ASIC Corporations (Repeal) Instrument 2016/1005

Administered by Department of the Treasury

Legislation au F2016L01622 Not in force Legislative Instrument

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Explanatory Statement for
ASIC Corporations (Renounceable Rights Issue Notifications) Instrument 2016/993 and ASIC Corporations (Repeal) Instrument 2016/1005

Prepared by the Australian Securities and Investments Commission

Corporations Act 2001

The Australian Securities and Investments Commission (ASIC) makes ASIC Corporations (Renounceable Rights Issue Notifications) Instrument 2016/993 and ASIC Corporations (Repeal) Instrument 2016/1005 under paragraphs 741(1)(a) and 1020F(1)(a) of the Corporations Act 2001 (the Act).

Paragraph 741(1)(a) provides that ASIC may exempt a person from a provision of Chapter 6D of the Act. Paragraph 741(2)(b) provides that the exemption may apply to all persons, specified persons or a specified class of persons.

Paragraph 1020F(1)(a) provides that ASIC may exempt a person or a class of persons from all or specified provisions of Part 7.9 of the Act.

Under subsection 33(3) of the Acts Interpretation Act 1901 (as in force as at 1 January 2005 and as applicable to the relevant powers because of section 5C of the Act), where an Act confers a power to make, grant or issue any instrument (including rules, regulations or by-laws), the power shall 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.

Background

Under the Legislative Instruments Act 2003, legislative instruments cease automatically, or ‘sunset’, after 10 years, unless action is taken to exempt or preserve them. To preserve its effect, a legislative instrument must be remade before its sunset date.

ASIC Class Order [CO 02/225] is scheduled to sunset on 1 April 2017. ASIC Corporations (Repeal) Instrument 2016/1005 repeals [CO 02/225] while ASIC Corporations (Renounceable Rights Issue Notifications) Instrument 2016/993 continues the relief that was given by [CO 02/225] in a new form.

ASIC Corporations (Renounceable Rights Issue Notifications) Instrument 2016/993 provides relief in connection with ‘rights issue notifications’ (i.e. the notification form that members receive in a rights offer informing them of their individual entitlement to acquire a specified number of shares or interests under the offer). The standard form used by listed companies, referred to as an ‘entitlement and acceptance form’, combines the ‘rights issue notification’ with an acceptance form and is provided to members with the offer document or disclosure document, as applicable, for the rights offer.

In a renounceable rights offer, one of the options available to the offeree includes transferring all or part of their entitlement to another person. The transfer of such an entitlement is governed by Division 3 of Part 7.11 of the Act and regulation 7.11.11(2) of the Corporations Regulations 2001 (the Regulations). The latter provides that a sufficient transfer of a ‘Division 3 right’ can be effected by a document duly completed in accordance with specified forms set out in Schedule 2A to the Regulations.

In practice, this is effected by the offeree (i.e. the transferor) sending a completed renunciation and transfer form to the relevant share registry and, if the transferee wishes to take up all or part of the entitlement transferred to them, they must then send their application money together with the entitlement and acceptance form to the registry.

Certain provisions of Chapter 6D and Part 7.9 may require these forms to be included in or accompanied by a disclosure document or Product Disclosure Statement. ASIC Corporations (Renounceable Rights Issue Notifications) Instrument 2016/993 provides disclosure relief to facilitate the sale or transfer of rights by offerees in a renounceable rights offer.

2. Purpose of the instrument

The purpose of ASIC Corporations (Renounceable Rights Issue Notifications) Instrument 2016/993 is to preserve the effect of [CO 02/225], which was scheduled to sunset on 1 April 2017 under the Legislative Instruments Act 2003. ASIC considers that the relief in the instrument continues to form a necessary and useful part of the legislative framework.

The instrument re-makes the relief that was provided by [CO 02/225] without significant changes. Minor amendments were made to the conditions of the relief so as to facilitate electronic access to documents and to remove unnecessary references (see Consultation Paper 261: Remaking and repealing ASIC class orders on rights issue notifications and money market deposits).

ASIC Corporations (Repeal) Instrument 2016/1005 repeals [CO 02/225] as the relief contained within that class order is now provided by ASIC Corporations (Renounceable Rights Issue Notifications) Instrument 2016/993.

3. Operation of the instrument

ASIC Corporations (Renounceable Rights Issue Notifications) Instrument 2016/993

Chapter 6D disclosure relief

ASIC Corporations (Renounceable Rights Issue Notifications) Instrument 2016/993 provides relief from subsections 721(1), 723(1) and 727(2) of the Act to persons involved in the renunciation and transfer of rights issued under a renounceable rights issue, but only to the extent that those provisions might otherwise require a ‘rights renunciation form’ to be included in or accompanied by a disclosure document.

For the purposes of the instrument, a rights renunciation form means:

(a) Form 5, 6, 7 or 8 in Schedule 2A to the Regulations or a form that is substantially similar to one of those Forms; or

(b) a notification form informing holders of Division 3 assets of their individual entitlement to acquire a specified number of Division 3 assets under a renounceable rights issue.

Part 7.9 disclosure relief

The instrument also provides relief from sections 1012B and 1016A of the Act to responsible entities of listed registered schemes that make offers to issue and issues interests in the scheme under a renounceable rights issue, but only to the extent that those provisions might require:

(a) a rights renunciation form to be included in or be accompanied by a Product Disclosure Statement; and

(b) the responsible entity to give a Product Disclosure Statement to a person (a transferee) to whom Division 3 rights are transferred or to a transferee who exercises such rights.

Conditions

In order to rely on the relief in the instrument, the listed body or the responsible entity (as applicable) must:

(a) have arrangements in place to ensure that during the period that offers under the renounceable rights issue remain open:

(i) the disclosure document or Product Disclosure Statement for the renounceable rights issue is made available for inspection at the registered office of the body or responsible entity or published on a website of the body or responsible entity;

(ii) if requested by a person (other than an excluded person), the disclosure document or Product Disclosure Statement is given to the person free of charge; and

(b) announce to each prescribed financial market on which the body or scheme is listed that the arrangements specified in paragraph (a) have been or will be put in place.

ASIC Corporations (Repeal) Instrument 2016/1005

ASIC Corporations (Repeal) Instrument 2016/1005 repeals [CO 02/225].

4. Consultation

ASIC undertook public consultation in relation to its proposal to re-make the relief in [CO 02/225] in Consultation Paper 261: Remaking and repealing ASIC class orders on rights issue notifications and money market deposits. ASIC received one submission, which was in support of the proposals outlined in the paper.

Overview

The Corporations Act 2001, enacted by the Australian Parliament, aims to regulate and provide a framework for corporations in Australia. One of its objectives is to ensure that corporations maintain transparency and fairness in their dealings, particularly in the context of financial activities and investor protections. To address issues concerning renounceable rights issues, the Australian Securities and Investments Commission (ASIC) has introduced the ASIC Corporations (Renounceable Rights Issue Notifications) Instrument 2016/993 and the ASIC Corporations (Repeal) Instrument 2016/1005. These instruments were enacted to preserve and continue the relief previously provided by ASIC Class Order [CO 02/225], which was set to sunset on 1 April 2017 under the Legislative Instruments Act 2003. The primary purpose of these instruments is to provide disclosure relief for entities involved in renounceable rights issues, facilitating the renouncement and transfer of rights by offerees. The instruments offer exemptions from certain provisions of the Corporations Act to ease the process of notifying shareholders about their rights in renounceable rights issues, while maintaining necessary disclosure requirements.

Scope and Application

The ASIC Corporations (Renounceable Rights Issue Notifications) Instrument 2016/993 and ASIC Corporations (Repeal) Instrument 2016/1005 apply to entities and individuals involved in the renounceable rights issues for listed companies in Australia. Specifically, the instruments provide disclosure relief to persons involved in the renunciation and transfer of rights under a renounceable rights issue, as well as to responsible entities of listed registered schemes that offer and issue interests in the scheme under such an issue. The relief pertains to the requirements under Chapter 6D and Part 7.9 of the Corporations Act 2001, which may otherwise mandate the inclusion of a 'rights renunciation form' in or with a disclosure document or Product Disclosure Statement. The geographic and jurisdictional reach of these instruments is nationwide, as they are made under the Corporations Act 2001, which is a Commonwealth Act. These instruments also extend their application through subordinate regulations, specifically the Corporations Regulations 2001. Notably, there are no stated exclusions or exemptions in these instruments; however, they do impose conditions such as ensuring the availability and accessibility of disclosure documents and making announcements to prescribed financial markets. The ASIC Corporations (Repeal) Instrument 2016/1005 repeals the ASIC Class Order [CO 02/225], which was set to sunset on 1 April 2017 under the Legislative Instruments Act 2003, while ASIC Corporations (Renounceable Rights Issue Notifications) Instrument 2016/993 continues the relief provided by [CO 02/225] in a new form.

Key Provisions

The main operative sections of the ASIC Corporations (Renounceable Rights Issue Notifications) Instrument 2016/993 and ASIC Corporations (Repeal) Instrument 2016/1005 pertain to disclosure relief for rights issue notifications in renounceable rights offers. Specifically, section 3 of the 2016/993 instrument provides relief from certain subsections of the Corporations Act 2001, including subsections 721(1), 723(1), and 727(2), to the extent that they would require a 'rights renunciation form' to be included in or accompanied by a disclosure document. Additionally, relief is provided under section 4 of the 2016/993 instrument from sections 1012B and 1016A of the Act, relating to the need for a rights renunciation form to be included in or be accompanied by a Product Disclosure Statement, and the requirement for responsible entities to provide such statements to transferees. The 2016/1005 instrument serves to repeal the ASIC Class Order [CO 02/225] that was scheduled to sunset on 1 April 2017. The obligations and requirements imposed by the instruments primarily focus on the availability and accessibility of disclosure documents. To rely on the relief, the listed body or the responsible entity must have arrangements in place to ensure that during the period that offers under the renounceable rights issue remain open, the disclosure document or Product Disclosure Statement for the issue is made available for inspection at the registered office of the body or responsible entity, or published on their website (section 5(a)(i) of the 2016/993 instrument). Furthermore, these documents must be provided free of charge if requested by a person, excluding certain specified individuals (section 5(a)(ii)). The body or responsible entity is also required to announce to each prescribed financial market on which the body or scheme is listed that the aforementioned arrangements have been or will be put in place (section 5(a)(iii)). Failure to comply with the obligations and requirements set forth in the instruments may result in various civil or criminal consequences. Although the specific penalties are not detailed within the text of the instrument, the Corporations Act 2001 and associated regulations generally provide for both civil and criminal penalties for non-compliance with the Act and its related provisions. These penalties may include fines, imprisonment, or both, depending on the nature and severity of the breach.

Area of Law: Corporate Law & Governance
Instrument: Instrument
Concepts: Definitions & Interpretation; Reporting & Disclosure Obligations; Regulatory Standards

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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.

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