ASIC CLASS ORDER [CO 07/300]
EXPLANATORY STATEMENT
Prepared by the Australian Securities and Investments Commission
Corporations Act 2001
The Australian Securities and Investments Commission (ASIC) makes Class Order [CO 07/300] Foreign Securities under subsections 601QA(1), 655A(1), 741(1) and 1020F(1) of the Corporations Act 2001 (the Act). These sections provide that ASIC may exempt a person from a provision in Chapter 5C, Chapter 6, Chapter 6D and Part 7.9 of the Act respectively.
1. Background
A company making an offer of securities in Australia must, in general, comply with the fundraising provisions of the Act, set out in Chapter 6D.
ASIC has previously made a number of Class Orders concerning the issue and sale of, and publishing of notices in relation to, foreign securities. These include the following ASIC class orders:
- [CO 00/180] Foreign securities: publishing of reports and notices
- [CO 00/181] Foreign securities: publishing of reports and notices
- [CO 00/183] Foreign rights issue
- [CO 00/185] Foreign securities
- [CO 00/214] Foreign securities: listed foreign companies making 20 or fewer offers in Australia in 12 months
These class orders provide relief from disclosure and advertising provisions of Chapter 6D of the Act in relation to offers of securities which are quoted on an 'approved foreign market'.
Class order [CO 02/263] Foreign interests in a managed investment scheme traded on an approved foreign exchange: 20 or fewer offers in Australia in 12 months provides relief from the disclosure provisions in Part 7.9 in relation to certain offers of interests in managed investment schemes which are quoted on an ‘approved foreign market’.
Class order [CO 00/2338] Relief from the minimum bid price principle – s621(3) provides some relief from technical compliance with the requirement to provide consideration at least equal to the maximum consideration paid for bid class securities in the four months prior to a takeover bid. Some of the relief in the class order relates to securities quoted on an ‘approved financial market’.
Class order [CO 05/26] Constitutional provisions about the consideration to acquire interests provides relief from the requirement for the constitution of a registered managed investment scheme to make adequate provision for the consideration paid to acquire the interest in certain circumstances. In some instances the relief only applies where the interests are quoted on ASX or an ‘approved foreign market’.
ASIC's policy on approving foreign markets is outlined in ASIC Policy Statement 72 Foreign securities prospectus relief ("[PS 72]").
2. Purpose of the class order
Class Orders [00/180], [00/181], [00/183], [00/185] , [00/214], [00/2338], [02/263] and [05/26] set out a list of foreign markets ASIC has designated as approved. Many of these approved foreign markets have changed their names since publication of the class orders. ASIC Class Order [CO 07/0300] updates obsolete names of approved foreign markets listed in those class orders and includes names of foreign markets that were inadvertently excluded from the class orders.
3. Operation of the class order
Class Order [07/0300] makes technical amendments to [CO 00/180], [CO 00/181], [CO 00/183], [CO 00/185], [CO 00/214], [00/2338], [02/263] and [05/26] to update references to approved foreign markets to reflect name changes and include markets inadvertently excluded from these class orders.
4. Consultation
ASIC did not undertake any consultation with external stakeholders before these instruments were made. Consultation was not undertaken because the instrument is considered minor or machinery in nature.
Overview
The Australian Securities and Investments Commission (ASIC) Class Order [CO 07/300], enacted in 2007 under the Corporations Act 2001, aims to address the need for updating references to approved foreign markets in existing class orders concerning foreign securities. This order provides relief from certain disclosure and advertising provisions in the Act for offers of securities quoted on approved foreign markets. The Class Order updates obsolete names and includes markets that were inadvertently excluded from previous class orders, ensuring compliance with current market standards. The enacting body, ASIC, did not undertake external consultation due to the minor or machinery nature of the amendments.
Scope and Application
The ASIC Class Order [CO 07/300], made under the Corporations Act 2001, applies to companies making offers of securities in Australia and to the Australian Securities and Investments Commission (ASIC) as the regulatory authority overseeing compliance with the Act's fundraising provisions. The Class Order specifically targets the relief from disclosure and advertising provisions for offers of securities quoted on 'approved foreign markets', aiming to streamline compliance for companies engaging in such transactions. The geographic reach of the Class Order extends to the Commonwealth of Australia, with the scope encompassing entities involved in issuing or selling securities in the Australian market. The Class Order updates and rectifies previous class orders by correcting the names of approved foreign markets and including markets that were previously omitted. The application of the Class Order is further extended through subordinate instruments, which may specify additional markets or modify existing provisions, thereby broadening or restricting the Class Order's application as necessary.
Key Provisions
ASIC Class Order [CO 07/300] is an instrument that modifies several existing class orders concerning the issue and sale of foreign securities in Australia. Under sections 601QA(1), 655A(1), 741(1), and 1020F(1) of the Corporations Act 2001, ASIC has the authority to exempt certain entities from specific provisions of the Act. This class order specifically focuses on updating references to "approved foreign markets" in previous class orders, ensuring that the list remains current and comprehensive. This involves correcting errors and updating names to reflect changes in the markets since the original class orders were published.
The main operative sections of this class order are those that technically amend previous class orders to update references to approved foreign markets. This includes updating the names of markets that have changed since the original class orders were published and adding markets that were inadvertently omitted. These amendments are crucial for maintaining the relevance and accuracy of the legal framework governing foreign securities in Australia.
This class order imposes specific obligations on entities involved in the issue and sale of foreign securities. It mandates that these entities comply with the updated list of approved foreign markets as outlined in the amended class orders. This ensures that they can avail themselves of the exemptions and reliefs provided under the Corporations Act 2001. Additionally, the order requires entities to stay informed about changes to the list of approved markets, ensuring that their practices remain compliant with the current legal standards.
Failure to comply with the provisions of the Corporations Act 2001 and the amended class orders can result in civil or criminal penalties. The exact penalties depend on the nature and severity of the breach. For corporate entities, penalties can include substantial fines, with the maximum penalty varying based on the specific provision breached. Individual officers or directors may also face fines and, in some cases, imprisonment. The consequences underscore the importance of adhering to the legal requirements governing the issue and sale of foreign securities in Australia.