SEC Amends Cross-Border Business Combination Rules

In December 2008, amendments to the rules of the US Securities and Exchange Commission (SEC) governing the cross-border business combination transactions became effective (the 22008 amendments'). The amendments build on a set of exemptions adopted by the SEC in 1999 (the '1999 rules') to accommodate cross-border transactions and reflect the first significant rule-making by the SEC since the 1999 rules were adopted. Some of the amendments reflect the codification of no-action, exemptive or interpretive positions previously taken by the staff of the SEC; other amendments were implemented to address specific aspects of the 1999 exemptions that made these exemptions difficult to apply in practice and limited their usefulness. While the amendments provide additional relief in respect of many legal and procedural conflicts that arise in cross0border transactions, they do not address fully one of the most notable deficiencies in the current rules: practical difficulties associated with assessing the interest of US investors in a transaction and the ability of parties to rely on the cross-border exemptions.

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