ASIC Class Order [CO 02/608]
Warrants: relief from PDS requirements for secondary sales
This instrument is made under subsection 1020F(1) of the Corporations Act 2001.
This compilation was prepared on 11 November 2015 taking into account amendments up to ASIC Corporations (Amendment) Instrument 2015/963 that commenced on 10 November 2015. See the table at the end of this class order.
Prepared by the Australian Securities and Investments Commission.
Australian Securities and Investments Commission
Corporations Act 2001 — Subsection 1020F(1) — Declaration
Under subsection 1020F(1) of the Corporations Act 2001 (the “Act”) the Australian Securities and Investments Commission hereby declares, for the avoidance of doubt, that Part 7.9 of the Act applies to ASX traded warrants and Chi-X traded warrants as if item 3 in the table in subsection 761E(3) of the Act were omitted.
Interpretation
In this instrument:
ASX operating rules means the operating rules of the licensed market operated by ASX Limited.
ASX traded warrant means a warrant (within the meaning of rule [7100] of the ASX operating rules) that has been admitted to trading status (within the meaning of rule [7100] of the ASX operating rules).
Chi-X operating rules means the operating rules of the licensed market operated by Chi-X Australia Pty Ltd.
Chi-X traded warrant means a warrant (within the meaning of rule 1.1 of the Chi-X operating rules) that has been admitted to quotation (within the meaning of rule 1.1 of the Chi-X operating rules).
Notes to ASIC Class Order [CO 02/608]
Note 1
ASIC Class Order [CO 02/608] (in force under s1020F(1) of the Corporations Act 2001) as shown in this compilation comprises that class order amended as indicated in the tables below.
Table of Instruments
Instrument number | Date of making or FRLI registration | Date of commencement | Application, saving or transitional provisions |
[CO 02/608] | 20/5/2002 (see F2006B11721) | 20/5/2002 | |
[CO 02/1297] | 22/11/2002 (see F2006B11722) | 22/11/2002 | - |
[CO 04/188] | 11/3/2004 (see F2006B11720) | 11/3/2004 | - |
2015/963 | 9/11/2015 (see F2015L01767) | 10/11/2015 | - |
Table of Amendments
ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted
Provision affected | How affected |
First para......... | am. 2015/963 |
Interpretation...... | rs. [CO 02/1297] am. [CO 04/188] rs. 2015/963 |
Overview
ASIC Class Order [CO 02/608], made in 2002 under subsection 1020F(1) of the Corporations Act 2001, aims to clarify and provide relief from the disclosure requirements of a Product Disclosure Statement (PDS) for secondary sales of certain warrants traded on the Australian Securities Exchange (ASX) and Chi-X Australia. This legislative instrument was enacted by the Australian Securities and Investments Commission (ASIC) to address the issue of unnecessary PDS requirements for the secondary sales of warrants, thereby streamlining the trading process for these financial instruments. The policy objective is to ensure that the disclosure obligations are proportionate and do not unduly burden market participants while maintaining investor protection. This class order has been subject to amendments, most recently in 2015, to keep it aligned with evolving market practices and regulatory requirements.
Scope and Application
ASIC Class Order [CO 02/608], made under subsection 1020F(1) of the Corporations Act 2001, pertains specifically to ASX traded warrants and Chi-X traded warrants, clarifying that Part 7.9 of the Act applies to these warrants as though a particular item in subsection 761E(3) were omitted. This means that certain disclosure requirements under the Act do not apply to these warrants, providing relief from the obligations that would otherwise apply to the preparation and distribution of Product Disclosure Statements (PDS) for secondary sales. The Class Order applies to warrants admitted to trading on the ASX and Chi-X markets, which are defined within the operating rules of these respective exchanges. It is a Commonwealth instrument, extending its application across Australia, and aims to streamline the regulatory environment for these financial instruments. The order does not specify exclusions or thresholds but operates under the broader framework of the Corporations Act 2001, with potential for further specification or amendment through subordinate instruments.
Key Provisions
The ASIC Class Order [CO 02/608], made under the Corporations Act 2001, specifies that Part 7.9 of the Act, which relates to the disclosure of a prospectus (PDS), applies to ASX traded warrants and Chi-X traded warrants as if item 3 in the table in subsection 761E(3) of the Act were omitted (subsection 1020F(1)). This means that secondary sales of these warrants are exempt from the PDS requirements, streamlining the process for investors looking to trade these securities.
Entities governed by this Act, such as ASX and Chi-X, must ensure that their operating rules comply with this class order. This involves recognising that secondary sales of the specified warrants do not necessitate the preparation and distribution of a prospectus, thereby allowing for more efficient market transactions. The warrants themselves must be admitted to trading status on ASX or to quotation on Chi-X, as defined by the respective operating rules.
Failure to comply with the provisions of this class order may result in legal consequences. The Australian Securities and Investments Commission (ASIC) may take action against entities that do not adhere to the relief from PDS requirements for secondary sales. Although the specific penalties for non-compliance are not detailed in the class order, breaches of the Corporations Act can generally result in significant fines and potential criminal charges for individuals responsible for the oversight of compliance. The exact penalties would depend on the nature and severity of the breach, as well as any applicable provisions within the broader Corporations Act framework.