There are important amendments to the City Code on Takeovers and Mergers (the "Code") which will come into effect as of 30 September 2013, and which will affect a number of Isle of Man public listed companies.

There are a few ways in which the Code can apply to an Isle of Man company, the first of which being where an Isle of Man company has its shares listed on a 'regulated market' (the "Regulated Market Test"). To date, the Regulated Market Test has included the Main Market of the London Stock Exchange, but has excluded smaller markets, such as AIM and the ISDX Growth Market.

Isle of Man companies listed on AIM and ISDX have therefore been able to avoid being subject to the Code in the past, relying on the exemption provided for smaller markets where the central management and control of those companies is based outside of the UK and Isle of Man (the "Management and Control Exemption").

From 1 October 2013, however, the Regulated Market Test is being expanded to include any companies whose shares are listed on a 'multilateral trading facility' in the UK, which generally speaking captures almost any UK stock exchange, including AIM and ISDX. As a result of this change, any Isle of Man companies listed on these markets which otherwise escaped the jurisdiction of the Code through the Management and Control Exemption, will now be subject to the Code.

The Code itself provides particularly onerous provisions on, amongst other things, company announcements, shareholder dealing and shareholder notification requirements. More importantly, the Code also makes provision for the requirement of mandatory offers for the entire issued share capital of companies, if your holding in a company subject to the Code increases above 30%.

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.