BARBADOS Law and Practice Contributed by: Debbie Fraser, Joanna M. Austin, Makela Harrison-Yarde and Jael Smith, Fraser Law
holders who voted regarding the resolution, or a reso - lution signed by all shareholders entitled to vote. 4.4 Dealings in Derivatives Dealings in derivatives are allowed in Barbados. 4.5 Filing/Reporting Obligations In Barbados, there are no filing/reporting obligations specific to derivatives under securities disclosure and competition laws. 4.6 Transparency Shareholders must make known the purpose of their acquisition and their intention regarding control of the company. Please see 4.2 Material Shareholding Dis- closure Threshold for further details. As it relates to private companies, save for where reg - ulatory approvals are required – for example, a review by the FTC of a merger over the threshold – there is no legal obligation to publicly disclose M&A transactions. However, publicly listed companies are bound by the rules and regulations of the BSE (which provides the only stock exchange in Barbados), and other legisla - tion may be applicable such as the provisions of the Securities Act, Chapter 308. Pursuant to the rules, to maintain a listing, the listed company must observe and comply with the exchange requirements (the List - ing Rules, trading procedure and policies issued by the BSE, any direction, order or decision of the BSE and the guidance notes), keep the BSE fully informed of events and decisions affecting its security holders and disclose material information concerning its business and affairs forthwith upon said information becoming known to management, or in the case of information previously known upon it becoming apparent that the information is material. The rules require disclosure by listed companies of any proposed material change in the business or affairs of said companies. “Material change” includes a change in the known beneficial or registered own - ership of shares of the company that, to the knowl - 5. Negotiation Phase 5.1 Requirement to Disclose a Deal
edge of the company or its officers, directors or major shareholders – or in the opinion of the Exchange – is sufficient to materially affect control. Since disclosure is required for a “proposed” material change, early disclosure is expected. Material change disclosure to the FSC is also required. 5.2 Market Practice on Timing Market practice on the timing of disclosure in Barba - dos can differ from legal requirements, especially as it relates to publicly listed companies. While the BSE Listing Rules and the Securities Act, Chapter 318A set out disclosure obligations, market practice may lead to earlier disclosures, so as to provide a sense of transparency or reassure investors, or to more detailed disclosures in certain cases. 5.3 Scope of Due Diligence In Barbados, due diligence usually encompasses the following aspects, among others, and is dependent on the structure of the deal. • Legal due diligence involves (i) reviewing the cor - porate structure and governance of a company, including the articles of incorporation, by-laws and shareholder agreements (if any); (ii) reviewing key contracts and identifying whether there are any related party transactions and potential conflicts of interests; (iii) verifying the litigation status of the company, including whether there are any ongo - ing or potential legal disputes, by conducting court searches and obtaining legal opinions confirming the status of the company if necessary; and (iv) confirming that the company is in good standing with Business Barbados (formerly the Corporate Affairs and Intellectual Property Office) by obtaining a certificate of good standing and an insolvency certificate from the Supervisor of Insolvency. • Financial due diligence encompasses (i) examining the audited financial statements of the company, typically within the past three years; (ii) assess - ing the debt obligations of the company; and (iii) confirming that there are no outstanding tax obliga - tions by reviewing a Barbados Revenue Authority tax clearance certificate. • Regulatory due diligence involves reviewing the relevant licences, permits or government approvals of the company if applicable.
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