ASIC Corporations (Foreign Rights Issues) Instrument 2015/356

Administered by Department of the Treasury

Legislation au F2015L01377 Not in force Legislative Instrument

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ASIC Corporations (Foreign Rights Issues) Instrument 2015/356

 

About this compilation

 

Compilation No. 1

 

This is a compilation of ASIC Corporations (Foreign Rights Issues) Instrument 2015/356 as in force on 5 September 2017. 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 Disclosure relief for rights issues of foreign securities

Endnotes

Endnote 1—Instrument history

Endnote 2—Amendment history

 

Part 1—Preliminary

1 Name of legislative instrument

This instrument is ASIC Corporations (Foreign Rights Issues) Instrument 2015/356.

3 Authority

This instrument is made under section 741 of the Corporations Act 2001.

4 Definitions

In this instrument:

Act means the Corporations Act 2001.

approved foreign market has the meaning given by section 9 of the Act.

Note: The definition of approved foreign market is notionally inserted by ASIC Corporations (Definition of Approved Foreign Market) Instrument 2017/669.

Australian offeree means an offeree who receives an offer of securities under a pro-rata offer or shortfall offer in this jurisdiction.

Australian resident, in relation to a pro-rata offer or shortfall offer of a foreign company, means:

(a) a beneficial owner of securities in the offer class whose address:

(i) as included in publicly available reports of beneficial ownership that have been given to:

(A) an agency of a government or other body that performs regulatory functions under the laws of:

(I) the place of origin of the foreign company; or

(II) the jurisdiction of an approved foreign market on which the securities in the offer class are quoted; or

(B) a market operator of an approved foreign market on which the securities in the offer class are quoted; or

(ii) as otherwise known to the foreign company,

is in this jurisdiction; or

(b) if the address of a beneficial owner of securities in the offer class is not included in such publicly available reports or otherwise known to the foreign company—a holder of securities in the offer class whose address, as recorded in the relevant register of members, is in this jurisdiction.

foreign regulatory requirements means the laws or other rules (however described) that apply to the pro-rata offer or the shortfall offer in the primary foreign jurisdiction as in force at the date of the offer.

offer class means the class of securities to which offers of securities under a pro-rata offer relates.

primary foreign jurisdiction means:

(a) the place of the approved foreign market on which the securities in the offer class are quoted; or

(b) if securities in the offer class are quoted on more than one approved foreign market—the place of the approved foreign market where it is reasonably expected that the largest numbers of offers will be received under the pro-rata offer.

pro-rata offer means an offer of securities that is made to every person who holds securities in a particular class to issue them, or their assignee, with the percentage of the securities to be issued that is the same as the percentage of the securities in the class that they hold before the offer but disregarding:

(a) the rounding up or down of the number of securities offered to that holder to a whole number; and

(b) the fact that the offer is not made to holders in relation to whom, under the foreign regulatory requirements, offers do not have to be made.

shortfall offer, in relation to a pro-rata offer, means an offer of securities in the same class as the offer class where:

(a) the offer is made to persons to whom offers were made under the pro-rata offer; and

(b) the offer is made no later than 2 months after the first offer is made under the pro-rata offer; and

(c) either:

(i) the securities had first been offered to, but not accepted by, a person under the pro-rata offer; or

(ii) the offer is made on the condition that the securities to which the offer relates may only be issued to the person where an offer of securities has first been made to, but not accepted by, another person under the pro-rata offer.

Part 2—Exemption

5 Disclosure relief for rights issues of foreign securities

(1) A foreign company that makes a pro-rata offer or shortfall offer of securities that the company reasonably believes is made in accordance with foreign regulatory requirements does not have to comply with Part 6D.2 or 6D.3 of the Act in relation to the pro-rata offer or shortfall offer.

(2) A person that makes a sale offer of securities within 12 months after the issue of the securities under a pro-rata offer or shortfall offer does not have to comply with Part 6D.2 or 6D.3 of the Act in relation to the sale offer.             

(3) The exemptions in subsections (1) and (2) apply where all of the following are satisfied in relation to the pro-rata offer or shortfall offer:

(a) the terms of each offer made to an Australian offeree are no less favourable than those extended to other offerees;

(b) the number of securities offered to Australian residents is no more than 10% of the number of securities offered to all offerees;

(c) the securities to which the offer relates are in a class of securities that were quoted on an approved foreign market at all times in the 3 months before the day the offer is made;

(d) trading in that class of securities on the foreign market was not suspended for more than a total of 5 days during the shorter of the following periods:

(i) the period during which the class of securities is quoted;

(ii) the period of 12 months before the day on which the offer is made;

(e) the disclosure relating to the offer that is given or made available to Australian offerees:

(i) is the same as the disclosure that is given or made available to an offeree located in the primary foreign jurisdiction; and

(ii) is in English if an English version of the disclosure is available; and

(iii) is given or made available at or before the time the offer is made.

Endnotes

Endnote 1—Instrument history

Instrument number

Date of FRL registration

Date of commencement

Application, saving or transitional provisions

2015/356

1/9/2015 (see F2015L01377)

2/9/2015

 

2017/6

4/9/2017 (see F2017L01128)

5/9/2017

-

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 4 (definition of approved foreign market)


am. 2017/6

 

 

Overview

The ASIC Corporations (Foreign Rights Issues) Instrument 2015/356, enacted on 2 September 2015, was introduced to provide relief from certain disclosure requirements under the Corporations Act 2001 for foreign companies issuing securities through pro-rata or shortfall offers to Australian investors. This legislative instrument was made under section 741 of the Corporations Act 2001 by the Australian Securities and Investments Commission (ASIC). The policy objective of the instrument is to facilitate foreign companies in making rights issues to Australian investors while ensuring that Australian investors receive adequate and timely information about such offers. The exemptions from disclosure requirements are subject to conditions, including that Australian investors receive disclosure no less favourable than that given to foreign investors and that the securities offered to Australian investors do not exceed 10% of the total offered. This instrument aims to balance the need for investor protection with the practicalities of cross-border securities offerings. The ASIC Corporations (Foreign Rights Issues) Instrument 2015/356 addresses a gap in the regulatory framework by providing tailored disclosure exemptions for foreign rights issues, thereby encouraging foreign investment in Australian markets. The exemptions are conditional, ensuring that Australian investors are not disadvantaged and are provided with sufficient information to make informed investment decisions. This legislative instrument reflects a policy objective of fostering a well-regulated, competitive financial market that attracts international investment while protecting domestic investors.

Scope and Application

The ASIC Corporations (Foreign Rights Issues) Instrument 2015/356 applies to foreign companies making pro-rata offers or shortfall offers of securities to Australian residents under certain conditions. The exemptions provided by this legislative instrument are intended to alleviate compliance burdens on foreign companies and persons involved in rights issues of foreign securities, provided the offers meet specific criteria including, but not limited to, the terms offered to Australian residents being no less favourable than those offered to other residents, the number of securities offered to Australian residents not exceeding 10% of the total number offered, and the securities being in a class that was quoted on an approved foreign market in the preceding three months without trading suspension exceeding five days. Additionally, the disclosure provided to Australian residents must be the same as that provided to residents in the primary foreign jurisdiction and must be made in English if an English version is available. The instrument is made under section 741 of the Corporations Act 2001 and came into effect on 2 September 2015, with amendments registered on 5 September 2017. The instrument’s application can be further extended or restricted through subordinate instruments, although such provisions are not detailed in this specific legislative instrument.

Key Provisions

The ASIC Corporations (Foreign Rights Issues) Instrument 2015/356 provides exemptions from certain disclosure requirements under the Corporations Act 2001 for foreign companies issuing securities through pro-rata or shortfall offers, as well as for persons making a sale offer of such securities within 12 months of the issue. According to Section 5(1), a foreign company that makes a pro-rata or shortfall offer of securities, which it reasonably believes complies with foreign regulatory requirements, is exempt from the need to comply with Part 6D.2 or 6D.3 of the Act. Similarly, Section 5(2) exempts a person who makes a sale offer of securities within 12 months after the issue of the securities under a pro-rata or shortfall offer from the same parts of the Act. These exemptions apply if specific conditions are met, including that the terms offered to Australian offerees are no less favourable than those extended to other offerees, the number of securities offered to Australian residents is no more than 10% of the total number offered, and the securities were quoted on an approved foreign market for the three months preceding the offer. The obligations imposed by this instrument on the parties it governs are primarily centred around ensuring compliance with the conditions that trigger the exemptions from disclosure requirements. For example, a foreign company must ensure that the terms of the offer to Australian offerees are at least as favourable as those offered to other offerees and that the number of securities offered to Australian residents does not exceed 10% of the total number offered. Additionally, the company must confirm that the securities were quoted on an approved foreign market for at least the three months prior to the offer. Furthermore, the foreign company must ensure that trading in the securities was not suspended for more than a total of 5 days during the shorter of two specified periods, and that the disclosure provided to Australian offerees is the same as that provided to offerees in the primary foreign jurisdiction, is available in English if an English version exists, and is provided at or before the time of the offer. The instrument does not explicitly outline specific offences, penalties, or consequences for breach. However, it is implied that any failure to comply with the conditions necessary to invoke the exemptions could result in the foreign company or the person making the sale offer being subject to the full disclosure requirements of Part 6D.2 or 6D.3 of the Act. While the instrument itself does not detail penalties, any breach of the Corporations Act 2001 may lead to civil or criminal penalties, which could include fines or imprisonment, depending on the nature and severity of the breach.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.