Ensuring adequate funding for the takeovers watchdog

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South African Law Journal

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University of Cape Town

The Securities Regulation Panel (the Panel) is a regulatory body establishedin terms of s 440B of the Companies Act 61 of 1973 (the Act). Its function is,among other things, to regulate corporate mergers and takeovers. It ismandated to make rules relating to the effective monitoring of compliancewith, and enforcement of, the Securities Regulation Code on CompanyTakeovers and Mergers (the Code: see ss 440C (1)(a) and (4) (e) of the Act). The Panel was formed pursuant to a report made to the Standing Advisory Committee on Company Law by the Hon Mr Justice Cecil Margo and Professor Stefan Naude in 1983 (the Margo Report: see The Securities Regulation Code: Its Background, Implementation and the Role as Pertaining to Take-overs and Mergers, available at http://www.srpanel.co.za/Background.pdf accessed on 2 June 2008). In the report Margo J and Professor Naude did not consider it necessary to discuss the administrative and financial details of the Panel's organization because they did not foresee any insurmountable problems (see C Margo and S Naude 'Take-overs and Mergers: the City Panel and the Position in South Africa' in Report to the Standing Advisory Committee on Company Law (1983) 35). With the benefit of hindsight, one could say that they ought to have discussed the issue, for the Panel established as a result of their recommendation has faced, and continues to face, financial problems which threaten its continued financial viability. This in turn affects its ability both to monitor compliance with, and to enforce, the Code. In the course of events, details of the Panel's financing scheme were left to be determined by the legislature and the Panel itself.