ASIC Corporations (Sale Offers That Do Not Need Disclosure) Instrument 2026/94

Explanatory Statement

ASIC Corporations (Sale Offers That Do Not Need Disclosure) Instrument 2026/94

This is the Explanatory Statement for ASIC Corporations (Sale Offers That Do Not Need Disclosure) Instrument 2026/94 (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) regulates the making of offers for the issue or sale of securities and sets out when an offer needs disclosure to investors in a disclosure document. Part 7.9 of the Act regulates the making of offers for the issue or sale of financial products (other than securities) and sets out when an offer needs disclosure to investors through a Product Disclosure Statement (PDS). These provisions also set out certain categories of offers that do not need disclosure.
2.              Broadly, offers for issue require disclosure to address the imbalance of information between issuers and investors, unless an exception is available. While the exceptions are varied, in all cases the underlying policy is that certain persons do not need, or certain circumstances do not require, the protection provided by disclosure.
3.              To prevent abuse of these exceptions, anti-avoidance provisions are contained in s707 Sale offers that require disclosure and s1012C Obligation to give Product Disclosure Statement – offers related to sale of financial products (the on-sale provisions).
4.              The Instrument modifies the Act to provide relief from the on-sale provisions in certain circumstances.
5.              The Instrument also modifies sections 708A and 1012DA of the Act so that the disclosure exemptions in those sections also apply to stapled securities.
6.              The Instrument provides relief, on largely the same terms as ASIC Corporations (Sale Offers That Do Not Need Disclosure) Instrument 2016/80 which was scheduled to expire under the Legislation Act 2003 on 1 April 2026 (Sunsetting Instrument).

Purpose of the instrument

1.              The issue of financial products to wholesale investors is an important feature of the Australian capital market. Generally, such issues can be completed more quickly and at a lower cost than issues made to retail investors due to a combination of factors, including economies of scale and fewer regulatory requirements.
2.              Many of the products issued in the wholesale market are of the same kind as those issued or traded in the wider markets. In such cases, financial products issued to wholesale investors could be on-sold to retail investors. Such transactions, being secondary in nature, usually do not attract an obligation to issue a disclosure document or PDS. This is because disclosure requirements in the Act generally apply to the issue of financial products and not to their on-sale, unless the sale occurs within 12 months of the issue and the on-sale provisions apply.
3.              Financial products issued in the wholesale market are likely to be on-sold into the retail market in the ordinary course of wholesale investors carrying on their investment activities. In such transactions, avoiding disclosure to retail clients will usually not be a relevant motive.
4.          However, the differences in the regulatory requirements between wholesale and retail markets raises the potential for:
   1.           financial products issued in the wholesale market to be on-sold to retail investors within 12 months of their issue (which may undermine the requirements for disclosure for retail offers of financial products); and
   2.           opportunities for abuse of those differences by persons who are inclined to exploit them.
5.          Consequently, anti-avoidance provisions have long been a feature of Australian law. By enacting the on-sale provisions, Parliament intended to tighten the operation of their anti-avoidance effect.
6.          Nonetheless, ASIC notes that without relief the on-sale provisions can present some practical difficulties and may unduly impede the ordinary placement of securities and other financial products.
7.          Further, without relief, retail investors who are issued securities or financial products under a specific exemption from the disclosure provisions (e.g. for dividend reinvestment plans or as consideration for a takeover offer) might not be able to on-sell those products within 12 months of their issue.
8.          ASIC considers that these types of offers are subject to specific alternative disclosure requirements and accordingly do not give rise to the avoidance issues contemplated by the on-sale provisions. The Instrument operates against this background, to enable the fundraising provisions to operate more appropriately in particular circumstances that may not have been envisaged, and to ameliorate apparently unintended outcomes.
9.          The Instrument provides relief to clarify the application of the ‘issuer purpose’ test (which prevents the relief from being relied upon where the issuer has the avoidance purpose proscribed in the Act) for certain offers.

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.          The Instrument provides on-sale relief by modifying sections 707 and 1012C of the Act in relation to:
   1.           offers of securities, interests in a managed investment scheme or interests in a notified foreign passport fund for sale; and
   2.           recommendations to acquire interests in a managed investment scheme or interests in a notified foreign passport fund by way of transfer,

where those securities or interests are covered by an ‘exempt category’.

1.          The instrument sets out seven such ‘exempt categories’.
2.           The Instrument also provides relief, by modifying sections 708A and 1012DA, so that the disclosure exemptions for sale offers in those sections apply to stapled securities: notional s708A(13) and 1012DA(13).

Form of modifications to s707 and 1012C of the Act

1.          The Instrument modifies s707 of the Act, by omitting subsections 707(3) and (4), and inserting a new subsection 707(3) (only).
2.          This modified s707(3) provides that an offer of a body’s securities for sale needs disclosure if:
   1.           the securities are offered for sale within 12 months after their issue;
   2.           the securities were issued without disclosure under Part 6D.2 of the Act; and
   3.           the body that issued the securities did so with the purpose of:
      1.             selling or transferring the securities; or
      2.          granting, issuing or transferring interests in, or options or warrants over, them.
3.          The modification applies only where the securities are covered by an ‘exempt category’.
4.          As a result, modified s707(3) will only apply—and therefore a sale offer of securities within 12 months after their issue will only amount to an indirect issue requiring disclosure—where the body that issued the securities had the proscribed on-sale purpose at the time they issued the securities (the issuer purpose).
5.          For example, where a body issues securities to an intermediary without disclosure, with the purpose of that intermediary then on-selling those securities (as part of an arrangement to avoid preparing a disclosure document at the time of issue), then any on-sale of those securities within 12 months of their issue will require disclosure—hence s707(3) (including as modified) acts as an anti-avoidance provision.
6.          By omitting s707(3) and (4), and inserting this modified s707(3), where the securities are covered by an ‘exempt category’, the Instrument provides relief from:
   1.           the ‘acquirer purpose’ test that would otherwise apply under unmodified s707(3)(b)(ii); and
   2.           the more restrictive provisions of unmodified s707(4), under which:
      1.             securities are taken to be issued or acquired with a proscribed purpose if there are reasonable grounds for concluding that the securities were issued or acquired with that purpose; and
      2.          securities are taken to be issued or acquired with a proscribed purpose if they are subsequently sold, or offered for sale, within 12 months after issue (unless the contrary is proved).
7.          The Instrument also modifies s1012C of the Act, by omitting subsections 1012C(6) and (7), and inserting a new subsection 1012C(6) (only). These modifications to Part 7.9 of the Act operate in an equivalent way to the modifications to s707 described above and provide relief for interests in a managed investment scheme or interests in a notified foreign passport fund that are covered by an ‘exempt category’, in relation to both offers for sale, and recommendations to acquire by way of transfer.

Exempt categories where these modifications apply

1.          The Instrument sets out the following seven ‘exempt categories’, which variously relate to securities that were issued without disclosure under Part 6D.2 of the Act and/or interests in a managed investment scheme or notified foreign passport fund issued without a PDS being prepared (issued without disclosure):
2.          Category 1: Share or interest purchase plans applies where the securities or interests were issued without disclosure because the offer or issue of securities or interests was covered by ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/547, or any individual relief similar to ASIC Instrument 2019/547 provided for share purchase plans and interest purchase plans.
3.          Category 2: Options, convertible or converting securities applies where:

(a) securities or interests were issued without disclosure on the exercise of options, or on the conversion of convertible or converting notes, or convertible or converting preference shares;

(b) the options, convertible or converting notes, or convertible or converting preference shares were issued with disclosure (that is, under a disclosure document under Part 6D.2 of the Act, or with a PDS being prepared); and

(c) the exercise of the option, or the conversion, did not involve any further offer.

1.          Category 3: Dividend or distribution reinvestment or bonus plans applies where the securities or interests were issued without disclosure under a dividend reinvestment plan or bonus plan under the statutory exemption in s708(13), or a distribution reinvestment plan under the statutory exemption in s1012D(3).
2.          Category 4: Compromises and arrangements applies where the securities were issued without disclosure under a compromise or arrangement under Part 5.1 of the Act, relying on the statutory exemption in s708(17).
3.          Category 5: Deeds of Company Arrangement applies where the securities were issued without disclosure under the exemption in s708(17A), which relates to an offer made to any or all of a company’s creditors under a deed of company arrangement.
4.          Category 6: Takeovers applies where the securities or interests were issued without disclosure as consideration under a takeover bid under Chapter 6D of the Act that is accompanied by a bidder’s statement.
5.          Category 7: Securities of exempt public authorities applies where the securities were issued without disclosure by an exempt public authority under the statutory exemption in s708(21).

Repeal of Sunsetting Instrument

1.          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 Instrument provides administrative relief in circumstances where strict compliance with the primary legislation produces an unintended or unforeseen result.  
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 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.
3.          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.
4.          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.
5.          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 (Sale Offers That Do Not Need Disclosure) Instrument 2026/94

Overview

1. This instrument modifies the Corporations Act 2001 to provide relief from the on-sale provisions in sections 707 and 1012C of the Act in certain circumstances (e.g. under a share or interest purchase plan) where specified requirements are satisfied.

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.