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SGS 1: Introduction to Auction Sales Questions (New Version 2024-25) & Complete Solutions
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SGS 1: Introduction to Auction Sales Questions (New Version 2024-25) & Complete Solutions
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SGS 1: Introduction to Auction Sales Questions(New Version 2024-25) & Complete Solutions
What are the rules relating to misleading statements? - ✔✔Various criminal offences for
misleading statements were introduced under s. 89 Financial Services Act 2012. A person guilty
of this offence is liable to a term of imprisonment not exceeding seven years or a fine, or both.
In the case of Smith New Court Securities v Scrimgeour Vickers (Asset Management) Ltd [1996],
the court held that embellishment can amount from misrepresentation and is actionable in
damages for misrepresentation.
What are human shareholder and regulatory consents for acquisitions? - ✔✔Shareholder
and regulatory consents must always be considered, but there is tighter regulation of
acquisitions of a listed target company than a private company. The regulatory consents that
must be sought by all companies before an acquisition are confirmation from the Secretary of
State that they will not refer the acquisition to the CMA, or where the trade falls within a class
of particular services governed by a regulatory body (e.g. financial services, newspapers, oil and
gas and other utilities, and civil aviation (see page 10 of Chapter 2)).
A company listed on which stock exchange much comply with the Listing, Prospectus
Regulation, Disclosure and Transparency Rules? - ✔✔London Stock Exchange (LSE)
What is the first set of rules that govern the LSE that are of relevance? - ✔✔a. class tests on
how the disposal is classified to ensure that the relevant RIS and shareholder consent is
obtained before the company (see below),
What is the second set of rules that govern the LSE that are of relevance? - ✔✔a. their
general obligation of disclosure and transparency (i.e. the duty to disclose major new
developments if it has a significant effect of the share price) under the Disclosure and
Transparency Rules of anything that would have a significant effect on the company's share
price UNLESS it is only delayed so as to not prejudice legitimate interests provided that the
delay would bot mislead the public and confidentiality agreements are used to protect the
information of the listed company,
, What is the third set of rules that govern the LSE that are of relevance? - ✔✔a. related party
transactions. These are transactions between a listed company or its subsidiary and a related
party (i.e. a party within the same group structure). When this applies, the relevant RIS
(Regulatory Information Service) and shareholder consents excluding the related parties' votes
are required, as well as an explanatory circular. This is included at LR 11 of the Listing Rules, but
is not required if all four percentage ratios are not more than 0.25%, as this falls within the
"small transaction" exception.
What are the main competition bodies in the UK? - ✔✔The main UK competition bodies are
the CMA (Competition and Markets Authority), the Secretary of State for Business, Energy and
Industrial Strategy, and the CAT (Competition Appeal Tribunal).
How does EU competition law operate in the UK? - ✔✔Competition law in the UK works on a
one-stop-shop approach where the EU has exclusive jurisdiction if the EUMR (EU Merger
Regulation) bites. The EUMR applies to concentrations which have an EU Dimension, meaning
that the businesses will have to operate in other Member States.
What does the EUMR require? - ✔✔The EUMR requires notification prior to their
implementation and following the conclusion of the agreement (art 4(1)) and that the
concentration is not effective until approves (art. 7 EUMR). The acquisition agreement must
therefore include a condition precedent that all public consents have been obtained. Parties
will usually enter informal discussions with the EU two weeks prior to notification.
How does notification occur and what investigations are undertaken by the Commission? -
✔✔a. When notified via Form CO, the Commission has 25 working days to make its initial
assessment. It will either grant a summary clearance or conduct a Phase II investigation into
whether the transaction would threaten healthy competitive principles (i.e. "significantly
impedes effective competition in particular as a result of the creation or strengthening of
dominance"). A Phase II investigation will take up to 90 working days.
How does the CMA have jurisdiction over other competition regulation? - ✔✔a. If the EU
rules do not apply, the CMA has jurisdiction to open an investigation by its own motion. There
is no obligation to seek CMA approval, but the parties risk the transaction being declined, so it
is best for them to obtain statutory pre-notification by Merger Notice. The CMA has 40 working
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