Australian Securities and Investments Commission
Corporations Act 2001 — Paragraph 1020F (1)(a) — Exemption
Under paragraph 1020F(1)(a) of the Corporations Act 2001 (the “Act”), the Australian Securities and Investments Commission (“ASIC”) hereby exempts the class of persons specified in Schedule A in the case specified in Schedule B from subsection 1018A(2) of the Act for so long as and on condition that:
1 the offeror does not in aggregate publish more than 5,000 advertisements and statements of the type referred to in Schedule B;
2 the offeror does not permit an organisation which it engages for the purpose of market research of the type permitted by this exemption (“the market research organisation”) to reveal to the offeror the names or addresses of any of the persons contacted for the purpose of such market research; and
3 the offeror provides, and permits the market research organisation to provide, information (“prescribed matter”) to which subsection 1018A(2) would apply in relation to a particular financial product or proposed financial product to persons only to the extent necessary to enable:
(a) the market research organisation to conduct market research as mentioned in Schedule B; and
(b) those persons to answer questions asked of them by the market research organisation for the purposes of that research.
SCHEDULE A
A corporation (an “offeror”) and an organisation in the business of conducting market research being an organisation engaged by (but not otherwise associated with) the offeror for the purpose of conducting market research (a “bona fide market research organisation”).
SCHEDULE B
An advertisement or statement which:
(a) is published by the offeror or the bona fide market research organisation;
(b) contains prescribed matter in relation to a financial product which is not available for acquisition by persons as retail clients but is reasonably likely to become so available (whether or not it is, or will also become, available for acquisition by persons as wholesale clients) by way of issue, or pursuant to sale offers to which section 1012C of the Act will apply, to be made pursuant to a Product Disclosure Statement which will state that the product is, or will be, able to be traded on a financial market operated by Australian Stock Exchange Limited; and
(c) is published solely for the purpose of market research by a bona fide market research organisation to ascertain:
(i) the number of copies of the Product Disclosure Statement which should be printed in order to meet demand;
(ii) to whom the intended offer should be marketed; and
(iii) the type and extent of marketing which should be undertaken.
Commencement
This instrument takes effect on the commencement of Schedule 1 to the Financial Services Reform Act 2001.
Dated the 6th day of February 2002
Signed by Brendan Byrne
as a delegate of the Australian Securities and Investments Commission
Overview
The Australian Securities and Investments Commission Corporations Act 2001, enacted by the Parliament of Australia, was introduced to address the need for comprehensive regulation of financial markets and corporate activities within Australia. This Act aims to maintain fair, efficient, and transparent financial markets and to protect consumers and investors by regulating financial products and services. Under the Act, the Australian Securities and Investments Commission (ASIC) is granted significant powers to enforce compliance and administer the Act's provisions. This legislative instrument, F2007B00294, issued under the authority of the Act, provides an exemption for certain market research activities. It allows specified corporations and bona fide market research organisations to disseminate limited information about financial products that are not yet available to retail clients but are expected to become so, provided that strict conditions are met regarding the number of advertisements and the confidentiality of participant information. This exemption facilitates market research essential for the strategic planning of financial product offerings, while ensuring that sensitive information is protected and that disclosures are limited to what is necessary for research purposes.
Scope and Application
Under the Corporations Act 2001, the Australian Securities and Investments Commission (ASIC) has provided an exemption under paragraph 1020F(1)(a) for a specific class of entities, namely corporations (referred to as "offerors") and bona fide market research organisations that are engaged by these corporations for market research purposes but are not otherwise associated with them. This exemption applies to the offerors and market research organisations when they publish advertisements and statements for market research regarding a financial product not yet available for retail acquisition but expected to be so, through means such as issuing via the Australian Stock Exchange Limited. This exemption is subject to several conditions, including a limit on the number of advertisements and statements published, restrictions on the disclosure of personal information gathered during the market research, and the provision of specific information only to the extent necessary for the research. This legislative instrument is effective as of the commencement of Schedule 1 to the Financial Services Reform Act 2001, and its application may be extended or refined through subordinate instruments as necessary.
Key Provisions
Under paragraph 1020F(1)(a) of the Corporations Act 2001 (the “Act”), the Australian Securities and Investments Commission (ASIC) has granted an exemption for a specified class of persons, as detailed in Schedule A, from the requirements of subsection 1018A(2) of the Act, provided certain conditions are met. Specifically, the exemption applies to a corporation (referred to as an “offeror”) and a bona fide market research organisation engaged by the offeror for market research purposes. The exemption is limited to advertisements and statements that fall within the scope of Schedule B.
The exemption imposes several obligations on the parties involved. Firstly, the offeror must ensure that they do not publish more than 5,000 advertisements and statements of the type specified in Schedule B in aggregate. Secondly, the offeror must ensure that the market research organisation they engage does not reveal the names or addresses of any individuals contacted for market research purposes to the offeror. Thirdly, the offeror, along with the market research organisation, must provide prescribed matter to individuals only to the extent necessary to enable the market research organisation to conduct the market research and for individuals to answer questions related to that research.
Breach of the conditions set forth in this exemption could result in significant consequences. While the legislation does not explicitly state the penalties for non-compliance, any failure to adhere to the specified conditions could potentially lead to enforcement actions by ASIC. Such actions could include fines, legal proceedings, or other regulatory sanctions aimed at ensuring compliance with the Act's requirements. Additionally, ongoing non-compliance could tarnish the reputation of the offeror and the market research organisation, potentially impacting their ability to conduct business effectively.