensure a fair and informed market," said Mr Ashley Alder, the SFC’s Chief Executive Officer. "They are also in line with our front-loaded approach to prevent breaches before they occur."

The Takeovers Executive should be consulted where there is any doubt about the application of the revised Codes, particularly where the timing may produce major difficulties for transactions which have already been announced.




  1. On 19 January 2018, the SFC issued a Consultation Paper on proposed amendments to the Codes on Takeover and Mergers and Share Buy-backs. The consultation period ended on 19 April 2018. A total of 26 submissions were received from a range of stakeholders, including listed companies, asset management firms, industry associations and law firms.
  2. The amendments to the Codes are set out in Appendix 2 to the consultation conclusions.
  3. Under the Codes, the Takeovers Executive may waive an obligation to make a general offer triggered by the issuance of new shares in a comparatively narrow set of circumstances. This is known as a whitewash waiver.
  4. This refers to the Executive Director of the SFC’s Corporate Finance Division or any delegate of the Executive Director.

Page last updated : 13 Jul 2018