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TKO 2.7 Guidance

1. TKO Rule 2.7.1 and TKO Rule 2.7.2 require the Target's adviser to have a sufficient degree of independence from the Target to ensure the advice given is properly objective. In certain circumstances it may not be appropriate for a Person who has had a recent advisory relationship with a Bidder to give advice to a Target. Additionally, the DFSA would consider a Person who has a significant interest in or financial connection with either a Bidder or the Target of such a kind as to create a conflict of interest.
2. The requirement for competent independent advice is of particular importance where the Bid is a management buyout or similar transaction or is being made by the existing controlling shareholder or group of shareholders. In any such cases, the independence of the adviser must be beyond question.
3. The DFSA should be consulted if there is any potential of a contravention of these Rules TKO 2.7.1 and TKO 2.7.2. The DFSA may waive or modify the application of the Rules if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these Rules.

Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]