ARTICLE
10 May 1996

Czech News - April 96 - Code And Act Amendments

Czech Republic Antitrust/Competition Law
COMMERCIAL CODE, SECURITIES ACT AND INVESTMENT AND MUTUAL FUNDS ACT AMENDMENTS

During the last session of the Czech Parliament and prior to the June elections, important amendments to the Commercial Code, the Securities Act and the Act on Investment and Mutual Funds were passed. These amendments will come into force on 1 July 1996.

COMMERCIAL CODE AMENDMENT

The amendment defines circumstances under which the majority owner of a publicly traded company has to offer to purchase the shares of minority shareholders. In particular, a majority owner has to offer to purchase shares from minority holders of the company at the time which he gains shareholding levels of 50, 66 and 75%, for the price calculated as the weighted average of prices on public trades during the period of the preceding six months.

SECURITIES ACT AMENDMENT

The amendment introduces the use of sub-registers which should help to speed up the settlement of individual trades with securities.

ACT ON INVESTMENT AND MUTUAL FUNDS

The amendment strengthens the state control over the capital market and further tightens their reporting requirements. The amendment has not removed the 20% limit in shareholding which may be held by a fund in a single entity. The change in legal status from investment or mutual fund into an ordinary joint stock company will require the approval by two thirds of all shareholders.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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