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Corporate Review: EU/UK consultations and Indian merger control rules

07 July 2011

In the June edition of Corporate Review, we consider a number of European and UK consultations which have begun this month. At EU level, ESMA is consulting on the proposed new look and feel of prospectus summaries and the proposed content of short form prospectuses for rights issues.

In the UK, a White Paper to establish the new regulatory structure that will replace the FSA has been published, with the expectation that the resulting Financial Services Bill will be put before Parliament by the end of the year. Also, as part of the UK government’s aim to see a shift in investors’ focus from short-term profits to long-term value, it has appointed Professor John Kay to carry out an independent review of investment in UK equity markets. This follows the government’s call for evidence in A Long-Term Focus for Corporate Britain – an examination of corporate governance in response to the takeover of Cadbury by Kraft Foods in 2010 – the next steps in relation to which are expected to be announced over the summer.

Back in March we reported that BIS was consulting on proposed options for reform of the UK competition regime. Allen & Overy has now submitted its response to that consultation. Our view is that the UK regime is already robust, effective, and held in high regard internationally, and we are not persuaded of the case for wholesale reform.

In another competition-related development, the long-awaited Indian merger control rules came into force on 1 June 2011. We have seen global interest in how the new regime would be framed, with India an increasingly important jurisdiction for international M&A. However, a number of issues are likely to remain unclear until such time as the decisional practice of the Competition Commission of India has built up.

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