ASIC Corporations (Offers of Convertibles) Instrument 2026/97

Explanatory Statement

ASIC Corporations (Offers of Convertibles) Instrument 2026/97

This is the Explanatory Statement for ASIC Corporations (Offers of Convertibles) Instrument 2026/97 (Instrument).

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

Summary

1.              Chapter 6D of the Corporations Act 2001 (the 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 documents;
   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.              The Instrument modifies the Act so that an offer of certain securities that are convertible into continuously quoted securities can rely on the prospectus disclosure rules in section 713 of the Act.
3.              The Instrument provides relief, on largely the same terms as ASIC Corporations (Offers of Convertibles) Instrument 2016/83 which was scheduled to expire under the Legislation Act 2003 on 1 April 2026 (Sunsetting Instrument).

Purpose of the instrument

1.              The Instrument modifies the Act to allow the offer of convertible or converting notes or convertible or converting preference shares to be made based on information required by s713(2) instead of s710(1).
2.              This modification recognises that the disclosures required by investors for these convertible or converting notes and convertible or converting preference shares are similar to those required for the underlying continuously quoted securities (except that the rights attaching to the convertibles will be different), and the only new information investors should require for the offer is: 
   1.           the effect of the offer on the body;
   2.           the rights and liabilities attaching to:

1.            the convertibles offered; and
2.          the underlying securities into which the convertibles will convert; and
   1.           information not previously disclosed to the market, which covers information excluded from a continuous disclosure notice under the relevant listing rules.

1.              The instrument also clarifies that relief is available only where the issuer of the convertible security is also the issuer of the underlying security.

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.          Section 713 of the Act provides an alternative general disclosure test for disclosing entities offering continuously quoted securities, or options to acquire continuously quoted securities. This is known as transaction-specific disclosure.
3.          A prospectus prepared under section 713 (a ‘transaction-specific prospectus’) must contain information regarding:
   1.           the effect of the offer on the body (s713(2)(a));
   2.           the rights and liabilities attaching to the securities offered (or if the securities are options, the rights and liabilities attaching to the options themselves and the underlying securities) (s713(2)(c)-(d))); and
   3.           information not previously disclosed to the market, which covers information excluded from a continuous disclosure notice under the relevant listing rules (s713(5)).
4.          The Instrument modifies section 713 so that a transaction-specific prospectus can be used for the offer of convertible or converting notes or convertible or converting preference shares of a body that are convertible or may convert into continuously quoted securities of the body.
5.          In addition to the information required by paragraph 713(2)(a) and subsection 713(5), a transaction-specific prospectus of this nature must contain information about the rights and liabilities attaching to both the convertible or converting securities themselves, and the underlying securities: s713(2)(ca).
6.          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 this 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 offers. The Instrument provides administrative relief in circumstances where strict compliance with the primary legislation produces an unintended or unforeseen result [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 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 (Offers of Convertibles) Instrument 2026/97

Overview

1. This instrument modifies the Corporations Act 2001 so that an offer of certain securities that are convertible into continuously quoted securities can rely on the prospectus disclosure rules in section 713 of the Act.

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.