ASIC Class Order [CO 00/0180]

Overview

ASIC Class Order [CO 00/180], enacted under section 741(1) of the Corporations Act 2001, was introduced to address a gap in the legislation concerning the publication of notices and reports by foreign corporations whose securities are traded on approved foreign markets. This instrument exempts certain persons from the restrictions imposed by subsection 734(2) of the Act, allowing them to publish specific notices and reports without contravening the law. The order was prepared by the Australian Securities and Investments Commission (ASIC) and is designed to facilitate transparency and compliance in the reporting practices of foreign corporations whose securities are quoted on designated international exchanges. The policy objective is to ensure that investors have access to relevant information about foreign securities while maintaining the integrity of the Australian financial markets. The class order applies to notices and reports related to securities quoted on approved markets such as the New York Stock Exchange, the London Stock Exchange, and the Tokyo Stock Exchange, among others.

Scope and Application

ASIC Class Order [CO 00/180], operating under section 741(1) of the Corporations Act 2001, provides an exemption from the prohibitions under section 734(2) of the Act for certain persons publishing notices or reports in relation to securities of foreign corporations or proposed foreign corporations. This exemption applies to individuals or entities that publish notices or reports that pertain to securities quoted on an approved foreign market, as defined in the Class Order, which includes significant markets such as the New York Stock Exchange, London Stock Exchange, and Tokyo Stock Exchange, among others. The exemption is specifically targeted at notices or reports issued by the foreign corporation or its officers regarding the corporation's affairs or notices of general meetings of the corporation, ensuring that these communications do not breach Australian securities laws. This instrument applies on a national level across Australia, facilitating the smooth dissemination of financial information between Australian entities and their foreign counterparts without unnecessary legal impediments.

Key Provisions

The ASIC Class Order [CO 00/180] provides an exemption under subsection 741(1) of the Corporations Act 2001, allowing certain persons to publish notices or reports in relation to securities of foreign corporations without contravening subsection 734(2) of the Act. Specifically, the exemption applies to notices or reports that relate to an offer of securities of a body quoted on an approved foreign market (Schedule B(a)), or to a general meeting of such a body (Schedule B(b)). The approved foreign markets are listed in the Interpretation section of the Class Order and include major global exchanges such as the New York Stock Exchange and the London Stock Exchange. Entities or individuals falling under the exemption in Schedule A are permitted to publish notices or reports concerning foreign securities, provided these relate to securities quoted on the specified approved foreign markets. This includes reports by the foreign body or its officers regarding the body’s affairs, or notices concerning general meetings of such bodies. The Class Order ensures that such publications do not breach the prohibitions under subsection 734(2) of the Act, which otherwise restrict the publication of certain information relating to foreign securities. The Class Order imposes several obligations on the parties it governs. Firstly, it requires that any notices or reports published must pertain specifically to securities quoted on an approved foreign market, as outlined in the Interpretation section. Secondly, it mandates that the notices or reports must either relate to an offer of securities by the foreign corporation or consist solely of a report of a general meeting of such corporation. Failure to adhere to these obligations could result in the exemption not applying, potentially leading to contraventions of the Corporations Act. For breaches of the Corporations Act 2001, including non-compliance with this Class Order, various civil and criminal penalties may apply. Civil penalties can include fines and, in severe cases, imprisonment. Under the Corporations Act, an individual officer or employee may face a penalty of up to $210,000 for a serious contravention. Additionally, corporations may be subject to fines of up to $1,050,000 for similar breaches. Criminal penalties could also be imposed depending on the nature and severity of the contravention, with potential imprisonment terms for individuals involved.