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ARTICLE · 22 OCTOBER 2008

U.S. Securities And Exchange Commission Revises Cross-Border Tender Offer Rules

Davies Ward Phillips & Vineberg LLP
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On September 19, 2008, the U.S. Securities and Exchange Commission adopted changes to the exemptions for certain cross-border tender offers, exchange offers, and rights offerings.

CanadaFinance and Banking
Gerald Shepherd
Gerald Shepherd
Darren Novak
Darren Novak
Bonnie Roe
Bonnie Roe
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Background

On September 19, 2008, the U.S. Securities and Exchange Commission (the "SEC") adopted changes to the exemptions for certain cross-border tender offers, exchange offers, and rights offerings.1 The exemptions, which were originally adopted in 1999, are structured to provide relief from various U.S. regulations that would otherwise apply to cross-border transactions. The level of relief is designed to be inversely proportionate to the U.S. interest in the transaction, as calculated by the percentage of target securities that are beneficially owned by U.S. holders. The rules provide for a two-tier system. Relief under the "Tier I" level of U.S. ownership is available in situations where U.S. beneficial ownership of the non-U.S. target is less than or equal to 10%, and "Tier II" relief is available where U.S. beneficial ownership is more than 10% but not more than 40%. Generally, under Tier I there are broad exemptions in place from various U.S. filing,

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