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Mergers and Acquisitions 2018-08-30T14:43:45+00:00

Mergers and Acquisitions Department

The Mergers and Acquisitions Department deals with issues pertaining to mergers and acquisitions of businesses operating within the country, and of outside businesses having business activity in the country. The phrase “Mergers and Acquisitions” is prevalent in investment banking, amongst competition regulators, and other financial sector regulators. It is basically the acquisition or buying of the shares /assets of another company by another or by an individual. It also means the amalgamation of companies to form a single economic/business concern. The Mergers and Acquisitions Department is responsible for the analysis of transactions in order to ascertain if these transactions are likely to result in the substantial lessening of competition in the country.

What is a Merger?

Section 35 of the Competition Act No.8 of 2007 (“the Act”), requires that enterprises to a merger transaction notify and seek the approval of the Commission before implementing a merger. The only prerequisite for notifying is that the transaction in question must constitute a “merger” as defined in the Act.

In terms of Section 2 of the Act, “merger” means the acquisition of a controlling interest in –

(i)         any trade involved in the production or distribution of any goods or services; or

(ii)        an asset which is or may be utilised for or in connection with the production or distribution of any commodity.

A merger may occur through a purchase or lease of shares, an interest or assets, joint ventures and/ the amalgamation or other combination with another enterprise. A merger therefore occurs when there is a “change of control”.

Acquisitions of shares (or other equity interests such as partnership interests) typically qualify as mergers whenever they result in a change of control in any of the ways listed in Regulation 3 (1)(g) of the Competition Commission Regulations Notice of 2010 (“Competition Regulations”). The controlling interest may be in any trade involved in the production or distribution of any goods or services.

A merger can also be an acquisition of a controlling interest in an asset as defined in the Act. However, not all acquisitions of assets constitute a merger. With respect to acquisitions of assets, the main question relates to whether the acquired assets have sufficient independent competitive significance in connection with production or distribution of any commodity in a relevant market. To qualify as a merger, the transferred assets must enable a business activity to continue and the revenue directly related to the transferred assets must be identifiable. Simply put, the transferred asset must be capable of being independently used to generate income (commercial purposes).  As such, assets bought in the ordinary course of business and those acquired for personal use do not qualify as mergers.

 What is acquisition of “controlling interest”?

The assessment of whether there has been a change in control is undertaken by the Commission on a case-by-case basis, having regard to the unique facts of each particular case. In terms of Regulation 3 of the Competition Regulations, acquisition of controlling interest means the holder thereof –

(i)         beneficially owns more than one half often voting and/or more than half of the economic interest of the target firm;

(ii)        is entitled to vote a majority of the votes that may be cast at a general meeting of the firm;

(iii)       is able to appoint or veto the appointment of a majority of the directors of the firm; or

(iv)       has the ability to exercise a decisive influence over the policies of the firm and its strategic direction.

 

Who should file a merger and where to obtain the forms

In a merger transaction, there are normally two parties involved and these are the acquirer and the target. Both these parties are responsible for notifying the transaction to the Commission. A merger is notifiable if one or both of the parties to the transaction has an economic presence in the country. This may be through direct presence in the country, through subsidiaries or through any economic activity/selling their products in the country; even if the firms do not have a physical presence in the country. The relevant forms for the merger notification filing can be obtained on request from the Swaziland Competition Commission.

When must the Swaziland Competition Commission be notified of a Merger?
The Commission must be notified of all mergers and acquisitions that have an effect  in the economy of Swaziland before the merger is implemented. The business can request for a pre-notification meeting with the Mergers and Acquisitions Department to obtain any other necessary guidance related to merger procedure. The inquirer will be duly furnished with the list of requirements and documents necessary for a complete filing of a merger.

How much does it cost to notify a merger?

Mergers are classified as either small or large.  A small merger is defined as a transaction in respect of which the parties’ combined assets or turnover is E8 Million or less. Small mergers are exempt from paying a filing fee. A large merger is defined as a transaction in respect of which the parties’ combined assets or turnover is above E8 Million. In the case of large mergers, the filing fee is equal to (0.1%) of the combined annual turnover or assets value (whichever is greater) of the merging entities. The fee is calculated on the assets or turnover of the merging firms situated in and out of the country. However, this fee is capped at E600 000 (i.e. the fee cannot exceed E600 000). The following table presents the merger thresholds and notification fees payable for small and large mergers.

Merger thresholds and notifiable fees payable
Thresholds Combined turnover / Asset value Notification fee payable
Small mergers Below or equal to E8million (≤E8 000 000) None
Large mergers Above E8 Million

(>E8 000 000)

Zero point one percent of combined annual turnover/assets (0.1%), however the fee is capped at E600 000

 What does the Commission consider when analysing a merger?

The Competition Regulations set out the analytical framework for the competitive assessment of mergers as follows-

  1. a) Is the merger likely to substantially prevent or lessen competition in the relevant markets?
  2. b) If it appears that the merger is likely to substantially prevent or lessen competition in the relevant markets, then the Commission needs to determine whether these anti-competitive effects can be outweighed by technological, efficiency or other pro-competitive gains.

In terms of the Competition Regulations, the Commission needs to evaluate the following factors to assess the strength of competition in the relevant market(s) and determine whether the merger will result in any change in the competitive landscape that could substantially prevent or lessen competition in the relevant market(s)-

  1. I) rationale for the transaction;
  2. II) the ease of entry into the market, including tariff and regulatory barriers;

III)        the actual and potential level of import competition in the market;

  1. IV) the relevant market(s) with emphasis on the relevant product(s) and the geographic market;
  2. V) the levels of concentration in the market;
  3. VI) the degree of countervailing power in the market (that is the bargaining strength that the buyer has vis-a-vis the seller in commercial negotiations due to its size, commercial significance to the seller and its ability to switch to alternative suppliers);

VII)      the dynamic characteristics of the market, including growth, innovation, and product differentiation;

VIII)     the nature and extent of vertical integration in the market;

  1. IX) whether the business or part of a business of a party to the merger or proposed merger has failed or is likely to fail; and
  2. X) whether the merger will result in the removal of an effective competitor.

 What happens after the Commission has looked at the merger notification?

In the case of small and large mergers, upon completion of the merger investigation, the Commission may-

(a) approve the merger without any conditions;

(b) approve the merger subject to specific conditions; or

(c) prohibit the merger altogether.

Parties aggrieved by a decision of the Commission may within thirty days of the decision of the Commission appeal to the High Court of Swaziland.

Failure to notify a merger transaction

Businesses are urged to comply with the legislation and notify merger transactions. In terms of Section 35 of the Act, failure to notify a merger is an offence which attracts a sentence of a fine not exceeding E250 000 or imprisonment to a term not exceeding five years or both. Further, Regulation 28A of the Competition Commission (Amendment) Regulations Notice of 2016 empowers the Commission to impose a fine of up to 10% of a firm’s total turnover for failure to comply with the Act.

Section 35 of the Act allows parties to a merger to make an application for condonation with the Commission, following prior implementation of a merger without notifying. The Commission is at liberty to either grant the condonation application with or without conditions or to refuse to grant the application altogether. A merger transaction implemented without the approval of the Commission is not considered valid and is of no legal effect unless an application for condonation has been applied for and granted by the Commission.

When not sure whether the proposed transaction is notifiable, what should businesses do?
If businesses are uncertain about whether a transaction is a merger and should be notified with the Commission or not, a written request for an advisory opinion, detailing the nature of the business proposal, may be submitted to the Commission. Furthermore, businesses are encouraged to request for a pre-notification meeting with the Mergers Department of the Commission to obtain any other necessary guidance related to the merger notification procedures.

(I) In adjudicating a proposed merger, the Commission may –
(a) approve the implementation of the merger without any conditions;
(b) approve the implementation of the merger subject to specific conditions; or
(c) prohibit the implementation of the merger.

(2) When determining whether or not a proposed merger is anti-competitive, the Commission shall consider any factor relevant to competition, including but not limited to the following-
(a) the definition of the relevant market;
(b) the post-merger market concentration;
(c) ease of entry into the market, including tariff and regulatory barriers;
(d) availability of substitute products;
(e) levels of import competition;
(f) levels of countervailing power;
(g) effective remaining competition; and
(h) the probability that the enterprises in the market will after the merger behave competitively or cooperatively –

(i) the ability of national industries to compete in international markets;
(ii) the competitiveness of a particular industrial sector or region in Swaziland; and
(iii) the ability of small enterprises to become competitive.

(I) Where a merger is proposed, anyone of the primary enterprises involved in the merger, or their duly appointed representatives shall file a joint application to the Commission for authorization of the merger in terms of regulation 20 of these Regulations.
(2) A party to a non-consensual merger may apply to the Commission for the consideration of that merger.

A joint application shall be made in a single filing by one of the primary enterprises or their duly appointed representative, and shall include –

(a) for each of the primary enterprises, Substantive Statement on the merger in Form 3, which in each case –
(i) satisfies all the filing instructions set out in that Form;
(ii) has attached to it all the documents required by those instructions; or
(iii) is accompanied by the requisite filing fee in the appropriate amount; or
(iv) if paid separately or earlier, is accompanied by proof of payment which is acceptable to the Commission.

(I) A transaction is non-consensual if –
(a) the primary firm filing the joint merger notification first made an offer to purchase the target firm to the management of that firm which was rejected in writing; or
(b) the management of the target firm has publicly stated that it does not support the offer made by the primary acquiring firm; or
(c) the management of the target firm has not responded to an offer made by the acquiring firm within a reasonable time, which shall not be less than 10 days from the date of the offer.

(2) A primary enterprise involved in a non-consensual transaction may tile a joint merger application on behalf of both primary enterprises at any time after the satisfaction of the requirements of a non-consensual transaction set out in this Regulation.

(3) A joint merger notification filed with the Commission must be served on the other primary firm’s registered office or principal place of business on the date of filing with the Commission.

(4) Where some of the information contained in the merger notification is confidential to the primary firm or third parties, the notification must be accompanied by a summary of the information classified as confidential, which must set out the reasons why the information is considered confidential and how the other primary firm may gain access to it.

(5) The initial period for a merger filed in terms of this Regulation begins on the business day following the date on which the merger notification was served on the other primary firm, provided that –
(a) the Commission does not request additional information in terms of Regulation 22 in respect of the information filed on behalf of the primary firm that filed the joint merger notification.

(6) The primary firm filing the joint notification must-
(a) file a competitiveness report on the date of the filing of the joint merger notification; and
(b) set out in detail the sources of information it relied on in compiling the Substantive Statement of the merger on behalf of the other primary firm.

(7) Non-consensual transactions are subject to the same time frames set out in Regulation 16 of these Regulations.

(8) Where the other primary firm intends to oppose the joint merger notification –
(a) it must file its corrected Substantive Statement of the merger within 10 business days from the date of filing of the joint merger notification; and
(b) file all attachments within 10 business days from the date of the filing ofthe joint merger notification; or
(c) within 10 business days from the date of filing of the joint merger notification, apply for an extension of time to compile and file its corrected information, which extension shall not exceed 10 business days.

(9) If the other primal}’ firm fails to file any document or information within the time periods set out in this Regulation, it shall be bound by the information filed on its behalf by the primary firm that filed the joint merger notification.

(10) The Commission may extend the investigation period of a non-consensual transaction by 30 days where, in its opinion, having regard to the information filed by the parties and its own independent knowledge of the industry, the transaction is likely to give rise to significant competition concerns.

(I) If merging parties submit a merger application in respect of an intemational transaction where the date of closing is likely to occur before the finalization of the Commission’s investigation, the parties shall –
(a) indicate in the original application the intended date of closing;
(b) set out how their interests in Swaziland would be insulated from the implementation of the world wide transaction; and
(c) provide legally enforceable undertakings that will ensure that the parties’ interest in Swaziland will be managed and run without any interference from the merged firm following closing of the international transaction.

(2) The international closing of a proposed merger is not allowed before the filing of a merger application before the Commission.

(3) In urgent circumstances, the Commission on good cause shown may shorten the time period.

(1) For purposes of considering a proposed merger, the Commission may, through the office of the Executive Director or any officer delegated by him, refer the application in respect of the proposed merger in terms of section 38(1) of the Act to an officer for investigation and advise the parties to the merger of the name and contact details of the officer in question.

(2) As soon as practicable after a referral in terms of sub-regulation (I), the officer concerned shall –
(a) investigate the merger as expeditiously as possible; and
(b) furnish the Executive Director or his nominee with a report of the investigation before the expiry of the Commission’s investigation period.

(3) A person, including a person not involved as a party in a proposed merger, may voluntarily submit to an officer or the Executive Director any document, affidavit, statement or other relevant information in respect of a proposed merger at any time before the conclusion of the investigation.

(4) For avoidance of doubt, the Executive Director and the investigation team shall consider any material information submitted to them before the end of the investigation period or before the Board makes its determination, which information may be presented as an addendum to a final report.

(5) The officer shall properly consider the information given and provide copies of such information to the merging parties where such information is not subject to confidentiality claims for their information and comment.

(6) Where the information submitted is covered by confidentiality claims, the officer shall require the party that furnished the information to prepare a summary of the confidential information for submission to the merging parties.

(7) The Executive Director or officer responsible for the investigation of the merger may, at any time, convene a meeting with any of the parties to the merger or third parties for purposes of inquiring further into any specific issues that may be of concern to the Commission.

(8) A meeting convened in terms of this Regulation shall be conducted in a manner considered expedient by the Executive Director or officer of the Commission.

At any time during a merger investigation, the Commission may-
(a) informally request additional information from a party to a merger but such request shall not have the effect of extending the Commission’s investigation period as envisaged by Regulation 16; and
(b) require a party to a merger to provide additional information, at any time, as provided in Regulation 22 by serving on the party a request in Form 5, setting out the specific information that the Commission requires.

(I) A merger application must be accompanied by a certificate of completeness in Form 6 in the form of an affidavit attested to by an officer of the company filing the application certifying the accuracy and completeness of the information submitted to the Commission in terms of the Act and the Regulations.

(2) If, at any time, the Commission believes that a document filed in respect of a merger contains false or misleading information, the Commission may require the party that filed the information to submit the correct information, which must be accompanied by an affidavit from the officer who attested to the certificate of completeness setting out –
(a) why the original information was false or misleading; and
(b) the extent to which he has satisfied himself that the new information is complete, correct, reliable and free from any errors or deficiencies.

(3) Where the Commission issues a notice in terms of sub-regulation (2) above, the parties to the merger will not have fulfilled their notification requirements until corrected information has been filed to the satisfaction of the Commission even if the initial investigation period or an extension had already begun.

(4) A party aggrieved by the issuing of Form 6 may appeal the Commission’s decision to the Board, of which the Chairperson of the Board shall, within seven (7) days of receipt of such appeal, refer it to the Technical Committee of the Board who shall advise accordingly, with a subsequent and final appeal to the Board of Commissioners.

(I) The party that filed the merger application may notify the Commission using Form 7 that it has abandoned the proposed merger and has no intention of implementing it.

(2) The notice of abandonment shall be accompanied by a certificate of consent from the other party to the transaction confirming that the merger has been abandoned.

(3) Where there is disagreement between the parties, the Commission may continue with its investigation and both parties shall be obliged to comply with all the requirements of the Act and the Regulations in respect of the submission of any information that the Commission may require.

(4) None of the parties to the merger may re-file the abandoned merger within a period of twelve months from the date of abandonment.

(5) The Commission may in its discretion refund the filing fee or part thereof to the party that paid the fee.

(1) A third party may, at their own initiative or at the request of the Commission, make submissions to the Commission in confidence or not, in relation to a merger application.

(2) Third party comments to a merger application may be done orally or in writing to the Commission.

(3) Where the Commission receives anonymous submissions, such submission may be confirmed with other relevant third parties before it is used in the assessment of the merger application.

(4) All submissions against the merger shall, within seven (7) days of their receipt, be availed to the parties to the merger for their comments, of which the parties shall respond accordingly within fourteen (14) days after receipt of same.

(1) The Commission may within the time period set out in this Regulation and after complying with the other provisions of this Regulation revoke a decision authorizing the implementation of a merger if –
(a) the decision was based on materially incorrect or misleading information for which a party to the merger is responsible; or
(b) a condition attached to the authorization of the merger that is material to the implementation is not complied with.

(2) Where the Commission relies on sub-regulation (I )(a) as a basis for the revocation, it may revoke its decision within three years from the date of authorization.

(3) Where the Commission relies on sub-regulation (I)(b) as a basis for the revocation, it may revoke its decision within twelve months from the last day on which the merging parties should have fully complied with the authorization conditions.

(4) If the Commission intends to revoke the authorization of a merger under sub-regulation (I )(a) it shall-
(a) give notice in writing of the proposed revocation to the merging parties and interveners, if any; and
(b) call upon such persons to submit to the Commission, within ten (10) days after receipt of the notice, any representations which they wish to make in respect of the proposed revocation.

(5) If the Commission intends to revoke the authorization of a merger under sub regulation (I)(b), it must first afford the merging parties the opportunity to submit a plan to remedy the breach of the conditions within ten (10) days of receipt of the notice of revocation.

(6) If any of the merging parties submits a plan to the Commission in terms of sub-regulation (5), the Commission may either –
(a) accept the proposed plan; or
(b) reject the proposed plan and present the merging parties with a proposed plan of its own to which the parties shall respond in writing within ten (10) days of receipt thereof.

(7) If no response is received from the merging parties within the ten (10) days set out in sub regulation (6)(b), or the parties reject the Commission’s proposed plan, the Commission’s initial authorization of the merger will be revoked from the date when the ten (10) days expire or the date when the parties reject the Commission’s proposed plan, whichever comes first.

. (I) On receipt of the Executive Director’s report in respect of any merger, the Commission may, if it considers it appropriate, direct that an oral hearing be held in relation to a proposed merger.

(2) If the Commission determines that an oral hearing shall be held, it shall before the expiry of the investigation period, give reasonable notice to the enterprises involved –
(a) convening the oral hearing;
(b) specifying the date, time and place for the holding of the hearing; and
(c) stipulating the matters to be considered at the hearing.

(3) A party to the merger or a third party interested in the merger by virtue of information supplied to the Commission in relation to the merger may request an oral hearing once the Executive Director has submitted his report to the Commission but before the Commission has taken its decision in relation to the merger. A party requesting an oral hearing shall do so in writing setting out –
(a) the issues to be dealt with during the oral hearing;
(b) the reasons why written submissions will be insufficient to deal with the issues in its written request; and
(c) the reasons why an oral hearing with the investigation team was not requested before the conclusion of the investigation.

(4) The Chairperson, in consultation with the Board, may determine the procedure for the oral hearing, including the number of people who may speak on behalf of the parties and the length of time they may take to address the Commission.

(5) The Commission may in its discretion grant or reject the request for an oral hearing.

(6) The Commission’s decision shall be final.

(7) In the case where the Commission agrees to an oral hearing, the Commission may conduct the hearing in public or in camera-
(a) in an inquisitorial manner;
(b) as expeditiously as possible; and
(c) in accordance with the principles of fairness and natural justice.

(I) The Chairperson of the Commission may, in consultation with the Executive Director, in writing issue an invitation to participate in the deliberations of the Commission in terms of section 14(9) of the Act.

(2) The Chairperson’s invitation envisaged in sub-regulation (I) shall be preceded by a Commission resolution adopted in a properly constituted meeting.

(3) The Chairperson’s invitation letter shall specify –
(a) the duration of the invitation;
(b) the specific issues in respect of which the invitee’s expertise and specialist knowledge is sought; and
(c) that none of the parties to the issues in question object to the invitee’s participation in the Commission’s deliberations; or
(d) if objections were initially received, that these have since been resolved or overruled by the Chairperson.

(4) An acceptance of an invitation to participate in the Commission’s deliberations must be in writing and shall be delivered prior to the commencement of the deliberations. The acceptance letter shall, among other things, confirm that –
(a) the invitee accepts the invitation on the terms set out in the Chairperson’s invitation letter;
(b) the invitee has signed a confidentiality undertaking with respect to the Commission and any other party whose confidential information would be made available to him; and
(c) to the best of his knowledge, there is no conflict of interest that may preclude him from discharging his responsibilities in respect of the invitation.

(5) A person nominated by the Minister to attend the deliberations of the Commission in terms of Section 14(9) of the Act shall be invited by the Chairperson in terms of this Regulation and the person shall, for all intents and purposes, be regarded as an invitee of the Commission. All the provisions of this Regulation shall be applicable to the Minister’s nominee.

(1) A committee appointed by the Commission in terms of section 15 of the Act may be assigned the responsibility of assisting the Commission with one or more of the following –
(a) the conduct of sector specific studies;
(b) the review of the Act and any other legislation;
(c) the review of any issues concerning any regulations;
(d) the review of any operational issues, including the performance, recruitment and retention of employees; and
(e) the review and/or performance of any other function conferred upon the Commission in terms of section II of the Act.

(2) A committee appointed in terms of section I5 of the Act shall include at least one member of the Commission who shall be the ex officio chairperson of the committee unless otherwise as directed by the Commission.

(3) All committees established in terms of section I5 of the Act shall be appointed by the Commission in a general meeting convened for that purpose.

(4) In appointing the committees, the Commission shall take into account interests not already adequately represented within the Commission as well as the specialist knowledge, expertise and experience required to properly deal with the issues to be assigned to the committee.

(5) Each committee shall be appointed for a specific task, which must be conducted and finalized within a reasonable time from the date of appointment, unless otherwise authorized by the Minister.

(6) The appointment of members of the committees shall be by a show of hands on the basis of a simple majority from a list of candidates compiled by the Executive Director in consultation with the Chairperson of the Commission.

(7) The Commission or a sub-committee duly constituted shall draw up the terms of reference of the committee before the commencement of their mandate.

(8) Each committee shall produce a written report, which deals with the issues referred to it at the conclusion of its mandate.

(9) The Chairperson of the Commission may, from time to time, invite the chairperson of any committee to give regular updates to the Commission in respect of the work done. At the conclusion of the committee’s mandate, the chairperson of the committee and members of the committee shall present their findings and recommendations to the Commission at a meeting convened for this purpose.

(10) The Commission shall be guided by the findings of the committee in resolving the issue that was handled by the committee, unless compelling reasons such as a serious error in judgment on the part of the committee preclude the Commission from implementing the committee’s report without properly motivated modifications.

(1) The Commission shall publish in its website, if any, a summary of its decisions on the first day of every quarter, or, if the first day of the quarter falls on a weekend or a holiday, on the next business day, containing the following information –
(a) the names of the parties;
(b) the industries in which they are involved;
(c) the issues that were brought before the Commission for determination;
(d) the Commission’s decision; and
(e) the reasons, in summary form, of the Commission’s decision.

(2) A person interested in any of the matters published by the Commission may approach the Commission to copy any documents from the Commission’s files that are not covered by confidentiality claims, subject to the payment of the appropriate fee.

(3) A request submitted to the Commission in respect of this Regulation shall be satisfied within seven days from the date of filing of the request.

(1) The Commission may, in terms of section 11 (2)(i) of the Act, at any time, invite any regulatory authority to participate in its proceedings if it is of the opinion that such regulatory authority possesses specialist knowledge and enjoys regulatory oversight in respect of an industry that is the subject of an investigation by the Commission.

(2) An invitation to participate in an investigation in terms of this Regulation shall be issued in writing by the Executive Director specifying –
(a) the names of the parties before the Commission;
(b) the issues under investigation and/or consideration; and
(c) the specific assistance sought from the regulatory authority.

(3) A submission made by a regulatory authority shall not be binding on the Commission where it concerns the interpretation and/or enforcement of the principles of the Act.

(4) The Commission shall, review any legislation or regulations administered by any regulatory authority with a view to harmonize them with the Competition Act and it’s Regulations –

(a) when conduction a review in terms of section 11 (2)(i) of the Act, the Executive Director shall notify the head of a regulatory authority that may have an interest in the review. The Executive Director’s notice shall-
(i) identify the provisions of the Act or regulations which are the subject of the Commission’s review;
(ii) the impact that these provisions are perceived to have on competition in the sector; and
(iii) invite the regulatory authority to suggest any possible solutions to the issues under review;

(c) a regulatory authority notified of a review in terms of this regulation may submit information or representations to the Commission before the finalization of the review;

(d) a regulatory authority that initiates a review of its own legislation shall notify the Commission of its intention to do so where –
(i) the contemplated review is anticipated to have implications on the enforcement of the Competition Act in that sector; or
(ii) the nature of the sector justifies, in the regulatory authority’s view, a departure from normal competition principles;

(e) an invitation in terms of this sub-regulation shall be directed to the Executive Director of the Commission;

(f) the Commission shall, through the Executive Director, advise the regulatory authority of its views regarding the proposed review;

(g) a regulatory authority furnished with the Commission’s views in relation to its proposed review of its legislation shall formulate its proposed amendments in a manner consistent with the views of the Commission.

(I) Where the Commission perceives that the market situation in which a person is involved requires specific market behavior from such person which may only be effective monitored through undertakings, the Commission may require such person to provide undertakings under section 11(1), 11 (2)(i), 35, 36 and 37(1) of the Act.

(2) When providing undertakings, the person shall ensure that the undertakings are –
(a) relevant to the competition and unfair trading issues that are of concern to the Commission;
(b) practical;
(c) self-regulatory -such as would not require the Commission’s constant vigilance; and
(d) do not impose obligations on the Commission.

(3) The Commission may also require that such undertaking be signed between the Commission and the person/s through a Memorandum of Understanding which shall detail information such as, but not limited to the following –
(a) the name of the person giving the undertakings as well as that of the Commission;
(b) the preamble i.e. background information that triggered the request for undertakings;
(c) the actual undertakings;
(d) a declaration that the Commission shall make the undertakings public;
(e) signatories of the person and the corporate seal thereof, if applicable, but which seal shall not have legal consequences if not affixed as long as the corporate representatives at director level have signed; and
(f) a Commission representative’s signature and the seal of the Commission.

(4) Depending on the gravity of the matter to the Commission, a Competition and Fair Trading Compliance Program may also be proposed by the Commission, which compliance program shall contain the information as in the Memorandum of Undertakings but also include information such as but not limited to the following –
(a) purpose of the compliance program;
(b) details of how the person shall comply with the provision of the Act; and
(c) a name and position of a senior officer in the entity who shall be responsible for ensuring compliance issues.