BERMUDA Law and Practice Contributed by: Natalie Neto, Rachel Nightingale and Marah Smith, Walkers
under the BSX Listing Regulations if the target’s shares are listed on the BSX. Under the Exchange Control Rules, any indi - vidual who owns 10% or more of the shares, voting rights or interests in a company through direct or indirect ownership thereof is defined as “beneficial owner” . When incorporating a vehicle, the beneficial owners of 10% or more must be identified, and specific permission must be sought from the BMA prior to incorporation (unless a general permission is otherwise avail - able). Accordingly, the impact of the Exchange Control Rules should always be considered when structuring a merger or amalgamation. Unless a general permission is otherwise avail - able, anyone seeking to acquire 10% or more of the voting shares of a Bermuda company must seek the prior approval of the BMA. Once that permission has been granted, that person may acquire up to 50% of the voting shares of the company without the prior approval of the BMA (subject to subsequent notification to the BMA). Prior permission of the BMA must be sought in order for an existing shareholder to hold more than 50% of the equity securities of the com - pany. General permissions are available, which are conditional upon subsequent notification to the BMA. These include where a company’s shares are being transferred amongst affiliates, where the company’s shares (or those of its parent) are listed on an “appointed stock exchange” (as defined pursuant to the Companies Act) or where a company is classified as an investment fund under the Investment Funds Act 2006. Permission is also not generally required for the issue or transfer of non-voting shares.
For companies that are listed on the BSX, direc - tors must deliver written notice without delay to the BSX if they become aware of any share - holder who: • acquires a beneficial interest in, control over or direction of 5% or more of securities; or • has a beneficial interest in or exercises con - trol over 5% or more of the securities and acquires, in aggregate, an additional 3% or more. Disclosure to and consent of the BMA or Regu - latory Authority may also be required where a company is regulated under one of the regula - tory acts in Bermuda. 4.3 Hurdles to Stakebuilding A company can adopt provisions in its by-laws that require a shareholder to notify the company of a particular percentage of direct or indirect ownership; such thresholds are often reflective of any potential onshore restrictions as well. The by-laws may also impose sanctions for failure to disclose this information to the company, including the shares becoming null and void and disenfranchisement of the shares (whereby the shareholder is prevented from exercising any While trading derivatives by a person for its own account is not generally regulated or prohibited in Bermuda, “dealing” in derivatives is a regulat - ed activity if conducted by a company in or from within Bermuda as a business (including by a Bermuda company or by a foreign company that held itself out as doing business in Bermuda). Where the derivatives relate to traditional invest - ment products, the dealer would be required to be registered under the Investment Business Act 2003 (IBA). Where the derivatives have underly - rights attaching to those shares). 4.4 Dealings in Derivatives
256 CHAMBERS.COM
Powered by FlippingBook