ASIC Class Order [CO 03/68]

Overview

The Australian Securities and Investments CommissionCorporations Act 2001 — Subsection 741(1) — Variation, enacted in 2001, was designed to address gaps in the regulatory framework governing securities and investments within Australia. This legislative instrument amends Class Order [CO 00/238] under the authority granted by the Australian Securities and Investments Commission (ASIC) in accordance with subsection 741(1) of the Corporations Act 2001. The primary policy objective of this amendment is to provide relief to registrable Australian bodies by exempting them from specific registration requirements when offering fully paid shares to existing shareholders through dividend reinvestment plans or bonus share plans. This exemption aims to streamline the process for such offers, reducing regulatory burdens while maintaining the integrity of the securities market.

Scope and Application

The Australian Securities and Investments Commission Corporations Act 2001, as amended under subsection 741(1) via legislative instrument F2006B01626, pertains to registrable Australian bodies offering fully paid shares to existing shareholders through a dividend reinvestment plan or bonus share plan. This variation to Class Order [CO 00/238] exempts such offers from the regulatory requirements of Part 6D.2 of the Corporations Act 2001. The exemption applies specifically to transactions where shares are offered to existing shareholders of the company under these particular plans, ensuring that these internal share distribution methods are not subject to the more stringent disclosure and reporting obligations that typically apply to public offers of securities. This legislative adjustment is designed to streamline certain internal corporate processes while maintaining regulatory oversight over broader public securities offerings.

Key Provisions

The key operative sections of the legislative instrument, F2006B01626, pertain to a variation of Class Order [CO 00/238] under subsection 741(1) of the Corporations Act 2001. This legislative instrument, dated 7th February 2003 and signed by Brendan Byrne as a delegate of the Australian Securities and Investments Commission, amends the heading of the Class Order by omitting the word "Law" and substituting it with "Act 2001". Additionally, it removes the introductory words and paragraphs (a) and (b), replacing them with a new provision that exempts registrable Australian bodies from Part 6D.2 of the Corporations Act 2001 in specific circumstances. This variation imposes particular obligations and requirements on registrable Australian bodies. Specifically, it exempts these bodies from certain disclosure obligations under Part 6D.2 of the Corporations Act 2001 when they offer fully paid shares to existing shareholders through a dividend reinvestment plan or a bonus share plan. The exemption is limited to offers made to current shareholders under these plans, ensuring that the bodies remain compliant with other relevant provisions of the Corporations Act 2001. The legislative instrument does not explicitly detail offences, penalties, or consequences for breaches of the exemption granted by this variation. However, it is important to note that any breach of the Corporations Act 2001, including non-compliance with the exemptions granted, could potentially lead to enforcement actions by the Australian Securities and Investments Commission. Such actions may include civil penalties, enforcement actions, and other legal consequences as stipulated under the Corporations Act 2001. The specific penalties for breaches can vary widely depending on the nature and severity of the breach, but they can include fines and other sanctions as determined by the courts. In summary, the legislative instrument modifies the exemption criteria under the Corporations Act 2001, allowing certain Australian bodies to offer fully paid shares to existing shareholders without certain disclosure requirements. Compliance with these exemptions is crucial, as breaches may result in significant legal consequences.