Section 16 Settlement Agreement

Answer: No. Since the application of Section 16, point b) is left to the discretion of private parties and courts, department staff will generally not rule on whether a particular transaction involves a “purchase” or “sale” for the purposes of this section. [23 May 2007] [9] We have standard powers and common notification agreements for Schedule 13G submissions. Please contact us if you need these forms. Investors should also keep in mind that the expiration date of an SRO must be set at least six months after the arrival date of the TRS, in order to avoid potential issues covered in point 16 (b). A shorter duration would lead to a Section 16 acquisition (b) upon entry into the TRS and a sale to Section 16 (b) if the TRS is implemented at the expiry of the TRS, both of which occur in the short period of time. Even if the expiration date of the TRS is six months or more from the date of entry of the TRS, there may of course be unforeseen events that lead the long party to want to settle the TRS before the expiry date. If this occurs within six months of the date of the creation of the TRS and at a time when the TRS reference price is below the settlement price (as a long party would expect), the profit that the insider would have made on the TRS transaction could be more disgorific, in accordance with Section 16 16). Therefore, while the ability to settle a TRS before the expiry date is an often visible clause in TRS contracts, a Section 16 insider must be prepared to commit to a six-month commitment from the date of the convening of the TRS, or perhaps longer if the insider has made other repotable transactions to avoid a profit-buying liability.

While the above principles may seem simple, there are many questions about the application of the guidelines for Section 16 (a) reports and the principles underlying Section 16 (b) when dealing with TRS transactions because of their complexity. Some TRSs provide interim accounts. B, e.g.B. quarterly results, prior to the final billing date for the TRS. These intermediate accounts should normally be reported as a TSR count and as an entry into a new TRS position and may be overlapping transactions within the meaning of Section 16 (b).10. while weeding in a new TRS). This will likely result in a non-exempt sale at the time of closing of the existing swap and a non-exempt purchase at the time of the new exchange.