TENDER OFFER AND CORPORATE GOVERNANCE LAW: CHILEAN NEW SET OF RULES TO INTEGRATE THE GLOBAL MARKETPLACE - PowerPoint PPT Presentation

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TENDER OFFER AND CORPORATE GOVERNANCE LAW: CHILEAN NEW SET OF RULES TO INTEGRATE THE GLOBAL MARKETPLACE

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Title: TENDER OFFER AND CORPORATE GOVERNANCE LAW: CHILEAN NEW SET OF RULES TO INTEGRATE THE GLOBAL MARKETPLACE


1
TENDER OFFER AND CORPORATE GOVERNANCE
LAWCHILEAN NEW SET OF RULES TO INTEGRATE THE
GLOBAL MARKETPLACE
  • ALVARO CLARKE DE LA CERDA
  • SUPERINTENDENTE DE VALORES Y SEGUROS DE CHILE
  • APRIL 2000

SVS - Chile
2
TENDER OFFER AND CORPORATE GOVERNANCE LAW
  • THE KEY QUESTION
  • How the Chilean securities market will integrate
    the global financial capital markets in the years
    to come?

Tender offer and corporate governance
SVS - Chile
3
MAINLY THROUGH TWO ACTIONS
  • 1) DEREGULATION
  • Capital controls
  • Taxes
  • 2) CHANGES IN OUR SECURITIES AND COMPANY LAW TO
    INTERNATIONAL STANDARDS
  • Tender offers and corporate governance law

Tender offer and corporate governance
SVS - Chile
4
NEW REGULATION
  • THE KEY PROBLEM
  • How to align the incentives of controllers
    (managers) and the other shareholders, sharing
    the companys creation of value, in a fair and
    equal basis?
  • or
  • which is the same as to How to lower the
    incentives of the insiders to extract value
    from the outsiders due to their privilege
    position.

Tender offer and corporate governance
SVS - Chile
5
THE THREE CONFLICT AREAS
  • 1) Major corporate events takeovers
  • 2) Transfer pricing
  • 3) Insider trading

Tender offer and corporate governance
SVS - Chile
6
NEW REGULATIONS
  • THE KEY SOLUTIONS
  • 1) Tender offers Mandatory bids
  • 2) Corporate governance Directors duties
  • 3) Insider trading Information disclosure

Tender offer and corporate governance
SVS - Chile
7
I. TAKEOVERS
  • 1) Control premium
  • 2) Tender offer rule
  • 3) Information disclosure

Tender offer and corporate governance
SVS - Chile
8
II. TRANSACTION AMONG AFFILIATES
  • 1. Approval without vote of directors with
    conflict of interest
  • 2. Indepent appraisal submitted to the market
  • 3. Information disclosure for at least 20 working
    days
  • 4. Shareholders right to call for a shareholders
    meeting approval

Tender offer and corporate governance
SVS - Chile
9
III. INSIDE INFORMATION
  • Mayor corporate events
  • 1. Take overs
  • Information disclosure
  • Mayor stakeholders
  • 2. Transaction with affiliates
  • Market transparency
  • 3. Increased sanctions

Tender offer and corporate governance
SVS - Chile
10
CORPORATE GOVERNANCE
  • Directors Committee
  • Treatment of directors with conflict of interest
  • Increase self-regulatory within the company
  • Independent directors
  • Annual meetings supervision

Tender offer and corporate governance
SVS - Chile
11
ADDITIONAL PROTECTION FOR NON CONTROLLING
SHAREHOLDERS
  • 1. More resources to regulatory body (SVS)
  • 2. Strengthen rights of withdrawal
  • Ownership concentration above 66
  • 3. Increase voting quorum approval
  • Mayor corporate events 3/4 shares

Tender offer and corporate governance
SVS - Chile
12
ADDITIONAL PROTECTION FOR NON CONTROLLING
SHAREHOLDERS
  • 4. Limit share issues with extra voting rights
  • 5. ADRs has same voting rights as shares
  • 6. Increase sanctions for inside information

Tender offer and corporate governance
SVS - Chile
13
CONCLUSIONS
  • 1. Harmonisation is crucial to play a role in the
    global financial market.
  • 2. Todays regulation asymmetries between banking
    and capital markets are lowered.
  • 3. Market consensus about the need of this new
    framework takes time.

Tender offer and corporate governance
SVS - Chile
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