ASIC CLASS ORDER [CO 10/94]

EXPLANATORY STATEMENT

Prepared by the Australian Securities and Investments Commission

Corporations Act 2001

Subsection 741(1) – Variation

The Australian Securities and Investments Commission (ASIC) makes ASIC Class Order [CO 10/94] Variation of relief for transaction-specific prospectuses when offering convertible securities under subsection 741(1) of the Corporations Act 2001 (the Act).  Paragraph 741(1)(a) of the Act provides that ASIC may exempt a person from a provision of Chapter 6D of the Act.

1. Background

ASIC has given class order relief (in Class Order [CO 00/195]) to allow a body to use a transaction-specific prospectus under s713 of the Act when offering certain convertible notes and convertible preference shares (“convertible securities”) on the conversion of which the holder will be issued continuously quoted securities of the body.

The exemption under [CO 00/195] is intended to apply to bodies offering convertible securities that would be able to use a transaction-specific prospectus under s713 of the Act for an offer of the underlying continuously quoted securities of the body. A body cannot use a transaction-specific prospectus under s713 of the Act when offering continuously quoted securities while a determination made by ASIC under s713(6) of the Act is in force in relation to the body. However, there is uncertainty as to whether [CO 00/195] operates to allow a body in relation to which a determination under s713(6) of the Act is in force to use a transaction-specific prospectus for an offer of convertible securities.

2.      The Class Order

[CO 10/94] amends [CO 00/195] to clarify that the exemption under [CO 00/195] does not allow a body in relation to which a determination under s713(6) of the Act is in force to use a transaction specific prospectus under s713 of the Act for an offer of convertible securities.

3.      Consultation

Consultation was not made as [CO 10/94] is only minor or machinery in nature and implements ASIC's existing policy under Regulatory Guide 66 Transaction-specific disclosure.