ASIC Class Order [CO 08/10]

ASIC Class Order [CO 08/10]

About this compilation

Compilation No. 1

This is a compilation of ASIC Class Order [CO 08/10] as in force on 5 September 2017. It includes any commenced amendment affecting the legislative instrument to that date.

This compilation was prepared by the Australian Securities and Investments Commission.

The notes at the end of this compilation (the endnotes) include information

about amending instruments and the amendment history of each amended provision.

Australian Securities and Investments Commission
Corporations Act 2001 — Paragraphs 601QA(1)(a), 911A(2)(l) and 1020F(1)(a) — Exemption

Enabling provisions

1. The Australian Securities and Investments Commission (ASIC) makes this instrument under paragraphs 601QA(1)(a), 911A(2)(l) and 1020F(1)(a) of the Corporations Act 2001 (the Act).

Title

2. This instrument is ASIC Class Order [CO 08/10].

Commencement

3. This instrument commences on the later of:

(a) the date it is registered under the Legislative Instruments Act 2003; and
 

(b) the date of its gazettal.

Note: An instrument is registered when it is recorded on the Federal Register of Legislative Instruments (FRLI) in electronic form: see Legislative Instruments Act 2003, s 4 (definition of register).  The FRLI may be accessed at http://www.frli.gov.au/.

Exemptions

4. An issuer who operates a managed investment scheme by reason of operating a sale facility or related purchase facility does not have to comply with:

(a) section 601ED of the Act in relation to the facility; and

(b) Divisions 2 to 5 of Part 7.9 of the Act in relation to an interest in the facility; and

(c) the requirement to hold an Australian financial services licence for the provision of the following financial services:

(i) dealing in an interest in the facility; and

(ii) the provision of general advice in relation to an interest in the facility.

Note: The exemptions in paragraph 4 do not apply to the financial products that are sold or purchased through the sale facility or related purchase facility.

5. To avoid doubt, an issuer who invites a holder of a financial product of the issuer to make an offer to sell the financial product through a sale facility does not have to comply with Division 5A of Part 7.9 of the Act.

Where relief applies

6. The exemptions in paragraphs 4 and 5 apply in relation to a sale facility or related purchase facility that satisfies all of the following:

(a) the financial products that may be sold or purchased (as applicable) through the facility are shares or interests in a managed investment scheme that are admitted to quotation on a licensed market or approved foreign market;

(b) where the facility is a sale facility—under the terms of the facility:

(i) the financial products (the relevant financial products) of participating holders to be sold through the facility are pooled; and

(ii) a broker sells the relevant financial products in the ordinary course of trading on the relevant market; and

(iii) the proceeds of the sale net of expenses (to the extent (if any) that they are not met by the issuer) are distributed to participating holders; and

(iv) each participating holder is paid their proportion of the proceeds of sale as soon as practicable and, in any event, within 8 weeks after the date on which the issuer received the participating holder’s election to participate in the facility;

(c) where the facility is a related purchase facility—under the terms of the facility:

(i) the money of the participating holders to be used to purchase financial products through the facility is pooled; and

(ii) a broker purchases the financial products in the ordinary course of trading on the relevant market; and

(iii) the broker may deduct from the money referred to in subparagraph (i) expenses of purchasing the financial products (to the extent (if any) that they are not met by the issuer); and

(iv) each participating holder is allocated their proportion of the financial products purchased; and

(v) each participating holder has transferred to them the financial products allocated to them as soon as practicable and, in any event, within 8 weeks after the date on which the issuer received the participating holder’s election to participate in the facility; and

(vi) each participating holder may purchase financial products through the facility (aggregated with financial products of the same class that were purchased through any previous facility) for consideration totalling no more than $5,000 in any consecutive 12 month period.

Conditions of the relief

7. An issuer relying on the exemptions in subparagraphs 4(a) or (b) or paragraph 5 must:

(a) give or send to each holder of financial products of the issuer who has been invited to participate in the facility, a document which complies with paragraph 8, by:

(i) giving the document to the holder personally; or

(ii) sending the document:

(A) by post to the address for the holder in the register of members or an alternative address (if any) nominated by the holder; or

(B) to the fax number or electronic address (if any) nominated by the holder; and

Note: A responsible entity of a registered scheme is subject to a statutory duty in paragraph 601FC(1)(d) of the Act to treat scheme members who hold interests of the same class equally and members who hold interests of different classes fairly.

(b) take reasonable steps to ensure the facility is not operated during any period where a control transaction has been publicly proposed and has not ended; and

(c) take reasonable steps to ensure that where a related purchase facility is made available in conjunction with a sale facility, a participating holder can only participate in either, but not both, of the facilities.

8. The document:

(a) must contain the following statements and information:

(i) a statement that the facility is open until the expiry date set out in the document, which cannot be more than 12 months after the date of the document; and

(ii) information about the minimum and maximum number (if any) of financial products a participating holder can sell or purchase through the facility; and

(iii) a statement that the market price of financial products is subject to change from time to time; and

(iv) information about how to obtain up-to-date information on the market price of the financial product; and

(v) information about any expenses relating to the sale or purchase of financial products that will be paid by the participating holders; and

(vi) information about:

(A) for a sale facility—how the proceeds of sale for financial products sold through the facility will be allocated between participating holders; and

(B) for a related purchase facility—how the financial products purchased through the facility will be allocated between participating holders; and

(vii) a statement that:

(A) for a sale facility—the amount of money received by a participating holder for a financial product that is sold through the facility may be more or less than the actual price that is received by the broker for that financial product; and

(B) for a related purchase facility—the amount of money that is paid by a participating holder for a financial product that is acquired through the facility may be more or less than the actual consideration that is paid by the broker for that financial product; and

(viii) information about any other significant characteristics or features of the facility or of the rights and obligations of holders who elect to participate in the facility; and

(ix) information about any alternatives that the holder may have to participating in the facility; and

(b) must be worded and presented in a clear, concise and effective manner; and

(c) may be given in printed or electronic form and, if given in electronic form, must, as far as practicable, be given in a way that will allow the holder to print or save a copy of it; and

(d) may be made up of 2 or more separate documents that are given at the same time and by the same means.

Exclusion from reliance

9. An issuer is excluded from relying on paragraph 4(c) of this instrument if it becomes aware of matters that give it reason to believe that it has failed in a material respect to comply with a condition of this instrument and does not give full particulars of the failure to ASIC in writing within 15 business days after becoming so aware.

10. The exemptions in paragraph 4 and 5 also do not apply to an issuer who has been notified in writing by ASIC that they are excluded from relying on this instrument.

Interpretation

11. In this instrument:

approved foreign market has the meaning given by section 9 of the Act.

Note: The definition of approved foreign market is notionally inserted by ASIC Corporations (Definition of Approved Foreign Market) Instrument 2017/669.

broker means a participant of a licensed market or approved foreign market with whom the issuer has entered arrangements for the operation of the sale facility or related purchase facility.

control transaction means a transaction or proposed transaction that affects the control, or potential control, of:

(a) where the financial products are shares—the issuer; or

(b) where the financial products are interests in a managed investment scheme—the managed investment scheme to which those interests relate. 

facility has a meaning affected by section 762C of the Act.

holder has the meaning given by section 761A of the Act.

issuer means the issuer of the financial products that may be sold or purchased through the sale facility or related purchase facility.

licensed market has the meaning given by section 761A of the Act.

participating holder means a person who:

(a)  holds a financial product in the same class of financial products as those to which the facility relates; and

(b) has elected to participate in the facility.

register of members means:

(a) in relation to a company or registered scheme—the register of members required to be set up and maintained under section 169 of the Act; and

(b) in relation to a foreign company—the register of members (however described) required to be kept under the laws of its place of origin.

related purchase facility means a facility made available in conjunction with a sale facility, through which a participating holder can acquire, by way of transfer, additional financial products in the same class.

sale facility means a facility through which a participating holder can sell financial products.

Notes to ASIC Class Order [CO 08/10]

Note 1

ASIC Class Order [CO 08/10] (in force under s601QA(1)(a), 911A(2)(l) and 1020F(1)(a) of the Corporations Act 2001) as shown in this compilation comprises that Class Order amended as indicated in the tables below.

Table of Instruments

Table of Amendments

ad. = added or inserted     am. = amended      rep. = repealed     rs. = repealed and substituted