The
Department for Business, Enterprise and Regulatory Reform has published for comment a draft of the
Companies (Share Capital and Acquisition by Company of its Own Shares) Regulations 2009. The purpose of the Regulations is to make amendments to provisions within
Part 17 (A company's share capital) and
Part 18 (Acquisition by a limited company of its own shares) of the
Companies Act (2006), including:
- The minimum pre-emption rights issue subscription period in section 562(5) of the 2006 Act will be reduced from 21 days to 14 days (in line with a recommendation made by the Rights Issue Review Group in November 2008; for related changes to the Listing Rules, see here).
- A new requirement will be introduced in section 646 of the 2006 Act requiring creditors objecting to a reduction in a company's capital to demonstrate that their claim is at risk and the company has not provided adequate safeguards.
The Government intends to bring the Regulations into force on 1 October 2009.
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