ASIC Class Order [CO 09/69]

Administered by Department of the Treasury

Legislation au F2009L02437 Not in force Legislative Instrument

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ASIC CLASS ORDER [CO 09/69]

EXPLANATORY STATEMENT

Prepared by the Australian Securities and Investments Commission

Corporations Act 2001

The Australian Securities and Investments Commission (ASIC) makes ASIC Class Order [CO 09/69] Variation of Class Orders [CO 03/606] and [CO 04/671] under paragraph 911A(2)(l) and subsections 741(1) and 1020F(1) of the Corporations Act 2001 (the Act).

Paragraph 911A(2)(l) provides that ASIC may exempt a person from the requirement to hold an Australian financial services licence for the provision of a financial service in specified circumstances.

Subsection 741(1) provides that ASIC may declare that Chapter 6D of the Act applies to a person as if specified provisions were omitted, modified or varied as specified in the declaration.

Subsection 1020F(1) provides that ASIC may declare that Part 7.9 of the Act applies in relation to a person or a financial product, or a class of persons or financial products, as if specified provisions were omitted, modified or varied as specified in the declaration.

1. Background

General advice provided in relation to certain foreign regulated control transactions

Part 7.6 of the Act deals with licensing of providers of financial services. Under section 911A, a person who carries on a financial services business in Australia must hold an Australian financial services licence unless exempt.

Class Order [CO 03/606] Financial product advice – exempt documents exempts persons from the requirement to hold an Australian financial services licence in relation to financial product advice that is:

(a) general advice; and

(b) contained in a document of a kind specified, including a bidder’s statement, a supplementary bidder’s statement, a target’s statement or a supplementary target’s statement.

General advice contained in an offer document or a document responding to an offer document under a foreign regulated control transaction is not covered by [CO 03/606]. Without relief, a person who distributes such a document containing general advice in Australia would need an Australian financial services licence.

Secondary sales of securities received under foreign scrip takeovers

Chapter 6D regulates the making of offers for the issue or sale of securities. It provides a disclosure and liability regime so as to ensure adequate investor protection in circumstances where an investor may not know all the information needed to make a decision whether to accept an offer of securities.

In addition to requiring disclosure for the issue of securities, the provisions set out where an offer for the sale of securities needs disclosure to investors. The following sale offers need disclosure under Chapter 6D (unless an exemption applies):

(a) an offer of a body's securities for sale by the body's controller where the securities are either not quoted or not offered for sale in the ordinary course of trading on a relevant financial market;

(b) an offer of a body's securities for sale within 12 months after their issue without disclosure where either the body issued the securities, or the person to whom they were issued acquired them, with the purpose of the securities being on-sold; and

(c) an offer of a body's securities for sale within 12 months after their sale without disclosure by the body's controller where the securities were at the time of sale by the controller either not quoted or not offered for sale in the ordinary course of trading on a relevant financial market and either the controller sold the securities, or the person to whom they were sold acquired them, with the purpose of the securities being on-sold.

A foreign scrip takeover is a foreign regulated takeover where securities or interests in a managed investment scheme form all or part of the consideration offered under the takeover.

The offer of securities as consideration for an offer under a takeover bid that is accompanied by a bidder’s statement (Chapter 6 Bid) is exempt from the prospectus requirement under subsection 708(18) of the Act. Class Order [CO 04/671] Disclosure for on-sale of securities and other financial products gives disclosure relief for secondary sales of securities where the securities were issued without disclosure because of subsection 708(18) to facilitate the on-sale of securities received under a Chapter 6 Bid.

[CO 09/68] Prospectus and PDS relief for foreign scrip takeovers gives conditional disclosure relief for offers of securities as consideration under foreign scrip takeovers regulated by or under a law in force in certain foreign countries where no more than 10% of the bid class securities are held by Australian residents. The relief is provided because these are primarily foreign business transactions that are subject to comparable regulation in another jurisdiction. Similarly to securities received under a Chapter 6 Bid, secondary sales of securities received under a foreign scrip takeover would be inhibited by the requirement to prepare a prospectus.

Secondary sales of interests in managed investment schemes received under foreign scrip takeovers

Part 7.9 regulates the issue, sale and purchase of financial products (except securities).

It provides a disclosure and liability regime so as to ensure adequate protection in circumstances where a person who is a retail client may not know all the information needed to make a decision whether to acquire a financial product.

The provisions set out where the sale of a financial product needs disclosure, generally in the form of a Product Disclosure Statement (PDS). A PDS may need to be given (unless an exemption applies):

(a) by a person who gives personal advice recommending a particular financial product; and

(b) by a person who sells a financial product in certain situations.

[CO 09/68] gives relief from the requirement to provide a PDS for interests in a managed investment scheme offered under a foreign scrip takeover because the offers are likely to be accompanied by adequate disclosure. However, secondary sales of interests in a managed investment scheme received under a foreign scrip takeover would be inhibited by the requirement under Part 7.9 to prepare a PDS.

2. Purpose of the class order

The purpose of [CO 09/69] is to provide relief from:

(a) the requirement to hold an Australian financial services licence in relation to financial product advice that is general advice and contained in a document prepared pursuant to a control transaction that is regulated in the jurisdiction of an approved foreign market; and

(b) the prospectus and PDS disclosure requirements to persons who make offers to sell securities or interests in managed investment schemes received under a foreign scrip takeover where the initial offers under the foreign scrip takeover did not need disclosure because of [CO 09/68].

3. Operation of the class order

[CO 09/69] varies [CO 03/606] by adding as a class of exempt documents an offer document or a document prepared in response to an offer document about a control transaction regulated under the laws of one of the following:

(a) Canada;

(b) France;

(d) Hong Kong;

(e) Italy;

(f) Japan;

(g) Malaysia;

(h) The Netherlands;

(i) New Zealand;

(j) Singapore;

(k) South Africa;

(l) Switzerland;

(m) United Kingdom; and

(n) United States of America,

where the document has been prepared because it is required by law.

[CO 09/69] also varies [CO 04/671] to give disclosure relief for the on-sale of securities or financial products where the securities or products were issued without disclosure to investors under Part 6D.2 or without a PDS for the product being prepared because the issuer relied upon Class Order [CO 09/68].

4. Consultation

The declarations in [CO 09/69] were the subject of public consultation in Consultation Paper 79 Disclosure relief for foreign scrip takeovers (CP 79), which foreshadowed this relief and was published on our website (at www.asic.gov.au). Submissions received were supportive of the proposed relief in CP 79.

Overview

The ASIC Class Order [CO 09/69] was enacted to address specific gaps in the regulatory framework for financial services in Australia, particularly in relation to foreign regulated control transactions. Made by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001, the class order aims to provide relief from certain licensing and disclosure requirements. The primary objective is to facilitate the smooth operation of financial transactions that are primarily foreign and governed under comparable regulations in other jurisdictions. This includes exempting certain financial product advice from the need for an Australian financial services licence and providing relief from prospectus and Product Disclosure Statement (PDS) requirements for secondary sales of securities or interests in managed investment schemes received under foreign scrip takeovers. The class order is designed to align Australian regulations with international practices, thereby easing the burden on entities involved in cross-border financial activities while maintaining investor protection.

Scope and Application

ASIC Class Order [CO 09/69] applies to financial services providers and entities involved in foreign regulated control transactions, specifically those regulated under the laws of certain jurisdictions, including Canada, France, Germany, Hong Kong, Italy, Japan, Malaysia, The Netherlands, New Zealand, Singapore, South Africa, Switzerland, the United Kingdom, and the United States of America. The Class Order exempts these entities from the requirement to hold an Australian Financial Services Licence (AFSL) for providing general financial product advice contained in documents related to such control transactions, provided these documents are prepared in compliance with the laws of the foreign jurisdiction. Additionally, it exempts entities from the need to prepare a prospectus or Product Disclosure Statement (PDS) for secondary sales of securities or interests in managed investment schemes received under a foreign scrip takeover, where the initial offer did not require disclosure under certain Class Orders. This relief is designed to streamline transactions that are subject to comparable regulatory frameworks in foreign jurisdictions, thereby facilitating smoother cross-border financial activities. The scope of the Class Order is geographically broad, encompassing any transactions governed by the listed jurisdictions, and is implemented under the authority granted by the Corporations Act 2001.

Key Provisions

The primary sections of ASIC Class Order [CO 09/69] amend existing class orders [CO 03/606] and [CO 04/671] to provide specific exemptions and relief for certain financial services related to foreign regulated control transactions. Section 1 of [CO 09/69] adds to the exempt documents under [CO 03/606], specifically including offer documents or response documents related to control transactions regulated in the jurisdictions of Canada, France, Germany, Hong Kong, Italy, Japan, Malaysia, the Netherlands, New Zealand, Singapore, South Africa, Switzerland, the United Kingdom, and the United States. This amendment exempts the holders of these documents from the requirement to hold an Australian financial services licence for providing general advice contained in these documents. Similarly, section 2 modifies [CO 04/671] to exempt secondary sales of securities or financial products that were issued without disclosure requirements because they were part of a foreign scrip takeover regulated in one of the aforementioned jurisdictions. This exemption removes the need for these secondary sales to comply with the prospectus and Product Disclosure Statement (PDS) requirements outlined in Parts 6D and 7.9 of the Corporations Act 2001. The obligations imposed by [CO 09/69] are primarily centred around ensuring that the exempted documents and transactions adhere to the conditions set out in the order. For example, for the exemption under [CO 03/606] to apply, the document must be an offer document or response document related to a control transaction regulated in one of the specified jurisdictions and must have been prepared because it is required by law. Similarly, for the exemption under [CO 04/671], the securities or financial products must have been issued without disclosure due to a reliance on [CO 09/68] and must be part of a secondary sale under a foreign scrip takeover. Compliance with these conditions ensures that the relief provided by the order is appropriately targeted and does not inadvertently allow for broader exemptions. There are no specific offences or penalties outlined within [CO 09/69] itself, as the primary focus of the order is on providing exemptions and relief rather than penalising non-compliance. However, any breach of the broader Corporations Act 2001, which [CO 09/69] is intended to supplement, could result in civil or criminal penalties. For example, unauthorised financial services activities could lead to penalties under section 12GA, with potential maximum penalties including fines of up to $2.1 million for corporations and imprisonment for up to five years for individuals. Additionally, failure to comply with disclosure requirements could result in civil penalty provisions under section 1317E, with penalties including fines of up to $2.1 million for corporations and $420,000 for individuals. These potential penalties underscore the importance of adhering to the conditions set out in [CO 09/69] and the broader legislative framework.

Area of Law: Corporate Law & Governance; Financial Law
Instrument: Regulation
Concepts: Regulatory Standards; Licensing & Registration; Exemptions & Exclusions; Enforcement Powers

Interactions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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