ASIC CLASS ORDER [CO 08/382]
EXPLANATORY STATEMENT
Prepared by the Australian Securities and Investments Commission
Corporations Act 2001
The Australian Securities and Investments Commission (ASIC) makes Class Order [CO 08/382] Variation of Class Order [CO 01/1519] under subsection 205G(6) of the Corporations Act 2001 (the Act).
Subsection 205G(6) provides that ASIC may relieve a director from the obligation specified in s205G of the Act to notify a relevant market operator of an interest in a security or contract.
1. Background
Under s205G(1) of the Act, every director of an Australian listed public company must notify the relevant market operator of:
(a) the director’s relevant interests in securities of the company or a related body corporate; and
(b) contracts:
(i) to which the director is a party or under which the director is entitled to a benefit; and
(ii) that confer a right to call for or deliver shares in, debentures of, or interests in a managed investment scheme made available by, the company or a related body corporate.
ASX Listing Rule 3.19A imposes a complementary obligation on a listed entity to notify ASX of a director’s interests.
Class Order [CO 01/1519] provides a director with relief from their obligations under section 205G of the Act if the relevant listed company has made equivalent disclosure to ASX under ASX Listing Rule 3.19A.
2. Purpose of the class order
ASIC Class Order [CO 08/382] varies [CO 01/1519]:
- to reflect the current name of the relevant market operator, ASX Limited; and
- by replacing specific references to various technical and security features of the ASX electronic lodgment facility with a more general reference to the ASX electronic lodgment facility.
3. Operation of the class order
Class Order [CO 08/382] makes technical amendments to Class Order [CO 01/1519] to update the name of ASX Limited and generalise references to ASX’s electronic lodgment requirements.
4. Documents incorporated by reference
ASX Guidance Note 20—“ASX Online” which was issued on 5 May 2008 has been incorporated by reference into this Class Order. This document explains the ASX online facility. This guidance note can be located at the ASX website at:
http://www.asx.com.au/supervision/rules_guidance/listing_rules_guidance.htm
5. Consultation
ASIC consulted with ASX before making Class Order [CO 08/382]. Consultation with other external stakeholders was not undertaken because the class order is minor or machinery in nature and does not substantially alter existing arrangements.
Overview
The Australian Securities and Investments Commission (ASIC) has enacted Class Order [CO 08/382] under the Corporations Act 2001 to address the need for updating the references to the Australian Securities Exchange Limited (ASX) in previous Class Order [CO 01/1519]. This order serves to streamline and modernise the legal framework by replacing outdated references with those that reflect the current operations of ASX, including its electronic lodgment facility. The primary objective of this class order is to ensure that the obligations placed upon directors of listed public companies align with the current practices and technological advancements of ASX, thereby maintaining the integrity and efficiency of market disclosures. The class order was formulated following consultations with ASX, ensuring that the changes are practical and consistent with current market operations.
Scope and Application
ASIC Class Order [CO 08/382] applies to directors of Australian listed public companies, specifically those who have an interest in securities or contracts that are related to their company or a related body corporate. The order is an amendment to Class Order [CO 01/1519] and aims to reflect the current name of the relevant market operator, ASX Limited, and update technical references to the ASX electronic lodgment facility. It provides relief to directors from their obligations under section 205G of the Corporations Act 2001 if the company has made equivalent disclosure to ASX under ASX Listing Rule 3.19A. The class order operates on a national level, affecting entities and individuals operating within the Australian securities market. There are no stated exclusions, exemptions, or thresholds in this particular class order, though it is worth noting that the scope and application of the class order can be extended or restricted through subordinate instruments.
Key Provisions
The key operative sections of ASIC Class Order [CO 08/382] concern the variation of the previous Class Order [CO 01/1519]. Section 205G(6) of the Corporations Act 2001 empowers ASIC to relieve a director from their obligation to notify a relevant market operator of interests in securities or contracts, provided certain conditions are met. Specifically, this relief is applicable when the listed company has made equivalent disclosures to the Australian Securities Exchange (ASX) under ASX Listing Rule 3.19A. The purpose of this class order is to update the name of the market operator to ASX Limited and to make general references to ASX's electronic lodgment facility rather than specific technical details.
The obligations imposed by this Act on directors include notifying the relevant market operator of their relevant interests in securities of the company or related entities, and any contracts to which they are a party or under which they are entitled to a benefit, as well as those that confer rights to call for or deliver shares, debentures, or interests in managed investment schemes. The obligations are detailed in section 205G(1) of the Corporations Act 2001. Furthermore, the listed entity must ensure it has disclosed the same information to ASX under Listing Rule 3.19A.
Should there be a breach of the obligations outlined in section 205G of the Corporations Act 2001, the director may face civil consequences, including fines and potential disqualification from managing corporations. The maximum penalties for such breaches are prescribed by the Act and can vary based on the nature and severity of the offence. The specific penalties are detailed within the Corporations Act 2001 and are not explicitly stated in the Class Order itself. Nonetheless, non-compliance with the disclosure requirements could lead to significant repercussions for both the director and the company.