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	IN THIS ISSUE   Class Exemptions from the Takeovers Code - a summary   Transitional provisions   How the code permits increases in voting rights - a thumbnail guide   No mandatory bid in New Zealand Takeovers Code   Frequently asked questions   Relationship between the Takeovers Panel and the Securities Commission   How to contact us David Jones is principal of an Auckland law practice and has been practising in commercial and company law for more than 20 years. He was a member of the Takeovers Panel from its inception as an advisory group. He was appointed also in 1991 to act as the personal adviser to the Minister of Justice on the company law reform programme. Following the introduction of the Companies Act 1993 David Jones served on the Company Law Monitoring Group. He lectures in company law on the Institute of Directors’ residential programme for company directors. Class Exemptions Gazetted The Takeovers Code (Class Exemptions) Notice 2001 is published on our website www.takeovers.govt.nz.	The Class Exemptions - a summary THE TAKEOVERS CODE (CLASS EXEMPTIONS) NOTICE 2001 COMES INTO FORCE ON 1 JULY 2001 AT THE SAME TIME AS THE TAKEOVERS CODE. THE CLASS EXEMPTIONS PROVIDE A STANDARD FORM OF EXEMPTION TO APPLY TO COMMON CLASSES OF TRANSACTIONS. THIS WILL REDUCE SIGNIFICANTLY THE NEED FOR APPLICATIONS FOR SPECIFIC EXEMPTIONS FOR PARTICULAR TRANSACTIONS. THE TERMS AND CONDITIONS OF THE CLASS EXEMPTIONS ARE DESIGNED TO ENSURE THAT THE UNDERLYING PURPOSE AND INTENT OF THE CODE ARE FULFILLED. IF THE TERMS AND CONDITIONS OF THE CLASS EXEMPTIONS DO NOT FIT THE CIRCUMSTANCES OF A PARTICULAR CASE A SPECIFIC EXEMPTION MAY NEED TO BE SOUGHT.
		KEY AREAS The key areas covered by the class exemptions relate to:   buybacks by code companies of voting securities;   allotments by code companies of voting securities; and   transactions involving lenders and receivers, proxies and corporate representatives, sharebrokers, underwriters, nominee companies and bare trustees, executors, trustees and administrators of deceased estates and intra-group transfers. Another class exemption relates to the requirement to send a copy of the securities register of the target company to the Takeovers Panel. THE FUNDAMENTAL RULE The fundamental rule in the code prevents any shareholder from becoming the holder or controller of more than 20 percent of the voting rights in a code company except in a manner permitted by the code. However, if a transaction falls within one of the class exemptions, increases that might otherwise be in breach of the fundamental rule will be exempted if certain conditions are met.	BUYBACKS AND ALLOTMENTS The purpose of the class exemptions for buybacks and allotments is to facilitate these transactions. Transactions of this type can inadvertently lead to a breach of the fundamental rule. The policy of the class exemptions is to ensure that people are not breaking the law because they have inadvertently breached the code. However, conditions apply to these exemptions to ensure the policy of the code is complied with. BUYBACKS If a person increases its control of the voting rights in a code company as a result of the code company acquiring its own voting securities, that person is exempted from the fundamental rule if either:   the acquisition is approved by an ordinary resolution of shareholders of the code company, provided the notice of meeting complies with a set disclosure regime and certain voting restrictions are adhered to (this exemption in clause 4 closely mirrors the shareholder approval mechanism, which is an exception to the fundamental rule, set out in rules 7(c) and 15 of the Takeovers Code); or   the increase is eliminated (wholly or, in some cases, in part only) within six (continued p2)

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