Overview

The Australian Securities and Investments Commission Corporations Act 2001, enacted by the Parliament of Australia, addresses the need to clarify and regulate the relationship between Call Warrant issuers and holders to ensure transparency and compliance with securities laws. This legislative instrument revokes Class Order [00/452] under sections 655A and 673 of the Corporations Act 2001 and declares that Chapters 6 and 6C of the Act apply to the class of persons described in Schedule A, specifically in relation to the calculation of relevant interests, voting power, or substantial holdings where the Offering Circular or Product Disclosure Statement for the Call Warrant indicates the application of this Class Order. The policy objective is to prevent undue association between Call Warrant issuers and holders, ensuring that control over voting or disposal of securities does not create an unwarranted association unless and until the Call Warrant expires.

Scope and Application

The Australian Securities and Investments Commission (ASIC) has revoked Class Order [00/452] under sections 655A and 673 of the Corporations Act 2001. Simultaneously, ASIC has declared that Chapters 6 and 6C of the Act apply to a specific class of persons as detailed in Schedule A. This application occurs in specific circumstances referenced in Schedule B, which involves the calculation of relevant interests, voting power, or substantial holdings of a person in the class of persons described in Schedule A. The modification under this declaration notably excludes any association between a Call Warrant issuer and a Call Warrant holder solely due to the Call Warrant, as per the new subsection added to section 12. Furthermore, it specifies that a Call Warrant issuer does not have a relevant interest in a security held in trust under the terms of the Call Warrant if the issuer has no control over the voting or disposal of the security. However, if the Call Warrant issuer gains such control, they are considered to have acquired a relevant interest in the security by a transaction in relation to the security. This legislative instrument applies to Call Warrant issuers, holders, and any person who might otherwise have a relevant interest or voting power in securities held in trust for Call Warrants or as a result of holding a Call Warrant.

Key Provisions

Sections 655A and 673 of the Corporations Act 2001 provide the Australian Securities and Investments Commission (ASIC) with the authority to revoke or modify existing class orders. In this instance, ASIC has revoked Class Order [00/452] and has introduced modifications to the application of Chapters 6 and 6C of the Act to certain classes of persons involved in call warrants. Specifically, the modifications address the definition of an associate and the circumstances under which a call warrant issuer has a relevant interest in a security. These changes clarify that no association exists between a call warrant issuer and a call warrant holder solely due to the existence of a call warrant. Additionally, the modifications clarify the conditions under which a call warrant issuer has a relevant interest in a security held in trust under the terms of the call warrant. Under the Act, call warrant issuers, holders, and other relevant parties are subject to specific obligations and requirements. Call warrant issuers must adhere to the modified provisions regarding their association with call warrant holders, ensuring no association is presumed merely because of the call warrant. Furthermore, call warrant issuers must ensure that they do not have a relevant interest in a security held in trust unless certain conditions are met, such as the call warrant expiring or the holder defaulting. When the conditions in subsection 6A cease to apply, the call warrant issuer is considered to acquire a relevant interest in the security at that time. These obligations are designed to maintain transparency and proper governance in the issuance and holding of call warrants. Failure to comply with the provisions of the Act and the modifications introduced by ASIC may result in legal consequences. Although the specific penalties are not detailed in the provided text, breaches of the Corporations Act 2001 can lead to both civil and criminal penalties. Civil penalties may include fines, while criminal penalties can result in imprisonment, depending on the severity and intent of the breach. The exact penalties would be determined by the courts, taking into account the specific circumstances of the case. Ensuring compliance with these provisions is crucial to avoid any potential legal repercussions for the involved parties.