ASIC Class Order [CO 00/0843]

Overview

The ASIC Class Order [CO 00/843], introduced in 2000 under subsection 741(1) of the Corporations Act 2001, was enacted to provide relief concerning the exposure period for options over listed securities. The Australian Securities and Investments Commission (ASIC), the body responsible for enacting this legislation, aimed to facilitate smoother transactions involving options for securities quoted on prescribed financial markets. By exempting certain individuals from specific subsections of the Corporations Act, the Class Order streamlines the regulatory framework surrounding these financial instruments, ensuring that the disclosure requirements are met without unnecessary delays. The subsequent amendments, such as [CO 02/302], were made to refine and update the Class Order to reflect evolving market practices and regulatory needs.

Scope and Application

The ASIC Class Order [CO 00/843] applies to individuals or entities that offer options to acquire quoted securities under a disclosure document, effectively exempting them from certain provisions of the Corporations Act 2001. This exemption specifically relates to the acceptance of applications for, or the issue or transfer of, these options, thereby facilitating a smoother process for entities engaged in such transactions. The term “quoted securities” is defined to include securities that are in the same class as those quoted on a prescribed financial market at the time of lodgment of the disclosure document. This class order extends to any person offering such options, irrespective of their geographic location within Australia, provided the securities in question are those quoted on a recognised financial market. The order was initially introduced on 18 April 2000 and has since been amended, most notably by [CO 02/302] on 8 March 2002. The exemptions and stipulations set out in this class order are subject to the broader framework and regulations provided by the Corporations Act 2001, and any further clarification or specific application details are to be found within the legislative context of the Act.

Key Provisions

The ASIC Class Order [CO 00/843], in force under subsection 741(1) of the Corporations Act 2001, provides a specific exemption to certain entities offering options to acquire quoted securities. This exemption applies to the requirement under subsection 727(3) of the Act, which generally mandates a cooling-off period for the acceptance of an application for, or the issue or transfer of, options. Essentially, this Class Order allows those who offer options through a disclosure document to bypass the cooling-off period, facilitating quicker transactions. The Act imposes obligations on entities offering options to acquire quoted securities. They must comply with the disclosure requirements as outlined in the disclosure document. These documents must provide sufficient information to potential investors about the options being offered, ensuring that the investors are well-informed before making any decisions. Additionally, the securities offered must be of the same class as those quoted on a prescribed financial market at the time the disclosure document is lodged. Breaching the provisions of the ASIC Class Order [CO 00/843] could result in civil and criminal consequences. Under the Corporations Act 2001, significant penalties can be imposed for non-compliance. Civil penalties can include fines and, in severe cases, the suspension or revocation of an entity’s financial services licence. Criminal penalties may also apply, potentially resulting in fines or imprisonment for individuals who knowingly contravene the Act’s requirements. The exact penalties depend on the nature and severity of the breach, with maximum penalties specified in relevant sections of the Act.