ASIC Class Order [CO 00/0185]

Overview

The ASIC Class Order [CO 00/185], enacted under section 741(1) of the Corporations Act 2001, aims to provide exemptions for certain foreign securities transactions within Australia. The Australian Securities and Investments Commission (ASIC) established this Class Order to streamline and facilitate cross-border securities offerings by foreign corporations, particularly those whose securities are quoted on approved international markets. The primary objective is to ensure that foreign issuers can offer securities to Australian investors under certain conditions, while maintaining necessary protections and compliance with Australian laws. The exemptions apply to foreign corporations with securities quoted on specified international markets and their associates, under specific conditions such as equal treatment of Australian offerees and compliance with the foreign market's rules.

Scope and Application

ASIC Class Order [CO 00/185], made under section 741(1) of the Corporations Act 2001, pertains to foreign securities and exempts specific classes of persons from certain provisions of the Act. The exemption applies to foreign corporations whose securities are quoted on an approved foreign market and their associates, provided the offer for the issue or sale of securities meets certain criteria. These criteria include the offer being part of a foreign takeover offer or scheme of arrangement, the securities being in a class quoted or expected to be quoted on an approved foreign market, and the terms and conditions of the offer being identical for Australian offerees as for other offerees. Additionally, Australian offerees must receive the same notices, documents, or information as other offerees, with any necessary modifications to comply with Australian legislation. The Class Order also requires compliance with the legislative requirements of the foreign market where the securities are quoted. The geographic reach of this Class Order is nationwide, as it applies to Australia, and it encompasses various industries and entities involved in the offer and sale of foreign securities. The approved foreign markets are limited to specific exchanges, including the American Stock Exchange, Borsa Italiana, Bursa Malaysia, and others. The Class Order has been amended several times since its inception, with the latest amendment noted in [CO 07/300]. Subordinate instruments may further extend or restrict the application of this Class Order.

Key Provisions

The ASIC Class Order [CO 00/185] provides exemptions from certain provisions of the Corporations Act 2001 for foreign corporations and their associates when offering or selling securities in Australia. According to section 741(1) of the Act, these exemptions apply to foreign corporations whose securities are quoted on an approved foreign market and not suspended, as well as their associates, under specific conditions (Schedule A). The exemptions cover offers for securities in connection with a foreign takeover offer or foreign scheme of arrangement, provided that the securities are in a class quoted on an approved foreign market, and that Australian offerees receive the same terms, conditions, notices, documents, and information as other offerees (Schedule B). The Act imposes several obligations on the parties governed by this Class Order. Foreign corporations and their associates must ensure that their offers for securities comply with all legislative requirements in the location of the approved foreign market and adhere to the operating rules of that market. Additionally, Australian offerees must be provided with the same notices, documents, and information as other offerees, with any necessary modifications to comply with Chapter 6D of the Act. The Class Order also mandates that foreign corporations and their associates must meet the criteria outlined in Schedule B for the exemptions to apply. Breach of the provisions in the Class Order may lead to various civil or criminal consequences. While the Class Order itself does not specify maximum penalties, breaches of the Corporations Act 2001 can result in substantial fines and imprisonment. For example, under section 13001 of the Act, individuals can be fined up to $210,000 or imprisoned for up to five years, or both, for misleading or deceptive conduct. Similarly, corporate entities can face fines of up to $1.05 million for breaches of the Act. These penalties underscore the importance of compliance with the requirements set out in the ASIC Class Order and the underlying Corporations Act 2001.