Executive summary - Udo Bullmann

offeree company must give its views on the effects of the bid on employment,conditions of employment and the company's business locations.• The board of the offeree company must act in the interest of the company as a whole,and must not deny the holders of securities the opportunity to decide on the merits ofthe bid.• False markets must not be created in the securities of the offeree company, the offerorcompany or any other company concerned by the bid in such a way that rise or fall inthe prices of the securities becomes artificial and the normal functioning of themarket is distorted.• An offeror may only announce after ensuring that it can fulfil in full any cashconsideration it offers and after having taken all responsible measures to secure theimplementation of any other type of consideration.• Offeree companies must be hindered in the conduct of their affairs for longer thanresponsible by a bid for their securities.As far as the hedge fund and Private Equity industry is concerned, however, Art. 47 para 2EC is a more obvious regulatory norm but its application must be considered on a case bycase basis. Regulations in this area have the aim of coordinating legal and administrativeprovisions on the commencement of independent activities. A regulation could thereforeapply in the case of investment companies themselves. Fundamental money market legalprovisions are already founded on Art. 47 of the European Treaty: for example, the Marketsin financial instruments directive (MiFiD). Particularly the Directive on the coordination oflaws, regulations and administrative provisions relating to undertakings for collectiveinvestment in transferable securities (UCITS) is based on this regulation.MIFID introduces more detailed requirements covering: the organisation and conduct ofbusiness of investment firms, and how regulated markets and MTFs (Market tradingfacilities) operate; new pre-and post-trade transparency requirements for equity markets; thecreation of a new regime for 'systematic internalisers' of retail order flow in liquid equities;and more extensive transaction reporting requirements.Types of firms to be regulated by the MiFID requirements are: investment banks; portfoliomanagers; stockbrokers and broker dealers; corporate finance firms; many futures andoptions firms; some commodities firms.Most firms that fall within the scope of MiFID will also have to comply with the new CapitalRequirements Directive (CRD), which is similar to Basel II, which will set requirements forthe regulatory capital which a firm must hold.MiFID will require transaction reports for any instrument admitted to trading on a regulatedmarket including commodity instruments e.g electricity, oil and metals admitted to trading onexchange.***68