ASIC Corporations (Debenture Prospectuses) Instrument 2026/91

Explanatory Statement

ASIC Corporations (Debenture Prospectuses) Instrument 2026/91

This is the Explanatory Statement for ASIC Corporations (Debenture Prospectuses) Instrument 2026/91 (Instrument).

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

Summary

1.              Chapter 6D of the Corporations Act 2001 (Act) establishes the statutory regime applying to fundraising through the offer of securities for issue or sale in Australia. It:
   1.           addresses the circumstances in which a person offering securities for issue or sale must lodge a disclosure document with ASIC and the relevant form, content and procedural requirements applying to that disclosure document;
   2.           sets out certain prohibited conduct in relation to fundraising activity;
   3.           outlines the circumstances in and extent to which persons may be liable for defective disclosure documents; and
   4.           provides certain statutory remedies for investors.
2.              This Instrument modifies the prospectus content requirements in Chapter 6D of the Act for offers of debentures by a body in the ordinary course of its business.
3.              Subject to various requirements, the relief allows the interest rate and term information relating to the offer to be set out in the most recent application form lodged with ASIC from time to time, or to be easily accessed by applicants by other means free of charge, rather than in the prospectus itself.
4.              The Instrument provides relief, on largely the same terms as ASIC Corporations (Debenture Prospectuses) Instrument 2016/75 which was scheduled to expire under the Legislation Act 2003 on 1 April 2026 (Sunsetting Instrument).

Purpose of the instrument

1.              An offer of securities for issue or sale needs—unless a relevant statutory exception applies—disclosure under Chapter 6D of the Act. A debenture is a ‘security’ in accordance with section 9 of the Act. Accordingly, debenture issuers are required to comply with the fundraising provisions of Chapter 6D of the Act and must prepare and lodge a disclosure document with ASIC in relation to an offer of debentures.
2.              A prospectus prepared in accordance with sections 710, 711 and 713 of the Act must include all information investors reasonably require to make an informed assessment of the offer. These provisions generally require the issuer to state in the prospectus or accompanying application form particulars of all of the essential terms of the offer and the resulting contract—which would include the interest rates applicable and the term of the debenture.
3.              For continuous debenture issuers (bodies which issue debentures in the ordinary course of their business), the requirement that all material information be included in the body of the prospectus creates difficulties where the interest rate and term of the debenture being offered is constantly changing. It would be unduly burdensome for debenture issuers who raise funds on a continuous basis through the issue of debt securities (such as finance companies) to be required to reissue a prospectus for each offering of debentures simply due to a change in interest rate or term of the debenture being offered, where all other underlying information remains the same.
4.              Section 712 of the Act allows a short form prospectus to incorporate documents into a prospectus by reference, provided the documents are lodged with ASIC with the prospectus. However, this section does not allow incorporation by reference of documents lodged from time to time with ASIC. In addition, it is not possible under section 712 of the Act for essential terms of the offer to be incorporated by reference into a prospectus by making this information available to potential investors by other means (for instance, on an offeror’s website or by contacting the offeror for a copy of the latest interest rate and term information).
5.              The Instrument modifies the Act to allow a prospectus to incorporate interest rate and term information set out in application forms lodged with ASIC from time to time, or easily accessible to potential investors by other means (and involves no charge), throughout the life of the prospectus.

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.           the day after it is registered on the Federal Register of Legislation; and
   2.           1 April 2026.
2.          This instrument modifies Chapter 6D of the Act by:

1.           inserting subsections 712(7) – (10) and subsection 727(2A) to allow interest rate and term information to be included on an application form lodged with ASIC from time to time, rather than in the prospectus itself, provided that:

1.             the prospectus:

1.            makes it clear that the interest rate and term is subject to change from time to time;

1.             states that the current interest rate and term at any time will be set out in the application form most recently lodged with ASIC; and

1.             explains that the applicant may have rights to a refund if the application is made on an out-of-date application form (under section 725AA); and

1.          the body does not make an offer of debentures or distribute the prospectus for the offer unless the offer or prospectus is accompanied by a copy of the most recent application form lodged with ASIC.

1.           inserting section 712A to allow a prospectus and accompanying application form to be silent on the interest rate and term of the debenture provided that:

1.             the prospectus clearly and prominently:

1.            explains how applicants can ascertain the relevant interest rate and term information;

1.             advises the applicant to confirm the currency of any interest rate prior to completing the application; and

1.             explains that an applicant may have rights to a refund if the application form does not specify an interest rate, an amount or a term or specifies an interest rate which is not the current interest for debentures of the amount and term specified by the applicant (under section 725AA);

1.          the application form makes provision for the applicant to specify or select the applicable interest rate and term when applying for debentures; 

1.        the means by which the interest rate and term information can be ascertained is easily accessible and involves no charge to the applicant; and

1.         any change in the interest rate or term of an available debenture is advertised in appropriate media.

1.          In accordance with subsection 712(7) and subsection 712A(1) respectively, these sections only apply to an offer of a body’s debentures for issue in the ordinary course of its business and in the case of subsection 712A(1), where the debentures have a term of no more than five years.  Accordingly, the relief provided by this instrument only applies to bodies which raise funds on a continuous basis through the issue of debt securities (such as finance companies).
2.          The Instrument also modifies or varies Chapter 6D of the Act by inserting section 725AA, which provides applicants with rights to a refund when an out-of-date, incorrect or incomplete application form is used to apply for debentures.  Under this provision, the body must:

1.           repay the money received by the applicant; or

1.           give the applicant a notice that informs them of the error in their application and provides them with the correct information or a copy of the correct application form (as the case may be) and allow the applicant one month to withdraw their application and be repaid; or

1.           issue the debentures to the applicant at the current interest rate and give them the notice referred to above and 1 month to withdraw their application and be repaid (subsection 725AA(3)).

1.          Alternatively, if the interest rate specified in the incorrect application form is higher than the current interest rate, the body can elect to issue the debentures to the applicant at that higher rate (subsection 725AA(4)).
2.          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 the Instrument is more appropriate for a legislative instrument rather than primary legislation because the matters contained in the instrument only affect a relatively small subset of issuers. If the matters in the instrument were to be inserted into the primary legislation, they would insert, into an already complex statutory framework, a set of specific provisions that would apply only to a relatively small group of entities. This would result in unnecessary complexity for other users of 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 741(1) of the Act.
2.          Subsection 741(1) provides that ASIC may:

1.           exempt a person from a provision of Chapter 6D; or
2.           declare that Chapter 6D applies to a person as if specified provisions were omitted, modified or varied as specified in the declaration.

1.          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.
2.          This Instrument is disallowable under section 42 of the Legislation Act 2003.

Statement of Compatibility with Human Rights 

1.          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 (Debenture Prospectuses) Instrument 2026/91

Overview

1. This instrument modifies the prospectus content requirements in Chapter 6D of the Corporations Act 2001 for offers of debentures by a body in the ordinary course of its business. Subject to various requirements, the relief allows the interest rate and term information relating to the offer to be set out in the most recent application form lodged with ASIC from time to time, or to be easily accessed by applicants by other means free of charge, rather than in the prospectus itself.

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.