ASIC Class Order [CO 00/0175]

Overview

ASIC Class Order [CO 00/175], enacted in 2000 under the authority of subsection 741(1) of the Corporations Act 2001, addresses the need for regulatory clarity concerning pre-prospectus roadshow presentations. This legislative instrument was prepared by the Australian Securities and Investments Commission (ASIC) and is aimed at exempting certain corporations from specific provisions within Parts 6D.2 and 6D.3 of the Act. The primary objective is to facilitate more streamlined interactions between companies and targeted financial sector professionals during the pre-prospectus phase, ensuring that these communications remain within the bounds of regulatory requirements while fostering efficient market practices. This order specifically exempts corporations from certain disclosure obligations when making presentations that refer to or draw the attention of regulated principals, exempt dealers, exempt investment advisers, or persons holding an Australian financial services licence, thereby ensuring that these interactions are appropriately managed within the legislative framework.

Scope and Application

ASIC Class Order [CO 00/175], which operates under subsection 741(1) of the Corporations Act 2001, provides an exemption for specified persons, namely corporations, from certain parts of the Act when conducting pre-prospectus roadshow presentations. These presentations may refer to or draw the attention of regulated principals, exempt dealers, exempt investment advisers, or individuals holding an Australian financial services licence and their representatives to an intended offer of securities for issue or sale, provided the offer is to be made by a disclosure document to be lodged with ASIC and the securities are to be quoted on a financial market operated by the Australian Stock Exchange Limited. The exemption does not apply to any other persons. This Class Order is designed to streamline the process for corporations that are preparing to offer securities, while still maintaining regulatory oversight through the exemption conditions outlined in the schedules. The Class Order's application is subject to amendments, as evidenced by its amendment history, ensuring it remains relevant and effective in the evolving financial services landscape.

Key Provisions

The ASIC Class Order [CO 00/175] provides an exemption under subsection 741(1) of the Corporations Act 2001 for certain persons and circumstances. Specifically, it exempts a class of persons, namely corporations, from the provisions of Parts 6D.2 and 6D.3 of the Act, provided that their actions fall within the parameters outlined in Schedule B. This means that if a corporation engages in activities that refer or draw attention to specific individuals, such as regulated principals, exempt dealers, or persons holding an Australian financial services licence, during a transition period, and these activities are directly or indirectly related to an intended offer of securities to be quoted on the Australian Stock Exchange, they are exempt from certain disclosure requirements. The obligations imposed by this Class Order are primarily on corporations that fall within the exemption. They must ensure that their actions, particularly any pre-prospectus roadshow presentations or related activities, comply with the conditions set out in Schedule B. This includes being mindful of the types of individuals they are communicating with and ensuring that these communications are within the exempted scope. The exemptions are contingent on the corporation not directing their activities towards any broader audience beyond those specified in Schedule B. In terms of consequences for breach, the Class Order does not explicitly state penalties or consequences for non-compliance. However, any actions that fall outside the exemption criteria may still be subject to the general provisions of the Corporations Act 2001. This means that any failure to comply with the broader disclosure requirements of Parts 6D.2 and 6D.3 could result in civil or criminal penalties under the Act. Such penalties could include fines and, in more severe cases, imprisonment, depending on the nature and severity of the breach. Therefore, while the Class Order provides a specific exemption, it is crucial for corporations to adhere strictly to its conditions to avoid falling under the purview of the general Act provisions.