ASIC Corporations (Takeovers—Accelerated Rights Issues) Instrument 2026/102

Explanatory Statement

ASIC Corporations (Takeovers—Accelerated Rights Issues) Instrument 2026/102

This is the Explanatory Statement for ASIC Corporations (Takeovers—Accelerated Rights Issues) Instrument 2026/102 (Instrument).

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

Summary

1.              A rights issue is an invitation to existing security holders to purchase additional new securities in the company. A traditional rights issue is made on a pro rata basis—that is, an entity offers existing holders the opportunity to subscribe for new securities or interests in proportion to their holding of securities or interests in that class. The terms of the offer are the same for each holder, including the timing of the offers.
2.              By contrast, in an accelerated rights issue, while existing securities holders are all offered an opportunity to purchase additional securities, offers generally proceed in two tranches: institutional and retail. Institutional holders are required to deal with their pro rata entitlement before other holders and are generally allotted their securities first. This allows issuers to receive a significant proportion of the offer proceeds from their institutional holders in a very short timeframe.
3.              The Act contains a general prohibition on acquisitions of certain relevant interests in voting shares. It also contains specific exceptions to the general prohibition, including for acquisitions resulting from issues of securities under certain rights issues.
4.              Item 10 of s611 of the Corporations Act 2001 (Act) provides an exemption for traditional rights issues that satisfy a number of conditions (e.g. the terms of all the rights issues offers are the same) however, this exemption does not extend to accelerated rights issues. Without an appropriate exemption, an accelerated rights issue offer would likely result in a breach of the Chapter 6 takeover provisions.
5.              The Instrument modifies the Act to provide an additional exception for issues of securities under certain accelerated rights issues. 
6.              The Instrument provides relief, on largely the same terms as ASIC Corporations (Takeovers—Accelerated Rights Issues) Instrument 2015/1069 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 2015/1069 is to provide an exemption from the takeovers provisions in Chapter 6 for accelerated rights issues.
2.              In absence of an applicable exemption, a person is prohibited under Chapter 6 from acquiring a relevant interest in securities in an entity as a result of participating in an accelerated rights issue if that acquisition would result in the person's or someone else's voting power in the entity breaching the takeover thresholds stipulated in section 606.
3.              The relief offered by the Instrument is desirable because it creates an exception for persons who will, for technical reasons, temporarily exceed the takeover threshold in section 606 merely as a result of participating in an accelerated rights issue.
4.          Without the exception provided by the Instrument, the market structure of many accelerated rights issues would result in technical breaches of the Corporations Act due to differences between the timing of the take-up offer between institutional and retail investors.

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.    day after it is registered on the Federal Register of Legislation; and
   2.    1 April 2026.
2.          The Instrument provides a modification to section 611 by notionally inserting item 10A of section 611 (item 10A) to provide an exemption from the takeovers provisions in Chapter 6 for accelerated rights issues offers.
3.          The accelerated rights issue exception in item 10A is similar to the rights issue exception in item 10, but allows for:
   1.           timing differences between the offer periods and dates of allotment for retail and institutional holders, to accommodate accelerated rights issue structures; and
   2.           differences in the offers resulting from the ability of retail holders, but not institutional holders, to trade their rights.
4.          The exception only applies where the retail allotment of the accelerated rights issue occurs within two months of the allotment to institutional investors. The modification does not extend to shortfall offers or mean that an offeror does not have to comply with the nominee process in s615.
5.          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 issuers. 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 655A(1) of the Act.
2.          Subsection 655A(1) provides that ASIC may:
   1.           exempt a person from a provision of Chapter 6; or
   2.           declare that Chapter 6 applies to a person as if specified provisions were omitted, modified or varied as specified in the declaration.
3.          Subsection 655A(2) provides that in deciding whether to give the exemption or declaration, ASIC must consider the purposes of Ch 6 set out in section 602.  
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.           ASIC has considered section 602 and concluded that the declarations in this Instrument are:
   1.           not inconsistent with, and do not undermine, the purposes of Ch 6; and
   2.           appropriate. 
6.          This Instrument is disallowable under section 42 of the Legislation Act 2003.

Statement of Compatibility with Human Rights 

20. 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 (Takeovers—Accelerated Rights Issues) Instrument 2026/102

Overview

1.              The Corporations Act 2001 (Act) contains a general prohibition on acquisitions of certain relevant interests in voting shares. It also contains a number of specific exceptions to the general prohibition, including for acquisitions resulting from issues of securities under certain rights issues.
2.              This instrument modifies the Act to provide an additional exception for issues of securities under certain accelerated rights issues

Assessment of human rights implications

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

Conclusion

1.              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.