Panel Releases Final Guidance on Broker Handling Fees [03/06/2003] The Takeovers Panel

Tuesday, 3 June 2003

PANEL RELEASES FINAL GUIDANCE ON BROKER HANDLING FEES

The Takeovers Panel has today released a final Guidance Note on broker handling fees. The final version follows public consultation on a draft that the Panel released on 28 March 2003.

The final Guidance Note is based on the Panel's view that broker handling fees have potentially two conflicting effects, which must be balanced against each other.

First, where a broker handling fee encourages brokers to inform their clients about the existence of a bid and to discuss the merits of the bid, the fee may facilitate the acquisition of shares taking place in an efficient, competitive and informed market.

Second, however, broker handling fees that are excessively high, or are only available for a limited period of time, may induce brokers to pressure their clients to accept an offer under a bid where they would not otherwise give such advice.

To promote market certainty, the Guidance Note sets out quantitative and other guidelines on the features of broker handling fees that the Panel is likely not to find unacceptable.

The Panel has also published on its website a paper that sets out the Broker Handling Fees Sub-Committee's response to external comments on the consultation draft.

The Panel would like to thank the Broker Handling Fees Sub-Committee (both the Panel's internal members Carol Buys, Braddon Jolley, Simon Mordant and especially the external members Paul Masi and Bruce Skelton) for their work.

The Broker Handling Fees Guidance Note and the Public Consultation Response Statement are available at:

http://www.takeovers.gov.au/Content/guidance/broker.asp

http://www.takeovers.gov.au/Content/consultation/brokerPCRS.asp

Nigel Morris
Director, Takeovers Panel
Level 47 Nauru House, 80 Collins Street, Melbourne Vic 3000
Ph: +61 3 9655 3501
Email: nigel.morris@takeovers.gov.au