Here is a chronology according to Chessbase.com:-
San Luis: The prize-giving ceremony
FIDE to charge $1 million for a presidential bid
'Another dramatic development is that FIDE will permit anyone to challenge the current World Chess Champion Veselin Topalov, provided he or she is rated 2700 or higher and is able to put up the prize fund – including a 20% fee for FIDE. Apparently the regular world championship cycle is unaffected by this rule. If Topalov should lose his title in this kind of free challenge he will simply be replaced by the new champion in the 2007 eight-player world championship.'
Kirsan reveals details of Topalov-Kramnik match
'FIDE President Kirsan Ilyumzhinov has revealed further details on the reunification match planned for Elista in September. All contracts have been signed, the prize fund of one million dollars will be split, whatever the outcome of the match, and the loser will have to start in the next cycle from scratch. Sport Express report.'
'Topalov-Kramnik match to take place in Elista, "Tournament of Eight" in Mexico'
Topalov to play Radjabov for the world title
'Last December we reported that the FIDE president Kirsan Ilyumzhinov had proposed that any grandmaster with an Elo rating of over 2700 could challenge the FIDE world champion Veselin Topalov – if he could put up at least $1 million in prize money. Azerbaijani talent Teimour Radjabov can, the match is on.'
Elista Tiebreak: Vladimir Kramnik wins unified title!
- 2006-12-15: Danailov, Topalov challenge Kramnik 'There is a FIDE regulation that states that any player with a rating of 2700 or higher can issue a challenge for a match of 12 games for the World Championship title against the incumbent World Champion. Condition: the challenger's side has to provide the prize fund of one million dollars. Now Silvio Danailov, the manager of former FIDE world champion Veselin Topalov has issued the challenge.'
I found the FIDE regulations on Archive.org: Rules & regulations for a World Chess Championship Match within the cycle 2005-2007.
1.1 A World Chess Championship Match between the World Champion and a challenger who was either an ex-World champion or has a minimum FIDE rating of 2700, can be organized under specific conditions as described in articles 2.1, 2.2, 2.3 and 2.4 of these regulations. This World Chess Championship match shall be organised in 2006/07 and represent an integral part of the World Chess Championship regulations for the cycle 2005-2007.
1.2 Governing Body: the World Chess Federation (FIDE). For the purpose of creating the regulations, communicating with the players and negotiating with the organisers, the FIDE President has nominated a committee, hereby called the World Chess Championship Committee (WCCC).
1.3 FIDE retains all commercial and media rights of the World Chess Championship match, including internet rights. These rights can be granted by FIDE to the organizer(s) of the event.
2. Qualification for the World Chess Championship Match
2.1 A player with a current FIDE rating of 2700 and above, as well as an ex-World Champion, can issue a challenge for a match of 12 games for the World Championship title against the incumbent World Champion on the following conditions:
a. The challenger’s side shall provide an amount of 1,000,000 (one million) USD as guaranteed prize money for the incumbent World Champion, net and not subject to any further deductions such as tax. The challenger’s side should also provide the exact total prize fund of the event (World Champion and challenger), net and not subject to any further deductions such as tax.
b. At the same time, the challenger’s side shall guarantee the organisational budget of the match, including a contribution fee to FIDE in the amount of 20% above and over of the total prize fund, net and not subject to any further deductions such as tax.
c. If the challenger wins the World Championship Match and becomes the new World Champion, then his previous status in the World Championship Cycle 2005-2007 (World Cup or Candidates or World Championship Tournament qualifier, etc.) passes to the loser of the World Championship Match. This would not be a replacement but a switch of status between the challenger and the World Champion. The winner of the World Championship Match shall be obliged to defend his title in the World Chess Championship Tournament 2007.
d. Should the above-mentioned provisions be fulfilled, the World Champion is obliged to play the match.
2.2 In case the challenger’s side provides, as guaranteed prize money for the incumbent World Champion, an amount less than 1,000,000 (one million) USD but more than 500,000 (five hundred thousand) USD, the World Champion has the right to negotiate the proposal with the challenger and FIDE in order to decide whether to accept the challenge or refuse it. If the World Champion agrees to play the match, the challenger’s side shall be responsible for covering the organisational costs as well as a contribution fee to FIDE in the amount of 20% above and over of the total prize fund.
2.3 The match should be terminated at least six (6) months before the start of the World Championship Tournament, due to be held in September/October 2007.
2.4 The challenger’s side should present the bank guarantees, for the whole sums described in articles 2.1.a, 2.1.b and 2.2, at the same time as his proposal, after which FIDE shall organise the match within a 5-month period.
The tournament mentioned in section 2.3 would eventually be 2007 Mexico City (Anand 1st; IX-X 2007). Neither the Topalov - Radjabov match nor the Kramnik - Topalov rematch ever took place.