ASIC Corporations (Foreign Scrip Bids) Instrument 2025/612

Explanatory Statement

ASIC Corporations (Foreign Scrip Bids) Instrument 2025/612

This is the Explanatory Statement for ASIC Corporations (Foreign Scrip Bids) Instrument 2025/612 (Instrument).

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

Summary

1.              Chapter 6D and Part 7.9 of the Corporations Act 2001 (Act) regulate the offers of securities and financial products in Australia. Generally, a prospectus or Product Disclosure Statement (PDS) is required for offers received in Australia, unless an exemption applies. The Act provides specific exemptions to this disclosure requirement for securities and interests in a managed investment scheme offered as consideration under a bid regulated by Chapter 6 of the Act: subsections 708(18) and 1012D(7).
2.              There is no specific exemption from the prospectus and PDS requirement for a foreign scrip bid and therefore a prospectus or PDS would ordinarily be required for offers received in Australia. The requirement to prepare a prospectus or PDS for a relatively small number of Australian members may deter bidders from offering scrip to them.

Note: A foreign scrip bid is a bid regulated in a foreign jurisdiction where securities, interests in a managed investment scheme or shares in a CCIV form all or part of the consideration offered under the bid.

1.              The purpose of the Instrument is to provide conditional prospectus and PDS relief for offers of scrip under a bid where the bid class securities are quoted on an approved foreign market and where Australian residents hold no more than 10% of the bid class securities.

Purpose of the instrument

1.              The Instrument is intended to facilitate participation by Australian investors in these foreign scrip bids on the same basis as foreign investors, where suitable safeguards are in place.
2.              The Instrument provides relief, on largely the same terms as ASIC Corporations (Foreign Scrip Bids) Instrument 2015/357 which was scheduled to expire on 1 October 2025.

Consultation

1.              On 9 July 2025, ASIC published simple consultation CS 25 Proposed remake of disclosure relief for offers of foreign securities and interests to Australian investors on its website (CS 25). 
2.              On 9 July 2025, ASIC also published an accompanying news item ASIC proposes to remake disclosure relief for offers of foreign securities and interests to Australian investors.  
3.              ASIC brought CS 25 to the attention of its external stakeholders through the Corporate Finance Update published July 2025.
4.              ASIC did not receive any submissions to CS 25 (which closed 15 August 2025).

Operation of the instrument

1.          The Instrument commences on the day after it is registered on the Federal Register of Legislation.
2.          The Instrument provides relief from Parts 6D.2 and 6D.3 and sections 1012A, 1012B and 1012C for offers of securities or interests in a managed investment scheme under a foreign scrip bid where:

1.           Australian residents hold no more than 10% of the bid class securities or interests (determined at a time, fixed by the bidder, in the 30 day period before offers are first made under the takeover);
2.           the bid class securities or interests are quoted on an approved foreign market and the takeover is regulated by the law or other rules that apply in that jurisdiction;
3.           if the applicable law or rules require disclosure, Australian offerees are given an English version of the disclosure (if available) or a version of the document given to offerees in the foreign jurisdiction;
4.           the offer made to Australian offerees is on terms that are at least as favourable as offers that are made to foreign offerees; and
5.           the entity relying on the relief reasonably believes that the bid complies with the relevant foreign regulatory requirements.

1.          The bid class securities must be quoted on an approved foreign market but the relief does not impose any requirement on the scrip offered as consideration.
2.          The Instrument also gives relief from the on-sale restrictions in subsections 707(3) and 1012C(6). Without on-sale relief, a person who received securities or interests described in subsections 707(3) and 1012C(6) under a foreign scrip bid conducted without a prospectus or PDS would be restricted from selling those securities, interests or shares in Australia within 12 months of receiving them.

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 are highly specific and only apply where a relatively small subset of offerees are located in Australia. The Instrument provides administrative relief in circumstances where strict compliance with the primary legislation produces anomalous outcomes that would be inconsistent with the intent of the primary law. 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 additional cost and 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 the Instrument under subsections 741(1) and 1020F(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.          Subsection 1020F(1) provides that ASIC may:

1.           exempt a person or class of persons from all or specified provisions of Part 7.9; or
2.           exempt a financial product or a class of financial products from all or specified provisions of Part 7.9; or
3.           declare that Part 7.9 applies in relation to a person or a financial product, or a class of persons or financial products, as if specified provisions were omitted, modified or varied as specified in the declaration.

1.          The 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 (Foreign Scrip Bids) Instrument 2025/612

Overview

This instrument provides conditional relief from the disclosure provisions in Ch 6D of the Corporations Act 2001 (Act) and the Product Disclosure Statement (PDS) provisions in Pt 7.9 of the Act for bids where the bid class securities are quoted on an approved foreign market.

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.