CAYMAN ISLANDS Law and Practice Contributed by: Shari Seymour, Kerry Ann Phillips and Michael Lockwood, Maples Group
4.2 Material Shareholding Disclosure Threshold
the offer documents of the intentions of the offeror) may apply; see 2.2 Primary Regulators .
There are no material shareholding disclosure thresh - olds under Cayman Islands law, although Cayman Islands entities may be subject to onshore disclosure and reporting obligations (if, for example, their shares are listed on a foreign stock exchange). Unless a company falls within an exemption, it is required to take reasonable steps to identify its benefi - cial owners and certain intermediate holding compa - nies prescribed in the Companies Act, and to maintain a beneficial ownership register at its registered office in the Cayman Islands with a licensed and regulated corporate service provider. Under existing Cayman Islands laws, the information contained in a beneficial ownership register is not publicly available. 4.3 Hurdles to Stakebuilding There are no stakebuilding rules applicable under Cayman Islands law; see 4.1 Principal Stakebuilding Strategies . Cayman Islands entities can generally provide for dis - closure and reporting thresholds in their constitutional documents. 4.4 Dealings in Derivatives Dealings in derivatives are allowed in the Cayman Islands. 4.5 Filing/Reporting Obligations There are no securities disclosure or competition laws in the Cayman Islands, so there are no filing/reporting obligations in relation to derivatives. 4.6 Transparency Under Cayman Islands law, there is generally no requirement for shareholders to make known the pur - pose of their acquisition and their intention regarding control of a company; see 4.2 Material Shareholding Disclosure Threshold . That being said, in the case of an entity listed on the CSX, the CSX Code on Takeovers and Mergers and Rules Governing Substantial Acquisitions of Shares (which prescribe certain rules relating to disclosure in
5. Negotiation Phase 5.1 Requirement to Disclose a Deal
There is generally no requirement under Cayman Islands law for a target company to publicly disclose a deal. However, in the case of a target listed on the CSX, an announcement of a firm intention to make an offer must be made in the following circumstances: • when the board of the target has been notified in writing of a firm intention to make an offer from a serious source, irrespective of the attitude of the board to the offer; or • immediately upon an acquisition of shares that gives rise to an obligation to make a mandatory offer under the Code; see 6.2 Mandatory Offer Threshold . Cayman Islands entities listed on foreign stock exchanges may also be subject to additional disclo - sure and reporting obligations under the applicable listing rules. 5.2 Market Practice on Timing There is no general market practice regarding the tim - ing of disclosure of M&A deals; see 5.1 Requirement to Disclose a Deal . 5.3 Scope of Due Diligence There is no standard set of due diligence requirements in the Cayman Islands in a negotiated business com - bination or other M&A transaction. The due diligence requirements vary from deal to deal, based on the requirements of the relevant parties involved in the transaction. Generally speaking, the basic due diligence consists of a review of: • the constitutional documents of the company; • the statutory registers (register of directors and officers, register of members, register of mortgages and charges and, if applicable, the beneficial own - ership register); and
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