ASIC Corporations (Disclosure Relief—Offers to Associates) Instrument 2017/737

Overview

The ASIC Corporations (Disclosure Relief—Offers to Associates) Instrument 2017/737 was enacted to provide relief from certain disclosure obligations under the Corporations Act 2001 in relation to offers made to associates of a disclosing entity. This legislative instrument was created under the authority of subsections 741(1) and 1020F(1) of the Corporations Act 2001 by the Australian Securities and Investments Commission (ASIC). The objective of this instrument is to reduce the administrative burden on companies and their officers by providing relief from specific disclosure requirements, while ensuring that the interests of investors are still adequately protected. This instrument modifies the definition of 'senior manager' for the purposes of certain chapters in the Corporations Act, thereby altering the scope of who is required to disclose information about offers to associates. The instrument came into effect on 24 August 2017 and was further amended on 18 September 2018. The changes primarily involve adjustments to the definitions and application of the relief provisions. This legislative instrument aims to streamline the disclosure process for companies, making it easier for them to comply with the law without unnecessarily burdening them with excessive reporting requirements.

Scope and Application

The ASIC Corporations (Disclosure Relief—Offers to Associates) Instrument 2017/737 is a legislative instrument that modifies the definition of 'senior manager' under the Corporations Act 2001, thereby affecting the scope of certain provisions concerning offers to associates. The instrument applies to all persons involved in the management of a body, irrespective of their formal designation as a director or secretary, and extends to managed investment products and foreign passport fund products as specified in the Act. The purpose of this modification is to provide relief by potentially reducing the disclosure obligations under specific sections of the Corporations Act. The instrument came into effect on 24 August 2017, with a subsequent amendment on 18 September 2018, which further clarified the application of the instrument. The changes are limited to the definition of 'senior manager' and do not extend to other areas of the Act unless specifically mentioned.

Key Provisions

The ASIC Corporations (Disclosure Relief—Offers to Associates) Instrument 2017/737 is a legislative instrument that modifies the definition of 'senior manager' in the Corporations Act 2001. Specifically, section 5 of the instrument amends the definition in section 9 of the Act by omitting paragraph (a) and substituting a new definition. This means that a senior manager, in relation to a body, is now defined as a person who is concerned in, or takes part in, the management of the body, regardless of their designation and whether or not they are a director or secretary of the body. This amendment imposes certain obligations on the parties governed by the Corporations Act 2001. Companies and other bodies subject to the Act must ensure that their senior managers understand the requirements of the Act and comply with any disclosure obligations that may arise. This includes ensuring that any offers made to associates are properly disclosed, and that the company has obtained the necessary approvals or waivers as required by the Act. Failure to comply with the provisions of the Act, including the requirements related to offers to associates, can result in both civil and criminal consequences. The Act provides for a range of penalties, including fines and imprisonment, for breaches of the disclosure requirements. For example, section 1311 of the Act provides for a maximum penalty of $210,000 or imprisonment for five years, or both, for certain types of insider trading. Similarly, section 1041H provides for a maximum penalty of $210,000 or imprisonment for two years, or both, for breaches of the disclosure requirements related to offers to associates. It is important for companies and other bodies to be aware of the requirements of the Act and to ensure that they are properly managed by their senior managers. Failure to do so can result in significant penalties and reputational damage, as well as potential legal action from affected parties. Companies should seek legal advice if they are unsure about their obligations under the Act, or if they require guidance on how to comply with the disclosure requirements related to offers to associates.