Explanatory Statement
ASIC Corporations (Amendment) Instrument 2024/664
This is the Explanatory Statement for ASIC Corporations (Amendment) Instrument 2024/664.
The Explanatory Statement is approved by the Australian Securities and Investments Commission (ASIC).
Summary
1. ASIC Corporations (Amendment) Instrument 2024/664 (the Instrument) amends paragraph 5(g) of ASIC Corporations (Replacement Bidder’s and Target’s Statements) Instrument 2023/688 (ASIC Instrument 2023/688). This change is made to give effect to the original intent of the relevant instruments.
Purpose of the Instrument
2. The Instrument amends item 14 of s635(1) in ASIC Instrument 2023/688 to clarify that the bidder must make offers for the securities under the bid through the relevant financial market, on the next day after the date referred to in item 13.
Consultation
3. On 30 November 2022, ASIC released Consultation Paper 365 (CP 365) seeking feedback on proposals to remake nine class orders relating to takeovers, compulsory acquisitions and relevant interests (including [CO 12/1209], [CO 13/519], [CO 13/520], [CO 13/521], [CO 13/522], [CO 13/524], [CO 13/525], [CO 13/526], and [CO 13/528]). The consultation period closed on 23 January 2023 and ASIC took submissions to CP 365 into account in remaking the relevant class orders. Details of the submissions received are contained in REP 773 Response to submissions on CP 365 which is available on ASIC’s website at www.asic.gov.au. No further consultation was required in respect of the Instrument because it gives effect to the policy intent of ASIC Instrument 2023/688 as originally made.
Operation of the Instrument
4. The Instrument amends ASIC Instrument 2023/688.
Legislative instrument and primary legislation
5. The subject matter and policy implemented by the Instrument is more appropriate for a legislative instrument rather than primary legislation because it provides administrative relief in circumstances where strict compliance with the primary legislation produces an unintended or unforeseen result.
Duration of the Instrument
6. The amendments made by the Instrument will cease to have effect on expiry of ASIC Instrument 2023/688.
Legislative authority
7. The Instrument is made under subsection 655A(1) Corporations Act 2001.
8. Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make any instrument, the power is to be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to amend any such instrument.
9. As a legislative instrument, the Instrument is disallowable under section 42 of the Legislation Act 2003.
Statement of Compatibility with Human Rights
10. The Explanatory Statement for a disallowable legislative instrument must contain a Statement of Compatibility with Human Rights under subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011. A Statement of Compatibility with Human Rights is in the Attachment.
Attachment
Statement of Compatibility with Human Rights
This Statement of Compatibility with Human Rights is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
ASIC Corporations (Amendment) Instrument 2024/664
Overview
1. ASIC Corporations (Amendment) Instrument 2024/664 (the Instrument) amends item 14 of s635(1) in ASIC Instrument 2023/688 to clarify that the bidder must make offers for the securities under the bid through the relevant financial market, on the next day after the date referred to in item 13.
Assessment of human rights implications
2. The Instrument does not engage any of the applicable rights or freedoms.
Conclusion
3. The Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
The ASIC Corporations (Amendment) Instrument 2024/664 was enacted to amend the ASIC Corporations (Replacement Bidder’s and Target’s Statements) Instrument 2023/688, specifically clarifying the obligations of bidders in corporate takeovers. This legislative instrument was introduced to address the unintended consequences of the original instrument that had potentially hindered the clarity and enforceability of takeover bids. The Australian Securities and Investments Commission (ASIC) was the enacting body, aiming to rectify the policy intent of the earlier instrument. The primary objective of this amendment is to ensure that bidders make offers for securities through the relevant financial market on the specified date, thereby enhancing the transparency and effectiveness of the corporate takeover process in compliance with the Corporations Act 2001.
Scope and Application
The ASIC Corporations (Amendment) Instrument 2024/664 amends paragraph 5(g) of ASIC Corporations (Replacement Bidder’s and Target’s Statements) Instrument 2023/688, clarifying the process for bidders to make offers for securities under a bid. This amendment ensures that the bidder must make these offers through the relevant financial market on the next day after the date specified in item 13. The purpose of this Instrument is to correct an unintended outcome from the original instrument, thereby ensuring compliance with the original policy intent. The Instrument applies to all bidders involved in corporate takeovers governed by the Corporations Act 2001, and its jurisdictional reach is national, as it pertains to all financial markets operating within Australia. There are no stated exclusions or exemptions within the Instrument itself, though any broader exclusions or exemptions would be governed by the primary legislation. The Instrument is a legislative instrument made under the authority of the Corporations Act 2001 and can be amended in the same manner as the original instrument. It is also subject to disallowance under the Legislation Act 2003.
Key Provisions
The ASIC Corporations (Amendment) Instrument 2024/664 amends the ASIC Corporations (Replacement Bidder’s and Target’s Statements) Instrument 2023/688. Specifically, it modifies item 14 of section 635(1) to ensure that bidders must make offers for securities through the relevant financial market on the next day after the date specified in item 13 (section 1). This amendment aims to clarify and enforce the original intent of the legislative framework regarding takeovers and compulsory acquisitions.
Under the amended instrument, the key obligation imposed on bidders is to adhere to the new stipulation that offers for securities must be made through the relevant financial market on the specified date (item 14, s635(1)). This requirement is designed to ensure transparency and fairness in the bidding process, facilitating orderly transactions within the financial market. The instrument also imposes a procedural requirement on bidders to ensure compliance with these timelines and market protocols, thereby maintaining the integrity of the market.
Failure to comply with the requirements of the amended instrument can result in regulatory repercussions. While the specific penalties are not detailed in the explanatory statement, non-compliance with ASIC regulations typically results in penalties under the Corporations Act 2001. These penalties can include fines and, in severe cases, criminal charges. The exact penalties depend on the nature and severity of the breach, with potential maximum penalties set out in the primary legislation.
The instrument, as a legislative instrument, is made under subsection 655A(1) of the Corporations Act 2001 and is subject to disallowance under section 42 of the Legislation Act 2003. Additionally, the Instrument is accompanied by a Statement of Compatibility with Human Rights, asserting that it does not engage any of the applicable rights or freedoms and is therefore compatible with the human rights and freedoms recognised in the international instruments listed in the Human Rights (Parliamentary Scrutiny) Act 2011.