Overview
The Takeovers Panel is a peer review body established as ‘a specialist body largely comprised of takeover experts’1 that is the main forum for resolving disputes in takeovers.
The Panel was established (as the “Corporations & Securities Panel”) under section 171 of the Australian Securities and Investments Commission Act 1989 (Cth) and continued in existence by section 261 of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). It was renamed by the Financial Services Reform Act 2001 (Cth).
Two primary pieces of legislation empower and regulate the operations of the Panel. They are Part 6.10 of the Corporations Act 2001 (Cth) (Corporations Act) and Part 10 of the ASIC Act.
The Panel is given wide powers under Part 6.10 of the Corporations Act. Broadly, those powers are directed at two main dispute resolution functions:
- considering whether unacceptable circumstances exist and
- reviewing certain decisions of ASIC.
Part 10 of the ASIC Act contains most of the machinery provisions for the Panel, including its establishment and the processes for conducting its proceedings.
The ASIC Regulations give further specific powers to the Panel.
For further information about the Panel, please refer to the Panel’s latest Annual Report.
Unacceptable circumstances
The Panel’s primary power is to declare circumstances unacceptable in relation to a takeover or the control of an Australian company or a listed managed investment scheme. These powers are set out in section 657A of the Corporations Act. However, the Panel can only consider whether circumstances are unacceptable if a person who has standing makes an application to the Panel. Further information on who can make an application to the Panel and how to make an application can be found in the Panel’s Procedural Guidelines and on the Panel process page.
There is no definition of unacceptable circumstances. The Panel's ability to make a declaration of unacceptable circumstances is broad. Guidance Note 1: Unacceptable Circumstances provides an overview of the Panel's approach to making a declaration of unacceptable circumstances, including the Panel's powers and the circumstances in which the Panel may declare circumstances unacceptable.
The Panel has the power to make orders to protect the rights of persons or groups (especially target company shareholders) during a takeover bid and to ensure that a takeover bid proceeds (as far as possible) in a way that it would have proceeded if the unacceptable circumstances had not occurred.
Review of Panel decisions
Under section 657EA of the Corporations Act, the Panel also has a function of reviewing its own decisions concerning unacceptable circumstances on a de novo basis.2 A Panel reviewing the decision of the initial Panel consists of different Panel members. There can be only one review of an original Panel decision. Further information on review of Panel decisions can be found on the Panel process page.
Review of certain ASIC decisions
The Panel also has the power to review decisions of ASIC regarding whether to grant exemptions or modifications to Chapter 6 or, during the life of a takeover, Chapter 6C of the Corporations Act. This function had previously been carried out by the Administrative Appeals Tribunal. These powers are set out in section 656A of the Corporations Act.
Other features
The Panel publishes Guidance Notes which elaborate on policy that the Panel considers relevant in control transactions. The Panel has also published a summary of the Panel's major Guidance Notes.
The Panel may also make rules, not inconsistent with the Corporations Act or the Corporations Regulations 2001 (Cth), to clarify or supplement the operation of the provisions of Chapter 6. The Panel has not made any rules under this power.
The Panel has a power to make procedural rules under section 195 of the ASIC Act. The Panel’s current Procedural Rules 2020, and accompanying Procedural Guidelines, came into effect on 1 April 2021 and apply in respect of all applications made on or after 1 April 2021.
- 1Paragraph [7.16] of the Explanatory Memorandum for the Corporate Law Economic Reform Program Bill 1998 (Cth)
- 2 The Panel has an additional review function if a matter is referred from the court under section 657EB of the Corporations Act