FSA consults on endorsement of the Takeover Code

The FSAs current endorsement of the Takeover Code means that if an authorised firm fails to comply with the Code or a requirement or ruling made by the Takeover Panel, the Panel can request the FSA to take enforcement action against that firm. The statutory underpinnings of this endorsement will cease to exist once the Financial Services and Markets Act comes into force. The FSA is required, under the new statutory framework, to consult on continuation of the endorsement. It is proposed that the endorsement should continue to be applicable to firms that carry on investment business.

The FSA has worked with the Takeover Panel in putting the consultation paper together and will continue to work closely with the Panel as the consultation process unfolds. Comments on the draft rules are invited by 1 June 2001.

Notes for editors

1. CP87: Endorsement of the City Code on Takeovers and Mergers and the Rules Governing Substantial Acquisitions of Shares is available on the FSA Website www.fsa.gov.uk.

2. The Takeover Code and the rules governing substantial acquisitions of shares do not, by themselves, have the force of law. The current FSA endorsement was made in 1995 to provide some statutory support to the Takeover Panel. This endorsement applies to all persons authorised under the Financial Services Act 1986 to carry on investment business.

3. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act: maintaining market confidence; promoting public understanding of the financial system; the protection of consumers; and fighting financial crime.

4. The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.