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  1. Point in time
    2007-01-07

MAR 4.1 Application and Purpose

Application

MAR 4.1.1 R RP

1This chapter applies to every firm whose permission includes, or ought to include, any designated investment business, except as set out in MAR 4.4.1 R.

MAR 4.1.2 G RP

MAR 4.1.1 R applies regardless of whether the firm's activity:

  1. (1)

    is a regulated activity;

  2. (2)

    is carried on from an office of the firm in the United Kingdom; or

  3. (3)

    is in respect of a client in the United Kingdom.

Purpose

MAR 4.1.3 G

The Takeover Code and the SARs provide valuable regulation in the areas of takeovers, mergers and substantial acquisition of shares of companies. The purpose of endorsing the Takeover Code and the SARs is to provide them with statutory support. The other requirements in this chapter provide further support for the functions of the Takeover Panel.

MAR 4.1.4 G

Endorsing the Takeover Code and the SARs and imposing the other requirements in this chapter furthers the FSA's regulatory objectives, and in particular the objectives of market confidence and protection of consumers.

MAR 4.2 Endorsement

MAR 4.2.1 R

The FSA endorses:

  1. (1)

    the Takeover Code; and

  2. (2)

    the SARs;

as respects the firms described in MAR 4.1.1 R.

MAR 4.2.2 G

The FSA's endorsement in MAR 4.2.1R has effect in relation to the Takeover Code and the SARs as amended from time to time. This is because the FSA has notified the Takeover Panel that it is satisfied with the Takeover Panel's consultation procedures, and not withdrawn that notification, in accordance with section 143(6) of the Act (Endorsement of codes etc.).

MAR 4.2.3 G

The effect of the FSA's endorsement in MAR 4.2.1R is that, under section 143 of the Act (Endorsement of codes etc.):

  1. (1)

    at the request of the Takeover Panel, the FSA may take enforcement action against a firm which contravenes the Takeover Code or the SARs, under Part IV (Permission to Carry on Regulated Activities), Part XIII (Incoming firms: Intervention by Authority), Part XIV (Disciplinary Measures) and Part XXV (Injunctions and Restitution) of the Act (see ENF 14.10); and

  2. (2)

    at the request of the Takeover Panel, the FSA may take enforcement action against an approved person under section 66(2)(b) of the Act (Disciplinary powers).

MAR 4.2.4 G

A failure to comply with a requirement imposed, or ruling given, by the Takeover Panel under the Takeover Code or the SARs has the same effect as a contravention of the Takeover Code or the SARs, under section 143(5) of the Act (Endorsement of codes etc.).

MAR 4.2.5 G

ENF 14.10 contains guidance on the FSA's exercise of its enforcement powers in this area.

MAR 4.3 Further Support of the Takeover Panel's Functions

MAR 4.3.1 R RP

A firm must not act, or continue to act, for any person in connection with a transaction to which the Takeover Code or the SARs apply (including a rule8transaction) if the firm has reasonable grounds for believing that the person in question, or his principal, is not complying or is not likely to comply with the Takeover Code or the SARs.

MAR 4.3.2 G RP
  1. (1)

    The Takeover Panel publishes notices regarding compliance with the Takeover Code and SARs. It may also, from time to time, name in those notices persons as persons that, in the Takeover Panel's opinion, are not likely to comply with the Takeover Code or the SARs. Any notices of this type will be available on the Takeover Panel's website (www.thetakeoverpanel.org.uk).

  2. (2)

    A firm should keep itself informed of Takeover Panel notices and take them into account in seeking to comply with MAR 4.3.1 R. If the Takeover Panel were to name such a person in such a notice, the FSA would expect a firm to comply with MAR 4.3.1 R by not acting or continuing to act for that person.

  3. (3)

    The FSA would not regard a firm as in breach of MAR 4.3.1 R where the Takeover Panel has indicated that it is content for the firm to act in relation to that transaction.

MAR 4.3.3 G RP
  1. (1)

    Where a restriction under MAR 4.3.1 R applies, among other things the firm is prevented from carrying on any designated investment business activity, or communicating or approving any financial promotion, in connection with a transaction to which the Takeover Code or the SARs applies.

  2. (2)

    Where a restriction under MAR 4.3.1 R applies, the firm is not prevented from carrying on other activities (including regulated activities) in relation to that person. This includes designated investment business activity which is not in connection with a transaction to which the Takeover Code or the SARs applies.

MAR 4.3.4 G RP
  1. (1)

    Where a restriction under MAR 4.3.1 R applies, an authorised professional firm is not prevented from providing professional advice or representation in any proceedings to the person where that falls within section 327(8) of the Act. This means that the person can obtain legal advice or representation in any proceedings from a law firm and accounting advice from an accounting firm: see MAR 4.4.1 R (2).

  2. (2)

    While the FSA recognises the duty of authorised professional firms to act in the best interests of their clients, the duty cannot override the provisions of the Takeover Code or SARs so as to require the authorised professional firm to provide services in breach of, or enable breach of, the Takeover Code or SARs.

MAR 4.3.5 R RP

A firm must provide to the Takeover Panel:

  1. (1)

    any information and documents in its possession or under its control which the Takeover Panel requests to enable the Takeover Panel to perform its functions; and

  2. (2)

    such assistance as the Takeover Panel requests and as the firm is reasonably able to provide to enable the Takeover Panel to perform its functions.

MAR 4.3.6 G RP

In MAR 4.3.5 R, "documents" includes information recorded in any form and, in relation to information recorded otherwise than in legible form, references to providing documents include references to producing a copy of the information in legible form.

MAR 4.3.7 G RP

As a result of section 413 of the Act (Limitation on powers to require documents), MAR 4.3.5 R does not require a firm or an authorised professional firm to produce, disclose or permit the inspection of protected items.

MAR 4.4 Exceptions

MAR 4.4.1 R RP

This chapter is subject to the following exceptions:

  1. (1)

    this chapter does not require an authorised professional firm to contravene any rule or principle of, or requirement of a published guidance note relating to, professional conduct applying generally to members of the profession regulated by its designated professional body;

  2. (2)

    this chapter does not prevent an authorised professional firm from providing professional advice, that is, in accordance with section 327(8) of the Act, advice:

    1. (a)

      which does not constitute carrying on a regulated activity; and

    2. (b)

      the provision of which is supervised and regulated by a designated professional body;

  3. (3)

    this chapter does not have effect in relation to an authorised professional firm in respect of non-mainstream regulated activity; and

  4. (4)

    this chapter does not apply to:

    1. (a)

      a UCITS qualifier; or

    2. (b)

      an incoming EEA firm which has permission only for cross border services and which does not carry on regulated activities in the United Kingdom.