Australian Securities and Investments Commission
Corporations Law — Paragraph 601QA(1)(a)
Exemption and Declaration
Pursuant to paragraph 601QA(1)(a) of the Corporations Law ("the Law") the Australian Securities and Investments Commission ("the Commission") hereby exempts each person included in the class of persons mentioned in Schedule A (each a "Promoter") and the manager in the cases referred to in Schedule B from compliance with all of the provisions of Chapter 5C and Divisions 2 and 3 of Part 7.12 of the Law and the regulations for the purposes of those provisions (other than section 1022 and regulation 7.12.12) for as long as and on condition that the Promoter:
1 promptly provides to the lead regulator with whom the Promoter is registered and with whom the Promoter's scheme is or is proposed to be registered ("the Lead Regulator") a copy of each of the following:
(a) any agreement establishing or affecting the Promoter's scheme;
(b) any agreement in relation to the Promoter's scheme to which any scheme participant is a party;
(c) any information, including any disclosure statement in relation to the Promoter's scheme, provided by the Promoter to an offeree;
(d) any advertisement in respect of the Promoter's scheme; and
(e) any finance lease proposed to be used by participants in the Promoter's scheme;
2 provides to each offeree, at or prior to the time of the making of the offer or invitation of a scheme interest , a current full and fair disclosure statement in respect of the scheme which has received the prior approval of the Lead Regulator;
3 does not publish or cause to be published any notice (within the meaning of subsection 1025(1) of the Law) or report (within the meaning of subsection 1026(1) of the Law) without the prior approval of the Lead Regulator;
4 provides any assistance or information reasonably required by the Lead Regulator;
5 complies with any rules, regulations or guidelines made by the Lead Regulator to ensure that a scheme of the kind described in Schedule B is honestly, efficiently and fairly operated;
6 provides any assistance or information reasonably required by the Commission in relation to any scheme promoted by the Promoter;
7 if the Promoter is not the manager of the scheme, states in the disclosure statement which complies with Condition 2 of this exemption that a participant in the scheme will be required to manage the scheme in accordance with the terms of any agreement governing the scheme approved by the Lead Regulator and any rules, regulations or guidelines made by the Lead Regulator in respect of such manager or management;
8 prior to registration of the scheme with the Lead Regulator, ensures that the participants in the scheme either have unencumbered title to the whole of the scheme horses or lease the whole of the scheme horses pursuant to a finance lease agreement in standard form;
9 within 45 days of the scheme being fully subscribed, registers the scheme with the Lead Regulator;
10 if the scheme is not fully subscribed within 6 months after the date on which the disclosure statement in respect of that scheme is approved by the Lead Regulator, repays all money received from any person who applied to participate in the scheme, together with interest (if any) which accrued in respect of that money, within ten business days after the expiry of that six month period;
11 discharges the obligations which are incurred by a dealer in respect of its representatives by virtue of Division 4 of Part 7.3 of the Law, or would be so incurred was it not for the operation of Regulation 7.3. 11 of the Corporations Regulations and this exemption; and
12 is not in breach of and does not breach the conditions and restrictions which are included or expressed to be included in any dealers licence of the kind described in Schedule A of this instrument held by the Promoter at the time of the issue, offer or invitation referred to in Schedule B of this instrument as such conditions or restrictions are varied by the Commission from time to time.
And pursuant to subsection 1084(6) of the Law the Commission hereby declares that Division 6 of the Law and the regulations made for the purposes of that Division shall have effect in their application to each Promoter in the case referred to in Schedule B as if Regulation 7.12.17 of the Corporations Regulations were modified or varied by inserting after the words "a prospectus that complies with that Law" the words, "or a current full and fair disclosure statement in respect of the undertaking, scheme, enterprise or investment contract to which the disclosure statement relates which has received the prior approval of any person then designated. as a lead regulator by the Commission in an exemption granted pursuant to subsection 1084(2) of the Law".
SCHEDULE A
Any person who is registered by a lead regulator as the promoter of a scheme of the kind described in Schedule B and who holds a dealers licence granted by the Commission under Part 7.3 of the Law which is subject to conditions and restrictions which as originally granted or as subsequently varied refer to this exemption or CO 92/327 or which was originally granted for the purpose of allowing the promotion of horse racing syndicates of the kind described in the exemption in respect of horse racing syndicates registered with any of the lead regulators granted by the Commission on 24 April 1991.
SCHEDULE B
The operation of, and the offer for subscription, and issue of invitations to subscribe for any interest in a scheme:
(i) the principal purpose of which is the racing of a horse or horses ("the scheme horses") named and (prior to any offer or invitation in relation to the scheme) described in a disclosure statement which complies with Condition 2 of this exemption;
(ii) in respect of which there are at no time more than 20 participants;
(iii) in respect of which the total amount sought by way of subscriptions from participants does not exceed $250,000.00;
(iv) in respect of which the disclosure statement which complies with Condition 2 of this exemption in respect of the scheme contains an undertaking by the Promoter that the Promoter will:
(a) within 45 days of the scheme being fully subscribed, register the scheme with the Lead Regulator; and
(b) prior to registration of the scheme with the Lead Regulator, ensure that the participants in the scheme either have unencumbered title to the whole of the scheme horses or lease the whole of the scheme horses pursuant to a finance lease agreement in a standard form;
(v) which is subject to terms to the effect of those described in Schedule C ("the Terms") and which contains provision that the Terms may not be excluded, modified or varied without the written agreement of all participants in the scheme;
(v) in respect of which a disclosure statement is approved by a lead regulator.
SCHEDULE C
1 The manager of the scheme shall manage the scheme in accordance with the terms of any agreement ("the Agreement") governing the scheme approved by the Lead Regulator throughout its duration unless that person:
(a) retires with the prior written consent of the majority of the participants of the scheme not associated with the retiring manager;
(b) is removed in accordance with the terms of the Agreement; or
(c) otherwise retires or is removed with the consent of the Lead Regulator;
2 The manager shall:
(a) in respect of the scheme keep such accounting records as correctly record and explain the transactions and financial position of the scheme, such records to be kept in such a way as will enable true and fair profit and loss accounts and a statement of assets and liabilities to be prepared in respect of the scheme from time to time;
(b) in respect of each financial year other than a financial year that ended before the commencement of the scheme prepare a true and fair profit and loss account and statement of assets and liabilities containing such information and matters as correctly record and explain the transactions and financial position of the scheme ("the Accounts") and lodge the Accounts with the Lead Regulator within 90 days after the end of each financial year (being 30 June or such other day as specified in any agreement approved by the lead regulator as the day on which the financial year shall end) in respect of the relevant financial year and in addition lodge with the Commission a copy of the Accounts in respect of the last preceding financial year within 14 days after receipt of a written request to do so by the Commission; and
(c) open and maintain a separate account with an Australian bank in respect of the scheme which account shall be used for the deposit and payment of all moneys relating to the operation of the scheme.
Interpretation
For the purpose of this declaration:
"disclosure statement" means a written notice or other instrument:
(a) inviting applications or offers to subscribe for or buy any scheme interest; or
(b) offering any scheme interest for subscription or purchase.
"lead regulator, means any one of Australian Jockey Club, Victorian Racing Club, South Australian Jockey Club, Queensland Principal Club, Western Australian Turf Club, Tasmanian Thoroughbred Racing Council, Alice Springs Turf Club, Darwin Turf Club, Harness Racing Authority, The Western Australian Trotting Association, The Queensland Harness Racing Board.
"manager" means the person so named in the disclosure statement referred to in Condition 2 of this exemption or the person so appointed in accordance with the terms of any agreement governing the scheme approved by the Lead Regulator, or otherwise appointed with the approval of the Lead Regulator.
"offeree" means a person who is issued with, offered for subscription or purchase, or invited to subscribe for or buy, a scheme interest.
"participant" means any person who holds a beneficial interest in a scheme whether jointly or otherwise.
"scheme" means a managed investment scheme complying with the terms of Schedule B. "scheme interest" means an interest in a scheme of the kind described in Schedule B.
"standard form", in relation to a finance lease, means a form approved for that purpose by the lead regulator with whom the Promoter is registered in relation to the scheme for which the lease is to be used.
Dated 14th day of July 1998
Signed by George Durbridge
as delegate of the Australian Securities and Investments Commission