ASIC Corporations (Approved Foreign Markets—Buy-backs and Takeovers) Instrument 2026/104

Explanatory Statement

ASIC Corporations (Approved Foreign Markets—Buy-backs and Takeovers) Instrument 2026/104

This is the Explanatory Statement for ASIC Corporations (Approved Foreign Markets—Buy-backs and Takeovers) Instrument 2026/104 (Instrument).

The Explanatory Statement is approved by the Australian Securities and Investments Commission (ASIC).

Summary

S257B(7)

1.              Division 2 of Pt 2J.1 of the Corporations Act 2001 (Act) regulates share buy-backs. A company may buy back its own shares if:

1.           the buy-back does not materially prejudice the company’s ability to pay its creditors; and
2.           the company follows the procedures in Division 2 of Part 2J.1.

1.              On-market buy-backs are one type of buy-back under the Act. An on-market buy-back is defined in s9 of the Act as a buy-back by a listed corporation on a declared financial market in the ordinary course of trading on that market.
2.              An on-market buy-back also occurs when an offer is made in the ordinary course of trading in a financial market outside of Australia which ASIC has declared in writing to be an approved overseas financial market for the purposes of s257B(7).
3.              In this Instrument, ASIC declares that an approved foreign market is an approved overseas market for the purposes of subsection 257B(7) of the Act (dealing with when a buy-back is an on-market buy-back).

Note:  In the Instrument, approved foreign market has the same meaning as in section 5 of ASIC Corporations (Definition of Approved Foreign Market) Instrument 2017/669 .  ASIC Instrument 2017/669 is available on the Federal Register of Legislation.

Item 14 of section 611

1.              A downstream acquisition occurs when a person acquires a relevant interest in the shares of a downstream company as a result of an acquisition in an upstream entity.
2.              Item 14 of section 611 of the Act exempts downstream acquisitions from the section 606 prohibition when the acquisition results from an upstream acquisition of a relevant interest in voting shares of a body corporate that is included in the official list of:
   1.           a declared financial market; or
   2.           a foreign body conducting a financial market that is a body approved in writing by ASIC for the purposes of item 14.
3.              The policy intention behind item 14 is to:
   1.           preserve the free flow of shares in widely held entities listed on appropriate exchanges;
   2.           prevent companies constructing a takeover defence through the acquisition of strategic parcels in downstream companies; and
   3.           enhance international comity through the removal of obstacles to primarily foreign business transactions.
4.              In this Instrument, ASIC approves a foreign body conducting an approved foreign market for the purposes of item 14 of the table in section 611 of the Act. Item 14 provides an exemption from the 20% acquisition limit in section 606 of the Act.
5.              The Instrument provides relief, on largely the same terms as ASIC Corporations (Approved Foreign Markets—Buy-backs and Takeovers) Instrument 2015/1071 which was scheduled to expire under the Legislation Act 2003 on 1 April 2026 (Sunsetting Instrument).

Purpose of the instrument

1.          The purpose of the Instrument is to;

1.           enable foreign financial markets that have comparable disclosure requirements to ASX to rely on the exemption provided in item 14;
2.           facilitate international comity through the removal of excessive costs and regulatory obstacles to primarily foreign business transactions; and
3.           maintain sufficient investor disclosure.

1.          Further information on downstream acquisitions may be found in Regulatory Guide 71 Downstream acquisitions (RG 71).

Consultation

1.          ASIC determined that the relief in the Sunsetting Instrument was operating effectively and efficiently and continues to form a necessary and useful part of the legislative framework.
2.          On 24 November 2025, ASIC published CS 36 Proposed remake of relief for fundraising and mergers and acquisitions (CS 36).
3.          On 24 November 2025, ASIC also published an accompanying news item ASIC proposes to remake relief for fundraising and mergers and acquisitions. 
4.          ASIC brought CS 36 to the attention of its external stakeholders through the Corporate Finance Update published November 2025.
5.          ASIC did not receive any submissions about the Instrument in response to CS 36 (which closed 19 December 2025).

Operation of the instrument

1.          The Instrument commences on the later of:
   1.           day after it is registered on the Federal Register of Legislation; and
   2.           1 April 2026.
2.          The Instrument includes:
   1.           a declaration for the purposes of subsection 257B(7) of the Act; and
   2.           an approval for the purposes of item 14 of the table in section 611 of the Act.
3.          Finally, the Instrument repeals the Sunsetting Instrument (rather than leave it to expire/sunset) to avoid any doubt that it no longer continues in force.

Legislative instrument and primary legislation 

1.          The subject matter and policy implemented by this instrument is more appropriate for a legislative instrument rather than primary legislation because the Instrument contains technical detail which would otherwise introduce unnecessary complexity to the primary legislation
2.          It will be a matter for the Government and for Parliament as to whether the Act or Regulations may be amended in future to include the relief in the Instrument.

Duration of the instrument

1.          The Instrument will expire after 5 years.
2.          This allows sufficient time for the Government and for Parliament to determine whether to amend the Act or Regulations to include the relief.

Legislative authority

1.          ASIC makes this Instrument under subsection 11(4) of the Australian Securities and Investments Commission Act 2001 (ASIC Act) for the purposes of:
   1.           subsection 257B(7) of the Act; and
   2.           item 14 of the table in section 611 of the Act.
2.          Subsection 11(4) of the ASIC Act provides that ASIC has such functions and powers as are conferred on it by or under the corporations legislation (other than the excluded provisions).
3.          Section 5 of the ASIC Act defines:
   1.           ‘corporations legislation’ to mean the Act and the ASIC Act; and 
   2.           ‘excluded provisions’ to mean section 12A and Division 2 of Part 2.
4.          Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power is to be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend or vary any such instrument.
5.          This Instrument is disallowable under section 42 of the Legislation Act 2003.

Statement of Compatibility with Human Rights 

20. 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 (Approved Foreign Markets—Buy-backs and Takeovers) Instrument 2026/104

Overview

1.              This instrument is made for the purposes of certain buy-back and takeover provisions of the Corporations Act 2001 (Act). It:

1.            declares that an approved foreign market is an approved overseas market for the purposes of subsection 257B(7) of the Act (dealing with when a buy-back is an on-market buy-back); and

1.           approves a foreign body conducting an approved foreign market for the purposes of item 14 of the table in section 611 of the Act. Item 14 provides an exemption from the 20% acquisition limit in section 606 of the Act.

Assessment of human rights implications

2. This instrument does not engage any of the applicable rights or freedoms. 

Conclusion

3. This 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.