ASIC Class Order [CO 00/178]
Foreign securities: publishing of reports and notices
This instrument has effect under subsection 741(1) of the Corporations Act 2001.
This compilation was prepared on 4 October 2005 taking into account amendments up to [CO 02/301].
Prepared by the Australian Securities and Investments Commission.
Australian Securities and Investments Commission
Corporations Act 2001 — Subsection 741(1) — Exemption
Pursuant to subsection 741(1) of the Corporations Act 2001 (the “Act”), the Australian Securities and Investments Commission (“ASIC”) hereby exempts the class of persons specified in Schedule A (each an “author”) in the case specified in Schedule B from subsection 734(2) of the Act on condition that if a person whose address is, to the knowledge of the author, in this jurisdiction responds to the advertisement or statement by applying for the securities referred to in that advertisement or statement the author does not issue or procure the issue to that person of the securities applied for unless that person is first provided with a copy of a disclosure document which complies with the requirements of the Act and which has been lodged with ASIC.
SCHEDULE A
A person who, as the author of an advertisement or statement in relation to securities of a foreign corporation or proposed foreign corporation, causes or authorises a publication of the advertisement or statement which, but for this exemption, would be prohibited by subsection 734(2) of the Act.
SCHEDULE B
An advertisement or statement which:
(a) is published in a newspaper or periodical:
(i) which is produced outside this jurisdiction;
(ii) substantially all of the circulation of which is outside this jurisdiction; and
(iii) is not distributed in this jurisdiction by or on behalf of the author or whether directly or indirectly at the instigation of or by arrangement with the author; and
(b) complies with any legislative requirements and the operating rules of the financial market applicable to such advertisements or statements in the place in which the newspaper or periodical is produced.
Note: In this instrument, “this jurisdiction” means Australia: Act, ss 5 and 9 (definition of “this jurisdiction”).
Notes to ASIC Class Order [CO 00/178]
Note 1
ASIC Class Order [CO 00/178] (in force under subsection 741(1) of the Corporations Act 2001) as shown in this compilation comprises that Class Order amended as indicated in the Tables below.
Table of Instruments
Instrument number | Date of making or FRLI registration | Date of commencement | Application, saving or transitional provisions |
[CO 00/178] | 13/2/2000 | 13/2/2000 | - |
[CO 02/301] | 8/3/2002 | 11/3/2002 | - |
Table of Amendments
ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted
Provision affected | How affected |
Introductory para | am. [CO 02/301] |
Schedule B | am. [CO 02/301] |
Schedule B para (b) | rs. [CO 02/301] |
Class order | am. [CO 02/301] |
Overview
The ASIC Class Order [CO 00/178], enacted under subsection 741(1) of the Corporations Act 2001, was introduced to address the issue of foreign securities advertisements being published in Australian media without proper disclosure of required information. This legislative instrument was created by the Australian Securities and Investments Commission (ASIC) to provide an exemption from certain prohibitions in the Act, with a view to ensuring that Australian investors receive adequate information before applying for foreign securities. The policy objective is to protect investors by requiring that they be provided with a compliant disclosure document before any securities are issued. This is particularly relevant when advertisements for foreign securities are published in Australian newspapers or periodicals that are produced outside Australia, ensuring that the necessary protections are not bypassed by jurisdictional limitations.
Scope and Application
The ASIC Class Order [CO 00/178], operating under subsection 741(1) of the Corporations Act 2001, pertains to individuals or entities, referred to as "authors," who publish advertisements or statements concerning securities of foreign corporations or proposed foreign corporations. This Class Order specifically exempts such authors from the prohibitions under subsection 734(2) of the Act, provided that if an Australian resident responds to the advertisement or statement by applying for the securities, the author must first ensure the applicant receives a copy of a disclosure document that meets the requirements of the Act and has been lodged with ASIC. The exemption applies to advertisements or statements published in newspapers or periodicals produced outside Australia, substantially circulated outside Australia, and not distributed in Australia by or on behalf of the author, or at the author's instigation or arrangement. Furthermore, these publications must comply with the legislative requirements and the operating rules of the financial market in the jurisdiction where the newspaper or periodical is produced. This Class Order, which came into effect on 13 February 2000, has been amended since its inception, with the most recent amendment, [CO 02/301], coming into effect on 11 March 2002.
Key Provisions
The ASIC Class Order [CO 00/178] provides an exemption from certain provisions of the Corporations Act 2001 (the “Act”) for authors of advertisements or statements about foreign securities. Specifically, Section 741(1) of the Act allows the Australian Securities and Investments Commission (ASIC) to exempt certain classes of people from certain subsections of the Act, provided certain conditions are met. Under this order, authors of advertisements or statements about foreign securities are exempt from subsection 734(2) of the Act, provided that if a person in Australia responds to the advertisement or statement by applying for the securities, the author must first provide that person with a disclosure document that complies with the Act and has been lodged with ASIC (Section 734(2)). The exemptions apply to advertisements or statements published in newspapers or periodicals produced outside Australia, where the circulation is substantially outside Australia, and are not distributed in Australia by or on behalf of the author or at the instigation of or by arrangement with the author, provided they comply with the relevant legislative requirements and operating rules of the financial market in the place where the newspaper or periodical is produced (Schedule B).
Authors of advertisements or statements about foreign securities must ensure that if a person in Australia responds to their advertisement or statement by applying for the securities, they provide that person with a disclosure document that complies with the Act and has been lodged with ASIC. This obligation is intended to ensure that investors in Australia have access to the same level of information about foreign securities as they would for domestic securities, and that they are not misled by the advertisement or statement. Authors must also ensure that their advertisements or statements comply with any legislative requirements and the operating rules of the financial market in the place where the newspaper or periodical is produced.
Failure to comply with the obligations set out in the ASIC Class Order [CO 00/178] may result in civil or criminal consequences. The maximum penalties for breaches of the Act are set out in the Act itself, and may include fines, imprisonment, or both. For example, under Section 1311 of the Act, a person who contravenes a civil penalty provision may be liable for a penalty of up to $202,000 for a corporation and $42,400 for an individual. Under Section 1317 of the Act, a person who commits an offence against a criminal penalty provision may be liable for a penalty of up to 10 years imprisonment for an individual and 500 penalty units for a corporation. The specific penalties applicable to a particular breach will depend on the nature and circumstances of the breach.