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11 April 2002
On March 15 2002 the Federal Trade Commission announced the adoption of certain modifications, originally published by the commission on February 1 2001, to the Hart-Scott-Rodino rules. At that time, the commission had announced two new sets of rules: (i) proposed interim rules to implement changes necessitated by the 2000 amendments to the Hart-Scott-Rodino Act that raised certain filing thresholds and implemented new filing fee structures, and (ii) proposed changes to several other existing rules.
The commission announced that it is amending Interim Rule 802.21(b) to restore the full five-year exemption period for acquisitions of voting securities that follow a pre-February 1 2001 notification filing and that do not meet or exceed a greater notification threshold. As originally published, Interim Rule 802.21(b) created a transitional rule for persons who filed notifications prior to February 1 2001, the effective date of the new filing thresholds, and subsequently acquired voting securities not meeting or exceeding the next notification threshold in place at the time they filed. Under the original rule, such subsequent transactions did not require an additional Hart-Scott-Rodino filing as long as (i) the person filing crossed the notification threshold it filed for within one year of the expiration or termination of the applicable Hart-Scott-Rodino waiting period, and (ii) the additional acquisitions were made within five years of the expiration of the waiting period on the original filing. Since the amendments to the Hart-Scott-Rodino Act and other interim rules changed the filing thresholds, the interim rule had limited this exemption to subsequent purchases made within one year of the adoption of the new notification periods.
Now the commission has restored the full five-year exemption for parties who filed notifications prior to February 1 2001. This change took effect on March 18 2002, but will be applied retroactively from February 2 2002. Thus, parties who filed notifications prior to February 1 2001 to report their acquisition of voting securities of an issuer may acquire additional voting securities of that issuer up to (but not crossing) the next notification threshold in effect when they originally filed without filing an additional notification, provided that (i) they crossed the notification threshold for which they filed within one year of the expiration or termination of the Hart-Scott-Rodino waiting period, and (ii) such additional acquisitions are completed within five years of the expiration of the waiting period on the original filing.
The commission has not made the rest of the interim rules final, specifically the rules creating certain dollar-based filing thresholds. The commission announced that it needs more time to consider whether the dollar-based reporting thresholds introduced in February 2001 should become final due to the significant public comments received by the FTC in opposition to these changes.
The commission has made final, effective April 17 2002, many of the proposed rule changes, with certain modifications, including the following:
For further information on this topic please contact Michele S Harrington or Joseph G Krauss at Hogan & Hartson LLP by telephone (+1 202 637 5600) or by fax (+1 202 637 5910) or by email (firstname.lastname@example.org or email@example.com).
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