Introduction

Iceland has implemented the Takeover Directive by Act No. 31/2005 which amended the Act on Securities Transactions No. 33/2003. On 1 November 2007 Act No. 33/2003 on Securities Transactions was replaced by a new Act on Securities Transactions No. 108/2007 (the ‘Securities Act’). The primary legislation concerning takeover bids is to be found in Chapters X and XI of the Securities Act. The aforesaid rules concerning takeover bids were taken up practically unchanged in the Securities Act from the previous Act.

No other legislation or circulars have been issued by the Icelandic Ministry of Business Affairs or the Icelandic Financial Supervisory Authority (Fjármálaeftirlitið or ‘FME’) regarding takeover bids.

Prior to the implementation of the Takeover Directive, the competent authority for supervising takeover bids and the approval of offer documents issued in connection with takeovers in Iceland was the Iceland Stock Exchange, known today as the NASDAQ OMX Iceland hf., which operates the only regulated market in Iceland. Following the implementation of the Takeover Directive the FME took over as the competent authority.

It should be noted that, at the time of writing, a draft bill is being discussed in the Icelandic Parliament for amending the takeover provisions of the Securities Act. The main amendment suggested in the bill is a proposal to lower the threshold for mandatory bids from 40 per cent to 33 per cent.

Competent authority

As previously mentioned, the competent authority for supervising takeover bids in Iceland is the FME. With respect to the offer documents issued in connection to takeovers in Iceland, the FME shall oversee, and is competent for the approval of, such documents prior to their publication.