Understanding Form 8.5 (EPT/RI): Public Dealing Disclosures for Managing Investment Risk

Overview

Form 8.5 (EPT/RI) is a critical document required under Rule 8.5 of the Takeover Code. It ensures that exempt principal traders with recognised intermediary status publicly disclose their dealings when acting on behalf of clients. This form plays a significant role in managing investment risk and provides transparency for investment analysis during takeovers and similar corporate events.

Key Information Required

The form gathers essential details about the principal trader, the relevant transaction, and the securities involved. This includes information about the specific offeror or offeree, as well as details about executed trades, which can affect the stock portfolio of the parties involved.

Types of Dealings to be Disclosed

1. Purchases and Sales

All purchases and sales of relevant securities must be reported. The currency used for these transactions should always be specified to ensure clear investment analysis.

2. Cash-Settled Derivative Transactions

Details of any cash-settled derivatives involving the affected securities must be disclosed to accurately reflect the portfolio at risk.

3. Stock-Settled Derivative Transactions

Disclosure is also required for any options or other derivatives that are settled in stock, whether they are being written, sold, purchased, or exercised. This helps in managing investment risk related to derivative positions.

4. Other Dealings

Other forms of transactions, including the subscription for new securities, should also be included in the disclosure.

Additional Information

Indemnity and Other Arrangements

The form should state whether there are any indemnity arrangements or other agreements related to the securities involved, which could impact investment risks.

Agreements Related to Options or Derivatives

Any other agreements, arrangements, or understandings relating to options or derivatives involving the relevant securities must also be disclosed for a full and transparent investment analysis.

Importance of Compliance

Public disclosures under Rule 8 of the Takeover Code must be made to a designated Regulatory Information Service. Adhering to these requirements is essential for maintaining transparency, ensuring that investors and regulatory bodies can assess the portfolio at risk and manage investment risk effectively during corporate events.

--- This content is for informational purposes only and does not constitute financial advice.