ASIC Corporations (Real Estate Companies) Instrument 2026/99

Explanatory Statement

ASIC Corporations (Real Estate Companies) Instrument 2026/99

This is the Explanatory Statement for ASIC Corporations (Real Estate Companies) Instrument 2026/99 (Instrument).

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

Summary

1.              Chapter 6D of the Corporations Act 2001 (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 document;
   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.              Part 7.6 of the Act concerns the licensing of providers of financial services.
3.              A real estate company is a company formed for the purpose of owning and managing land and buildings.  Shares in the real estate company are held by persons who wish to have an exclusive right of occupation and use of a particular area within the land or building owned by the real estate company.  A real estate company is less common than strata title and has historically been used where owners wish to exercise control over occupiers, or where conversion to strata title is not practicable. 
4.              The Act regulates interests in real estate companies because they involve ownership of shares in a company. Under section 707 of the Act, a sale offer of shares must be accompanied by disclosure to investors if: 
   1.           the person making the offer controls the body and the securities are not quoted;
   2.           the offer of shares is made within 12 months after their issue without disclosure to investors and the purpose for the issue was on-sale; or 
   3.           the offer of shares is made within 12 months after being sold by the controller of the body without disclosure to investors, the shares are not quoted and the purpose for the issue was on-sale.
5.              Therefore, vendors of shares in real estate companies may have to issue a prospectus or other disclosure document that complies with Chapter 6D of the Act.   
6.              Valuers are engaged to provide valuations of shares in real estate companies, particularly for the purposes of their sale or purchase or their use as security for a mortgage.  Under subsection 911A(1) and section 766B of the Act, where a valuation report contains an opinion or is reasonably likely to influence:

1.           owners to sell their shares;
2.           potential owners to purchase shares; or 
3.           banks or financial institutions to register a mortgage over the shares; 

the person providing the report will be considered to be providing financial product advice and must hold an Australian financial services licence and comply with the obligations of a financial services licensee in Chapter 7 of the Act.  Real estate agents or others who regularly market or sell shares in real estate companies may also need to hold an Australian financial services licence because they are dealing in or providing advice in relation to shares. Shares are a kind of financial product.

1.              The Instrument recognises that shares in real estate companies are commercially regarded as real estate interests and that if these shares are treated as such, rather than as a financial product, there will be adequate consumer protection.  The Instrument ensures that owners of shares in real estate companies, real estate agents and valuers will not be subject to a regulatory burden that is unnecessary and disproportionate to the need for consumer protection. 
2.              The Instrument provides relief, on largely the same terms as ASIC Corporations (Real Estate Companies) Instrument 2015/1049 which was scheduled to expire under the Legislation Act 2003 on 1 April 2026 (Sunsetting Instrument).

Purpose of the instrument

1.              The purpose of the Instrument is to ensure that:

1.           vendors involved in secondary sales of shares in real estate companies; 
2.           real estate agents or others who regularly market or sell shares in real estate; and
3.           valuers who provide valuations of shares in real estate companies

are not subject to inappropriate regulation and the unreasonable cost burden that would be imposed on these persons under the financial services regulatory regime.

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.          Apart from a confidential, targeted consultation with the Australian Property Institute, ASIC otherwise did not receive any submissions about the Instrument in response to CS 36.
6.          Subsequent to CS 36, ASIC identified that ASIC Corporations (8 Daphne Street Botany Ltd – Real Estate Company) Instrument 2017/1063 (which is scheduled to expire/sunset on 1 April 2028) contains a reference to the Sunsetting Instrument.
7.          Ordinarily, ASIC might update ASIC Instrument 2017/1063 to substitute reference to the Sunsetting Instrument with a reference to the Instrument.  However, ASIC Instrument 2017/1063 provides relief to a company which is no longer registered.
8.          Having made appropriate enquiries, ASIC has formed the view that:

1.           ASIC Instrument 2017/1063 is no longer a necessary or useful part of the legislative framework;
2.           there is no-one appropriate or reasonably practicable to consult with; and
3.           it is appropriate to repeal ASIC Instrument 2017/1063 without undertaking further consultation.  

Operation of the instrument

1.          The Instrument commences on the later of:

1.           day after it is registered on the Federal Register of Legislation; and
2.           1 April 2026.

1.          The Instrument exempts persons who sell shares in a real estate company from the requirement to comply with the disclosure requirements in Part 6D.2 or Part 6D.3 of the Act where a number of conditions are met, including that:

1.           the sale is made by or on behalf of the vendor;
2.           the draft contract for sale is publicly available; and
3.           the terms of the sale contract include certain provisions regarding the real estate company and the property.

1.          The Instrument also gives relief from the licensing requirements of the Act for:

1.           persons who provide general advice and dealing in relation to shares in a real estate company; and
2.           persons who provide general advice that is, or is incidental to, a valuation of shares in a real estate company.

1.          This means that the licensing, conduct and disclosure obligations will not apply to those persons in those circumstances.
2.          Finally, the Instrument repeals:

1.           the Sunsetting Instrument (rather than leave it to expire/sunset) to avoid any doubt that it no longer continues in force; and
2.           ASIC Instrument 2017/1063.

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 companies. The Instrument provides administrative relief in circumstances where strict compliance with the primary legislation produces an unintended or unforeseen result. 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 subsections 741(1) and 926A(2) 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 926A(2) provides that ASIC may:

1.           exempt a person or class of persons from all or specified provisions to which this section applies; or
2.           exempt a financial product or class of financial products from all or specified provisions in which this section applies; or
3.           declare that provisions to which this section applies apply in relation to a person or financial product, or class of persons or financial products, 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 (Real Estate Companies) Instrument 2026/99

Overview

1. This instrument provides exemptions from:

(a) Parts 6D.2 and 6D.3 of the Corporations Act 2001 for persons who sell shares in a real estate company; and

(b) the requirement to hold an Australian financial services licence for:

(i) licensed real estate agents who provide general advice to a vendor in relation to shares in a real estate company or who deal in such shares on behalf of a vendor; and

(ii) persons who provide general advice in relation to shares in a real estate company that relates to a valuation of such shares or a valuation of property.

2. The exemptions are subject to various requirements.

Assessment of human rights implications

3. This instrument does not engage any of the applicable rights or freedoms. 

Conclusion

4. 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.