ASIC Class Order [CO 02/0254]

Overview

The Australian Securities and Investments Commission Corporations Act 2001 was enacted to provide a comprehensive regulatory framework for financial markets and entities in Australia. This legislation was introduced to address the need for a unified and modern legal structure to replace the previous Corporations Law, ensuring that the regulatory environment could effectively manage the complexities of contemporary financial activities. The Act was passed by the Australian Parliament and its policy objective is to protect investors and the financial system by ensuring that companies and financial markets operate in a fair, informed, and efficient manner. The legislative instrument, issued under the authority of the Financial Services Reform Act 2001, varies certain class orders to align with the new Corporations Act, reflecting the transition from the old legal framework to the updated statutory regime.

Scope and Application

Under the Corporations Act 2001, and as specified in Subsection 741(1) of the Act, the Australian Securities and Investments Commission has amended Class Order [00/214] to update references to the Corporations Law with the Corporations Act 2001. This variation applies to offers made by entities listed on approved foreign markets, which include exchanges such as the American Stock Exchange, London Stock Exchange, and others, provided securities are quoted on the main board. The changes ensure that offers are personal to the offeree and not transferable, and that any required documentation complies with the legislative requirements and operating rules of the respective foreign jurisdictions. The amendment also specifies that references to Australian law in the order are to be read as references to the law of the jurisdiction, which is defined as Australia under sections 5 and 9 of the Act. This legislative instrument extends to all approved foreign markets listed in the order, ensuring consistency and compliance with the legislative requirements of those markets.

Key Provisions

The Australian Securities and Investments Commission Corporations Act 2001, as varied by subsection 741(1), modifies Class Order [00/214] to adapt to the legislative transition from the former Corporations Law to the current Corporations Act 2001. The key changes include the substitution of references from "Corporations Law" to "Corporations Act 2001" throughout the document, ensuring consistency with the new legislative framework. Additionally, the term "Australia" has been replaced with "this jurisdiction" in several instances to reflect the specific applicability of the order within Australia. A notable alteration is the substitution of "ASIC approved stock exchange" with "approved foreign market," broadening the scope to include international markets. The new paragraph (2) of Schedule B explicitly states that offers must be personal to the offeree and not transferable, a critical change for compliance purposes. The obligations imposed by these variations require entities and individuals governed by Class Order [00/214] to ensure that their offers and related documentation comply with the legislative requirements and operating rules of the approved foreign market where securities are quoted. This includes preparing documents that meet the continuous disclosure requirements as outlined in subsection 111AP(1) of the Act, and ensuring these documents adhere to the law of the jurisdiction where the foreign market operates. Furthermore, entities must verify that the securities are quoted on the main board of the approved foreign market, unless otherwise specified. Failure to comply with these provisions can lead to significant consequences. Although the specific penalties are not detailed in the subsection 741(1) variation, breaches of the Corporations Act 2001 generally attract substantial fines and, in severe cases, criminal penalties. The exact penalties depend on the nature and severity of the breach but can include fines for corporations up to $1.65 million and imprisonment for individuals up to five years, as stipulated in other sections of the Act. These provisions underscore the importance of meticulous adherence to the updated legislative requirements to avoid potential legal ramifications.