ASIC Class Order [CO 14/632]
Key management personnel equity instrument disclosures
This instrument has effect under s341(1) of the Corporations Act 2001.
This compilation was prepared on 2 March 2016 taking into account amendments up to ASIC Corporations (Amendment) Instrument 2016/45 that commenced on 12 February 2016. See the table at the end of this class order.
Prepared by the Australian Securities and Investments Commission.
Australian Securities and Investments Commission
Corporations Act 2001 — Subsection 341(1) — Order
Enabling legislation
1. The Australian Securities and Investments Commission makes this order under subsection 341(1) of the Corporations Act 2001 (the Act).
Title
2. This order is ASIC Class Order [CO 14/632].
Commencement
3. This order commences on the date it is registered under the Legislative Instruments Act 2003.
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, section 4 (definition of register). The FRLI may be accessed at http://www.frli.gov.au/.
Order
4. A disclosing entity is relieved from sections 298 and 300A of the Act to the extent items 18 and 19 of the table in subregulation 2M.3.03(1) of the Corporations Regulations 2001 (the Regulations) require the directors’ report for a financial year of the disclosing entity to include details of equity instruments or transactions involving equity instruments, where those equity instruments are not issued by the disclosing entity or any of its subsidiaries.
5. This order applies in relation to financial years ending on or before 31 December 2016.
Condition
6. The disclosing entity must ensure that, in relation to an equity instrument issued or issuable by it and any of its subsidiaries that is required to be disclosed under items 17, 18 and 19 of the table in subregulation 2M.3.03(1) of the Regulations, the directors’ report for the financial year:
(a) separately specifies each class of equity instrument; and
(b) identifies each class of equity instrument by:
(i) the name of the issuing entity;
(ii) the class of equity instrument; and
(iii) if the instrument is an option or right—the class and number of equity instruments for which it may be exercised.
Interpretation
7. In this order:
(a) directors’ report has the same meaning as in subsection 298(1) of the Act.
(b) any other expression that is used in subregulation 2M.3.03(1) of the Regulations and defined in a relevant accounting standard that is applied for the purposes of disclosing information, has the same meaning given by that accounting standard.
Notes to ASIC Class Order [CO 14/632]
Note 1
ASIC Class Order [CO 14/632] (in force under s341(1) of the Corporations Act 2001) as shown in this compilation comprises that Class Order amended as indicated in the tables below.
Table of Instruments
Instrument number | Date of FRLI registration | Date of commencement | Application, saving or transitional provisions |
[CO 14/632] | 30/6/2014 (see F2014L00893) | 30/6/2014 | |
[CO 14/885] | 22/12/2014 (see F2014L01778) | 23/12/2014 | - |
2015/455 | 22/5/2015 (see F2015L00724) | 23/5/2015 | - |
2016/45 | 11/2/2016 (see F2016L00104) | 12/2/2016 | - |
Table of Amendments
ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted
Provision affected | How affected |
Para 5........... | rs. [CO 14/885] am. 2015/455 and 2016/45 |
Overview
ASIC Class Order [CO 14/632] was enacted in 2014 under the Corporations Act 2001 to provide relief to disclosing entities from certain disclosure requirements in the directors’ report concerning equity instruments. This legislative instrument, prepared by the Australian Securities and Investments Commission (ASIC), aims to ease the burden on companies by exempting them from having to disclose details of equity instruments issued by entities other than themselves or their subsidiaries, provided that such instruments are not issued under specific conditions. The order applies to financial years ending on or before 31 December 2016, ensuring that the directors’ report for disclosing entities must separately specify each class of equity instruments issued by the entity and its subsidiaries, identifying each class by the issuing entity's name, the class of equity instrument, and, if applicable, the class and number of equity instruments for which an option or right may be exercised.
Scope and Application
ASIC Class Order [CO 14/632] pertains to the disclosure of equity instruments by certain entities as required under the Corporations Act 2001. This Class Order applies to disclosing entities that are mandated to provide specific details in their directors’ reports for financial years ending on or before 31 December 2016. These entities must ensure that their directors’ reports include detailed information about equity instruments issued or issuable by them or their subsidiaries, as specified under items 17, 18, and 19 of the table in subregulation 2M.3.03(1) of the Corporations Regulations 2001. The Class Order relieves these entities from certain sections of the Corporations Act, namely sections 298 and 300A, to the extent that the directors’ report must detail equity instruments not issued by the entity or its subsidiaries. However, the order mandates that the directors’ report must separately specify each class of equity instrument and identify each class by the name of the issuing entity, the class of equity instrument, and if the instrument is an option or right, the class and number of equity instruments for which it may be exercised. This order is made under the authority granted by the Corporations Act and is subject to modifications through subordinate instruments as detailed in the table of amendments.
Key Provisions
The main operative sections of ASIC Class Order [CO 14/632] provide relief to disclosing entities from certain disclosure requirements in the Corporations Act 2001 and Corporations Regulations 2001 concerning equity instruments. Specifically, Section 4 of the Class Order exempts disclosing entities from the need to include details of equity instruments or transactions involving such instruments, which are not issued by the disclosing entity or any of its subsidiaries, in the directors' report for a financial year. This exemption applies to the extent that items 18 and 19 of the table in subregulation 2M.3.03(1) of the Corporations Regulations require such details. However, this relief is subject to certain conditions outlined in Section 6.
Under Section 6, the disclosing entity must ensure that the directors' report for the financial year includes specific details about equity instruments issued or issuable by the entity and its subsidiaries that are required to be disclosed under items 17, 18, and 19 of the table in subregulation 2M.3.03(1) of the Corporations Regulations. These details must include the separate specification of each class of equity instrument and identification of each class by the name of the issuing entity, the class of equity instrument, and if the instrument is an option or right, the class and number of equity instruments for which it may be exercised. This requirement ensures that while certain disclosures are exempted, other pertinent information must still be provided.
There are no explicit offences, penalties, or civil/criminal consequences outlined in the Class Order itself. However, non-compliance with the requirements of the Corporations Act 2001 and Corporations Regulations 2001, which the Class Order modifies, could result in legal consequences. For example, failure to provide the required disclosures in the directors' report could lead to civil liabilities under the Corporations Act, such as fines or legal actions by shareholders. Additionally, serious breaches of the Act or Regulations might lead to criminal penalties, including imprisonment, depending on the nature and severity of the breach.
In summary, ASIC Class Order [CO 14/632] provides specific relief to disclosing entities from certain disclosure requirements for equity instruments, while mandating that other specified disclosures must be included in the directors' report. Compliance with these requirements is essential to avoid potential legal and financial repercussions under the Corporations Act 2001 and Corporations Regulations 2001.