ASIC Corporations (Exposure Period) Instrument 2016/74
About this compilation
Compilation No. 1
This is a compilation of ASIC Corporations (Exposure Period) Instrument 2016/74 as in force on 15 November 2022. It includes any commenced amendment affecting the legislative instrument to that date.
This compilation was prepared by the Australian Securities and Investments Commission.
The notes at the end of this compilation (the endnotes) include information
about amending instruments and the amendment history of each amended provision.
Contents
Part 1—Preliminary
1 Name of legislative instrument
3 Authority
4 Definitions
Part 2—Exemption
5 Supplementary and replacement documents
6 Quoted securities
7 Options to acquire quoted securities
8 Products that are able to be traded on a market
Endnotes
Endnote 1—Instrument history
Endnote 2—Amendment history
Part 1—Preliminary
1 Name of legislative instrument
This instrument is ASIC Corporations (Exposure Period) Instrument 2016/74.
3 Authority
This instrument is made under sections 741 and 1020F of the Corporations Act 2001.
4 Definitions
In this instrument:
Act means the Corporation Act 2001.
exposure period, in relation to a disclosure document that is being supplemented or replaced, means the period mentioned in subsection 727(3) of the Act in relation to the disclosure document (including the period as extended by ASIC under that subsection).
responsible person has the meaning given by subsection 1013A(3) of the Act.
Part 2—Exemptions
5 Supplementary and replacement documents
(1) A person who lodges a supplementary or replacement document (an updating document) under section 719 of the Act after the expiration of the exposure period in relation to a disclosure document that is being supplemented or replaced does not have to comply with subsection 727(3) of the Act to the extent it would otherwise prohibit the person from accepting an application for, or issuing or transferring, securities offered under the updating document until the period of 7 days after the lodgment of the updating document has ended.
(2) A person who lodges an updating document before the expiration of the exposure period in relation to a disclosure document that is being supplemented or replaced does not have to comply with subsection 727(3) of the Act to the extent it would otherwise prohibit the person from accepting an application for, or issuing or transferring, securities offered under the updating document after the expiration of the exposure period.
(3) This section does not affect the application of subsection 727(3) of the Act to the disclosure document that is being supplemented or replaced.
6 Quoted securities
To avoid doubt, a person does not have to comply with subsection 727(3) of the Act in relation to an offer of securities if, at the time of lodgment of the disclosure document, the securities are in a class of securities that are quoted on a prescribed financial market.
7 Options to acquire quoted securities
A person does not have to comply with subsection 727(3) of the Act in relation to an offer of options to acquire securities if, at the time of lodgment of the disclosure document for the options, the underlying securities are in a class of securities that are quoted on a prescribed financial market.
8 Products that are able to be traded on a market
(1) To avoid doubt, a responsible person does not have to comply with subsection 1016B(1) of the Act in relation to an application made in response to a Product Disclosure Statement for a managed investment product (the product) or security in a retail CCIV (referable to a sub-fund) (the product) if, at the time of lodgment of the Statement, the product is in a class of products that are able to be traded on a prescribed financial market.
(2) For the purposes of this section, a class of products is not to be taken as not being able to be traded on a prescribed financial market merely because, at the time of lodgment of the Statement, trading in that class has been suspended.
Endnotes
Endnote 1—Instrument history
Instrument number | Date of FRL registration | Date of commencement | Application, saving or transitional provisions |
2016/74 | 16/03/2016 (see F2016L00347) | 17/03/2016 | |
2022/0940 | 14/11/2022 (see F2022L01459) | 15/11/2022 | - |
Endnote 2—Amendment history
ad. = added or inserted am. = amended LA = Legislation Act 2003 rep. = repealed rs. = repealed and substituted
Provision affected | How affected |
Section 2 | rep. s48D LA |
Section 8 | rs. 2022/0940 |
Overview
The ASIC Corporations (Exposure Period) Instrument 2016/74 was enacted to provide relief to companies and issuers from certain regulatory requirements concerning the timing of supplementary or replacement disclosure documents. This legislative instrument was made under the authority of sections 741 and 1020F of the Corporations Act 2001 by the Australian Securities and Investments Commission (ASIC). It aims to streamline the process for updating disclosure documents by allowing companies and issuers a brief period after the expiration of the exposure period to accept applications for, or issue or transfer securities without being constrained by the prohibitions set out in subsection 727(3) of the Act. This instrument seeks to balance the need for timely updates to disclosure documents with the practicalities of ensuring that investors are adequately informed about changes to offerings.
Scope and Application
The ASIC Corporations (Exposure Period) Instrument 2016/74 applies to individuals and entities involved in the offering of securities, options, and managed investment products in Australia. This legislative instrument is made under sections 741 and 1020F of the Corporations Act 2001, and it outlines exemptions from certain compliance requirements during the exposure period of a disclosure document. Specifically, it provides relief from the prohibition on accepting applications for, or issuing or transferring, securities if the supplementary or replacement document is lodged within specific timeframes. Additionally, it exempts certain offers of securities and options from compliance with the exposure period requirement if the securities are quoted on a prescribed financial market. This instrument extends its application nationally across Australia, providing uniformity in compliance requirements for financial markets. However, it does not affect the application of the exposure period to the original disclosure document that is being supplemented or replaced. The instrument also allows for its scope to be adjusted through subordinate instruments as necessary.
Key Provisions
The ASIC Corporations (Exposure Period) Instrument 2016/74 provides several key exemptions from certain requirements under the Corporations Act 2001 for specific types of securities and products. Section 5 of the Instrument exempts individuals or entities from the prohibition on accepting applications for, issuing, or transferring securities under a supplementary or replacement disclosure document after the expiration of the exposure period. This exemption applies if the updating document is lodged either after the exposure period has expired (subsection 5(1)) or before it expires (subsection 5(2)). However, it is important to note that this exemption does not extend to the original disclosure document that is being supplemented or replaced (subsection 5(3)).
Section 6 clarifies that there is no requirement to comply with certain prohibitions under the Corporations Act if the securities offered are quoted on a prescribed financial market at the time the disclosure document is lodged. Similarly, Section 7 extends this exemption to options to acquire quoted securities. These provisions are designed to streamline the process for entities dealing with securities that are already traded on a public market.
The Instrument also imposes specific obligations on responsible persons regarding the trading of managed investment products and securities in retail Continuously Convertible Instruments Vehicles (CCIVs). According to Section 8(1), responsible persons are not required to comply with certain restrictions under the Corporations Act when products are in a class that can be traded on a prescribed financial market at the time the Product Disclosure Statement is lodged. It is crucial that the ability of the product to be traded is not negated merely because trading has been suspended at the time of lodgment (subsection 8(2)).
Regarding the consequences of non-compliance, the Instrument itself does not detail specific offences, penalties, or consequences for breach. However, breaches of the underlying provisions of the Corporations Act 2001, which the Instrument seeks to modify, may result in both civil and criminal penalties. For instance, contraventions of disclosure requirements under the Corporations Act can result in substantial fines, both for the corporation and for individuals in responsible positions. The maximum penalties can include fines up to $210,000 for corporations and $42,000 for individuals, along with potential imprisonment terms for serious breaches. It is essential for parties governed by this Instrument to ensure compliance to avoid these potential legal repercussions.