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This is a Bill, not an Act. For current law, see the Acts databases.
1998-1999-2000-2001
The
Parliament of the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Corporations
Bill 2001 Volume 3
No. ,
2001
(Treasury)
A Bill
for an Act to make provision in relation to corporations, securities, the
futures industry and financial products and services, and for other
purposes
ISBN: 1642
466351
Contents
If a bidder becomes aware of:
(a) a misleading or deceptive statement in the bidder’s statement;
or
(b) an omission from the bidder’s statement of information required
by section 636; or
(c) a new circumstance that:
(i) has arisen since the bidder’s statement was lodged;
and
(ii) would have been required by section 636 to be included in the
bidder’s statement if it had arisen before the bidder’s statement
was lodged;
that is material from the point of view of a holder of bid class
securities, the bidder must prepare a supplementary bidder’s statement
that remedies this defect.
Note 1: The bidder must then send and lodge the
supplementary bidder’s statement in accordance with
section 647.
Note 2: Section 670A makes it an offence to give a
bidder’s statement after the bidder has become aware of a misleading or
deceptive statement, omission or new circumstance that is material from the
point of view of a holder of securities to whom the statement is given (unless
the deficiency is corrected).
Note 3: The power to issue a supplementary bidder’s
statement is not limited to the situations dealt with in this
section.
Note 4: This section applies to a bidder’s statement
that has already been previously supplemented.
If a target becomes aware of:
(a) a misleading or deceptive statement in the target’s statement;
or
(b) an omission from the target’s statement of information required
by section 638; or
(c) a new circumstance that:
(i) has arisen since the target’s statement was lodged;
and
(ii) would have been required by section 638 to be included in the
target’s statement if it had arisen before the target’s statement
was lodged;
that is material from the point of view of a holder of bid class
securities, the target must prepare a supplementary target’s statement
that remedies this defect.
Note 1: The target must then send and lodge the
supplementary target’s statement in accordance with
section 647.
Note 2: Section 670A makes it an offence to give a
target’s statement after the target has become aware of a misleading or
deceptive statement, omission or new circumstance that is material from
the point of view of a holder of securities to whom the statement is given
(unless the deficiency is corrected).
Note 3: The power to issue a supplementary target’s
statement is not limited to the situations dealt with in this
section.
Note 4: This section applies to a target’s statement
that has already been previously supplemented.
Identity as a supplementary statement
(1) At the beginning of a supplementary bidder’s or target’s
statement there must be:
(a) a statement that it is a supplementary statement; and
(b) an identification of the statement it supplements; and
(c) an identification of any previous supplementary statements lodged with
ASIC in relation to the bid; and
(d) a statement that it is to be read together with the statement it
supplements and any previous supplementary statements.
Approval of supplementary bidder’s statement
(2) The copy of the supplementary bidder’s statement that is lodged
with ASIC must be approved by:
(a) for a bidder that is a body corporate:
(i) if the consideration offered under the bid is a cash sum only—a
resolution passed by the directors of the bidder; or
(ii) otherwise—a unanimous resolution passed by all the directors of
the bidder; or
(b) for a bidder who is an individual—the bidder.
Approval of supplementary target’s statement
(3) The copy of a supplementary target’s statement that is lodged
with ASIC must be approved by:
(a) if paragraphs (b) and (c) do not apply—a resolution passed
by the directors of the target; or
(b) for a target that is under administration—the liquidator or
administrator; or
(c) for a target that has executed a deed of company arrangement that has
not yet terminated—the deed’s administrator.
Date
(4) A supplementary statement must be dated. The date is the date on which
it is lodged with ASIC.
If a supplementary statement is lodged with ASIC, for the purposes of the
application of this Chapter and Chapter 6B to events that occur after the
lodgment, the bidder’s or target’s statement is taken to be the
original statement together with the supplementary statement.
(1) A supplementary bidder’s statement must be sent to the target as
soon as practicable.
(2) A supplementary target’s statement must be sent to the bidder as
soon as practicable.
(3) Either kind of supplementary statement must as soon as practicable
be:
(a) lodged with ASIC; and
(b) if the bid class securities are quoted and the target is
listed—sent to each relevant securities exchange that has a stock market
on which the target’s securities are quoted; and
(c) if the bid is an off-market bid and the bid class securities are not
quoted—sent to all holders of bid class securities who have not accepted
an offer under the bid.
Note: Sections 648B and 648C provide for the manner in
which documents may be sent to holders.
(1) If the bidder or target obtains 2 or more reports each of which could
be used for the purposes of subparagraph 636(1)(h)(iii) or subsection 640(1),
the bidder’s or target’s statement must be accompanied by a copy of
each report.
(2) The expert must be someone other than an associate of the bidder or
target.
(3) The report must set out details of:
(a) any relationship between the expert and:
(i) the bidder or an associate of the bidder; or
(ii) the target or an associate of the target;
including any circumstances in which the expert gives them advice, or
acts on their behalf, in the proper performance of the functions attaching to
the expert’s professional capacity or business relationship with them;
and
(b) any financial or other interest of the expert that could reasonably be
regarded as being capable of affecting the expert’s ability to give an
unbiased opinion in relation to the matter being reported on; and
(c) any fee, payment or other benefit (whether direct or indirect) that
the expert has received or will or may receive in connection with making the
report.
Note: If the statement includes, or is accompanied by, the
report, it must state that the expert has consented to this being done (see
subsections 636(3) and 638(5)).
The bidder may send a document to a holder of securities for the purposes
of this Chapter at the address shown for the holder in the information given to
the bidder by the target under section 641. This section does not limit the
address to which the document may be sent to the holder.
Note: Section 109X makes general provision for service
of documents.
If a document must be sent to the holder of securities under this
Chapter, the document must be sent:
(a) if the document is to be sent to the holder outside Australia—by
pre-paid airmail post or by courier; or
(b) if the document is to be sent to the holder in Australia—by
pre-paid ordinary post or by courier.
(1) Subject to this Subdivision, the constitution of a company may contain
provisions to the effect that, if offers are made under a proportional takeover
bid for securities of the company:
(a) the registration of a transfer giving effect to a takeover contract
for the bid is prohibited unless and until a resolution (an approving
resolution) to approve the bid is passed in accordance with the
provisions; and
(b) a person (other than the bidder or an associate of the bidder) who, as
at the end of the day on which the first offer under the bid was made, held bid
class securities is entitled to vote on an approving resolution; and
(c) an approving resolution is to be voted on in whichever of the
following ways is specified in the provisions:
(i) at a meeting, convened and conducted by the company, of the persons
entitled to vote on the resolution;
(ii) by means of a postal ballot conducted by the company in accordance
with a procedure set out in the provisions;
or, if the provisions so provide, in whichever of those ways is
determined by the directors of the company; and
(d) an approving resolution that has been voted on is taken to have been
passed if the proportion that the number of votes in favour of the resolution
bears to the total number of votes on the resolution is greater than the
proportion specified in the provisions, and otherwise is taken to have been
rejected.
The proportion specified under paragraph (d) must not exceed
50%.
Note: Section 9 defines proportional takeover
bid. See paragraph 618(1)(b).
(2) To be effective, an approving resolution in relation to a proportional
takeover bid must be passed before the approving resolution
deadline. The deadline is the 14th day before the last day of the bid
period.
Note: In certain circumstances, an approving resolution will
be taken to have been passed (see subsection 648E(3)).
(3) Except to the extent to which a company’s constitution provides
otherwise:
(a) the provisions that apply to a general meeting of the company apply,
with such modifications as the circumstances require, to a meeting convened
under the company’s proportional takeover approval provisions;
and
(b) those provisions apply as if the meeting convened under the
proportional takeover provisions were a general meeting of the
company.
The provisions referred to in paragraph (a) may be the provisions of a
law, provisions of the company’s constitution or any other
provisions.
(1) If:
(a) a company’s constitution contains proportional takeover approval
provisions; and
(b) offers are made under a proportional bid for a class of the
company’s securities;
then:
(c) the company’s directors must ensure that a resolution to approve
the bid is voted on in accordance with those provisions before the approving
resolution deadline; and
(d) if the directors fail to ensure that a resolution of that kind is
voted on before the deadline, each of the directors contravenes this
subsection.
Note: Subsection 648D(2) sets the approving resolution
deadline.
(2) If a resolution to approve the bid is voted on in accordance with the
proportional takeover approval provisions before the approving resolution
deadline, the company must, on or before the deadline, give:
(a) the bidder; and
(b) if the company is listed—each relevant securities
exchange;
a written notice stating that a resolution to approve the bid has been
voted on and whether the resolution was passed or rejected.
(3) If no resolution to approve the bid has been voted on in accordance
with the proportional takeover approval provisions as at the end of the day
before the approving resolution deadline, a resolution to approve the bid is
taken, for the purposes of those provisions, to have been passed in accordance
with those provisions.
If a resolution to approve the bid is voted on, in accordance with the
proportional takeover approval provisions, before the approving resolution
deadline and is rejected:
(a) despite section 652A:
(i) all offers under the bid that have not been accepted as at the end of
deadline; and
(ii) all offers under the bid that have been accepted, and from whose
acceptance binding contracts have not resulted, as at the end of the
deadline;
are taken to be withdrawn at the end of the deadline; and
(b) as soon as practicable after the deadline, the bidder must return to
each person who has accepted an offer referred to in subparagraph (a)(ii)
any documents that the person sent the bidder with the acceptance of the offer;
and
(c) the bidder:
(i) is entitled to rescind; and
(ii) must rescind as soon as practicable after the deadline;
each binding takeover contract for the bid; and
(d) a person who has accepted an offer made under the bid is entitled to
rescind their takeover contract.
(1) A company’s proportional takeover approval provisions, unless
sooner omitted from the constitution of the company, cease to apply at the end
of:
(a) unless paragraph (b) or (c) applies—3 years;
(b) if the constitution provides that the provisions apply for a specified
period of less than 3 years and the provisions have not been renewed—the
specified period; or
(c) if the provisions have been renewed on at least one occasion and the
resolution, or the most recent resolution, renewing the provisions states that
the provisions are renewed for a specified period of less than 3 years—the
specified period.
(2) The period referred to in subsection (1) starts:
(a) if the provisions were contained in the company’s constitution
when it was incorporated or formed and have not been renewed—at
that time; or
(b) if the provisions were inserted in the company’s constitution
and have not been renewed—when the provisions were inserted; or
(c) if the provisions have been renewed on at least one
occasion—when the provisions were renewed, or last renewed.
(3) When the provisions cease to apply, the company’s constitution
is, by force of this subsection, altered by omitting the provisions.
(4) A company may renew its proportional takeover approval provisions. The
provisions are to be renewed in the same manner as that in which the company
could alter its constitution to insert proportional takeover approval
provisions.
(5) With every notice that:
(a) specifies the intention to propose:
(i) a resolution to alter a company’s constitution by inserting
proportional takeover approval provisions; or
(ii) a resolution to renew a company’s proportional takeover
approval provisions; and
(b) is sent to a person who is entitled to vote on the proposed
resolution;
the company must send a statement that:
(c) explains the effect of the proposed provisions, or of the provisions
proposed to be renewed; and
(d) explains the reasons for proposing the resolution and sets out the
factual matters and principles underlying those reasons; and
(e) states whether, as at the day on which the statement is prepared, any
of the directors of the company is aware of a proposal by a person to acquire,
or to increase the extent of, a substantial interest in the company and, if so,
explains the extent (if any) to which the proposal has influenced the decision
to propose the resolution; and
(f) for a proposed resolution to renew proportional takeover approval
provisions—reviews both the advantages, and disadvantages, of the
provisions proposed to be renewed for:
(i) the directors; and
(ii) the company’s members;
during the period during which the provisions have been in effect;
and
(g) discusses both the potential advantages, and the potential
disadvantages, of the proposed provisions, or of the provisions proposed to be
renewed, for:
(i) the directors; and
(ii) the company’s members.
(6) If, on a particular day, a company purports to:
(a) alter its constitution by inserting proportional takeover approval
provisions; or
(b) renew its proportional takeover approval provisions;
then:
(c) holders who together hold not less than 10% (by number) of the issued
securities in a class of securities in the company to which the provisions apply
may, within 21 days after that day, apply to the Court to have the purported
alteration or renewal set aside to the extent to which it relates to that class;
and
(d) unless and until an application made under paragraph (c) is
finally determined by the making of an order setting aside the purported
alteration or renewal to that extent, the company is taken for all purposes
(other than the purposes of an application of that kind):
(i) to have validly altered its constitution by inserting the provisions
referred to in paragraph (a) applying to that class; or
(ii) to have validly renewed the provisions referred to in
paragraph (b) applying to that class.
(7) An application under paragraph (6)(c) may be made, on behalf of
the holders entitled to make the application, by a holder or holders appointed
by them in writing.
(8) On an application under paragraph (6)(c), the Court may make an
order setting aside the purported alteration or renewal to the extent to which
it applies to that class if it is satisfied that it is appropriate in all the
circumstances to do so. Otherwise the Court must dismiss the
application.
(9) Within 14 days after the day on which the Court makes an order of the
kind referred to in subsection (8) in relation to a company, the company
must lodge a copy of the order with ASIC.
This Subdivision applies notwithstanding anything contained in:
(a) the business rules or listing rules of a securities exchange;
or
(b) the constitution of a company; or
(c) any agreement.
A bidder may only vary the offers under a market bid in accordance with
section 649B or 649C.
Note: ASIC may allow other variations under
section 655A.
The bidder may increase the current market bid price. They may not do so,
however, during the last 5 trading days of the relevant securities exchange in
the offer period.
(1) The bidder may extend the offer period. The extension must be
announced to the relevant securities exchange at least 5 trading days of the
exchange before the end of the offer period. However, the announcement may be
made up to the end of the offer period if during those 5 trading days:
(a) another person lodges with ASIC a bidder’s statement for a
takeover bid for securities in the bid class; or
(b) another person announces a takeover bid for securities in the bid
class; or
(c) another person makes offers under a takeover bid for securities
in the bid class; or
(d) the consideration for offers under another takeover bid for securities
in the bid class is improved.
The offer period is extended by having the extension announced to the
relevant securities exchange.
Note: Section 624 provides for an automatic extension
of the bid period in certain circumstances.
(2) On the day on which the announcement is made, the bidder
must:
(a) give the target and the relevant securities exchange a notice setting
out the terms of the announcement; and
(b) lodge a notice setting out the terms of the announcement with
ASIC.
(1) A bidder may only vary the offers under an off-market bid in
accordance with section 650B, 650C or 650D.
Note: ASIC may allow other variations under
section 655A.
(2) If the bidder varies the offer under an off-market bid in accordance
with section 650B, 650C or 650D, the bidder must vary all unaccepted offers
under the bid in the same way.
Note: Subsections 650B(2) and (3) deal with the effect of a
variation on takeover contracts that have already resulted from acceptances of
offers under the bid when the variation is made.
Improving the consideration offered
(1) The bidder may vary the offers made under the bid to improve the
consideration offered:
(a) by increasing a cash sum offered; or
(b) by increasing the number of securities offered; or
(c) by increasing the rate of interest payable under debentures offered;
or
(d) by increasing the amount or value of debentures offered; or
(e) by increasing the number of unissued securities that may be acquired
under options offered; or
(f) by offering a cash sum in addition to securities; or
(g) if the securities being acquired include shares to which rights to
accrued dividends are attached—by giving the holders the right
to:
(i) retain the whole or a part of the dividend; or
(ii) be paid an amount equal to the amount of the dividend;
in addition to the consideration already offered; or
(h) offering an additional alternative form of consideration.
Note: If the bidder increases the consideration during the
last 7 days of the offer period, subsection 624(2) extends the offer period by a
further 14 days.
Effect of increase in consideration on offers already
accepted
(2) Improving the consideration has the effects set out in the following
table on the rights of a person who has already accepted an offer when the
variation is made.
|
Effect of improving consideration |
[operative] |
|
|---|---|---|
|
|
Improvement |
Effect on person who has already accepted bid offer |
|
1 |
improvement of the only form of consideration being offered |
entitled to the improved consideration |
|
2 |
2 or more forms of consideration offered and all forms improved by the same
factor or percentage |
entitled to the improvement in the form of consideration accepted |
|
3 |
2 or more forms of consideration offered and improvement in the
consideration is identical for all forms |
entitled to the improvement in the form of consideration accepted |
|
4 |
addition of a new form of consideration |
entitled to make a fresh election as to the form of consideration to be
taken |
|
5 |
any other improvement |
entitled to make a fresh election as to the form of consideration to be
taken |
The person is entitled to receive the improved consideration immediately,
or immediately after the exercise of the election.
Fresh election as to the form of consideration
(3) If a person who has already accepted an offer has the right to make a
fresh election as to the form of consideration to be taken, the bidder must send
the person as soon as practicable after the variation a written notice informing
them about their right to make the election.
Note 1: Section 651B says how the election is to be
exercised.
Note 2: Sections 648B and 648C provide for the manner
in which documents may be sent to holders.
(1) A bidder making an off-market bid may extend the offer period at any
time before the end of the offer period.
(2) If the bid is subject to a defeating condition, the bidder may extend
the offer period after the publication of the notice under subsection 630(3)
only if one of the following happens after the publication:
(a) another person lodges with ASIC a bidder’s statement for a
takeover bid for securities in the bid class;
(b) another person announces a takeover bid for securities in the bid
class;
(c) another person makes offers under a takeover bid for securities
in the bid class;
(d) the consideration for offers under another takeover bid for securities
in the bid class is improved.
Note: Section 624 says how long the total offer period
can be.
Variation to be made by notice to the target and holders
(1) To vary offers under an off-market bid, the bidder must:
(a) prepare a notice that:
(i) sets out the terms of the proposed variation; and
(ii) if the bid is subject to a defeating condition and the proposed
variation postpones for more than 1 month the time by which the bidder must
satisfy their obligations under the bid—informs people about the right to
withdraw acceptances under section 650E; and
(b) lodge the notice with ASIC; and
(c) after the notice is lodged, give the notice to:
(i) the target; and
(ii) everyone to whom offers were made under the bid.
Note: Sections 648B and 648C provide for the manner in
which documents may be sent to holders.
(2) A person must be sent a copy of the notice under
subparagraph (1)(c)(ii) even if they have already accepted the offer.
However, they need not be sent a copy if:
(a) the variation merely extends the offer period; and
(b) the bid is not subject to a defeating condition at the time the notice
is given to the target.
(3) A notice under subsection (1) must be signed by:
(a) if the bidder is, or includes, an individual—the individual;
and
(b) if the bidder is, or includes, a body corporate with 2 or more
directors—not fewer than 2 of the directors who are authorised to sign the
notice by a resolution passed at a directors’ meeting; and
(c) if the bidder is, or includes, a body corporate that has only one
director—that director.
(4) A copy of a notice given to a person under
subparagraph (1)(c)(ii) must include a statement that:
(a) a copy of the notice was lodged with ASIC on a specified date;
and
(b) ASIC takes no responsibility for the contents of the notice.
(1) A person who accepts an offer made under an off-market bid may
withdraw their acceptance of the offer if:
(a) the bid is subject to a defeating condition; and
(b) the bidder varies the offers under the bid in a way that postpones for
more than 1 month the time when the bidder has to meet their obligations under
the bid; and
(c) the person is entitled to be given a notice of the variation under
subsection 650D(1).
(2) To withdraw their acceptance, the person must:
(a) give the bidder notice within 1 month beginning on the day after the
day on which the copy of the notice of the variation was received; and
(b) return any consideration received by the person for accepting the
offer.
(3) A notice under paragraph (2)(a):
(a) if it relates to securities that are entered on an SCH
subregister—must be in an electronic form approved by the SCH business
rules for the purposes of this Part; or
(b) if it relates to shares that are not entered on an SCH
subregister—must be in writing.
(4) To return consideration that includes securities, the person
must:
(a) if the securities are entered on an SCH subregister—take the
action that the SCH business rules require in relation to the return of the
securities; or
(b) otherwise—give the bidder any transfer documents needed to
effect the return of securities.
(5) If the person withdraws their acceptance, the bidder must:
(a) take any action that the SCH business rules require in relation to any
of the securities to which the acceptance relates that are entered on an SCH
subregister; and
(b) return any documents that the person sent the bidder with the
acceptance of the offer;
within 14 days after:
(c) if the person does the things referred to in subsection (2) on
the same day—that day; or
(d) if the person does those things on different days—the last of
those days.
(6) If under this section a person returns to a company any certificates
(together with any necessary transfer documents) in respect of the securities
issued by the company, the company must cancel those securities as soon as
possible. Any reduction in share capital is authorised by this
subsection.
(1) If the offers under an off-market bid are subject to a defeating
condition, the bidder may free the offers, and the takeover contracts, from the
condition only by giving the target a notice declaring the offers to be free
from the condition in accordance with this section:
(a) if the condition is that the bidder may withdraw unaccepted offers if
an event or circumstance referred to in subsection 652C(1) or (2) occurs in
relation to the target—not later than 3 business days after the end of the
offer period; or
(b) in any other case—not less than 7 days before the end of the
offer period.
(2) The notice must:
(a) state that the offers are free from the condition; and
(b) specify the bidder’s voting power in the company.
(3) The notice must be:
(a) if the securities in the bid class are quoted—given to the
relevant securities exchange; and
(b) if those securities are not quoted—lodged with ASIC.
All takeover contracts, and all acceptances that have not resulted in
binding takeover contracts, for an off-market bid are void if:
(a) offers made under the bid have at any time been subject to a defeating
condition; and
(b) the bidder has not declared the offers to be free from the condition
within the period before the date applicable under subsection 630(1) or (2);
and
(c) the condition has not been fulfilled at the end of the offer
period.
A transfer of securities based on an acceptance or contract that is void
under this section must not be registered.
Effect of purchases outside bid on offers made under the
bid
(1) The offers made under an off-market bid, and the takeover contracts,
are varied under this section if:
(a) the bidder purchases securities in the bid class outside the bid
during the bid period; and:
(b) the consideration for that purchase consists solely of a cash sum;
and
(c) either:
(i) the consideration, or 1 of the forms of consideration, payable under
the bid consists of a cash sum only and the consideration referred to in
paragraph (b) is higher than the cash sum payable for the securities under
the bid; or
(ii) a cash sum only is not the consideration, or 1 of the forms of
consideration, payable under the bid.
Note 1: Section 9 defines takeover
contract.
Note 2: The effect of section 623 is that the purchase
outside the bid has to be made through an on-market transaction (see subsection
623(1) and paragraph 623(3)(b)).
Effect on unaccepted cash offers
(2) If:
(a) one of the forms of consideration offered to a person under an
off-market bid is a cash sum only; and
(b) the person has not accepted the offer before the purchase outside the
bid occurs;
the cash sum is taken to be increased to the highest outside purchase price
before the offer is accepted.
Effect on cash offers already accepted
(3) The consideration payable for each security covered by a takeover
contract arising from the acceptance of an offer for a cash sum only is
increased to the highest outside purchase price. If the person who accepted the
offer has already received the whole or any part of the consideration under the
contract, they are entitled to receive the increase in consideration
immediately.
Effect on non-cash offers accepted at any time during bid
period
(4) If:
(a) a person accepts an offer under a bid at any time during the bid
period; and
(b) the consideration paid or provided, or to be paid or provided, under
the takeover contract arising from the acceptance of the offer does not consist
of a cash sum only;
then:
(c) the person may elect to take as consideration for each security
covered by the takeover contract a cash sum equal to the highest outside
purchase price instead of the consideration they originally accepted;
and
(d) the bidder must give the person a written notice of their right to
make the election within 14 days after the end of the offer period.
Note: Section 651B says how the election is to be
exercised.
(1) An election under section 650B or 651A to take a new form of
consideration must be made:
(a) by written notice to the bidder; and
(b) within 1 month after the person receives the notice from the bidder of
their right to make the election.
(2) The person becomes entitled to the new form of consideration if
they:
(a) make the election; and
(b) return to the bidder:
(i) any consideration they have already received; and
(ii) any necessary transfer documents.
If under section 651B a person returns to a company any certificates
(together with any necessary transfer documents) in respect of the securities
issued by a company, the company must cancel those securities as soon as
possible.
Unaccepted offers under a takeover bid may only be withdrawn under
section 652B or 652C.
Unaccepted offers under a takeover bid may be withdrawn with the written
consent of ASIC. ASIC may consent subject to conditions.
Bidder entitled to withdraw if certain events happen during the offer
period
(1) The bidder may withdraw unaccepted offers made under a market bid if 1
of the following happens during the bid period, but only if the bidder’s
voting power in the target is at or below 50% when the event happens:
(a) the target converts all or any of its shares into a larger or smaller
number of shares (see section 254H);
(b) the target or a subsidiary resolves to reduce its share capital in any
way;
(c) the target or a subsidiary:
(i) enters into a buy-back agreement; or
(ii) resolves to approve the terms of a buy-back agreement under
subsection 257C(1) or 257D(1);
(d) the target or a subsidiary issues shares, or grants an option over its
shares, or agrees to make such an issue or grant such an option;
(e) the target or a subsidiary issues, or agrees to issue, convertible
notes;
(f) the target or a subsidiary disposes, or agrees to dispose, of the
whole, or a substantial part, of its business or property;
(g) the target or a subsidiary charges, or agrees to charge, the whole, or
a substantial part, of its business or property;
(h) the target or a subsidiary resolves to be wound up.
(2) The bidder may also withdraw unaccepted offers made under a market bid
if 1 of the following happens during the bid period:
(a) a liquidator or provisional liquidator of the target or of a
subsidiary is appointed;
(b) a court makes an order for the winding up of the target or of a
subsidiary;
(c) an administrator of the target, or of a subsidiary, is appointed under
section 436A, 436B or 436C;
(d) the target or a subsidiary executes a deed of company
arrangement;
(e) a receiver, or a receiver and manager, is appointed in relation to the
whole, or a substantial part, of the property of the target or of a
subsidiary.
This is so regardless of the bidder’s voting power at the
time.
(3) Notice of the withdrawal must be given to each relevant securities
exchange.
If:
(a) an offer is made under an off-market bid for quoted securities;
and
(b) the SCH business rules require that an acceptance of the offer, so far
as it relates to those securities, must be made in a particular way;
an acceptance of the offer for those securities is effective only if it is
made in that way.
(1) If an off-market bid is made for securities:
(a) a person who:
(i) is able during the offer period to give good title to a parcel of
those securities; and
(ii) has not already accepted an offer under the bid for those
securities;
may accept as if an offer on terms identical with the other offers made
under the bid had been made to that person in relation to those securities;
and
(b) a person who holds 1 or more parcels of those securities as trustee or
nominee for, or otherwise on account of, another person may accept as if a
separate offer had been made in relation to:
(i) each of those parcels; and
(ii) any parcel they hold in their own right.
If a person accepts an offer under a proportional takeover bid for
securities, no-one else may accept an offer under the bid in respect of those
securities.
Note: Section 9 defines proportional takeover
bid. See paragraph 618(1)(b).
(2) For the purposes of this section:
(a) a person is taken to hold securities if the person is, or is entitled
to be registered as, the holder of the securities; and
(b) a person is taken to hold the securities on trust for, as nominee for
or on account of another person if they:
(i) are entitled to be registered as the holder of particular securities;
and
(ii) hold their interest in the securities on trust for, as nominee for or
on account of that other person; and
(c) in determining under subsection (1) whether a person has accepted
an offer for particular securities under a takeover bid, a person who accepts an
offer under a proportional takeover bid is taken to have accepted the offer for
all the securities in the bid class that they hold at the time they accept the
offer.
(3) If under paragraph (1)(b) a person may accept as if a separate
offer is taken to be made to a person for a parcel of securities within a
holding, an acceptance of that offer is ineffective unless:
(a) the person gives the bidder a notice stating that the securities
consist of a separate parcel; and
(b) the acceptance specifies the number of securities in the
parcel.
(4) A notice under subsection (3) must be made:
(a) if it relates to securities that are entered on an SCH
subregister—in an electronic form approved by the SCH business rules for
the purposes of this Part; or
(b) if it relates to shares that are not entered on an SCH
subregister—in writing.
(5) A person contravenes this subsection if:
(a) they purport to accept an offer under this section; and
(b) the acceptance is not made in accordance with this section.
The acceptance is, however, as valid as it would have been if it had been
made in accordance with this section.
(6) A person may, at the one time, accept for 2 or more parcels under this
section as if there had been a single offer for a separate parcel consisting of
those parcels.
(1) The bidder must not dispose of any securities in the bid class during
the bid period.
(2) Subsection (1) does not apply to a disposal of securities by the
bidder if:
(a) someone else who is not an associate of the bidder makes an offer, or
improves the consideration offered, under a takeover bid for securities in the
bid class after the bidder’s statement is given to the target;
and
(b) the bidder disposes of the securities after the offer is made or the
consideration is improved.
During the bid period, substantial shareholding notices that need to be
lodged under section 671B must be lodged by 9.30 am the next business day
(rather than the usual 2 business days).
(1) A bidder making a bid for securities of an unlisted company must give
the target a notice stating the bidder’s voting power in the target if, at
a particular time during the bid period, the bidder’s voting power in the
target rises from below a percentage in the following list to that percentage or
higher:
(a) 25%;
(b) 50%;
(c) 75%;
(d) 90%.
(2) The notice must be given as soon as practicable, and in any event
within 2 business days, after the rise in voting power occurred.
(3) The target must:
(a) make the notice available at its registered office for inspection
without charge by any holder of bid class securities during the bid
period; and
(b) lodge the notice with ASIC.
(1) ASIC may:
(a) exempt a person from a provision of this Chapter; or
(b) declare that this Chapter applies to a person as if specified
provisions were omitted, modified or varied as specified in the
declaration.
Note: Under section 656A, the Panel has power to review
the exercise by ASIC of its powers under this section.
(2) In deciding whether to give the exemption or declaration, ASIC must
consider the purposes of this Chapter set out in section 602.
(3) The exemption or declaration may:
(a) apply to all or specified provisions of this Chapter; and
(b) apply to all persons, specified persons, or a specified class of
persons; and
(c) relate to all securities, specified securities or a specified class of
securities; and
(d) relate to any other matter generally or as specified.
(4) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an exemption applies must
comply with the condition. The Court may order the person to comply with the
condition in a specified way. Only ASIC may apply to the Court for the
order.
(5) The exemption or declaration must be in writing and ASIC must publish
notice of it in the Gazette.
(6) For the purposes of this section, the provisions of this
Chapter include:
(a) regulations made for the purposes of this Chapter; and
(b) definitions in this Act or the regulations as they apply to references
in:
(i) this Chapter; or
(ii) regulations made for the purposes of this Chapter; and
(c) the old Division 12 of Part 11.2 transitionals.
(1) Subject to subsection (2), ASIC must take such steps as are
reasonable in the circumstances to give to each person whose interests are
affected by a decision under section 655A a notice, in writing or
otherwise:
(a) of the making of the decision; and
(b) of the person’s right to have the decision reviewed by the Panel
under section 656A.
(2) Subsection (1) does not require ASIC to give notice to a person
affected by the decision or to the persons in a class of persons affected by the
decision, if ASIC determines that giving notice to the person or persons is not
warranted, having regard to:
(a) the cost of giving notice to the person or persons; and
(b) the way in which the interests of the person or persons are affected
by the decision.
(3) A failure to comply with this section does not affect the validity of
the decision.
(1) The Panel may review:
(a) a decision of ASIC under section 655A; or
(b) a decision of ASIC under section 673 in relation to securities of
the target of a takeover bid during the bid period.
For these purposes, decision has the same meaning as in the
Administrative Appeals Tribunal Act 1975.
(2) An application to the Panel for review of the decision may be made by
any person whose interests are affected by the decision.
(3) For the purpose of reviewing the decision, the Panel may exercise all
the powers and discretions conferred on ASIC by this Chapter or Chapter 6C.
The Panel must make a decision:
(a) affirming the decision; or
(b) varying the decision; or
(c) setting aside the decision and:
(i) making a decision in substitution for the decision under review;
or
(ii) remitting the matter for reconsideration by ASIC in accordance with
any directions or recommendations of the Panel.
(4) The decision must be in writing and published in the
Gazette.
(5) If the Panel varies an ASIC decision, or makes a decision in
substitution for an ASIC decision:
(a) the ASIC decision as varied, or the substituted decision, is taken for
all purposes (other than the purposes of applications to the Panel for review in
accordance with this section) to be a decision of ASIC under section 655A;
and
(b) when the Panel’s determination on the review comes into
operation, the ASIC decision as varied, or the substituted decision, has effect,
or is taken to have had effect, on and from the day on which the ASIC decision
has or had effect.
Paragraph (b) applies unless the Panel otherwise orders.
(1) Subject to this section, applying to the Panel under section 656A
for review of an ASIC decision does not:
(a) affect the operation of the decision; or
(b) prevent the taking of action to implement the decision.
(2) On application by a party to the proceedings before the Panel, the
Panel may:
(a) make an order staying, or otherwise affecting the operation or
implementation of, the whole or a part of the decision if the Panel considers
that:
(i) it is desirable to make the order after taking into account the
interests of any person who may be affected by the review; and
(ii) the order is appropriate for the purpose of securing the
effectiveness of the hearing and determination of the application for review;
or
(b) make an order varying or revoking an order made under
paragraph (a) (including an order that has previously been varied on one or
more occasions under this paragraph).
(3) Subject to subsection (4), the Panel must not:
(a) make an order under paragraph (2)(a) unless ASIC has been given a
reasonable opportunity to make a submission to the Panel in relation to the
matter; or
(b) make an order under paragraph (2)(b) unless:
(i) ASIC; and
(ii) the person who requested the making of the order under
paragraph (2)(a); and
(iii) if the order under paragraph (2)(a) has previously been varied
by an order or orders under paragraph (2)(b)—the person or persons
who applied for the last-mentioned order or orders;
have been given a reasonable opportunity to make submissions to the Panel
in relation to the matter.
(4) Subsection (3) does not prohibit the Panel from making an order
without giving to a person referred to in that subsection a reasonable
opportunity to make a submission to the Panel in relation to a matter if the
Panel is satisfied that, by reason of the urgency of the case or otherwise, it
is not practicable to give that person such an opportunity. If an order is so
made without giving such an opportunity to ASIC, the order does not come into
operation until a notice setting out the terms of the order is served on
ASIC.
(5) An order in force under paragraph (2)(a) (including an order that
has previously been varied on one or more occasions under
paragraph (2)(b)):
(a) is subject to the conditions that are specified in the order;
and
(b) has effect until:
(i) if a period for the operation of the order is specified in the
order—the end of that period or, if the application for review is decided
by the Panel before the end of that period, the decision of the Panel on the
application for review comes into operation; or
(ii) if a period for the operation of the order is not specified in the
order—the decision of the Panel on the application for review comes into
operation.
(1) The Panel may declare circumstances in relation to the affairs of a
company to be unacceptable circumstances. Without limiting this, the Panel may
declare circumstances to be unacceptable circumstances whether or not the
circumstances constitute a contravention of a provision of this Act.
Note: Sections 659B and 659C deal with court
proceedings during and after a takeover bid.
(2) The Panel may only declare circumstances to be unacceptable
circumstances if it appears to the Panel that the circumstances:
(a) are unacceptable having regard to the effect of the circumstances
on:
(i) the control, or potential control, of the company or another company;
or
(ii) the acquisition, or proposed acquisition, by a person of a
substantial interest in the company or another company; or
(b) are unacceptable because they constitute, or give rise to, a
contravention of a provision of this Chapter or of Chapter 6A, 6B or
6C.
The Panel may only make a declaration under this subsection, or only
decline to make a declaration under this subsection, if it considers that doing
so is not against the public interest after taking into account any policy
considerations that the Panel considers relevant.
(3) In exercising its powers under this section, the Panel:
(a) must have regard to:
(i) the purposes of this Chapter set out in section 602;
and
(ii) the other provisions of this Chapter; and
(iii) the rules made under section 658C; and
(iv) the matters specified in regulations made for the purposes of
paragraph 195(3)(c) of the ASIC Act; and
(b) may have regard to any other matters it considers relevant.
In having regard to the purpose set out in paragraph 602(c) in relation to
an acquisition, or proposed acquisition, of a substantial interest in a company,
body or scheme, the Panel must take into account the actions of the directors of
the company or body or the responsible entity for a scheme (including actions
that caused the acquisition or proposed acquisition not to proceed or
contributed to it not proceeding).
(4) The Panel must give an opportunity to make submissions in relation to
the matter to:
(a) each person to whom a proposed declaration relates; and
(b) each party to the proceedings; and
(c) ASIC.
(5) The declaration must be in writing and published in the
Gazette.
(6) As soon as practicable, the Panel must give each person to whom the
declaration relates:
(a) a copy of the declaration; and
(b) a written statement of the Panel’s reasons for making the
declaration.
(7) This section does not require the Panel to perform a function, or
exercise a power, in a particular way in a particular case.
The Panel can only make a declaration under section 657A
within:
(a) 3 months after the circumstances occur; or
(b) 1 month after the application under section 657C for the
declaration was made;
whichever ends last. The Court may extend the period on application by the
Panel.
(1) The Panel may make a declaration under section 657A, or an order
under section 657D or 657E, only on an application made under this
section.
(2) An application for a declaration under section 657A or an order
under section 657D or 657E may be made by:
(a) the bidder; or
(b) the target; or
(c) ASIC; or
(d) any other person whose interests are affected by the relevant
circumstances.
Note: The Administrative Appeals Tribunal cannot review
ASIC’s decision whether to apply to the Panel (see paragraph
1317C(gc)).
(3) An application for a declaration under section 657A can be made
only within:
(a) 2 months after the circumstances have occurred; or
(b) a longer period determined by the Panel.
(1) The Panel may make an order under subsection (2) if it has
declared circumstances to be unacceptable under section 657A. It must not
make an order if it is satisfied that the order would unfairly prejudice any
person. Before making the order, the Panel must give:
(a) each person to whom a proposed order relates; and
(b) each party to the proceedings; and
(c) ASIC;
an opportunity to make submissions to the Panel about the matter
(2) The Panel may make any order (including a remedial order but not
including an order directing a person to comply with a requirement of
Chapter 6, 6A, 6B or 6C) that it thinks appropriate to:
(a) protect the rights or interests of any person affected by the
circumstances; or
(b) ensure that a takeover bid or proposed takeover bid in relation to
securities proceeds (as far as possible) in a way that it would have proceeded
if the circumstances had not occurred; or
(c) specify in greater detail the requirements of an order made under this
subsection; or
(d) determine who is to bear the costs of the parties to the proceedings
before the Panel;
regardless of whether it has previously made an order under this subsection
or section 657E in relation to the declaration. The Panel may also
make any ancillary or consequential orders that it thinks appropriate.
Note: Section 9 defines remedial
order.
(3) The Panel may vary, revoke or suspend an order made under this
section. Before doing so, it must give an opportunity to make submissions in
relation to the matter to:
(a) each person to whom the order is directed; and
(b) each party to the proceedings in which the order was made;
and
(c) ASIC.
(4) If the Panel makes an order under this section, the Panel must give a
copy of the order, and a written statement of its reasons for making the order,
to:
(a) each party to the proceedings before the Panel; and
(b) each person to whom the order is directed if they are not a party to
the proceedings; and
(c) for an order relating to specified securities of a company—the
company; and
(d) ASIC.
The Panel must also publish the order in the Gazette. The order
takes effect as soon as it is made and not when all the requirements of this
subsection are met.
(5) If the Panel makes an order of the kind referred to in
paragraph (j) of the definition of remedial order, the
exercise of rights attached to shares is to be disregarded as provided in the
order.
(6) If the Panel makes an order of the kind referred to in
paragraph (k) of the definition of remedial order, then, by
force of this subsection, the agreement or offer specified in the order is
cancelled, or becomes voidable, as from the making of the order or any later
time that is specified in the order.
(1) The Panel, or the President of the Panel, may make an interim order of
a kind referred to in subsection 657D(2) in relation to circumstances even
if:
(a) there is no declaration under section 657A that the circumstances
are unacceptable; or
(b) no application to the Panel for a declaration of that kind has been
made.
The order must specify the period (not exceeding 2 months) for which it is
to have effect.
(2) The order ceases to have effect:
(a) at the end of the period specified in the order; or
(b) if, before the end of that period, proceedings for a declaration under
section 657A in relation to the circumstances (and all related proceedings
for an order under section 657D) are determined—when those
proceedings are determined.
(1) The following may apply under this section for review by the Panel of
a decision of the Panel made on an application under
section 657C:
(a) a party to the proceedings in which the decision was made;
or
(b) ASIC.
For these purposes, decision has the same meaning as in the
Administrative Appeals Tribunal Act 1975.
(2) If the decision is not:
(a) a decision to make a declaration under section 657A; or
(b) a decision to make an order under section 657D or 657E;
the person may apply for review only with the consent of the President of
the Panel.
(3) The regulations may provide for the time limits within which an
application may be made for review of a decision.
Note: Regulations made under the ASIC Act deal with the
constitution of the Panel for the purposes of conducting a review under this
section and the procedures to be followed in conducting the
review.
(4) After conducting a review under this section, the Panel may:
(a) vary the decision reviewed; or
(b) set aside the decision reviewed; or
(c) set aside the decision reviewed and substitute a new
decision.
In conducting the review, the Panel has the same power to make a
declaration under section 657A, or an order under section 657D or
657E, as it has when it is considering an application under
section 657C.
(1) A Court hearing proceedings in relation to a decision of the Panel
made on an application under section 657C may refer the decision to the
Panel for review.
Note: Regulations made under the ASIC Act deal with the
constitution of the Panel for the purposes of conducting a review under this
section and the procedures to be followed in conducting the
review.
(2) After conducting a review under this section, the Panel may:
(a) vary the decision reviewed; or
(b) set aside the decision reviewed; or
(c) set aside the decision reviewed and substitute a new
decision.
In conducting the review, the Panel has the same powers to make a
declaration under section 657A, or an order under section 657D or
657E, as it has when it is considering an application under
section 657C.
A person who contravenes an order made under section 657D or 657E
commits an offence.
(1) If a person contravenes, or proposes to engage in conduct that would
contravene, an order made by the Panel under section 657D or 657E, the
Court may make any orders it considers appropriate to secure compliance with the
Panel’s order, including:
(a) 1 or more remedial orders; and
(b) an order directing a person to do, or to refrain from doing, a
specified act.
Note: Section 9 defines remedial
order.
(2) An application for an order under this section may only be made
by:
(a) ASIC; or
(b) the President of the Panel; or
(c) a person to whom the Panel’s order relates; or
(d) a person who was a party to the proceedings in which the Panel’s
order was made.
(1) ASIC may publish a report, statement or notice in relation to an
application it has made for:
(a) a declaration of unacceptable circumstances under section 657A;
or
(b) an order under subsection 657D(2); or
(c) an order under section 657E; or
(d) review under section 657EA of a decision of the Panel;
or
(e) an order under section 657G to secure compliance with an order
made under subsection 657D(2) or section 657E.
(2) The report, statement or notice must:
(a) state that the application has been made; and
(b) name the company; and
(c) if ASIC considers that the report, statement or notice should name any
other person to whom the declaration would relate or the order would be
directed—name that other person.
(3) The report, statement or notice may be published in any way that ASIC
thinks appropriate. It need not be in writing.
(4) This section does not limit a function or power of ASIC, the Panel or
any other person or body.
(1) If an application is made to the Panel under this Division, the Panel
may, at any stage of the proceeding, if it is satisfied that the application is
frivolous or vexatious:
(a) dismiss the application; or
(b) if the Panel considers it appropriate, on the application of a party
to the proceedings, direct that the person who made the application must not,
without leave of the Panel, make a subsequent application to the Panel of a kind
or kinds specified in the direction.
(2) A direction given by the Panel under paragraph (1)(b) has effect
despite any other provision of this Act or a provision of any other
Act.
(3) The Panel may revoke or vary the direction.
(1) A finding of fact recorded in an order by the Panel, or a written
statement of the reasons for an order of the Panel, is proof of the fact in the
absence of evidence to the contrary.
(2) A certificate signed by the President of the Panel that states a
finding of fact made in proceedings before the Panel is proof of the fact in the
absence of evidence to the contrary.
(1) The President of the Panel may, after consultation with members of the
Panel, make rules, not inconsistent with this Act or the Regulations, to clarify
or supplement the operation of the provisions of this Chapter.
(2) In making rules under this section, the President of the Panel must
consider the purposes of this Chapter set out in section 602.
(3) A rule under this section must be in writing and the President of the
Panel must:
(a) publish notice of it in the Gazette; and
(b) give the Minister, and ASIC, a copy of the rule as soon as practicable
after it is published in the Gazette.
(4) Within 28 days after receiving the copy, the Minister may disallow the
whole or a specified part of the rule.
(5) If a person contravenes a rule made under this section, the Court may
give directions for compliance with the rule to:
(a) that person; or
(b) if that person is a body corporate—the directors of the body
corporate.
The Court must give the person against whom the order is sought, and any
person aggrieved by the contravention, an opportunity to be heard before giving
directions under this subsection.
(6) The Court may give a direction under subsection (5) only on
application by:
(a) ASIC; or
(b) the President of the Panel; or
(c) a person aggrieved by the contravention.
If there is an inconsistency between a rule made under section 658C
and an exemption given, or declaration made, by ASIC under section 655A,
the rule made under section 658C prevails to the extent of the
inconsistency.
The Panel may, of its own motion, refer a question of law arising in a
proceeding before the Panel to the Court for decision.
The object of sections 659B and 659C is to make the Panel the main
forum for resolving disputes about a takeover bid until the bid period has
ended.
Delay in commencing court proceedings until after end of bid
period
(1) Only the following may commence court proceedings in relation to a
takeover bid, or proposed takeover bid, before the end of the bid
period:
(a) ASIC;
(b) a Minister of the Commonwealth;
(c) a Minister of a State or Territory in this jurisdiction;
(d) the holder of an office established by a law of:
(i) the Commonwealth; or
(ii) a State or Territory in this jurisdiction;
(e) a body corporate incorporated for a public purpose by a law
of:
(i) the Commonwealth; or
(ii) a State or Territory in this jurisdiction;
to the extent to which it is exercising a power conferred by a law of the
Commonwealth or a State or Territory in this jurisdiction.
Note: This restriction starts to apply as soon as there is a
takeover bid, or a proposed takeover bid; it does not start to apply only when
the bid period commences.
Court power to stay proceedings that have already
commenced
(2) A court may stay:
(a) court proceedings in relation to a takeover bid or proposed takeover
bid; or
(b) court proceedings that would have a significant effect on the progress
of a takeover bid;
until the end of the bid period.
(3) In deciding whether to exercise its powers under subsection (2),
the court is to have regard to:
(a) the purposes of this Chapter; and
(b) the availability of review by the Panel under
Division 2.
(4) For the purposes of this section:
court proceedings in relation to a takeover bid or proposed takeover
bid:
(a) means any proceedings before a court in relation to:
(i) an action taken or to be taken as part of, or for the purposes of, the
bid or the target’s response to the bid; or
(ii) a document prepared or to be prepared, or a notice given or to be
given, under this Chapter; and
(b) includes:
(i) proceedings to enforce an obligation imposed by this Chapter;
or
(ii) proceedings for the review of a decision, or the exercise of a power
or discretion, under this Chapter; or
(iii) proceedings for the review of a decision, or the exercise of a power
or discretion, under Chapter 6C in relation to securities of the target of
a takeover bid during the bid period; and
(iv) proceedings under Part 2F.1A for leave to bring, or to intervene
in, proceedings referred to in paragraph (a) or subparagraph (b)(i),
(ii) or (iii).
This is not limited to proceedings brought under this Chapter or this Act
but includes proceedings under other Commonwealth and State or Territory laws
(including the general law).
(5) Nothing in this section is intended to affect the jurisdiction of the
High Court under section 75 of the Constitution.
(1) If:
(a) an application is made to the Panel for a declaration under
section 657A that particular conduct amounts to, or leads to, circumstances
that are unacceptable; and
(b) the Panel refuses to make the declaration; and
(c) a Court finds after the end of the bid period that the conduct
contravenes this Act;
the Court’s powers under this Act in relation to the conduct are
limited to the following:
(d) the Court may:
(i) determine whether a person is guilty of an offence against this Act
because they engaged in or were involved in the conduct; and
(ii) impose a penalty if the person is found guilty;
(e) the Court may:
(i) determine whether a person who engaged in, or was involved in, the
conduct contravened a provision of this Act; and
(ii) order the person to pay an amount of money to another person (whether
by way of damages, account of profits, pecuniary penalty or
otherwise);
(f) the Court may make an order under section 1318 or 1322 in
relation to the conduct.
This subsection does not confer power or jurisdiction on a court that it
does not have apart from this subsection.
(2) Without limiting subsection (1), the only kind of remedial order
that the Court may make is one that requires the person to pay money to another
person.
This Chapter extends to the acquisition of securities of listed bodies
that are not companies but are incorporated or formed in Australia in the same
way as it applies to the acquisition of securities of companies.
Note: Section 9 defines company and
listed.
(1) This Chapter extends to the acquisition of interests in a registered
scheme that is also listed as if:
(a) the scheme were a company; and
(b) interests in the scheme were shares in the company; and
(c) voting interests in the scheme were voting shares in the
company.
(2) If Part 6A.1 applies to a scheme at the end of the bid period for
a takeover, that Part continues to apply to the scheme in relation to the
takeover bid even if the scheme ceases to be listed.
(3) If Part 6A.2 applies to a scheme when a compulsory acquisition
notice under section 664C is lodged, that Part (including Division 2
of that Part) continues to apply to the scheme in relation to the notice even if
the scheme ceases to be listed.
(4) The regulations may modify the operation of this Chapter as it applies
in relation to the acquisition of interests in listed managed investment
schemes.
Threshold for compulsory acquisition power
(1) Under this subsection, the bidder under a takeover bid may
compulsorily acquire any securities in the bid class if:
(a) the bid is:
(i) an off-market bid to acquire all the securities in the bid class;
or
(ii) a market bid; and
(b) during, or at the end of, the offer period:
(i) the bidder and their associates have relevant interests in at least
90% (by number) of the securities in the bid class; and
(ii) the bidder and their associates have acquired at least 75% (by
number) of the securities that the bidder offered to acquire under the bid
(whether the acquisitions happened under the bid or otherwise).
This is so even if the bidder subsequently ceases to satisfy
subparagraph (b)(i) because of the issue of further securities in the bid
class.
Note: Subsection 92(3) defines securities for
the purposes of this Chapter.
(2) For the purposes of subsection (1), disregard any relevant
interests that the bidder has merely because of the operation of subsection
608(3) (relevant interest by 20% interest in body corporate).
Court may allow compulsory acquisition even if threshold not
reached
(3) Under this subsection, the bidder under a takeover bid may
compulsorily acquire securities in the bid class with the approval of the
Court.
Securities to be acquired
(4) If the bidder compulsorily acquires securities in the bid class under
subsection (1) or (3), the bidder:
(a) must acquire all the securities in the bid class:
(i) which were issued or granted before the end of the offer period;
and
(ii) in which the bidder does not have a relevant interest; and
(b) may elect to acquire all securities in the bid class:
(i) that were issued or granted after the end of the offer period and
before the notice under section 661B is issued; and
(ii) in which the bidder does not have a relevant interest;
but only if the bidder and their associates have relevant interests in at
least 90% (by number) of the securities in the bid class when the bidder gives
notice under section 661B; and
(c) if securities exist when the bidder gives the notice under
section 661B that:
(i) will convert, or may be converted, to securities in the bid class;
or
(ii) confer rights to be issued securities in the bid class that may be
exercised;
within the period of 6 weeks after the notice is given—may elect to
acquire securities that come to be in the bid class during that period due to a
conversion or exercise of the rights but only if the bidder and their associates
have relevant interests in at least 90% of the securities (by number) in the bid
class when the bidder gives notice under section 661B; and
(d) may elect to acquire any securities in the bid class in which the
bidder has a relevant interest (no matter when they were issued or
granted).
(5) This section has effect despite anything in the constitution of the
company whose securities are to be acquired.
Compulsory acquisition notice
(1) To compulsorily acquire securities under subsection 661A(1) or (3),
the bidder must:
(a) prepare a notice in the prescribed form that:
(i) informs the holders of the securities that the bidder is entitled to
acquire their securities under that subsection; and
(ii) informs the holders about the compulsory acquisition procedure under
this Part, including:
(A) their right under section 661D to obtain the names and addresses
of everyone else the bidder has given the notice to; and
(B) their right under section 661E to apply to the Court for an order
that the securities not be compulsorily acquired; and
(b) lodge the notice with ASIC; and
(c) give the notice to each other person who is:
(i) a holder of securities in the bid class; or
(ii) if the bidder elects under paragraph 661A(4)(c) to acquire securities
that come to be in the bid class after the notice is given—a holder of the
convertible securities referred to in that paragraph; and
(d) give a copy to each relevant securities exchange on the same day as it
is lodged with ASIC if the target is listed.
If alternative forms of consideration were offered under the takeover bid,
the notice must specify which of those forms of consideration will apply to the
acquisition of the holder’s securities if the holder does not elect one of
the forms under paragraph 661C(2)(a).
Note: Everyone who holds bid class securities on the day on
which the notice is lodged with ASIC is entitled notice. Under
section 661E, anyone who holds the securities after that day may apply to
the Court to stop the acquisition.
Time for dispatching notices to holders
(2) The bidder must dispatch the notices under
paragraph (1)(c):
(a) during the offer period, or within 1 month after:
(i) the end of offer period if the acquisition is under subsection
661A(1); or
(ii) the court approval if the acquisition is under subsection 661A(3);
and
(b) on the day the bidder lodges the notice with ASIC or on the next
business day.
The notices cannot be withdrawn.
Manner of giving notice to holders
(3) The bidder may give the notice to a holder:
(a) personally; or
(b) by sending it by post to the address for the holder in the register of
members, debenture holders or option holders.
A notice sent by post is taken to be given 3 days after it is
posted.
(4) The notice may be sent:
(a) if the notice is to be sent to the holder outside Australia—by
pre-paid airmail post or by courier; or
(b) if the notice is to be sent to the holder in Australia—by
pre-paid ordinary post or by courier.
This section does not limit the manner in which the notice may be sent to
the holder.
Note: Section 109X makes general provision for service
of documents.
Same terms as takeover bid
(1) The bidder may acquire the securities only on the terms that applied
to the acquisition of securities under the takeover bid immediately
before:
(a) the notice under section 661B is given if it is given before the
end of the offer period; or
(b) the end of the offer period if it is not.
Alternative forms of consideration under takeover bid
(2) If alternative forms of consideration were offered under the takeover
bid, the form of consideration that applies to the acquisition of the
holder’s securities is:
(a) the form that the holder elects; or
(b) the form set out in the compulsory acquisition notice under subsection
661B(1).
(3) The holder makes an election under subsection (2) by giving the
bidder a notice of the election by the later of:
(a) 1 month after the compulsory acquisition notice is given under
section 661B; or
(b) 14 days after the holder is given a statement under section 661D
if the holder asks for it.
(4) The election must be:
(a) in an electronic form approved by the SCH business rules for the
purposes of this Part if it relates to securities that are entered on an SCH
subregister; or
(b) in writing if it relates to securities that are not entered on an SCH
subregister.
Within 1 month after a compulsory acquisition notice in relation to
securities in the bid class is lodged with ASIC under section 661B, the
holder of the securities may ask the bidder in writing for a written statement
of the names and addresses of everyone else the bidder has given the notice to.
The bidder must give the holder the statement within 7 days after the
request.
(1) The holder of securities covered by a compulsory acquisition notice
under section 661B may apply to the Court for an order that the securities
not be compulsorily acquired under subsection 661A(1). The application must be
made before the later of:
(a) the end of 1 month after the holder is given notice under
section 661B; or
(b) the end of 14 days after the holder is given a statement under
section 661D if the holder asks for it.
(2) The Court may order that the securities not be compulsorily acquired
under subsection 661A(1) only if the Court is satisfied that the consideration
is not fair value for the securities.
Note: See section 667C on valuation.
(3) If the Court makes an order under this section in relation to an
acquisition of securities, the order applies to all holders who have
applications to the Court pending for an order under this section in relation to
the acquisition.
See section 666A to find out how to complete the
acquisition.
(1) If the bidder and their associates have relevant interests in at least
90% of the securities (by number) in the bid class at the end of the offer
period, the bidder must offer to buy out the remaining holders of bid class
securities in accordance with sections 662B and 662C.
(2) This section does not apply to securities that are issued:
(a) if the takeover bid was not subject to a defeating
condition—after the end of the offer period; or
(b) if the takeover bid was subject to a defeating condition—after
the notice whether the bid is free from a defeating condition or not is given
under subsection 630(3).
Notice to remaining holders of bid class securities
(1) The bidder must:
(a) prepare a notice in the prescribed form that:
(i) states that the bidder and their associates have relevant interests in
at least 90% (by number) of the securities in the bid class; and
(ii) informs the holder of bid class securities about their right to be
bought out under this Part; and
(iii) sets out the terms on which the holder may be bought out;
and
(b) lodge the notice with ASIC; and
(c) give the notice to each other person who:
(i) is a holder of securities in the bid class on the day on which the
notice is lodged with ASIC; and
(ii) has not been given a compulsory acquisition notice under
section 661B when the notice under subsection (2) is given;
and
(d) give the notice to each relevant securities exchange on the same day
as it is lodged with ASIC if the target is listed.
If alternative forms of consideration were offered under the takeover bid,
the notice must specify which of those forms will apply to the acquisition of
the holder’s securities if the holder does not give the bidder an election
notice under subsection 662C(1).
Note: The notice is be given to everyone who holds bid class
securities on the day on which the notice is lodged with ASIC. Under
section 662C, anyone who acquires the securities after that day may require
the bidder to acquire the securities.
Time for dispatching notice to holders
(2) The bidder must dispatch the notices under
paragraph (1)(c):
(a) during, or within 1 month after the end of, the offer period;
and
(b) on the day the bidder lodges the notice with ASIC or on the next
business day.
The notices cannot be withdrawn.
Manner of giving notice to holders
(3) The bidder may give the notice to a holder:
(a) personally; or
(b) by sending it by post to the address for the holder in the register of
members, debenture holders or option holders.
A notice sent by post is taken to be given 3 days after it is
posted.
(4) The notice may be sent:
(a) if the notice is to be sent to the holder outside Australia—by
pre-paid airmail post or by courier; or
(b) if the notice is to be sent to the holder in Australia—by
pre-paid ordinary post or by courier.
This subsection does not limit the manner in which the document may be sent
to the holder.
Note: Section 109X makes general provision for service
of documents.
(1) Within 1 month after notice is given in relation to securities under
section 662B, the holder of the securities may give the bidder written
notice requiring the bidder to acquire the securities. If alternative forms of
consideration were offered under the takeover bid, the holder may elect in the
notice which of those forms will apply to the acquisition of the holder’s
securities.
(2) The notice by the holder gives rise to a contract between the holder
and the bidder for the sale of the securities on:
(a) the terms that applied to the acquisition of securities under the bid
immediately before the end of the offer period; or
(b) if alternative forms of consideration applied at that time—on
the terms that the bidder will provide:
(i) the alternative specified by the holder in the notice under
subsection (1); or
(ii) if the holder has not made an election under that
subsection—the alternative set out in the bidder’s notice under
section 662B; or
(c) if the holder and the bidder agree on other terms—those
terms.
If the bidder and their associates have relevant interests in at least
90% of the securities (by number) in the bid class at the end of the offer
period, the bidder must offer to buy out the holders of securities that are
convertible into bid class securities in accordance with sections 663B and
663C. This section does not apply to securities if a takeover bid has been made
for the convertible securities and a notice has been given under
section 661B or 662B in relation to the convertible securities.
Note: For when securities are convertible into bid class
securities, see the definition of convertible securities in
section 9.
Notice to holders of convertible securities
(1) The bidder must:
(a) prepare a notice in the prescribed form that:
(i) states that the bidder and their associates have relevant interests in
at least 90% of the securities (by number) in the bid class; and
(ii) informs the holder of convertible securities about their right to be
bought out under this Part; and
(iii) sets out the terms on which the holder may be bought out;
and
(b) lodge the notice with ASIC; and
(c) give each other person who is a holder of convertible
securities:
(i) the notice; and
(ii) a copy of the expert’s report, or of all the experts’
reports, under section 667A; and
(d) give a copy of those documents to each relevant securities exchange on
the same day as it is lodged with ASIC if the target is listed.
Note 1: Subparagraph (a)(iii)—Section 667A
deals with the contents of an expert’s report.
Note 2: The notice is to be given to everyone who holds
convertible securities on the day on which the notice is lodged with ASIC. Under
section 663C, anyone who acquires the securities after that day may require
the bidder to acquire the securities.
Time for dispatching notice to holders
(2) The bidder must dispatch the notices and reports under
paragraph (1)(c):
(a) during, or within 1 month after the end of, the offer period;
and
(b) on the day the bidder lodges the notice with ASIC or on the next
business day.
The notices cannot be withdrawn.
Manner of giving notice to holders
(3) The bidder may give the notice or report to a holder:
(a) personally; or
(b) by sending it by post to the address for the holder in the register of
members, debenture holders or option holders.
A notice or report sent by post is taken to be given 3 days after it is
posted.
(4) The notice may be sent:
(a) if the notice is to be sent to the holder outside Australia—by
pre-paid airmail post or by courier; or
(b) if the notice is to be sent to the holder in Australia—by
pre-paid ordinary post or by courier.
This subsection does not limit the manner in which the document may be sent
to the holder.
Note: Section 109X makes general provision for service
of documents.
(1) Within 1 month after notice under section 663B is given in
relation to convertible securities, the holder of the convertible securities may
give the bidder a notice requiring the bidder to acquire the
securities.
(2) The holder’s notice gives rise to a contract between the holder
and the bidder for the sale of the securities on:
(a) the terms agreed to by the bidder and the holder; or
(b) the terms determined by the Court on application by the
holder.
(3) If the Court makes a determination under paragraph (2)(b) in
relation to the terms of sale for a holder’s securities of a particular
class, the determination applies to all holders of securities in that class who
have applications to the Court pending for a determination under that paragraph
in relation to the terms of sale of their securities.
90% holder—holder of 90% of securities in particular
class
(1) A person is a 90% holder in relation to a class of securities of a
company if the person holds, either alone or with a related body corporate, full
beneficial interests in at least 90% of the securities (by number) in that
class.
90% holder—holder with 90% voting power and 90% of whole company
or scheme
(2) A person is also a 90% holder in relation to a class of securities of
a company if:
(a) the securities in the class are shares or convertible into shares;
and
(b) the person’s voting power in the company is at least 90%;
and
(c) the person holds, either alone or with a related body corporate, full
beneficial interests in at least 90% by value of all the securities of the
company that are either shares or convertible into shares.
Note: Subsection 667A(2) provides that the expert’s
report that accompanies the compulsory acquisition notice must support the
paragraph (c) condition.
90% holder may acquire remainder of securities in class
(3) Under this section, a 90% holder in relation to a class of securities
of a company may compulsorily acquire all the securities in that class in which
neither the person nor any related bodies corporate has full beneficial
interests if either:
(a) the holders of securities in that class (if any) who have objected to
the acquisition between them hold less than 10% by value of those remaining
securities at the end of the objection period set out in the notice under
paragraph 664C(1)(b); or
(b) the Court approves the acquisition under section 664F.
If subsection (2) applies to the 90% holder, the holder may
compulsorily acquire securities in a class only if the holder gives compulsory
acquisition notices in relation to all classes of shares and securities
convertible into shares of which they do not already have full beneficial
ownership.
Note: Subsection 92(3) defines securities for
the purposes of this Chapter.
(4) This section has effect despite anything in the constitution of the
company whose securities are to be acquired.
(5) This Part does not apply to shares that give the shareholder, as a
shareholder, a right to occupy or use real property that the company owns or
holds under lease, whether the right is a lease or licence or a contractual
right.
(6) The 90% holder’s power to compulsorily acquire securities under
a notice given under section 664C ends if the 90% holder contravenes
section 664D by offering benefits outside the terms proposed in the
compulsory acquisition notice under section 664C.
The 90% holder in relation to a class of securities of a company may
compulsorily acquire securities in that class under section 664A only if
the holder lodges the compulsory acquisition notice for the acquisition with
ASIC under paragraph 664C(2)(a) within whichever of the following periods ends
last:
(a) the period of 12 months that started on 13 March 2000;
or
(b) the period of 6 months after the 90% holder becomes the 90% holder in
relation to that class.
The 90% holder may acquire the securities in the class for a cash sum
only and must pay the same amount for each security in the class
acquired.
Compulsory acquisition notice
(1) To compulsorily acquire securities under section 664A, the 90%
holder must prepare a notice in the prescribed form that:
(a) sets out the cash sum for which the 90% holder proposes to acquire the
securities; and
(b) specifies a period of at least 1 month during which the holders may
return the objection forms; and
(c) informs the holders about the compulsory acquisition procedure under
this Part, including:
(i) their right to obtain the names and addresses of the other holders of
securities in that class from the company register; and
(ii) their right to object to the acquisition by returning the objection
form that accompanies the notice within the period specified in the notice;
and
(d) gives details of the consideration given for any securities in that
class that the 90% holder or an associate has purchased within the last 12
months; and
(e) discloses any other information that is:
(i) known to the 90% holder or any related bodies corporate; and
(ii) material to deciding whether to object to the acquisition;
and
(iii) not disclosed in an expert’s report under
section 667A.
(2) The 90% holder must then:
(a) lodge the notice with ASIC; and
(b) give each other person (other than a related body corporate) who is a
holder of securities in the class on the day on which the notice is lodged with
ASIC:
(i) the notice; and
(ii) a copy of the expert’s report, or of all experts’
reports, under section 667A; and
(iii) an objection form; and
(c) give the company copies of those documents; and
(d) give copies of those documents to the relevant securities exchange if
the company is listed.
Note: Everyone who holds the securities on the day on which
the notice is lodged with ASIC is entitled to notice. Under subsection 664E(1),
anyone who acquires the securities during the objection period may object to the
acquisition.
Time for dispatching notice to holders
(3) The 90% holder must dispatch the notices under paragraph (2)(b)
on the day the 90% holder lodges the notice with ASIC or on the next business
day.
Manner of giving notice to holders
(4) The 90% holder may give the notice to a holder:
(a) personally; or
(b) by sending it by post to the address for the holder in the register of
members, debenture holders or option holders.
A notice sent by post is taken to be given 3 days after it is
posted.
(5) The notice may be sent:
(a) if the notice is to be sent to the holder outside Australia—by
pre-paid airmail post or by courier; or
(b) if the notice is to be sent to the holder in Australia—by
pre-paid ordinary post or by courier.
This subsection does not limit the manner in which the document may be sent
to the holder.
Note: Section 109X makes general provision for service
of documents.
Notice not to be withdrawn
(6) The 90% holder may not:
(a) withdraw a notice under this section; or
(b) if the 90% holder has given a notice under this section in relation to
those securities and the objection period for that notice has not
ended—give another notice under this section in relation to
securities.
(1) If the 90% holder gives a notice under section 664C to
compulsorily acquire securities, the 90% holder or an associate must not offer,
give or agree to give a benefit to a person during the objection period
if:
(a) the benefit is likely to induce the person, or an associate of the
person, to:
(i) dispose of securities in that class; or
(ii) not object to the acquisition of those securities under the notice;
and
(b) the benefit is not provided for in the notice.
(2) If the 90% holder proposes to give a notice under section 664C to
acquire securities within the next 4 months, the 90% holder or an associate must
not offer, give or agree to give a benefit to a person if:
(a) the benefit is likely to induce the person, or an associate of the
person, to:
(i) dispose of securities in that class; or
(ii) not object to the acquisition of those securities under the notice;
and
(b) the benefit is not proposed to be provided for in the
notice.
(3) If the 90% holder gives a notice under section 664C to
compulsorily acquire securities, the 90% holder or an associate must not give a
benefit to a person:
(a) within 1 month after the end of the objection period (see subsection
664F(2)); or
(b) during any proceedings by the Court to determine an application under
subsection 664F(1) by the 90% holder;
if:
(c) the benefit is likely to induce the person, or an associate of the
person, to:
(i) not object, or pursue an objection, to the acquisition of those
securities under the notice; or
(ii) dispose of securities in that class; and
(d) the benefit is not offered to all holders of securities in that class
under the notice.
(4) This section does not prohibit simultaneous notices under
section 664C to compulsorily acquire different classes of securities in the
company.
(1) A person who holds securities covered by the compulsory acquisition
notice may object to the acquisition of the securities by signing an objection
form and returning it to the 90% holder. The objection:
(a) relates to all securities that are covered by the notice and are held
by the person at the end of the objection period; and
(b) cannot be withdrawn.
(2) The 90% holder must lodge with ASIC a copy of any objection form
returned under subsection (1) as soon as practicable after it is
returned.
(3) As soon as practicable after the end of the objection period, the 90%
holder must:
(a) prepare a list that sets out:
(i) the names of people who hold securities covered by the compulsory
acquisition notice and have objected to the acquisition; and
(ii) details of the securities they hold; and
(b) lodge the list with ASIC; and
(c) give a copy of the list to the company; and
(d) if the company is listed—give a copy to the relevant securities
exchange.
(4) If people who hold at least 10% of the securities covered by the
compulsory acquisition notice object to the acquisition before the end of the
objection period, the 90% holder must give everyone to whom the compulsory
acquisition notice was sent under section 664C:
(a) a notice that the proposed acquisition will not occur; or
(b) a notice that the 90% holder has applied to the Court for approval of
the acquisition under section 664F;
within 1 month after the end of the objection period.
(1) If people who hold at least 10% of the securities covered by the
compulsory acquisition notice object to the acquisition before the end of the
objection period, the 90% holder may apply to the Court for approval of the
acquisition of the securities covered by the notice.
(2) The 90% holder must apply within 1 month after the end of the
objection period.
(3) If the 90% holder establishes that the terms set out in the compulsory
acquisition notice give a fair value for the securities, the Court must approve
the acquisition of the securities on those terms. Otherwise it must confirm that
the acquisition will not take place.
Note: See section 667C on valuation.
(4) The 90% holder must bear the costs that a person incurs on legal
proceedings in relation to the application unless the Court is satisfied that
the person acted improperly, vexatiously or otherwise unreasonably. The 90%
holder must bear their own costs.
See section 666A for how to complete the acquisition.
(1) A person is a 100% holder of securities in a class if the person,
either alone or with a related body corporate, holds full beneficial interests
in all the securities in the class.
(2) A 100% holder in relation to a class of securities (the main
class) who becomes a 100% holder through compulsory
acquisitions under this Part must offer to buy out the holders of securities in
another class that are convertible into main class securities in accordance with
sections 665B and 665C. This subsection does not apply to securities if a
notice is given in relation to the securities under section 661B, 662B or
664C.
Note: For when securities are convertible into main class
securities, see the definition of convertible securities in
section 9.
Notice to holders of convertible securities
(1) The 100% holder must:
(a) prepare a notice in the prescribed form that:
(i) states that the person giving the notice has acquired all the
securities in the main class; and
(ii) sets out the information that was included in the compulsory
acquisition notice given in relation to securities in the main class under
paragraphs 664C(1)(d) and (e); and
(iii) sets out the cash sum for which they are willing to acquire the
convertible securities; and
(iv) informs the holder of convertible securities about their right to be
bought out under this Part; and
(b) lodge the notice with ASIC; and
(c) give each other person who is a holder of convertible securities on
the day on which the notice is lodged with ASIC:
(i) the notice; and
(ii) a copy of the expert’s report, or all experts’ reports,
under section 667A; and
(d) give a copy of the documents to the company that issued the
securities; and
(e) give a copy of the documents to each relevant securities exchange on
the same day as it is lodged with ASIC if the company is listed.
Note 1: Subparagraph (a)(iv)—Section 667A
deals with the contents of an expert’s report.
Note 2: The notice is to be given to everyone who holds
convertible securities on the day on which the notice is lodged with ASIC. Under
section 665C, anyone who holds the securities after that day may require
the 100% holder to acquire the securities.
Time for dispatching notice to holders
(2) The 100% holder must dispatch the notices and reports under
paragraph (1)(c):
(a) within 1 month after they become the 100% holder; and
(b) on the day the 100% holder lodges the notice with ASIC or on the next
business day.
The notices cannot be withdrawn.
Manner of giving notice to holders
(3) The 100% holder may give the notice or report to a holder:
(a) personally; or
(b) by sending it by post to the address for the holder in the register of
members, debenture holders or option holders.
A notice or report sent by post is taken to be given 3 days after it is
posted.
(4) The notice may be sent:
(a) if the notice is to be sent to the holder outside Australia—by
pre-paid airmail post or by courier; or
(b) if the notice is to be sent to the holder in Australia—by
pre-paid ordinary post or by courier.
This subsection does not limit the manner in which the document may be sent
to the holder.
Note: Section 109X makes general provision for service
of documents.
(1) Within 1 month after notice under section 665B is given in
relation to convertible securities, the holder of the convertible securities may
give the 100% holder a notice requiring the 100% holder to acquire the
securities.
(2) The notice by the holder of convertible securities gives rise to a
contract between the holder and the 100% holder for the sale of the securities
on:
(a) terms agreed to by the 100% holder and the holder of the convertible
securities; or
(b) the terms determined by the Court on application by the holder of the
convertible securities.
(3) If the Court makes a determination under paragraph (2)(b) in
relation to the terms of sale for a holder’s convertible securities of a
particular class, the determination applies to all holders of convertible
securities in that class who have applications to the Court pending for a
determination under that paragraph in relation to the terms of sale of their
convertible securities.
85% holder—holder of 85% of securities in particular
class
(1) A person is an 85% holder in relation to a class of securities of a
company if the person holds, either alone or with a related body corporate, full
beneficial interests in at least 85% of the securities (by number) in that
class.
85% holder—holder with 85% voting power and 85% of whole
company
(2) A person is also an 85% holder in relation to a class of securities of
a company if:
(a) the securities in the class are shares or convertible into shares;
and
(b) the person’s voting power in the company is at least 85%;
and
(c) the person holds, either alone or with a related body corporate, full
beneficial interests in at least 85% by value of all the securities of the
company that are either shares or convertible into shares.
Person becoming 85% holder to give notice to company
(3) A person who becomes an 85% holder in relation to a class of
securities of a company must notify the company in writing that they have become
an 85% holder in relation to that class. The person must give the notice within
14 days after the person becomes aware of the information.
Person continuing to be 85% holder to give notice to
company
(4) A person who:
(a) gives a company a notice under subsection (3) in relation to a
class of securities; and
(b) is an 85% holder in relation to the class on any anniversary of
becoming an 85% holder in relation to the class;
must notify the company in writing that they continue to be an 85% holder
in relation to the class. The person must give the notice within 14 days after
the anniversary.
Company to notify members
(1) A company that is given a notice by a person under section 665D
in relation to a class of securities must notify its members in writing
that:
(a) the person:
(i) has become an 85% holder in relation to the class; or
(ii) continues to be an 85% holder in relation to the class; and
(b) the person will be able to acquire the securities in that class under
this Part if the person becomes a 90% holder in relation to that
class.
Time for notifying members
(2) The company must notify its members before, or at the same time as,
whichever of the following it first gives to its members after the company is
given the notice under section 665D:
(a) a notice under another provision of this Act;
(b) a report under a provision of this Act.
Information about 85% holder to be prominent if included in other
material given to members
(3) If a company notifies its members under this section by including the
information referred to in paragraphs (1)(a) and (b) in:
(a) a notice given to members under another provision of this Act;
or
(b) a report given to members under a provision of this Act;
the information must appear prominently in the notice or
report.
Completion to be by private treaty or statutory procedure
(1) A person entitled to acquire securities under section 661A or
664A must either:
(a) pay, issue or transfer the consideration to the holder, take a
transfer of the securities from the holder and have the company that issued the
securities register the transfer; or
(b) complete the procedure laid down in section 666B;
by the end of the period referred to in subsection (2) or
(3).
Time for completing compulsory acquisition following
takeover
(2) For an acquisition under section 661A, the period ends 14 days
after the later of:
(a) the end of 1 month after the compulsory acquisition notice was lodged
with ASIC under section 661B; or
(b) the end of 14 days after the last statement under section 661D
was given if a request is made under that section; or
(c) if an application to stop the acquisition is made to the Court under
section 661E—the application is finally determined.
Time for completing compulsory acquisition under
Part 6A.2
(3) For an acquisition under section 664A or 664F, the period ends 14
days after the later of:
(a) the end of the objection period; or
(b) if an application for approval of the acquisition is made to the Court
under section 664F in relation to the securities—the application is
finally determined.
(1) Under this section, the person acquiring the securities
must:
(a) give the company that issued the securities a copy of the compulsory
acquisition notice under section 661B or 664C together with a transfer of
the securities:
(i) signed as transferor by someone appointed by the person acquiring the
securities; and
(ii) signed as transferee by the person acquiring the securities;
and
(b) pay, issue or transfer the consideration for the transfer to the
company that issued the securities.
The person appointed under subparagraph (a)(i) has authority to sign
the transfer on behalf of the holder of the securities.
(2) If the person acquiring the securities complies with
subsection (1), the company that issued the securities must:
(a) register the person as the holder of the securities; and
(b) hold the consideration received under subsection (1) in trust for
the person who held the securities immediately before registration;
and
(c) give written notice to the person referred to in paragraph (b) as
soon as practicable that the consideration has been received and is being held
by the company pending their instructions as to how it is to be dealt
with.
(3) If the consideration held under subsection (2) consists of, or
includes, money, that money must be paid into a bank account opened and
maintained for that purpose only.
(1) An expert’s report under section 663B, 664C or 665B
must:
(a) be prepared by a person nominated by ASIC under section 667AA;
and
(b) state whether, in the expert’s opinion, the terms proposed in
the notice give a fair value for the securities concerned; and
(c) set out the reasons for forming that opinion.
Note: See section 667C on valuation.
(2) If the person giving the compulsory acquisition notice is relying on
paragraph 664A(2)(c) to give the notice, the expert’s report under
section 664C must also:
(a) state whether, in the expert’s opinion, the person (either alone
or together with a related body corporate) has full beneficial ownership in at
least 90% by value of all the securities of the company that are shares or
convertible into shares; and
(b) set out the reasons for forming that opinion.
(3) If the person giving the compulsory acquisition notice obtains 2 or
more reports, each of which were obtained for the purposes of that notice, a
copy of each report must be given to the holder of the securities.
(1) A person who proposes to obtain an expert’s report for the
purposes of section 663B, 664C or 665B must request ASIC in writing to
nominate a person to prepare the expert’s report.
(2) Within 14 days after receiving a request under subsection (1),
ASIC must nominate:
(a) an appropriate person to prepare the report; or
(b) up to 5 appropriate persons, one of whom the person making the request
may choose to prepare the report.
(3) In determining whether a person is an appropriate person to prepare an
expert’s report, and without limiting the matters that ASIC may consider,
ASIC must consider the nature of the company to be valued.
(1) The expert who provides the report must not be an associate
of:
(a) the person giving the notice; or
(b) the company that issued the securities.
(2) The report must set out details of:
(a) any relationship between the expert and:
(i) the person giving the notice or an associate of the person giving the
notice; or
(ii) the company that issued the securities or an associate of the
company;
including any circumstances in which the expert gives them advice, or
acts on their behalf, in the proper performance of the functions attaching to
the expert’s professional capacity or business relationship with them;
and
(b) any financial or other interest of the expert that could reasonably be
regarded as being capable of affecting the expert’s ability to give an
unbiased opinion in relation to the matter being reported on; and
(c) any fee, payment or other benefit (whether direct or indirect) that
the expert has received or will or may receive in connection with the
report.
(1) To determine what is fair value for securities for the purposes of
this Chapter:
(a) first, assess the value of the company as a whole; and
(b) then allocate that value among the classes of issued securities in the
company (taking into account the relative financial risk, and voting and
distribution rights, of the classes); and
(c) then allocate the value of each class pro rata among the securities in
that class (without allowing a premium or applying a discount for particular
securities in that class).
(2) Without limiting subsection (1), in determining what is fair
value for securities for the purposes of this Chapter, the consideration (if
any) paid for securities in that class within the previous 6 months must be
taken into account.
Records of unclaimed compulsory acquisition consideration
(1) If a company is paid consideration in respect of securities that are
compulsorily acquired under Part 6A.1 or 6A.3, the company must maintain
records of:
(a) the consideration paid (including any benefit accruing from the
consideration and any property substituted for the whole or any part of that
consideration); and
(b) the people who are entitled to that consideration; and
(c) any transfers of the consideration to the people entitled to
it.
(2) The company must keep the records at:
(a) its registered office; or
(b) its principal place of business in this jurisdiction; or
(c) another place in this jurisdiction approved by ASIC.
(3) A person may ask the company to let the person inspect all or any of
the records kept by the company under this section. The company must let the
person inspect the records:
(a) if the company requires payment of an amount not exceeding the
prescribed amount—within 7 days after the day on which the company
receives that amount; or
(b) in any other case—within 7 days after the day on which the
request is made.
(4) By the end of February each year, the company must publish in the
Gazette a copy of the records kept under subsection (1) as at the
end of the previous December.
(1) If the company has not transferred the unclaimed consideration to the
person entitled to it within 12 months after the publication of a copy of the
records in the Gazette, the company must transfer the consideration to
ASIC within 1 month after the end of that 12 month period.
(2) The company is then discharged from liability to any person in respect
of the consideration.
(3) ASIC must deal with the consideration under Part 9.7.
(4) Except as provided by subsection (2), this Part does not deprive
a person of any right or remedy to which the person is entitled against a
liquidator or company.
(1) ASIC may:
(a) exempt a person from a provision of this Chapter; or
(b) declare that this Chapter applies to a person as if specified
provisions were omitted, modified or varied as specified in the
declaration.
(2) The exemption or declaration may:
(a) apply to all or specified provisions of this Chapter; and
(b) apply to all persons, specified persons, or a specified class of
persons; and
(c) relate to all securities, specified securities or a specified class of
securities; and
(d) relate to any other matter generally or as specified.
(3) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an exemption applies must
comply with the condition. The Court may order the person to comply with the
condition in a specified way. Only ASIC may apply to the Court for the
order.
(4) The exemption or declaration must be in writing and ASIC must publish
notice of it in the Gazette.
(5) For the purposes of this section, the provisions of this
Chapter include:
(a) regulations made for the purposes of this Chapter; and
(b) definitions in this Act or the regulations as they apply to references
in:
(i) this Chapter; or
(ii) regulations made for the purposes of this Chapter; and
(c) the old Division 12 of Part 11.2
transitionals.
(1) A person must not give:
(a) a bidder’s statement;
(b) a takeover offer document;
(c) a notice of variation of a takeover offer;
(d) a target’s statement;
(e) a compulsory acquisition notice under section 661B or
664C;
(f) a compulsory buy-out notice under section 662B, 663B or
665B;
(g) a report that is included in, or accompanies, a statement or notice
referred to in paragraphs (a) to (f);
if there is:
(h) for all documents—a misleading or deceptive statement in the
document; or
(i) for a bidder’s statement or target’s statement—an
omission from the document of material required by section 636 or 638;
or
(j) for a bidder’s statement or a target’s statement—a
new circumstance that:
(i) has arisen since the document was lodged; and
(ii) would have been required by section 636 or 638 to be included in
the document if it had arisen before the document was lodged; or
(k) for an expert’s report under subsection 636(2) or
section 640, 663B, 664C or 665B—an omission from the report of
material required by subsection 648A(3) or 667B(2).
Note 1: See section 670D for defences.
Note 2: Section 995 imposes liabilities in respect of
other conduct related to the dealings in securities.
Forecasts and other forward-looking statement
(2) A person is taken to make a misleading statement about a future matter
(including the doing of, or refusing to do, an act) if they do not have
reasonable grounds for making the statement. This subsection does not limit the
meaning of a reference to a misleading statement or a statement that is
misleading in a material particular.
Offence if statement, omission or new matter materially
adverse
(3) A person commits an offence if they contravene subsection (1)
and:
(a) the misleading or deceptive statement; or
(b) the omission or new circumstance;
is materially adverse from the point of view of the holder of securities to
whom the document is given.
(1) A person who suffers loss or damage that results from a contravention
of subsection 670A(1) may recover the amount of the loss or damage from a person
referred to in the following table if the loss or damage is one that the table
makes the person liable for. This is so even if the person did not commit, and
was not involved in, the contravention.
|
People liable on the document |
[operative table] |
|
|---|---|---|
|
|
For these documents these people... |
...are liable for loss or damages caused by |
|
|
bidder’s statement or takeover offer document |
|
|
1 |
the bidder |
any contravention of subsection 670A(1) in relation to the
document |
|
2 |
each director of a bidder that is a body if the consideration offered under
the bid is not a cash sum only |
any contravention of subsection 670A(1) in relation to the
document |
|
3 |
a director of a bidder that is a body unless the director proves that
they: if the consideration offered under the bid is a cash sum only |
any contravention of subsection 670A(1) in relation to the
document See also items 10 and 11. |
|
|
notice of variation of a takeover offer |
|
|
4 |
the bidder |
any contravention of subsection 670A(1) in relation to the
document |
|
5 |
a director of a bidder that is a body |
any contravention of subsection 670A(1) in relation to the
document See also items 10 and 11. |
|
|
a target’s statement |
|
|
6 |
the target |
any contravention of subsection 670A(1) in relation to the
document |
|
7 |
a director of the target unless the director proves that they: |
any contravention of subsection 670A(1) in relation to the
document See also items 10 and 11. |
|
|
a compulsory acquisition or compulsory buy-out
notice |
|
|
8 |
the person giving the notice |
any contravention of subsection 670A(1) in relation to the
document |
|
9 |
a director of a body corporate giving the notice unless the director proves
that they: |
any contravention of subsection 670A(1) in relation to the
document See also items 10 and 11. |
|
10 |
all documents a person named in the document, with their consent, as having made a
statement: |
the inclusion of the statement in the document |
|
11 |
a person who contravenes, or is involved in a contravention of, subsection
670A(1) |
that contravention |
(2) An action under subsection (1) may begin at any time within 6
years after the day on which the cause of action arose.
(3) This Chapter does not affect any liability that a person has under any
other law.
Note: Conduct that contravenes subsection 670A(1) is
expressly excluded from the operation of section 995.
(1) A person referred to in the table in subsection 670B(1) in relation to
a document must notify the issuer of the document in writing as soon as
practicable if they become aware during the bid period or objection period
that:
(a) a material statement in the document is misleading or deceptive;
or
(b) there is a material omission from the document of information required
by section 636, 638 or 640; or
(c) a material new circumstance that:
(i) has arisen since the document was lodged; and
(ii) would have been required by section 636, 638 or 640 to be
included in the document if it had arisen before the document was
lodged.
(2) An expert whose report accompanies, or is included in, a
target’s statement under section 640 must notify the target in
writing as soon as practicable if they become aware during the takeover period
that:
(a) a material statement in the report is misleading or deceptive;
or
(b) there has been a significant change affecting information included in
the report.
(3) An expert whose report accompanies, or is included in, a
bidder’s statement under subsection 636(2) must notify the bidder in
writing as soon as practicable if they become aware during the takeover period
that:
(a) a material statement in the report is misleading or deceptive;
or
(b) there has been a significant change affecting information included in
the report.
Not knowing statement misleading or deceptive
(1) A person does not commit an offence against subsection 670A(3), and is
not liable under section 670B for a contravention of subsection 670A(1),
because of a misleading or deceptive statement in a document if the person
proves that they did not know that the statement was misleading or
deceptive.
Not knowing there was an omission
(2) A person does not commit an offence against subsection 670A(3), and is
not liable under section 670B for a contravention of subsection 670A(1),
because of an omission from a document in relation to a particular matter if the
person proves that they did not know that there was an omission from the
document in relation to that matter.
Reasonable reliance on information given by someone
else—statements and omissions
(3) A person does not commit an offence against subsection 670A(3), and is
not liable under section 670B for a contravention against subsection
670A(1), because of a misleading or deceptive statement in, or an omission from,
a document if the person proves that they placed reasonable reliance on
information given to them by:
(a) if the person is a body—someone other than a director, employee
or agent of the body; or
(b) if the person is an individual—someone other than an employee or
agent of the individual.
(4) For the purposes of subsection (3), a person is not the agent of
a body or individual merely because they perform a particular professional or
advisory function for the body or individual.
Withdrawal of consent—statements and omissions
(5) A person who is named in a document as:
(a) making a statement included in the document; or
(b) making a statement on the basis of which a statement is included in
the document;
does not commit an offence against subsection 670A(3), and is not liable
under section 670B for a contravention against subsection 670A(1), because
of a misleading or deceptive statement in, or an omission from, a document if
the person proves that they publicly withdrew their consent to being named in
the document in that way.
Unawareness of new matter
(6) A person does not commit an offence against subsection 670A(3), and is
not liable under section 670B for a contravention of subsection 670A(1),
because of a new circumstance that has arisen since the document was lodged if
the person proves that they were not aware of the matter.
(1) A person who:
(a) enters into a transaction relating to securities in reliance
on:
(i) a public proposal for a takeover bid; or
(ii) an announcement of a market bid; and
(b) suffers loss or damage that results from a contravention of
section 631:
may recover the amount of the loss or damage from:
(c) the person who contravened the section; or
(d) any person involved in the contravention.
(2) To determine the amount of compensation payable under
subsection (1), deduct the price of the securities at which the transaction
was entered into from the price of the securities at which the transaction would
have been likely to be entered into if the proposal or announcement had not been
made.
A person does not commit an offence under subsection 631(1) or (2), and
is not liable under section 670E for a contravention of those subsections
if the person proves that they could not reasonably have been expected to comply
with those subsections because:
(a) at the time of the proposal or announcement, circumstances existed
that the person did not know of and could not reasonably have been expected to
know of; or
(b) after the proposal or announcement, a change in circumstances occurred
that was not caused, directly or indirectly, by the person.
This Chapter applies to the acquisition of relevant interests in the
securities of listed bodies that are not companies but are incorporated or
formed in Australia in the same way as it applies to the acquisition of relevant
interests in the securities of companies.
Note: Section 9 defines company and
listed.
Requirement to give information
(1) A person must give the information referred to in subsection (3)
to a listed company, or the responsible entity for a listed registered managed
investment scheme, if:
(a) the person begins to have, or ceases to have, a substantial holding in
the company or scheme; or
(b) the person has a substantial holding in the company or scheme and
there is a movement of at least 1% in their holding; or
(c) the person makes a takeover bid for securities of the company or
scheme.
The person must also give the information to each relevant securities
exchange.
Note 1: Section 9 defines substantial holding
and associate.
Note 2: The information must be given even if the situation
changes by the time the information is to be given.
(2) For the purposes of this section, there is a movement of at
least 1% in a person’s holding if the percentage worked out using
the following formula increases or decreases by 1 or more percentage points from
the percentage they last disclosed under this Part in relation to the company or
scheme:
where:
person’s and associates’ votes is the total
number of votes attached to all the voting shares in the company or interests in
the scheme (if any) that the person or an associate has a relevant interest
in.
total votes in company or scheme is the total number of votes
attached to all voting shares in the company or interests in the
scheme.
Note: Subsection (7) expands the normal concept of
relevant interest to take account of exchange traded options and conditional
agreements.
Information that must be given
(3) The information to be given is:
(a) the person’s name and address; and
(b) details of their relevant interest in:
(i) voting shares in the company; or
(ii) interests in the scheme; and
(c) details of any relevant agreement through which they would have a
relevant interest in:
(i) voting shares in the company; or
(ii) interests in the scheme; and
(d) the name of each associate who has a relevant interest in voting
shares in the company or interests in the scheme, together with details
of:
(i) the nature of their association with the associate; and
(ii) the relevant interest of the associate; and
(iii) any relevant agreement through which the associate has the relevant
interest; and
(e) if the information is being given because of a movement in their
holding—the size and date of that movement; and
(f) if the information is being given because a person has ceased to be an
associate—the name of the person; and
(g) any other particulars that are prescribed.
Note: Subsection (7) expands the normal concept of
relevant interest to take account of exchange traded options and conditional
agreements.
Information to be in prescribed form and accompanied by certain
documents
(4) The information must be given in the prescribed form and must be
accompanied by:
(a) a copy of any document setting out the terms of any relevant agreement
that:
(i) contributed to the situation giving rise to the person needing to
provide the information; and
(ii) is in writing and readily available to the person; and
(b) a statement by the person giving full and accurate details of any
contract, scheme or arrangement that:
(i) contributed to the situation giving rise to the person needing to
provide the information; and
(ii) is not both in writing and readily available to the person.
If the person is required to give a copy of a contract, scheme or
arrangement, the copy must be endorsed with a statement that the copy is a true
copy.
(5) The information does not need to be accompanied by the documents
referred to in subsection (4) if the transaction that gives rise to the
person needing to provide the information takes place on a stock exchange
approved under section 769.
Deadline for giving information
(6) The person must give the information:
(a) within 2 business days after they become aware of the information;
or
(b) by 9.30 am on the next trading day of the relevant securities exchange
after they become aware of the information if:
(i) a takeover bid is made for voting shares in the company or voting
interests in the scheme; and
(ii) the person becomes aware of the information during the bid
period.
Relevant interests—exchange traded options and conditional
agreements
(7) For the purposes of this section, a person has a relevant interest in
securities if the person would have a relevant interest in the securities but
for subsection 609(6) (exchange traded options) or 609(7) (conditional
agreements).
(1) A person who contravenes section 671B is liable to compensate a
person for any loss or damage the person suffers because of the
contravention.
(2) It is a defence in proceedings brought under this section if the
person who contravenes section 671B proves that they contravened that
section:
(a) because of inadvertence or mistake; or
(b) because they were not aware of a relevant fact or
occurrence.
In determining whether the defence is available, disregard the
person’s ignorance of, or a mistake on the person’s part concerning,
a matter of law.
(3) If 2 or more persons each contravene section 671B because of the
same act or omission, their liability under this section for the contravention
is joint and individual.
(1) ASIC, a listed company or the responsible entity for a listed managed
investment scheme, may direct:
(a) a member of the company or scheme; or
(b) a person named in a previous disclosure under section 672B as
having a relevant interest in, or having given instructions about, voting shares
in the company or interests in the scheme;
to make the disclosure required by section 672B.
(2) ASIC must exercise its powers under this section if requested to do so
by a member of the company or scheme unless it considers that it would be
unreasonable to do so in all the circumstances.
(1) A person given a direction under section 672A must disclose to
the person giving the direction:
(a) full details of their own relevant interest in the shares or interests
in the scheme and of the circumstances that give rise to that interest;
and
(b) the name and address of each other person who has a relevant interest
in any of the shares or interests together with full details of:
(i) the nature and extent of the interest; and
(ii) the circumstances that give rise to the other person’s
interest; and
(c) the name and address of each person who has given the person
instructions about:
(i) the acquisition or disposal of the shares or interests; or
(ii) the exercise of any voting or other rights attached to the shares or
interests; or
(iii) any other matter relating to the shares or interests;
together with full details of those instructions (including the date or
dates on which they were given).
A matter referred to in paragraph (b) or (c) need only be disclosed to
the extent to which it is known to the person required to make the
disclosure.
(2) The disclosure must be made within 2 business days after:
(a) the person is given the direction; or
(b) if the person applies for an exemption under section 673 from the
obligation to make the disclosure and ASIC refuses to grant the
exemption—ASIC notifies the person of its decision on the application;
or
(c) if the direction is given by a company or responsible entity—the
company or responsible entity pays any fee payable under the regulations made
for the purposes of section 672D.
(3) The person does not have to comply with a direction given by the
company or the responsible entity if the person proves that the giving of the
direction is vexatious.
If ASIC receives information in response to a direction under
section 672A about shares in a company or interests in a listed managed
investment scheme, ASIC:
(a) may pass the information on to the company or the responsible entity
for the scheme; and
(b) if ASIC gave the direction in response to a request under subsection
672A(2)—must pass the information on to the person who made the request
unless ASIC considers it would be unreasonable in all the circumstances to do
so.
(1) The regulations may prescribe fees that companies and responsible
entities are to pay to persons for complying with directions given under this
Part.
(2) A person is liable to repay a fee paid to the person for complying
with a direction under section 672A if the person does not comply with the
direction on time even if the person does so later. The fee may be recovered as
a debt due to the company or responsible entity that paid it to the
person.
A company or responsible entity is not, because of anything done under
this Part:
(a) taken for any purpose to have notice of; or
(b) put on inquiry as to;
a person’s right in relation to a share in the company or an interest
in the listed managed investment scheme.
(1) A person who contravenes section 672B is liable to compensate a
person for any loss or damage the person suffers because of the
contravention.
(2) It is a defence in proceedings brought under this section if the
person who contravenes section 672B proves that they contravened that
section:
(a) because of inadvertence or mistake; or
(b) because they were not aware of a relevant fact or
occurrence.
In determining whether the defence is available, disregard the
person’s ignorance of, or a mistake on the person’s part concerning,
a matter of law.
(3) If 2 or more persons each contravene section 672B because of the
same act or omission, their liability under this section for the contravention
is joint and individual.
(1) ASIC may:
(a) exempt a person from a provision of this Chapter; or
(b) declare that this Chapter applies to a person as if specified
provisions were omitted, modified or varied as specified in the
declaration.
(2) In deciding whether to give the exemption or declaration, ASIC must
consider the purposes of Chapter 6 set out in section 602.
(3) The exemption or declaration may:
(a) apply to all or specified provisions of this Chapter; and
(b) apply to all persons, specified persons, or a specified class of
persons; and
(c) relate to all securities, specified securities or a specified class of
securities; and
(d) relate to any other matter generally or as specified.
(4) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an exemption applies must
comply with the condition. The Court may order the person to comply with the
condition in a specified way. Only ASIC may apply to the Court for the
order.
(5) The exemption or declaration must be in writing and ASIC must publish
notice of it in the Gazette.
(6) For the purposes of this section, the provisions of this
Chapter include:
(a) regulations made for the purposes of this Chapter; and
(b) definitions in this Act or the regulations as they apply to references
in:
(i) this Chapter; or
(ii) regulations made for the purposes of this Chapter; and
(c) the old Division 12 of Part 11.2
transitionals.
Securities covered
(1) Subsection 92(3) defines securities for the purposes of
this Chapter.
Offers and invitations both covered
(2) For the purposes of this Chapter:
(a) offering securities for issue includes inviting applications for the
issue of the securities; and
(b) offering securities for sale includes inviting offers to purchase the
securities.
Person offering securities
(3) For the purposes of this Chapter, the person who offers securities is
the person who has the capacity, or who agrees, to issue or transfer the
securities if the offer is accepted.
Geographical coverage of Chapter
(4) This Chapter applies to offers of securities that are received in this
jurisdiction, regardless of where any resulting issue, sale or transfer
occurs.
This Chapter applies to offers of interests in managed investment schemes
as if:
(a) making the interests available were issuing the interests;
and
(b) the person making the interests available were the body whose
securities were issued; and
(c) the assets and liabilities, financial position and performance,
profits and losses and prospects of the scheme were those of the body;
and
(d) a person who has the capacity to determine the outcome of decisions
about the financial and operating policies governing the operation of the scheme
were able to control the body.
For the purposes of this Chapter:
(a) an offer of an option over securities is not taken to be an offer of
the underlying securities; and
(b) the grant of an option without an offer of the option is taken to be
an offer of the option; and
(c) an offer to grant an option is taken to be an offer to issue the
security constituted by the option.
Note 1: If a disclosure document is needed for the option
and there is no further offer involved in exercising the option, the issue or
sale of the underlying securities on the exercise of the option does not need a
disclosure document.
Note 2: Paragraph (b)—the grant of the option
will not require a disclosure document if no consideration is payable on the
grant or the exercise of the option (see subsections 708(15) and
(16)).
A condition of a contract for the sale or issue of securities is void if
it provides that a party to the contract is:
(a) required or bound to waive compliance with any requirement of this
Chapter; or
(b) taken to have notice of any contract, document or matter not
specifically referred to in the disclosure document for the offer.
Sections 706, 707 and 708 say when an offer of securities needs
disclosure to investors under this Part.
Note 1: Section 727 prohibits offering securities
without disclosure.
Note 2: If the offer needs disclosure, section 734
applies advertising restrictions. These continue throughout the whole offer
process. Different restrictions apply before and after the disclosure document
is lodged.
Note 3: The way the offers are made to people must not
breach the securities hawking prohibition in section 736.
The following table shows what disclosure documents to use if an offer of
securities needs disclosure to investors under this Part.
|
|
Disclosure document |
|
|---|---|---|
|
|
Type |
Sections |
|
1 |
prospectus The standard full-disclosure document. |
content [710, 711, 713] procedure [717] liability [728 and 729] defences [731, 733] |
|
2 |
short form prospectus May be used for any offer. Section 712 allows a prospectus to refer to material lodged with ASIC
instead of setting it out. Investors are entitled to a copy of this material if
they ask for it. |
content [712] |
|
3 |
profile statement Section 721 allows a brief profile statement (rather than the
prospectus) to be sent out with offers with ASIC approval. The prospectus must
still be prepared and lodged with ASIC. Investors are entitled to a copy of the
prospectus if they ask for it. |
content [714] procedure [717] liability [728 and 729] defences [732, 733] |
|
4 |
offer information statement Section 709 allows an offer information statement to be used instead
of a prospectus for an offer to issue securities if the amount raised from
issues of securities is $5 million or less. |
content [715] procedure [717] liability [728 and 729] defences [732, 733] |
An offer of securities for issue needs disclosure to investors under this
Part unless section 708 says otherwise.
Only some sales need disclosure
(1) An offer of securities for sale needs disclosure to investors under
this Part only if disclosure is required by subsection (2), (3) or
(5).
Off-market sale by controller
(2) An offer of a body’s securities for sale needs disclosure to
investors under this Part if:
(a) the person making the offer controls the body; and
(b) either:
(i) the securities are not quoted; or
(ii) although the securities are quoted, they are not offered for sale in
the ordinary course of trading on a stock market of a securities
exchange;
and section 708 does not say otherwise.
Note: See section 50AA for when a person controls a
body.
Sale amounting to indirect issue
(3) An offer of a body’s securities for sale within 12 months after
their issue needs disclosure to investors under this Part if the body issued the
securities:
(a) without disclosure to investors under this Part; and
(b) with the purpose of the person to whom they were issued:
(i) selling or transferring them; or
(ii) granting, issuing or transferring interests in, or options or
warrants over, them;
and section 708 does not say otherwise.
Note 1: Section 706 normally requires disclosure for
the issue of securities. This subsection is intended to prevent avoidance of
section 706. However, to establish a contravention of this subsection, the
only purpose that needs to be shown is that referred to in
paragraph (b).
Note 2: The issuer and the seller must both consent to the
disclosure document (see section 720).
Evidence of intention—indirect issue
(4) Unless the contrary is proved, a body is taken to issue securities
with the purpose referred to in paragraph (3)(b) if any of the securities
are subsequently sold, or offered for sale, within 12 months after their
issue.
Sale amounting to indirect off-market sale by controller
(5) An offer of a body’s securities for sale within 12 months after
their sale by a person who controlled the body at the time of the sale needs
disclosure to investors under this Part if:
(a) at the time of the sale by the controller either:
(i) the securities were not quoted; or
(ii) although the securities were quoted, they were not offered for sale
in the ordinary course of trading on a stock market of a securities exchange;
and
(b) the controller sold the securities without disclosure to investors
under this Part; and
(c) the controller sold the securities with the purpose of the person to
whom they were sold:
(i) selling or transferring them; or
(ii) granting, issuing or transferring interests in, or options or
warrants over, them;
and section 708 does not say otherwise.
Note 1: Subsection (2) normally requires disclosure for
a sale by a controller. This subsection is intended to prevent avoidance of
subsection (2). However, to establish a contravention of this subsection,
the only purpose that needs to be shown is that referred to in
paragraph (c).
Note 2: See section 50AA for when a person controls a
body.
Note 3: The controller and the seller must both consent to
the disclosure document (see section 720).
Evidence of intention—indirect sale by controller
(6) Unless the contrary is proved, a person who controls a body is taken
to sell securities with the purpose referred to in paragraph (5)(c) if any
of the securities are subsequently sold, or offered for sale, within 12 months
after their sale by the controller.
Small scale offerings (20 issues or sales in 12 months)
(1) Personal offers of a body’s securities by a person do not need
disclosure to investors under this Part if:
(a) none of the offers results in a breach of the 20 investors ceiling
(see subsections (3) and (4)); and
(b) none of the offers results in a breach of the $2 million ceiling (see
subsections (3) and (4)).
This subsection does not apply to an offer for sale to which subsection
707(3) (sale amounting to indirect issue) or (5) (sale amounting to indirect
sale by controller) applies.
Note 1: Subsection 727(4) makes it an offence to issue or
transfer securities without disclosure to investors once 20 issues or transfers
have occurred or $2 million has been raised.
Note 2: Under section 740 ASIC may make a determination
aggregating the transactions of bodies that ASIC considers to be closely
related.
(2) For the purposes of subsection (1), a personal offer is one
that:
(a) may only be accepted by the person to whom it is made; and
(b) is made to a person who is likely to be interested in the offer,
having regard to:
(i) previous contact between the person making the offer and that person;
or
(ii) some professional or other connection between the person making the
offer and that person; or
(iii) statements or actions by that person that indicate that they are
interested in offers of that kind.
(3) An offer by a body to issue securities:
(a) results in a breach of the 20 investors ceiling if it results in the
number of people to whom securities of the body have been issued exceeding 20 in
any 12 month period; and
(b) results in a breach of the $2 million ceiling if it results in the
amount raised by the body by issuing securities exceeding $2 million in any 12
month period.
(4) An offer by a person to transfer a body’s securities:
(a) results in a breach of the 20 investors ceiling if it results in the
number of people to whom the person sells securities of the body exceeding 20 in
any 12 month period; and
(b) results in a breach of the $2 million ceiling if it results in the
amount raised by the person from selling the body’s securities exceeding
$2 million in any 12 month period.
(5) In counting issues and sales of the body’s securities, and the
amount raised from issues and sales, for the purposes of subsection (1),
disregard issues and sales that result from offers that:
(a) do not need a disclosure document because of any other subsection of
this section; or
(b) are not received in Australia; or
(c) are made under a disclosure document.
Note: Also see provisions on restrictions on advertising
(section 734) and securities hawking provisions
(Part 6D.3).
(6) In counting issues and sales of the body’s securities, and the
amount raised from issues and sales, for the purposes of subsection (1),
disregard any issues and sales made by a body if:
(a) the body was a managed investment scheme (but not a registered managed
investment scheme) at the time that the offer of interests in the scheme that
resulted in the issues or sales was made; and
(b) the body became a registered managed investment scheme within 12
months after that offer was made; and
(c) the offer would have been exempted under any other subsection of this
section if the managed investment scheme had been a registered managed
investment scheme at the time that the offer was made.
(7) In working out the amount of money raised by the body by issuing
securities, include the following:
(a) the amount payable for the securities at the time when they are
issued;
(b) if the securities are shares issued partly-paid—any amount
payable at a future time if a call is made;
(c) if the security is an option—any amount payable on the exercise
of the option;
(d) if the securities carry a right to convert the securities into other
securities—any amount payable on the exercise of that right.
Sophisticated investors
(8) An offer of a body’s securities does not need disclosure to
investors under this Part if:
(a) the minimum amount payable for the securities on acceptance of the
offer by the person to whom the offer is made is at least $500,000; or
(b) the amount payable for the securities on acceptance by the person to
whom the offer is made and the amounts previously paid by the person for the
body’s securities of the same class that are held by the person add up to
at least $500,000; or
(c) it appears from a certificate given by a qualified accountant no more
than 6 months before the offer is made that the person to whom the offer is
made:
(i) has net assets of at least $2.5 million; or
(ii) has a gross income for each of the last 2 financial years of at least
$250,000 a year.
Note 1: Section 9 defines qualified
accountant.
Note 2: Paragraph (c)—A dealer has obligations
under Division 3 of Part 7.4 when making recommendations about
securities and ASIC has power under section 826 to revoke a dealer’s
licence if the dealer contravenes paragraph 708(8)(c).
(9) In calculating the amount payable, or paid, for securities for the
purposes of paragraph (8)(a) or (b), disregard any amount payable, or paid,
to the extent to which it is to be paid, or was paid, out of money lent by the
person offering the securities or an associate.
(10) An offer of a body’s securities does not need disclosure to
investors under this Part if:
(a) the offer is made through a licensed dealer; and
(b) the dealer is satisfied on reasonable grounds that the person to whom
the offer is made has previous experience in investing in securities that allows
them to assess:
(i) the merits of the offer; and
(ii) the value of the securities; and
(iii) the risks involved in accepting the offer; and
(iv) their own information needs; and
(v) the adequacy of the information given by the person making the offer;
and
(c) the dealer gives the person before, or at the time when, the offer is
made a written statement of the dealer’s reasons for being satisfied as to
those matters; and
(d) the person to whom the offer is made signs a written acknowledgment
before, or at the time when, the offer is made that the dealer has not given the
person a disclosure document under this Part in relation to the offer.
Professional investors
(11) An offer of securities does not need disclosure to investors under
this Part if it is made to:
(a) a person who is a licensed or exempt dealer and is acting as
principal; or
(b) a person who is a licensed or exempt investment adviser and is acting
as principal; or
(c) a body registered under the Life Insurance Act 1995;
or
(d) a body registered under the Financial Corporations Act 1974;
or
(e) a regulated superannuation fund, an approved deposit fund, a pooled
superannuation trust, or a public sector superannuation scheme within the
meaning of the Superannuation Industry (Supervision) Act 1993 if the
fund, trust or scheme has net assets of at least $10 million; or
(h) a person who controls at least $10 million (including any amount held
by an associate or under a trust that the person manages) for the purpose of
investment in securities.
Note 1: Section 68 defines exempt dealer
and exempt investment adviser.
Note 2: An underwriter to a securities issue or sale will
generally be a licensed dealer.
Offers of securities to people associated with the body
(12) An offer of a body’s securities does not need disclosure to
investors under this Part if it is made to:
(a) an executive officer of the body or a related body or their spouse,
parent, child, brother or sister; or
(b) a body corporate controlled by a person referred to in
paragraph (a).
Certain offers to present holder of securities
(13) An offer of securities for issue does not need disclosure to
investors under this Part if it is:
(a) an offer of fully-paid shares in a company to 1 or more existing
holders of shares in the company under a dividend reinvestment plan or bonus
share plan; or
(b) an offer of interests in a managed investment scheme to 1 or more
existing holders of interests in the scheme if:
(i) the offer is made under a distribution reinvestment plan or switching
facility; or
(ii) the scheme is of a kind commonly known as a cash common fund or cash
management trust.
(14) An offer of a disclosing entity’s debentures for issue does not
need disclosure to investors under this Part if the offer is made to 1 or more
existing debenture holders.
Issues or sales for no consideration
(15) An offer of securities (other than options) does not need disclosure
to investors under this Part if no consideration is to be provided for the issue
or transfer of the securities.
(16) An offer of options does not need disclosure to investors under this
Part if:
(a) no consideration is to be provided for the issue or transfer of the
options; and
(b) no consideration is to be provided for the underlying securities on
the exercise of the option.
Compromise or arrangement under Part 5.1
(17) An offer of securities does not need disclosure to investors under
this Part if it is made under a compromise or arrangement under Part 5.1
approved at a meeting held as a result of an order under subsection 411(1) or
(1A).
Takeovers
(18) An offer of securities does not need disclosure to investors under
this Part if it is:
(a) made as consideration for an offer to acquire securities under a
takeover bid under Chapter 6; and
(b) accompanied by a bidder’s statement.
Note: Although this offer does not need a disclosure
document, similar disclosures must be made about the securities in the
bidder’s statement under section 636.
Debentures of certain bodies
(19) An offer of a body’s debentures for issue or sale does not need
disclosure to investors under this Part if the body is:
(a) an Australian ADI; or
(b) registered under the Life Insurance Act 1995.
Offers by exempt bodies
(20) An offer of a body’s securities in a State or Territory in this
jurisdiction does not need disclosure to investors under this Part if the body
is an exempt body of that State or Territory.
Note: Section 66A defines exempt
body.
(21) An offer of a body’s securities for issue does not need
disclosure to investors under this Part if the body is an exempt public
authority of a State or Territory.
Note: Debentures, stock or bonds issued by a government are
not securities for the purposes of this Chapter (see subsection
92(3)).
Prospectus or short-form prospectus
(1) If an offer of securities needs disclosure to investors under this
Part, a prospectus must be prepared for the offer unless subsection (4)
allows an offer information statement to be used instead. Under
section 712, the prospectus may simply refer to material already lodged
with ASIC instead of including it.
Note: See sections 710 to 713 for the contents of a
prospectus.
Profile statement
(2) A profile statement for an offer may be prepared in addition to the
prospectus if ASIC has approved the making of offers of that kind with a profile
statement instead of a disclosure document.
Note 1: See section 714 for the contents of a profile
statement.
Note 2: Subsection 729(2) provides that there is still
liability to investors on the prospectus when a profile statement is
used.
(3) ASIC may approve the use of profile statements for offers of
securities of a particular kind. The approval may specify information to be
included in the profile statement (including information about a matter referred
to in paragraphs 714(1)(a) to (d)).
Offer information statement
(4) A body offering to issue securities may use an offer information
statement for the offer instead of a prospectus if the amount of money to be
raised by the body by issuing the securities, when added to all amounts
previously raised by:
(a) the body; or
(b) a related body corporate; or
(c) an entity controlled by:
(i) a person who controls the body; or
(ii) an associate of that person;
by issuing securities under an offer information statement is $5 million or
less.
Note 1: See section 715 for the contents of an offer
information statement. The statement must include financial statements that are
less that 6 months old.
Note 2: Under section 740, ASIC may make a
determination aggregating the transactions of bodies that ASIC considers to be
closely related.
(5) In working out the amount of money to be raised by a body or entity by
issuing securities, include the following:
(a) the amount payable for the securities at the time when they are
issued;
(b) if the securities are issued partly-paid—any amount payable at a
future time if a call is made;
(c) if the securities are options—any amount payable on the exercise
of the options;
(d) if the securities carry a right to convert the securities into other
securities—any amount payable on the exercise of that right.
(1) A prospectus for a body’s securities must contain all the
information that investors and their professional advisers would reasonably
require to make an informed assessment of the matters set out in the table
below. The prospectus must contain this information:
(a) only to the extent to which it is reasonable for investors and their
professional advisers to expect to find the information in the prospectus;
and
(b) only if a person whose knowledge is relevant (see
subsection (3)):
(i) actually knows the information; or
(ii) in the circumstances ought reasonably to have obtained the
information by making enquiries.
|
Disclosures |
[operative] |
||
|---|---|---|---|
|
|
Offer |
Matters |
|
|
1 |
offer to issue (or transfer) shares, debentures or interests in a managed
investment scheme |
• the rights and liabilities attaching to the securities
offered |
|
|
2 |
offer to grant (or transfer) a legal or equitable interest in securities or
grant (or transfer) an option over securities |
• the rights and liabilities attaching to: • if the person making the offer is: the assets and liabilities, financial position and performance, profits
and losses and prospects of that body |
|
Note: Section 713 makes special provision for
prospectuses for continuously quoted securities.
(2) In deciding what information should be included under
subsection (1), have regard to:
(a) the nature of the securities and of the body; and
(b) if the securities are investments in a managed investment
scheme—the nature of the scheme; and
(c) the matters that likely investors may reasonably be expected to know;
and
(d) the fact that certain matters may reasonably be expected to be known
to their professional advisers.
(3) For the purposes of this section, a person’s knowledge is
relevant only if they are one of the following:
(a) the person offering the securities;
(b) if the person offering the securities is a body—a director of
the body;
(c) a proposed director of the body whose securities will be issued under
the offer;
(d) a person named in the prospectus as an underwriter of the issue or
sale;
(e) a person named in the prospectus as a stockbroker to the issue or sale
if they participate in any way in the preparation of the prospectus;
(f) a person named in the prospectus with their consent as having made a
statement:
(i) that is included in the prospectus; or
(ii) on which a statement made in the prospectus is based;
(g) a person named in the prospectus with their consent as having
performed a particular professional or advisory function.
Note: Section 729 says who is liable for misstatements
in, and omissions from, a disclosure document.
Terms and conditions of offer
(1) The prospectus must set out the terms and conditions of the
offer.
Disclosure of interests and fees of certain people involved in the
offer
(2) The prospectus must set out the nature and extent of the interests (if
any) that each person referred to in subsection (4) holds, or held at any
time during the last 2 years, in:
(a) the formation or promotion of the body; or
(b) property acquired or proposed to be acquired by the body in connection
with:
(i) its formation or promotion; or
(ii) the offer of the securities; or
(c) the offer of the securities.
(3) The prospectus must set out the amount that anyone has paid or agreed
to pay, or the nature and value of any benefit anyone has given or agreed to
give:
(a) to a director, or proposed director, to induce them to become, or to
qualify as, a director of the body; and
(b) for services provided by a person referred to in subsection (4)
in connection with:
(i) the formation or promotion of the body; or
(ii) the offer of the securities; and
(c) if the prospectus is for interests in a managed investment
scheme—to the responsible entity:
(i) to procure acquisitions of interests in the scheme; or
(ii) for services provided under the constitution of the scheme.
To comply with this subsection it is not sufficient merely to state in the
prospectus that a person has been paid or will be paid normal, usual or standard
fees.
(4) Disclosures need to be made under subsections (2) and (3) in
relation to:
(a) any directors and proposed directors of the body;
(b) a person named in the prospectus as performing a function in a
professional, advisory or other capacity in connection with the preparation or
distribution of the prospectus;
(c) if the securities are interests in a managed investment
scheme—the person making the interests available and, if the person is a
body, its directors;
(d) a promoter of the body;
(e) a stockbroker or underwriter (but not a sub-underwriter) to the issue
or sale.
Quotation of securities
(5) If the prospectus for an offer of securities states or implies that
the securities are to be quoted on a stock market of a securities exchange
(whether in Australia or elsewhere), the prospectus must state that:
(a) the securities have been admitted to quotation on that stock market;
or
(b) an application for admission of the securities to quotation on that
stock market has been made to that securities exchange; or
(c) an application for admission of the securities to quotation on that
stock market will be made to that securities exchange within 7 days after the
date of the prospectus.
Note 1: Paragraph 724(1)(b) gives times within which the
person should seek and obtain admission to quotation.
Note 2: Subsection 716(1) requires the prospectus to be
dated.
Expiry date
(6) The prospectus must state that no securities will be issued on the
basis of the prospectus after the expiry date specified in the prospectus. The
expiry date must not be later than 13 months after the date of the prospectus.
The expiry date of a replacement prospectus must be the same as that of the
original prospectus it replaces.
Note 1: Subsection 716(1) requires the prospectus to be
dated.
Note 2: Section 719 deals with replacement
prospectuses.
Lodgment with ASIC
(7) The prospectus must state that:
(a) a copy of the prospectus has been lodged with ASIC; and
(b) ASIC takes no responsibility for the content of the
prospectus.
Prescribed information
(8) The prospectus must set out the information required by the
regulations.
Prospectus may simply refer to material lodged with ASIC
(1) Instead of setting out information that is contained in a document
that has been lodged with ASIC, a prospectus may simply refer to the document.
The reference must:
(a) identify the document or the part of the document that contains the
information; and
(b) inform people of their right to obtain a copy of the document (or
part) under subsection (5).
(2) The reference must also include:
(a) if the information is primarily of interest to professional analysts
or advisers or investors with similar specialist information needs:
(i) a description of the contents of the document (or part); and
(ii) a statement to the effect that the information in the document (or
part) is primarily of interest to those people; or
(b) in any other case—sufficient information about the contents of
the document to allow a person to whom the offer is made to decide whether to
obtain a copy of the document (or part).
(3) The document (or part) referred to under subsection (1) is taken
to be included in the prospectus.
(4) A person who wishes to take advantage of subsection (1) may lodge
a document with ASIC even if this Act does not require the document to be
lodged.
(5) If the prospectus is taken to include a document, or part of a
document, under subsection (1), the person making the offer must give a
copy of the document (or part) free of charge to anyone who asks for it during
the application period of the prospectus.
Alternative general disclosure test
(1) A prospectus for an offer of:
(a) continuously quoted securities of a body; or
(b) options to acquire continuously quoted securities of a body;
satisfies section 710 if it complies with subsections (2), (3)
and (4) of this section.
(2) The prospectus must contain all the information investors and their
professional advisers would reasonably require to make an informed assessment
of:
(a) the effect of the offer on the body; and
(b) if the securities are interests in a managed investment
scheme—the effect of the offer on the scheme; and
(c) the rights and liabilities attaching to the securities offered;
and
(d) if the securities are options—the rights and liabilities
attaching to:
(i) the options themselves; and
(ii) the underlying securities.
The prospectus must contain this information only to the extent to which it
is reasonable for investors and their professional advisers to expect to find
the information in the prospectus.
(3) The prospectus must state that:
(a) as a disclosing entity, the body or scheme is subject to regular
reporting and disclosure obligations; and
(b) copies of documents lodged with ASIC in relation to the body may be
obtained from, or inspected at, an ASIC office.
(4) The prospectus must either:
(a) inform people of their right to obtain a copy of any of the following
documents:
(i) the annual financial report most recently lodged with ASIC by the body
or scheme;
(ii) any half-year financial report lodged with ASIC by the body or scheme
after the lodgment of that annual financial report and before the lodgment of
the copy of the prospectus with ASIC;
(iii) any continuous disclosure notices given by the body or scheme after
the lodgment of that annual financial report and before the lodgment of the copy
of the prospectus with ASIC; or
(b) include, or be accompanied by, a copy of the document.
If the prospectus informs people of their right to obtain a copy of the
document, the person making the offer must give a copy of the document free of
charge to anyone who asks for it during the application period for the
prospectus.
Information excluded from continuous disclosure notice
(5) Information about the offer must also be set out in the prospectus if
the information:
(a) has been excluded from a continuous disclosure notice in accordance
with the listing rules of the securities exchange to which the notice was given;
and
(b) is information that investors and their professional advisers would
reasonably require for the purpose of making an informed assessment
of:
(i) the assets and liabilities, financial position and performance,
profits and losses and prospects of the body; and
(ii) the rights and liabilities attaching to the securities being
offered.
The prospectus must contain this information only to the extent to which it
is reasonable for investors and their professional advisers to expect to find
the information in the prospectus.
ASIC power to exclude entity from this section
(6) ASIC may determine in writing that a body or scheme may not rely on
this section if it is satisfied that, in the previous 12 months, any of the
following provisions were contravened in relation to the body or
scheme:
(a) the provisions of Chapter 2M;
(b) section 724;
(c) section 728;
(d) section 1001A.
ASIC must publish a copy of the determination in the Gazette. While
the determination is in force, section 710 and not this section applies to
securities of the body or scheme.
(1) A profile statement must:
(a) identify the body and the nature of the securities; and
(b) state the nature of the risks involved in investing in the securities;
and
(c) give details of all amounts payable in respect of the securities
(including any amounts by way of fee, commission or charge); and
(d) state that the person given the profile statement is entitled to a
copy of the prospectus free of charge; and
(e) state that:
(i) a copy of the statement has been lodged with ASIC; and
(ii) ASIC takes no responsibility for the content of the statement;
and
(f) give any other information required by the regulations or by ASIC
approval under subsection 709(3).
(2) The profile statement must state that no securities will be issued on
the basis of the statement after the expiry date specified in the statement. The
expiry date must not be later than 13 months after the date of the prospectus.
The expiry date of a replacement statement must be the same as that of the
original statement it replaces.
Note 1: Subsection 716(1) requires the profile statement to
be dated.
Note 2: Section 719 deals with supplementary and
replacement profile statements.
(1) An offer information statement for the issue of a body’s
securities must:
(a) identify the body and the nature of the securities; and
(b) describe the body’s business; and
(c) describe what the funds raised by the offers are to be used for;
and
(d) state the nature of the risks involved in investing in the securities;
and
(e) give details of all amounts payable in respect of the securities
(including any amounts by way of fee, commission or charge); and
(f) state that:
(i) a copy of the statement has been lodged with ASIC; and
(ii) ASIC takes no responsibility for the content of the statement;
and
(g) state that the statement is not a prospectus and that it has a lower
level of disclosure requirements than a prospectus; and
(h) state that investors should obtain professional investment advice
before accepting the offer; and
(i) include a copy of a financial report for the body; and
(j) include any other information that the regulations require to be
included in the statement.
(2) The financial report included under paragraph (1)(i)
must:
(a) be a report for a 12 month period and have a balance date that occurs
within the last 6 months before the securities are first offered under the
statement; and
(b) be prepared in accordance with the accounting standards; and
(c) be audited.
(3) The statement must state that no securities will be issued on the
basis of the statement after the expiry date specified in the statement. The
expiry date must not be later than 13 months after the date of the statement.
The expiry date of a replacement statement must be the same as that of the
original statement it replaces.
Note 1: Subsection 716(1) requires the statement to be
dated.
Note 2: Section 719 deals with replacement
statements.
Date of disclosure document
(1) A disclosure document must be dated. The date is the date on which it
is lodged with ASIC.
Consent of person to whom statement attributed
(2) A disclosure document may only include a statement by a person, or a
statement said in the document to be based on a statement by a person,
if:
(a) the person has consented to the statement being included in the
document in the form and context in which it is included; and
(b) the document states that the person has given this consent;
and
(c) the person has not withdrawn this consent before the document is
lodged with ASIC.
The following table summarises what a person who wants to offer
securities must do to make an offer of securities that needs disclosure to
investors under this Part and gives signposts to relevant sections:
|
Offering securities (disclosure documents and procedure) |
|||
|---|---|---|---|
|
|
Action required |
Sections |
Comments and related sections |
|
1 |
Prepare disclosure document, making sure that it: and that the directors consent to the disclosure document. |
710 711 712 713 714 715 716 |
Section 728 prohibits offering securities under a disclosure document
that is materially deficient. Section 729 deals with the liability for breaches of this
prohibition. Sections 731, 732 and 733 set out defences. |
|
2 |
Lodge the disclosure document with ASIC |
718 |
Subsection 727(3) prohibits processing applications for non-quoted
securities for 7 days after the disclosure document is lodged. |
|
3 |
Offer the securities, making sure that the offer and any application form
is either included in or accompanies: |
721 |
Sections 727 and 728 make it an offence to: Subsection 729(3) deals with liability on the prospectus if a profile
statement is used. The securities hawking provisions (section 736) restrict the way in
which the securities can be offered. |
|
4 |
If it is found that the disclosure document lodged was deficient or a
significant new matter arises, either: |
719 724 |
Section 728 prohibits making offers after becoming aware of a material
deficiency in the disclosure document or a significant new matter. Section 730 requires people liable on the disclosure document to
inform the person making the offer about material deficiencies and new
matters. |
|
5 |
Hold application money received on trust until the securities are issued or
transferred or the money returned. |
722 |
Investors may have a right to have their money returned if certain events
occur (see sections 724, 737 and 738). |
|
6 |
Issue or transfer the securities, making sure that: |
723 |
Section 721 says which disclosure document must be distributed with
the application form. Section 729 identifies the people who may be liable
if: Sections 731, 732 and 733 provide defences for the
contraventions. Section 737 provides remedies for an investor. |
A disclosure document to be used for an offer of securities must be
lodged with ASIC.
Note 1: Subsection 727(3) makes it an offence to process
applications for non-quoted securities under an offer that needs a disclosure
document until 7 days after the disclosure document is lodged.
Note 2: See section 720 for the consents that need to
be obtained before lodgment.
Note 3: Section 351 says what signatures are necessary
for documents that are to be lodged with ASIC.
Need for a supplementary or replacement document
(1) If the person making the offer becomes aware of:
(a) a misleading or deceptive statement in the disclosure document;
or
(b) an omission from the disclosure document of information required by
section 710, 711, 712, 713, 714 or 715; or
(c) a new circumstance that:
(i) has arisen since the disclosure document was lodged; and
(ii) would have been required by section 710, 711, 712, 713, 714 or
715 to be included in the disclosure document if it had arisen before the
disclosure document was lodged;
that is materially adverse from the point of view of an investor, the
person may lodge a supplementary or replacement document with ASIC.
Note 1: Section 728 makes it an offence to continue
making offers after the person has become aware of a misleading or deceptive
statement, omission or new circumstance that is materially adverse from the
point of view of an investor unless the deficiency is
corrected.
Note 2: Because of section 712, a prospectus may be
taken to include information in another document. This should be taken into
account when considering whether the prospectus is deficient.
Note 3: The power to issue a supplementary or replacement
document is not limited to the situations dealt with in this
section.
Note 4: This section applies to a document that has already
been previously supplemented or replaced.
Note 5: See section 720 for the consents that need to
be obtained before lodgment.
Form of supplementary document
(2) At the beginning of a supplementary document, there must be:
(a) a statement that it is a supplementary document; and
(b) an identification of the disclosure document it supplements;
and
(c) an identification of any previous supplementary documents lodged with
ASIC in relation to the offer; and
(d) a statement that it is to be read together with the disclosure
document it supplements and any previous supplementary documents.
The supplementary document must be dated. The date is the date on which it
is lodged with ASIC.
Form of replacement document
(3) At the beginning of a replacement document, there must be:
(a) a statement that it is a replacement document; and
(b) an identification of the disclosure document it replaces.
The replacement document must be dated. The date is the date on which it is
lodged with ASIC.
Consequences of lodging a supplementary document
(4) If a supplementary document is lodged with ASIC, the disclosure
document is taken to be the disclosure document together with the supplementary
document for the purposes of the application of this Chapter to events that
occur after the lodgment.
Note: This subsection means, for example, that offers made
after lodgment of the supplementary document must be accompanied by copies of
both the original disclosure document and the supplementary
document.
Consequences of lodging a replacement document
(5) If a replacement document is lodged with ASIC, the disclosure document
is taken to be the replacement document for the purposes of the application of
this Chapter to events that occur after the lodgment.
Note: This subsection means, for example, that offers made
after lodgment of the replacement document must be accompanied by copies of the
replacement document and not the original disclosure document.
Consents for issue offers
The lodgment of a disclosure document, or a supplementary or replacement
document, for the offer of a body’s securities requires the consent
of:
|
Consents required for lodgment |
[operative] |
||
|---|---|---|---|
|
|
Type of offer |
People whose consent is required |
|
|
1 |
Issue offers offer of securities for issue |
every director of the body every person named in the document as a proposed director of the
body if securities interests in a managed investment scheme made available by a
body—every director of that body if securities interests in a managed investment scheme made available by an
individual—that individual |
|
|
2 |
sale offers (sale by controller) offer of securities for sale that needs a disclosure document because of
subsection 707(2) |
if seller an individual—that individual if seller a body—every director of the body |
|
|
3 |
sale offers (sale amounting to indirect issue) offer of securities for sale that needs a disclosure document because of
subsection 707(3) |
every director of the body whose securities are offered for sale if seller an individual—that individual if seller a body—every director of the body |
|
|
4 |
sale offers (sale amounting to indirect sale by
controller) offer of securities for sale that needs a disclosure document because of
subsection 707(5) |
if seller an individual—that individual if seller a body—every director of the body if individual controls the body whose securities are offered for
sale—that individual if body controls the body whose securities are offered for sale—every
director of the controlling body |
|
Offers using prospectus alone
(1) Offers of securities for which a prospectus is being used must be made
in, or accompanied by, the prospectus unless subsection (2) allows a
profile statement to be used instead.
Note 1: Subsection 727(1) makes it an offence to make an
offer of securities unless the offer is made in or accompanied by the disclosure
document and subsection 723(1) makes it an offence to issue securities unless
they are applied for on a form that was issued in or together with the
disclosure document.
Note 2: Section 736 makes it an offence to make
unsolicited offers in a way that amounts to securities hawking.
Note 3: Section 728 makes it an offence for a person to
offer securities if the disclosure document is deficient in a way that is
material from the point of view of an investor.
Offers using prospectus and profile statement
(2) An offer of securities may be made in, or accompanied by, a profile
statement if:
(a) under subsection 709(3), ASIC has approved the making of offers of
that kind with a profile statement instead of a prospectus; and
(b) the profile statement complies with the requirements specified in ASIC
approval.
(3) If the offer that is made to a person is made in or accompanied by a
profile statement, the person making the offer must give the person a copy of
the prospectus free of charge if the person asks for it.
Offers using offer information statement
(4) Offers for which an offer information statement is being used must be
made in, or accompanied by, the offer information statement.
Note 1: Subsection 727(1) makes it an offence to make an
offer of securities unless the offer is made in or accompanied by the disclosure
document and subsection 723(1) makes it an offence to issue securities unless
they are applied for on a form that was issued in or together with the
disclosure document.
Note 2: Section 736 makes it an offence to make
unsolicited offers in a way that amounts to securities hawking.
Note 3: Section 728 makes it an offence for a person to
offer securities if the disclosure document is deficient in a way that is
material from the point of view of an investor.
(1) If a person offers securities for issue or sale under a disclosure
document, the person must hold:
(a) all application money received from people applying for securities
under the disclosure document; and
(b) all other money paid by them on account of the securities before they
are issued or transferred;
in trust under this section for the applicants until:
(c) the securities are issued or transferred; or
(d) the money is returned to the applicants.
(2) If the application money needs to be returned to an applicant, the
person must return the money as soon as practicable.
Applications must be made on form included in, or accompanied by,
disclosure document
(1) If an offer of securities needs a disclosure document, the securities
may only be issued or transferred in response to an application form. The
securities may only be issued or transferred if the person issuing or
transferring them has reasonable grounds to believe that:
(a) the form was included in, or accompanied by:
(i) the disclosure document; or
(ii) if subsection 721(2) allows a profile statement to be used—the
prospectus or the profile statement;
when the form was distributed by the person issuing or transferring the
securities; or
(b) the form was copied, or directly derived, by the person making the
application from a form referred to in paragraph (a).
Minimum subscription condition must be fulfilled before issue or
transfer
(2) If a disclosure document for an offer of securities states that the
securities will not be issued or transferred unless:
(a) applications for a minimum number of the securities are received;
or
(b) a minimum amount is raised;
the person making the offer must not issue or transfer any of the
securities until that condition is satisfied. For the purpose of working out
whether the condition has been satisfied, a person who has agreed to take
securities as underwriter is taken to have applied for those
securities.
Note 1: Under section 722, the application money must
be held in trust until the issue or transfer of the securities.
Note 2: This subsection prevents the issue or transfer of
the securities not only to those who apply for them in response to the
disclosure document but also to those who do not need to apply for them (for
example, because they are to take the securities under an underwriting
agreement).
Issue or transfer void if quotation condition not
fulfilled
(3) If a disclosure document for an offer of securities states or implies
that the securities are to be quoted on a stock market of a securities exchange
(whether in Australia or elsewhere) and:
(a) an application for the admission of the securities to quotation is not
made within 7 days after the date of the disclosure document; or
(b) the securities are not admitted to quotation within 3 months after the
date of the disclosure document;
then:
(c) an issue or transfer of securities in response to an application made
under the disclosure document is void; and
(d) the person offering the securities must return the money received by
the person from the applicants as soon as practicable.
(1) If a person offers securities under a disclosure document
and:
(a) the disclosure document states that the securities will not be issued
or transferred unless:
(i) applications for a minimum number of the securities are received;
or
(ii) a minimum amount raised;
and that condition is not satisfied within 4 months after the date of the
disclosure document; or
(b) the disclosure document states or implies that the securities are to
be quoted on a stock market of a securities exchange (whether in Australia or
elsewhere) and:
(i) an application for the admission to quotation is not made within 7
days after the date of the disclosure document; or
(ii) the securities are not admitted to quotation within 3 months after
the date of the disclosure document; or
(c) the person becomes aware that:
(i) the disclosure document contains a misleading or deceptive statement;
or
(ii) there is an omission from the disclosure document of information
required by section 710, 711, 712, 713, 714 or 715;
that is materially adverse from the point of view of an investor;
or
(d) the person becomes aware of a new circumstance that:
(i) has arisen since the disclosure document was lodged; and
(ii) would have been required by section 710, 711, 712, 713, 714 or
715 to be included in the disclosure document if it had arisen before the
disclosure document was lodged; and
(iii) is materially adverse from the point of view of an
investor;
the person must deal under subsection (2) with any applications for
the securities made under the disclosure document that have not resulted in an
issue or transfer of the securities. For the purpose of working out whether a
condition referred to in paragraph (a) has been satisfied, a person who has
agreed to take securities as underwriter is taken to have applied for those
securities.
(2) The person must either:
(a) repay the money received by the person from the applicants;
or
(b) give the applicants:
(i) the documents required by subsection (3); and
(ii) 1 month to withdraw their application and be repaid; or
(c) issue or transfer the securities to the applicants and give
them:
(i) the documents required by subsection (3); and
(ii) 1 month to withdraw their application and be repaid.
Note: Section 719 deals with lodging supplementary and
replacement documents. Section 728 makes it an offence for a person to
offer securities if the disclosure document is deficient in a way that is
material from the point of view of an investor.
(3) The documents to be given are set out in the following
table:
|
Documents to be given |
[operative] |
||
|---|---|---|---|
|
|
Circumstances |
Documents |
|
|
1 |
the sole disclosure document is a prospectus |
a supplementary or replacement prospectus that corrects the deficiency or
changes the terms of the offer |
|
|
2 |
the disclosure documents are a prospectus and a profile statement and
subsection (1) applies to the prospectus |
a statement that sets out the changes needed to the prospectus to correct
the deficiency or change the terms of offer; and a statement that the person is entitled to a copy of the prospectus free of
charge |
|
|
3 |
the disclosure documents are a prospectus and a profile statement and
subsection (1) applies to the profile statement Note that item 2 and this item may both apply to the
offer. |
a supplementary or replacement profile statement that corrects the
deficiency or changes the terms of the offer |
|
|
4 |
the disclosure document is an offer information statement |
a supplementary or replacement offer information statement that corrects
the deficiency or changes the terms of the offer |
|
(1) If a person offers securities under a disclosure document and the
disclosure document passes its expiry date, the person must deal with
applications for the securities under the document in accordance with
subsections (2) and (3).
(2) If an application is received on or before the expiry date, the person
may issue or transfer securities to the applicant.
Note: Subsection 723(1) (when read with subsections 719(4)
and (5)) requires the person issuing or transferring the securities to have
reasonable grounds to believe that the application form was included in, or
accompanied by, a disclosure document that was current at the
time.
(3) If an application is received after the expiry date, the person must
either:
(a) return any money received by the person from the applicant;
or
(b) give the applicant:
(i) a new disclosure document; and
(ii) 1 month to withdraw their application and be repaid; or
(c) issue or transfer the securities to the applicant and give
them:
(i) a new disclosure document; and
(ii) 1 month to withdraw their application and be repaid.
A person must not offer securities of:
(a) a body that has not been formed or does not exist; or
(b) a managed investment scheme that needs to be, or will need to be,
registered and that has not been registered;
if the offer would need disclosure to investors under Part 6D.2 if the
body or scheme did exist or had been registered. This is so even if it is
proposed to form, incorporate or register the body or scheme.
Offer of securities needs lodged disclosure document
(1) A person must not make an offer of securities, or distribute an
application form for an offer of securities, that needs disclosure to investors
under Part 6D.2 unless a disclosure document for the offer has been lodged
with ASIC.
Offer form to be included in or accompanied by disclosure
document
(2) A person must not make an offer of securities, or distribute an
application form for an offer of securities, that needs disclosure to investors
under Part 6D.2 unless:
(a) if a prospectus is used for the offer—the offer or form
is:
(i) included in the prospectus; or
(ii) accompanied by a copy of the prospectus; or
(b) if both a prospectus and a profile statement are used for the
offer—the offer or form is:
(i) included in the prospectus or profile statement; or
(ii) accompanied by a copy of the prospectus or profile statement;
or
(c) if an offer information statement is used for the offer—the
offer or form is:
(i) included in the statement; or
(ii) accompanied by a copy of the statement.
Note: Sections 706, 707 and 708 say when the offer
needs disclosure to investors under Part 6D.2.
Non-quoted securities—waiting period after lodgment before
processing applications for securities
(3) A person must not accept an application for, or issue or transfer,
non-quoted securities offered under a disclosure document until the period of 7
days after lodgment of the disclosure document has ended. ASIC may extend the
period by notice in writing to the person offering the securities. The period as
extended must end no more than 14 days after lodgment.
Issue or transfer not to breach section 708 ceiling
(4) If a person relies on subsection 708(1) to make offers of securities
without disclosure to investors under Part 6D.2, the person must not issue
or transfer securities without disclosure to investors under that Part if the
issue or transfer would result in a breach of the 20 investors ceiling or the $2
million ceiling (see subsections 708(3), (4), (5), (6) and (7)).
Misleading or deceptive statements, omissions and new
matters
(1) A person must not offer securities under a disclosure document if
there is:
(a) a misleading or deceptive statement in:
(i) the disclosure document; or
(ii) any application form that accompanies the disclosure document;
or
(iii) any document that contains the offer if the offer is not in the
disclosure document or the application form; or
(b) an omission from the disclosure document of material required by
section 710, 711, 712, 713, 714 or 715; or
(c) a new circumstance that:
(i) has arisen since the disclosure document was lodged; and
(ii) would have been required by section 710, 711, 712, 713, 714 or
715 to be included in the disclosure document if it had arisen before the
disclosure document was lodged.
Note 1: The person may make further offers after making up
the deficiency in the current disclosure document by lodging a supplementary or
replacement document.
Note 2: See sections 731, 732 and 733 for
defences.
Note 3: Section 995 imposes liabilities in respect of
other conduct related to the offering of the securities.
Forecasts and other forward-looking statements
(2) A person is taken to make a misleading statement about a future matter
(including the doing of, or refusing to do, an act) if they do not have
reasonable grounds for making the statement. This subsection does not limit the
meaning of a reference to a misleading statement or a statement that is
misleading in a material particular.
Offence if statement, omission or new matter materially
adverse
(3) A person commits an offence if they contravene subsection (1)
and:
(a) the misleading or deceptive statement; or
(b) the omission or new circumstance;
is materially adverse from the point of view of an investor.
Right to compensation
(1) A person who suffers loss or damage because an offer of securities
under a disclosure document contravenes subsection 728(1) may recover the amount
of the loss or damage from a person referred to in the following table if the
loss or damage is one that the table makes the person liable for. This is so
even if the person did not commit, and was not involved in, the
contravention.
|
People liable on disclosure document |
[operative] |
|
|---|---|---|
|
|
These people... |
are liable for loss or damage caused by... |
|
1 |
the person making the offer |
any contravention of subsection 728(1) in relation to the disclosure
document |
|
2 |
each director of the body making the offer if the offer is made by a
body |
any contravention of subsection 728(1) in relation to the disclosure
document |
|
3 |
a person named in the disclosure document with their consent as a proposed
director of the body whose securities are being offered |
any contravention of subsection 728(1) in relation to the disclosure
document |
|
4 |
an underwriter (but not a sub-underwriter) to the issue or sale named in
the disclosure document with their consent |
any contravention of subsection 728(1) in relation to the disclosure
document |
|
5 |
a person named in the disclosure document with their consent as having made
a statement: |
the inclusion of the statement in the disclosure document |
|
6 |
a person who contravenes, or is involved in the contravention of,
subsection 728(1) |
that contravention |
Note: Item 2—director includes a
shadow director (see section 9).
(2) A person who acquires securities as a result of an offer that was
accompanied by a profile statement is taken to have acquired the securities in
reliance on both the profile statement and the prospectus for the
offer.
(3) An action under subsection (1) may begin at any time within 6
years after the day on which the cause of action arose.
(4) This Part does not affect any liability that a person has under any
other law.
Note: Conduct that contravenes subsection 728(1) is
expressly excluded from the operation of section 995.
A person referred to in the table in section 729 must notify the
person making the offer in writing as soon as practicable if they become aware
during the application period that:
(a) a material statement in the disclosure document is misleading or
deceptive; or
(b) there is a material omission from the disclosure document of material
required by section 710, 711, 712, 713, 714 or 715; or
(c) a material new circumstance that:
(i) has arisen since the disclosure document was lodged; and
(ii) would have been required by section 710, 711, 712, 713, 714 or
715 to be included in the disclosure document if it had arisen before the
disclosure document was lodged.
Reasonable inquiries and reasonable
belief—statements
(1) A person does not commit an offence against subsection 728(3), and is
not liable under section 729 for a contravention of subsection 728(1),
because of a misleading or deceptive statement in a prospectus if the person
proves that they:
(a) made all inquiries (if any) that were reasonable in the circumstances;
and
(b) after doing so, believed on reasonable grounds that the statement was
not misleading or deceptive.
Reasonable inquiries and reasonable belief—omissions
(2) A person does not commit an offence against subsection 728(3), and is
not liable under section 729 for a contravention of subsection 728(1),
because of an omission from a prospectus in relation to a particular matter if
the person proves that they:
(a) made all inquiries (if any) that were reasonable in the circumstances;
and
(b) after doing so, believed on reasonable grounds that there was no
omission from the prospectus in relation to that matter.
Not knowing statement misleading or deceptive
(1) A person does not commit an offence against subsection 728(3), and is
not liable under section 729 for a contravention of subsection 728(1),
because of a misleading or deceptive statement in an offer information statement
or profile statement if the person proves that they did not know that the
statement was misleading or deceptive.
Not knowing there was an omission
(2) A person does not commit an offence against subsection 728(3), and is
not liable under section 729 for a contravention of subsection 728(1),
because of an omission from an offer information statement or profile statement
in relation to a particular matter if the person proves that they did not know
that there was an omission from the statement in relation to that
matter.
Reasonable reliance on information given by someone
else—statements and omissions
(1) A person does not commit an offence against subsection 728(3), and is
not liable under section 729 for a contravention against subsection 728(1),
because of a misleading or deceptive statement in, or an omission from, a
disclosure document if the person proves that they placed reasonable reliance on
information given to them by:
(a) if the person is a body—someone other than a director, employee
or agent of the body; or
(b) if the person is an individual—someone other than an employee or
agent of the individual.
(2) For the purposes of subsection (1), a person is not the agent of
a body or individual merely because they perform a particular professional or
advisory function for the body or individual.
Withdrawal of consent—statements and omissions
(3) A person who is named in a disclosure document as:
(a) being a proposed director or underwriter; or
(b) making a statement included in the document; or
(c) making a statement on the basis of which a statement is included in
the document;
does not commit an offence against subsection 728(3), and is not liable
under section 729 for a contravention against subsection 728(1), because of
a misleading or deceptive statement in, or an omission from, a disclosure
document if the person proves that they publicly withdrew their consent to being
named in the document in that way.
Unawareness of new matter
(4) A person does not commit an offence against subsection 728(3), and is
not liable under section 729 for a contravention of subsection 728(1),
because of a new circumstance that has arisen since the disclosure document was
lodged if the person proves that they were not aware of the matter.
No advertising or publicity for offers covered by the exception for 20
issues in 12 months
(1) A person must not:
(a) advertise; or
(b) publish a statement that directly or indirectly refers to;
an offer, or intended offer, of securities that would need a disclosure
document but for subsection 708(1) (exception for 20 issues in 12
months).
Advertising or publicity for offers that need a disclosure
document
(2) If an offer, or intended offer, of securities needs a disclosure
document, a person must not:
(a) advertise the offer or intended offer; or
(b) publish a statement that:
(i) directly or indirectly refers to the offer or intended offer;
or
(ii) is reasonably likely to induce people to apply for the
securities;
unless the advertisement or publication is authorised by
subsection (4), (5), (6) or (7).
Image advertising
(3) In deciding whether a statement:
(a) indirectly refers to an offer, or intended offer, of securities;
or
(b) is reasonably likely to induce people to apply for
securities;
have regard to whether the statement:
(c) forms part of the normal advertising of a body’s products or
services and is genuinely directed at maintaining its existing customers, or
attracting new customers, for those products or services; and
(d) communicates information that materially deals with the affairs of the
body; and
(e) is likely to encourage investment decisions being made on the basis of
the statement rather than on the basis of information contained in a disclosure
document.
Dissemination of disclosure document
(4) A person may disseminate a disclosure document that has been lodged
with ASIC without contravening subsection (2). This does not apply if an
order under section 739 is in force in relation to the offer.
Advertising and publicity before the disclosure document is
lodged
(5) Before the disclosure document is lodged, an advertisement or
publication does not contravene subsection (2) if it:
(a) if the offer is of securities in a class already quoted—includes
a statement that:
(i) a disclosure document for the offer will be made available when the
securities are offered; and
(ii) anyone who wishes to acquire the securities will need to complete the
application form that will be in or will accompany the disclosure document;
and
(b) in any other case—contains the following but nothing
more:
(i) a statement that identifies the offeror and the securities
(ii) a statement that a disclosure document for the offer will be made
available when the securities are offered
(iii) a statement that anyone who wants to acquire the securities will
need to complete the application form that will be in or will accompany the
disclosure document
(iv) a statement of how to arrange to receive a copy of the disclosure
document.
To satisfy paragraph (b), the advertisement or publication must
include all of the statements referred to in subparagraphs (i), (ii) and
(iii). It may include the statement referred to in
subparagraph (iv).
Advertising and publicity after the disclosure document is
lodged
(6) After the disclosure document is lodged, an advertisement or
publication does not contravene subsection (2) if it includes a statement
that:
(a) the offers of the securities will be made in, or accompanied by, a
copy of the disclosure document; and
(b) anyone wishing to acquire the securities will need to complete the
application form that will be in or will accompany the disclosure
document.
General exceptions
(7) An advertisement or publication does not contravene
subsection (2) if it:
(a) relates to an offer of securities of a listed body and consists of a
notice or report by the body, or one of its officers, about its affairs to the
relevant securities exchange; or
(b) consists solely of a notice or report of a general meeting of the
body; or
(c) consists solely of a report about the body that is published by the
body and:
(i) does not contain information that materially affects affairs of the
body other than information previously made available in a disclosure document
that has been lodged, an annual report or a report referred to in
paragraph (a) or (b); and
(ii) does not refer (whether directly or indirectly) to the offer;
or
(d) is a news report or is genuine comment, in a newspaper or periodical
or on radio or television relating to:
(i) a disclosure document that has been lodged or information contained in
such a disclosure document; or
(ii) a notice or report covered by paragraph (a), (b) or (c);
or
(e) is a report about the securities of a body or proposed body published
by someone who is not:
(i) the body; or
(ii) acting at the instigation of, or by arrangement with, the body;
or
(iii) a director of the body; or
(iv) a person who has an interest in the success of the issue or sale of
the securities.
Paragraphs (d) and (e) do not apply if anyone gives consideration or
another benefit for publishing the report.
Liability of publishers
(8) A person does not contravene subsection (1) or (2) by publishing
an advertisement or statement if they publish it in the ordinary course of a
business of:
(a) publishing a newspaper or magazine; or
(b) broadcasting by radio or television;
and the person did not know and had no reason to suspect that its
publication would amount to a contravention of a provision of this
Chapter.
Note: Depending on the circumstances of the publication, the
person may, however, commit an offence by being involved in someone else’s
contravention of subsection (1) or (2).
Pathfinder documents
(9) A person does not contravene subsection (1) or (2) by sending a
draft disclosure document for securities to a person if an offer of the
securities to the person would not require a disclosure document because of
subsection 708(8) or (10) (sophisticated investors) or 708(11) (professional
investors).
A person who offers securities under a disclosure document must keep a
consent required in respect of the document by subsection 716(2) or
section 720.
(1) A person must not offer securities for issue or sale in the course of,
or because of, an unsolicited:
(a) meeting with another person; or
(b) telephone call to another person;
unless the offer is exempted under subsection (2).
Note: Section 700 extends offers to include invitations
and distributing application forms.
(2) Subsection (1) does not prohibit an offer of securities
if:
(a) the offer does not need a disclosure document because of subsection
708(8) or (10) (sophisticated investors); or
(b) the offer does not need a disclosure document because of subsection
708(11) (professional investors); or
(c) the offer is an offer of listed securities made by telephone by a
licensed securities dealer; or
(d) the offer is made to a client by a licensed securities dealer through
whom the client has bought or sold securities in the last 12
months.
Right to withdraw and have money returned
(1) If securities are issued to a person in contravention of
section 724 (situation calling for a supplementary or replacement
document), the person has the right to return the securities and to have their
application money repaid. This is so even if the company that issued the
securities is being wound up.
(2) A right referred to in subsection (1) is exercisable by written
notice given to the company within 1 month after the date of the
issue.
(3) If the body or the seller does not repay the money as required by
subsection (1), the directors of the body or seller are personally liable
to repay the money.
If securities are issued or transferred to a person as a result of an
offer that contravenes section 736, the person may return the securities
within 1 month after the issue or transfer. If they do so, they are entitled to
be repaid the amount they paid for the securities.
(1) If ASIC is satisfied that an offer of securities under a disclosure
document lodged with ASIC would contravene section 728, ASIC may order that
no offers, issues, sales or transfers of the securities be made while the order
is in force.
(2) Before making an order under subsection (1), ASIC must:
(a) hold a hearing; and
(b) give a reasonable opportunity to any interested people to make oral or
written submissions to ASIC on whether an order should be made.
(3) If ASIC considers that any delay in making an order under
subsection (1) pending the holding of a hearing would be prejudicial to the
public interest, ASIC may make an interim order that no offers, issues, sales or
transfers of the securities be made while the interim order is in force. The
interim order may be made without holding a hearing and lasts for 21 days after
the day on which it is made unless revoked before then.
(4) At any time during the hearing, ASIC may make an interim order that no
offers, issues, sales or transfers of the securities be made while the interim
order is in force. The interim order lasts until:
(a) ASIC makes an order under subsection (1) after the conclusion of
the hearing; or
(b) the interim order is revoked;
whichever happens first.
(5) An order under subsection (1), (3) or (4) must be in writing and
must be served on the person who is ordered not to offer, issue, sell or
transfer securities under the disclosure document.
(1) ASIC may determine in writing that a number of different bodies are
closely related and that their transactions should be aggregated for the
purposes of this Chapter. If ASIC does so:
(a) an issue, sale or transfer of securities in any other bodies is taken
to also be an issue, sale or transfer of the securities of each of the other
bodies by those bodies; and
(b) any money received from an issue, sale or transfer of securities in
any of the bodies is taken to also be received by each of the other bodies from
an issue, sale or transfer of its own securities.
ASIC must give written notice of the determination to each of the
bodies.
(2) ASIC may determine in writing that the transactions of a body and of a
person who controls the body should be aggregated for the purposes of this
Chapter. If ASIC does so:
(a) an issue of securities in the body is taken to also be the transfer of
the securities by the controller; and
(b) any money received from an issue of securities in the body is taken to
also be received by the controller from a transfer of the securities;
and
(c) a sale or transfer of securities in the body by the controller is
taken to also be the issue of the securities by the body; and
(d) any money received from a sale or transfer of securities in the body
by the controller is taken to also be received by the body from an issue of the
securities.
ASIC must give written notice of the determination to the body and the
controller.
(1) ASIC may:
(a) exempt a person from a provision of this Chapter; or
(b) declare that this Chapter applies to a person as if specified
provisions were omitted, modified or varied as specified in the
declaration.
(2) The exemption or declaration may do all or any of the
following:
(a) apply to all or specified provisions of this Chapter;
(b) apply to all persons, specified persons, or a specified class of
persons;
(c) relate to all securities, specified securities or a specified class of
securities;
(d) relate to any other matter generally or as specified.
(3) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an exemption applies must
comply with the condition. The Court may order the person to comply with the
condition in a specified way. Only ASIC may apply to the Court for the
order.
(4) The exemption or declaration must be in writing and ASIC must publish
notice of it in the Gazette.
(5) For the purposes of this section, the provisions of this
Chapter include:
(a) regulations made for the purposes of this Chapter; and
(b) definitions in this Act or the regulations as they apply to references
in:
(i) this Chapter; or
(ii) regulations made for the purposes of this Chapter; and
(c) the old Division 12 of Part 11.2
transitionals.
The provisions of this Part have effect for the purposes of this Chapter,
except so far as the contrary intention appears in this Chapter.
Unless the contrary intention appears:
authority, in relation to a government, includes an
instrumentality or agency.
business rules, in relation to a body corporate,
means:
(a) in the case of a body corporate that conducts, or proposes to conduct,
a stock market—any rules, regulations or by-laws that are made by the body
corporate, or that are contained in its constitution, and that govern:
(i) the activities or conduct of that stock market; or
(ii) the activities or conduct of persons in relation to that stock
market;
other than rules, regulations or by-laws that are listing rules of the
body corporate; and
(b) otherwise—the provisions of the constitution of the body
corporate and any other rules, regulations or by-laws made by the body
corporate.
comply with, in relation to the business rules or listing
rules of a securities exchange, includes give effect to those rules.
eligible exchange means:
(a) the Exchange; or
(b) a securities exchange that is neither the Exchange nor an Exchange
subsidiary.
listing rules, in relation to a body corporate that conducts,
or proposes to conduct, a stock market, means rules, regulations or by-laws
governing or relating to:
(a) the admission to, or removal from, the official list of the body
corporate of bodies corporate, governments, unincorporate bodies or other
persons for the purpose of the quotation on the stock market of the body
corporate of securities of bodies corporate, governments, unincorporate bodies
or other persons and for other purposes; or
(b) the activities or conduct of bodies corporate, governments,
unincorporate bodies and other persons who are admitted to that list;
whether those rules, regulations or by-laws:
(c) are made by the body corporate or are contained in the constitution of
the body corporate; or
(d) are made by another person and adopted by the body
corporate.
marketable parcel, in relation to securities that are listed
for quotation on the stock market of a securities exchange, means a marketable
parcel of those securities within the meaning of the relevant business rules or
listing rules of that securities exchange.
odd lot has the meaning given by section 763.
participating exchange means an eligible exchange that is a
member of SEGC.
shares, in relation to a body corporate, includes units in
shares in the body.
trading day, in relation to a stock exchange,
means:
(a) in the case of the Exchange—a day on which a stock market of an
Exchange subsidiary; or
(b) in any case—a day on which a stock market of the stock
exchange;
is open for trading in securities.
trust account, in relation to a person, means, in the case of
a person who holds, or has at any time held, a dealers licence, an account that
a condition existing by virtue of section 866 provides or provided for the
person to maintain.
(1) A reference to engaging in conduct is a reference to doing or refusing
to do any act, including the making of, or the giving effect to a provision of,
an agreement.
(2) A reference to conduct, when that expression is used as a noun
otherwise than as mentioned in subsection (1), is a reference to the doing
of, or the refusing to do, any act, including the making of, or the giving
effect to a provision of, an agreement.
(3) Where, in a proceeding under this Chapter in respect of conduct
engaged in by a body corporate, it is necessary to establish the state of mind
of the body, it is sufficient to show that a director, employee or agent of the
body, being a director, employee or agent by whom the conduct was engaged in
within the scope of the person’s actual or apparent authority, had that
state of mind.
(4) Conduct engaged in on behalf of a body corporate:
(a) by a director, employee or agent of the body within the scope of the
person’s actual or apparent authority; or
(b) by any other person at the direction or with the consent or agreement
(whether express or implied) of a director, employee or agent of the body, where
the giving of the direction, consent or agreement is within the scope of the
actual or apparent authority of the director, employee or agent;
is taken to have been engaged in also by the body corporate.
(5) Where, in a proceeding under this Chapter in respect of conduct
engaged in by a person other than a body corporate, it is necessary to establish
the state of mind of the person, it is sufficient to show that a employee or
agent of the person, being a employee or agent by whom the conduct was engaged
in within the scope of the employee’s or agent’s actual or apparent
authority, had that state of mind.
(6) Conduct engaged in on behalf of a person other than a body
corporate:
(a) by a employee or agent of the person within the scope of the actual or
apparent authority of the employee or agent; or
(b) by any other person at the direction or with the consent or agreement
(whether express or implied) of a employee or agent of the first-mentioned
person, where the giving of the direction, consent or agreement is within the
scope of the actual or apparent authority of the employee or agent;
is taken to have been engaged in also by the first-mentioned
person.
(7) A reference in this section to the state of mind of a person includes
a reference to the knowledge, intention, opinion, belief or purpose of the
person and the person’s reasons for the person’s intention, opinion,
belief or purpose.
(1) A parcel of securities constitutes an odd lot if the number of
securities in that parcel is less than one marketable parcel of those
securities.
(2) When the number of securities in a parcel of securities is greater
than one marketable parcel of those securities and, after excluding so many of
the securities in that parcel as constitute a marketable parcel or marketable
parcels of those securities, a number of securities remains, that remaining
number of securities constitutes an odd lot.
In this Chapter, unless the contrary intention appears, a reference to
doing any act or thing includes a reference to causing, permitting or
authorising the act or thing to be done.
(1) When a person makes a representation with respect to any future matter
(including the doing of, or the refusing to do, any act) and the person does not
have reasonable grounds for making the representation, the representation is
taken to be misleading.
(3) Subsection (1) does not limit by implication the meaning of a
reference to a misleading representation, a representation that is misleading in
a material particular or conduct that is misleading or is likely or liable to
mislead.
A reference to a securities exchange permitting trading in securities on
a stock market of the securities exchange includes a reference to the securities
exchange listing the securities for quotation, or otherwise permitting the
securities to be quoted, on a stock market of the securities
exchange.
For the purposes of this Division, an unacceptable ownership situation
exists if any one person’s voting power in the Exchange exceeds
5%.
A person or persons (the acquirers) are guilty of an
offence if:
(a) the acquirers acquire any shares in the Exchange, or enter into a
relevant agreement to acquire shares in the Exchange; and
(b) the acquisition has the result that:
(i) a person who was not previously entitled to more than 5% of the voting
shares in the Exchange becomes entitled to more than 5% of the voting shares in
the Exchange; or
(ii) a person who was previously entitled to more than 5% of the voting
shares in the Exchange becomes entitled to a greater percentage of the voting
shares in the Exchange; and
(c) the acquirers knew the acquisition would have that result, or were
reckless as to whether the acquisition would have that result.
(1) The Exchange must take all reasonable steps to ensure that an
unacceptable ownership situation does not exist in relation to the
Exchange.
(2) If the Exchange knowingly or recklessly contravenes
subsection (1), the Exchange is guilty of an offence.
(1) If an unacceptable ownership situation exists in relation to the
Exchange, the Court may, on application by an eligible applicant, make such
orders as the Court considers appropriate for the purpose of ensuring that the
unacceptable ownership situation ceases to exist. For this purpose,
eligible applicant means:
(a) the Minister; or
(b) ASIC; or
(c) the Exchange; or
(d) a shareholder of the Exchange.
(2) The Court’s orders may include:
(a) an order directing the disposal of shares; or
(b) an order restraining the exercise of any rights attached to shares;
or
(c) an order prohibiting or deferring the payment of any sums due to a
person in respect of shares held by the person; or
(d) an order that any exercise of rights attached to shares be
disregarded; or
(e) an order directing any person to do or refrain from doing a specified
act, for the purpose of securing compliance with any other order made under this
section; or
(f) an order containing such ancillary or consequential provisions as the
Court thinks just.
(3) Subsection (2) does not, by implication, limit
subsection (1).
(4) Before making an order under this section, the Court may direct that
notice of the application be given to such persons as the Court thinks fit or be
published in such manner as the Court thinks fit, or both.
(5) The Court may, by order:
(a) rescind, vary or discharge an order made by the Court under this
section; or
(b) suspend the operation of such an order.
This Division applies, according to its tenor, in relation to:
(a) natural persons, whether resident in this jurisdiction or in Australia
or not and whether Australian citizens or not; and
(b) all bodies corporate and unincorporated bodies, whether formed or
carrying on business in this jurisdiction or in Australia or not; and
(c) acts and omissions outside this jurisdiction, whether in Australia or
not.
A person must not:
(a) establish or conduct; or
(b) assist in establishing or conducting; or
(c) hold out that the person conducts;
an unauthorised stock market.
(1) A body corporate may apply to ASIC in writing for approval by the
Minister as a stock exchange.
(2) The Minister may by writing approve the body as a stock exchange if,
and only if, he or she is satisfied that:
(b) the body’s business rules make satisfactory provision:
(i) for the standards of training and experience, and other
qualifications, for membership; and
(ii) for the exclusion from membership of:
(A) any person who is not of good character and high business integrity;
and
(B) any body corporate where a director of the body corporate, a person
concerned in the management of the body corporate or a person who has control,
or substantial control, of the body corporate is not of good character and high
integrity; and
(iii) for the expulsion, suspension or disciplining of a member for
conduct inconsistent with just and equitable principles in the transaction of
business or for a contravention of the body’s business rules, of this
Chapter or of the conditions of a licence held by the member; and
(iv) for the monitoring of compliance with, and for enforcement of, the
body’s business rules; and
(v) with respect to the conditions under which securities may be listed
for trading on the stock market of the proposed stock exchange; and
(vi) with respect to the conditions governing dealings in securities by
members; and
(vii) with respect to the class or classes of securities that may be dealt
with by members; and
(viii) generally for the carrying on of the business of the proposed stock
exchange with due regard to the interests of the public; and
(c) the body has made or adopted listing rules and, where the listing
rules are adopted, has made provision to the effect that an amendment to the
rules so adopted made by another person is of no effect until the body adopts
the amendment; and
(d) the listing rules made or adopted by the body make satisfactory
provision:
(i) with respect to conditions under which securities may be traded on the
stock market of the proposed stock exchange; and
(ii) generally for the protection of the interests of the public;
and
(e) either the body will be a participating exchange or there will be
enough money in the body’s fidelity fund to make the payments out of the
fund that may reasonably be expected to be necessary for the purposes of
Part 7.9; and
(f) the interests of the public will be served by the granting of its
approval.
(1) A securities exchange must:
(a) to the extent reasonably practicable, do all things that are necessary
to ensure that each stock market of the exchange is an orderly and fair market;
and
(b) have adequate arrangements for monitoring and enforcing compliance
with its business rules and listing rules; and
(c) have adequate arrangements for the expulsion, suspension or
disciplining of a member for conduct inconsistent with just and equitable
principles in the transaction of business or for a contravention of:
(i) the exchange’s business rules; or
(ii) this Chapter; or
(iii) the conditions of a licence held by the member; and
(d) have adequate arrangements for the settlement of transactions that
result from trading in securities on a stock market of the exchange;
and
(e) have adequate arrangements for investigating complaints by investors
relating to the transaction of the business of investors on a stock market of
the exchange.
(2) A contravention of subsection (1) is not an offence.
(1) If the Minister is of the opinion that a securities exchange is not
complying with the requirements of section 769A, the Minister may publish a
notice in the Gazette, directing the exchange to do specified things that
the Minister believes will promote compliance by the exchange with those
requirements.
(2) A securities exchange must comply with a direction under
subsection (1).
(3) If a securities exchange contravenes a direction under
subsection (1), the Court, on application by ASIC, may order the exchange
to comply with the direction.
(1) Within 3 months after the end of each of its financial years, a
securities exchange must prepare and give ASIC a report on the extent to which
the exchange complied with the requirements of section 769A during the
financial year. ASIC must give the report to the Minister.
(2) The report must be accompanied by:
(a) any other information and statements prescribed by the regulations;
and
(b) any audit report required by the Minister under
subsection (3).
(3) The Minister may require a securities exchange to obtain an audit
report on the annual report and on any information or statements required under
paragraph (2)(a). The audit report must be prepared, as the Minister
requires, either by ASIC or by some other person or body nominated by the
Minister.
(1) The Minister may, at any time, require a securities exchange to
prepare and give ASIC a special report on the extent to which the exchange is
complying with the requirements of section 769A. ASIC must give the report
to the Minister.
(2) The special report must be accompanied by any audit report required by
the Minister under subsection (3).
(3) The Minister may require a securities exchange to obtain an audit
report on the special report. The audit report must be prepared, as the Minister
requires, either by ASIC or by some other person or body nominated by the
Minister.
(4) A securities exchange must give the reports to ASIC, within the time
required by the Minister.
(1) A body corporate may apply to ASIC in writing for approval by the
Minister as an approved securities organisation.
(2) The Minister may by writing approve the body as an approved securities
organisation if, and only if, he or she is satisfied that:
(b) the body’s business rules make satisfactory provision:
(i) for efficient, honest, fair, competitive and informed trading in
securities on the stock market or stock markets of the proposed approved
securities organisation; and
(ii) for the expulsion, suspension or disciplining of a member for conduct
inconsistent with just and equitable principles in the transaction of business
or for a contravention of the body’s business rules, of this Chapter or of
the conditions of a licence held by the member; and
(iii) for the monitoring of compliance with, and for enforcement of, the
body’s business rules; and
(iv) generally for the carrying on of the business of the organisation
with due regard to the interests of the public;
and, without limiting the generality of the foregoing, make satisfactory
provision in relation to such of the following matters as appear to the Minister
to be relevant in relation to the application:
(v) the admission of members;
(vi) dealings in securities by members;
(vii) the listing of securities for trading on the stock market or stock
markets of the organisation;
(viii) trading in securities on that stock market or those stock
markets;
(ix) the clearing and settlement of dealings in securities that result
from trading in securities on that stock market or those stock
markets;
(x) the quotation of securities on, and the reporting of trading in
securities on, that stock market or those stock markets; and
(c) the body has made or adopted listing rules and, where the listing
rules are adopted, has made provision to the effect that an amendment of the
rules so adopted made by another person is of no effect until the body adopts
the amendment; and
(d) the listing rules made or adopted by the body make satisfactory
provision:
(i) with respect to conditions under which securities may be traded on the
stock market or stock markets of the organisation; and
(ii) generally for the protection of the interests of the public;
and
(e) either the body will be a participating exchange or there will be
enough money in the body’s fidelity fund to make the payments out of the
fund that may reasonably be expected to be necessary for the purposes of
Part 7.9; and
(f) the interests of the public will be served by the granting of its
approval.
(1) The responsible entity in relation to unquoted interests in a
registered scheme may apply to ASIC in writing for approval by the Minister of a
stock market on which the interests (whether or not they remain unquoted) may be
traded by means of an electronic trading facility.
(2) The Minister may, by writing, approve the stock market if, and only
if, the Minister is satisfied that:
(a) the responsible entity’s business rules make satisfactory
provision for the fair and orderly conduct of the stock market; and
(b) those business rules make satisfactory provision for a person or
partnership (the supervisor) who or that, having regard to the
regulations, is independent and appropriately qualified, to monitor compliance,
in relation to the stock market, with the business rules; and
(c) the responsible entity has made or will make, and will maintain,
satisfactory arrangements (including, for example, insurance) for meeting
liabilities of the responsible entity that arise in the course of conducting the
stock market; and
(d) the stock market will not be used except for trading the interests in
the scheme (whether or not they remain unquoted) by means of the electronic
trading facility.
(3) The approval is subject to:
(a) the conditions (if any) specified in the instrument of approval;
and
(b) a condition that the responsible entity will comply with the
requirements (if any) of the regulations for the lodging of documents containing
information relating to the interests in the scheme; and
(c) a condition that the supervisor must, if the supervisor becomes aware
of a contravention of the responsible entity’s business rules, notify ASIC
of the contravention within 7 days of becoming aware of it; and
(d) a condition that the supervisor must properly perform the duties that
the supervisor has under the responsible entity’s business
rules.
(4) The Minister may, by writing, revoke the approval if:
(a) the Minister is no longer satisfied as mentioned in
subsection (2); or
(b) the Minister is satisfied that a condition mentioned in
subsection (3) has been contravened; or
(c) the Minister is otherwise satisfied that the approval should be
revoked.
(5) In this section:
unquoted, in relation to interests in a registered scheme,
means the interests are not included in any class of securities that are quoted
on a stock market of a securities exchange.
(1) For the purposes of subsections 770A(1) and (2), separate stock
markets exist in relation to different kinds of interests in a registered scheme
even though:
(a) the stock markets are conducted by the same body corporate;
and
(b) the same business rules of the body corporate apply to the conduct of
the stock markets.
(2) For the purposes of subsection (1):
(a) unless paragraph (b) applies, the interests in a registered
scheme constitute a kind of interest in the scheme; and
(b) if a particular scheme relates to a number of different undertakings
in relation to interests—the interests in the scheme are taken to be
divided into a number of kinds, with each kind consisting of the interests to
which a particular one of those undertakings relates.
The regulations may make provision, in relation to section 770A
stock markets, for matters of a kind dealt with in sections 774 to 779
(inclusive) and section 1114.
(1) The Minister may by writing declare a specified stock market to be,
subject to any specified conditions, an exempt stock market.
(2) Without limiting the matters to which the Minister may have regard in
considering whether or not to vary or revoke a declaration in force under
subsection (1), he or she may, in so considering, have regard to a breach
of a condition specified in the declaration.
ASIC must cause a copy of an instrument executed under subsection 769(2),
770(2), 770A(2) or 771(1) to be published in the Gazette.
The business rules of a securities exchange have effect, by force of this
section, as a contract under seal:
(a) between the exchange and each member; and
(b) between a member and each other member;
under which each of those persons agrees to observe and perform the
provisions of the business rules as in force for the time being, so far as those
provisions are applicable to that person.
Self-listing allowed
(1) A body corporate that is a securities exchange may be included in its
own official list.
Quotation of securities of securities exchange on its own stock
market
(2) Securities of a securities exchange may be granted quotation on a
stock market of the exchange if the exchange has entered into such arrangements
as ASIC requires:
(a) for dealing with possible conflicts of interest that might arise from
the quotation of securities of the exchange on a stock market of the exchange;
and
(b) for the purpose of ensuring the integrity of trading in securities of
the exchange.
The exchange must comply with the arrangements.
(3) An arrangement under subsection (2) may provide for the exchange
to pay fees to ASIC (on behalf of the Commonwealth) for services provided by
ASIC under the arrangement, or otherwise provided under, or for the purposes of,
this section. The fees may be recovered by ASIC as a debt due to the
Commonwealth.
(4) The listing rules of a self-listing exchange must provide for ASIC,
instead of the exchange, to make decisions and to take action (or require the
exchange to take action on ASIC’s behalf) on the following
matters:
(a) the admission of the exchange to its own official list;
(b) the removal of the exchange from its own official list;
(c) granting, stopping or suspending the quotation of securities of the
exchange on a stock market of the exchange.
ASIC’s powers and functions
(5) ASIC has such powers and functions as are provided for it in
arrangements made for the purposes of subsection (2) or in listing rules
made for the purposes of subsection (4).
Note: Under section 776, ASIC may require a securities
exchange to provide assistance to ASIC for the performance of ASIC’s
functions.
Exemptions and modifications for self-listing exchanges
(6) ASIC may:
(a) exempt a self-listing exchange from a modifiable provision;
or
(b) declare that a modifiable provision applies to a self-listing exchange
as if specified provisions were omitted, modified or varied as specified in the
declaration.
(7) An exemption or declaration under subsection (6) must be in
writing and ASIC must publish notice of it in the Gazette.
(8) An exemption under subsection (6) may apply unconditionally or
subject to specified conditions.
(9) If a self-listing exchange is subject to conditions under
subsection (8), it must comply with those conditions.
(10) The Court, on application by ASIC, may order a self-listing exchange
to comply with a condition in a specified way.
Definitions
(11) In this section:
modifiable provision means:
(a) section 235 and any of the provisions of Chapters 6 and 7;
or
(b) regulations made for the purposes of any provision covered by
paragraph (a).
self-listing exchange means a securities exchange whose
securities have been granted quotation on a stock market of the
exchange.
For the purposes of this Part, a holder of a licence under an Australian
law relating to the licensing of auctioneers does not conduct a stock market
merely by conducting, on a stock market of a securities exchange, an auction of
forfeited shares.
(1) As soon as practicable after:
(a) an amendment is made, by way of rescission, alteration or addition, to
the business rules of a securities exchange; or
(b) a securities exchange makes or adopts an amendment, by way of
rescission, alteration or addition, to its listing rules;
the securities exchange must lodge written notice of the
amendment.
(2) The notice must:
(a) set out the text of the amendment; and
(b) specify the date on which the amendment was made or adopted;
and
(c) contain an explanation of the purpose of the amendment.
(3) If no notice is lodged under subsection (1) within 21 days after
the amendment is made or adopted, the amendment ceases to have effect.
(4) As soon as practicable after receiving a notice, ASIC must send a copy
to the Minister.
(5) Within 28 days after the receipt of a notice by ASIC under
subsection (4), the Minister may disallow the whole or a specified part of
the amendment to which the notice relates.
(6) As soon as practicable after the whole or a part of an amendment is
disallowed under subsection (5), ASIC must give notice of the disallowance
to the securities exchange and, upon receipt by the securities exchange of the
notice, the amendment, to the extent of the disallowance, ceases to have
effect.
(1A) A reference in this section to trading in securities on a stock
market is a reference to trading in securities on a stock market, whether in
this jurisdiction or elsewhere.
(1) Where ASIC forms the opinion that it is necessary to prohibit trading
in particular securities of a body corporate on a stock market of a securities
exchange in order to protect persons buying or selling the securities or in the
interests of the public, ASIC may give written notice to the securities exchange
stating that it has formed that opinion and setting out the reasons for that
opinion.
(2) If, after receiving the notice, the securities exchange does not take
action to prevent trading in the securities on a stock market of the securities
exchange and ASIC is still of the opinion that it is necessary to prohibit
trading in the securities on such a stock market, ASIC may, by written notice to
the securities exchange, prohibit trading in the securities on such a stock
market during a period of not more than 21 days.
(3) Where ASIC gives a notice to a securities exchange under
subsection (2), ASIC must:
(a) at the same time send a copy of the notice to the body corporate
together with a statement setting out the reasons for the giving of the notice;
and
(b) as soon as practicable give to the Minister a written report setting
out the reasons for the giving of the notice and send a copy of the report to
the securities exchange.
(4) The body corporate may request ASIC in writing to refer the matter to
the Minister.
(5) Where a request is made under subsection (4), ASIC must
immediately refer the matter to the Minister, who may, if he or she thinks fit,
direct ASIC to revoke the notice and, if such a direction is given, ASIC must
immediately revoke the notice.
(6) A securities exchange must not permit trading in securities on a stock
market of the securities exchange in contravention of a notice under
subsection (2).
(1) A securities exchange must provide such assistance to ASIC, or to a
person acting on behalf of, or with the authority of, ASIC, as ASIC reasonably
requires for the performance of its functions.
(2) Where a securities exchange reprimands, fines, suspends, expels or
otherwise takes disciplinary action against a member of the securities exchange,
it must as soon as practicable lodge written particulars of the name of the
member, the reason for and nature of the action taken, the amount of the fine
(if any) and the period of the suspension (if any).
(2A) A securities exchange that believes a person has committed, is
committing or is about to commit, a serious contravention of the securities
exchange’s business rules or listing rules, or this Act, must, as soon as
practicable, lodge a statement setting out:
(a) particulars of the contravention that it believes the person has
committed, is committing or is about to commit; and
(b) its reasons for that belief.
(2B) Subject to subsection (2C), a securities exchange that makes
information about a listed disclosing entity available to a stock market
conducted by the securities exchange must, as soon as practicable, give ASIC a
document that contains the information.
(2C) The regulations may provide that subsection (2B) does not apply
to information of a specified kind.
(3) A person authorised by ASIC is entitled at all reasonable times to
full and free access for any of the purposes of this Chapter to the trading
floor or trading floors of a securities exchange.
(4) A person must not refuse or fail, without lawful excuse, to allow a
person authorised by ASIC access in accordance with subsection (3) to a
trading floor of a securities exchange.
(5) In this section:
trading floor, in relation to a securities exchange, means a
place or facility maintained or provided by the securities exchange
for:
(a) the making or acceptance, by members of the securities exchange, or by
such members and other persons, of offers to sell, buy or exchange securities;
or
(b) the making, by members of the securities exchange, or by such members
and other persons, of offers or invitations that are intended, or may reasonably
be expected, to result, whether directly or indirectly, in the making or
acceptance of offers to sell, buy or exchange securities; or
(c) the provision of information concerning the prices at which, or the
consideration for which, particular persons, or particular classes of persons,
propose, or may reasonably be expected, to sell, buy or exchange
securities.
(1) Where a person who is under an obligation to comply with or enforce
the business rules or listing rules of a securities exchange fails to comply
with or enforce any of those business rules or listing rules, as the case may
be, the Court may, on the application of ASIC, the securities exchange or a
person aggrieved by the failure and after giving to the person aggrieved by the
failure and the person against whom the order is sought an opportunity of being
heard, make an order giving directions concerning compliance with, or
enforcement of, those business rules or listing rules to:
(a) that last-mentioned person; and
(b) if that person is a body corporate—the directors of that body
corporate.
(2) For the purposes of subsection (1), a body corporate that is,
with its agreement, consent or acquiescence, included in the official list of a
securities exchange, or an associate of such a body corporate, is taken to be
under an obligation to comply with the listing rules of that securities exchange
to the extent to which those rules purport to apply in relation to the body
corporate or associate, as the case may be.
(3) For the purposes of subsection (1), if a disclosing entity that
is an undertaking to which interests in a registered scheme relate is, with the
responsible entity’s agreement, consent or acquiescence, included in the
official list of a securities exchange, the responsible entity, or an associate
of the responsible entity, is taken to be under an obligation to comply with the
listing rules of that securities exchange to the extent to which those rules
apply to the responsible entity or associate.
(4) For the purposes of subsection (1), if a body corporate fails to
comply with or enforce provisions of the business rules or listing rules of a
securities exchange, a person who holds securities of the body corporate that
are quoted on a stock market of the securities exchange is taken to be a person
aggrieved by the failure.
(5) Subsection (4) does not limit the circumstances in which a person
may be aggrieved by a failure for the purposes of subsection (1).
(1) Despite any law of a State or Territory in this jurisdiction about
gaming or wagering:
(a) a person may enter into an option contract on:
(i) a stock market of a securities exchange; or
(ii) an exempt stock market; and
(b) the contract is valid and enforceable.
(2) Despite any law of a State or Territory in this jurisdiction about
gaming or wagering:
(a) a person may enter into a relevant agreement of a kind prescribed for
the purposes of paragraph 92A(1)(b); and
(b) the agreement is valid and enforceable.
(1) In this section:
delisting or suspension decision means a decision by a
securities exchange:
(a) whether or not to remove an entity from an official list of the
exchange; or
(b) whether or not to stop or suspend quotation of securities on a stock
market of the exchange.
disciplinary proceeding, in relation to a securities
exchange, means:
(a) a proceeding under the business rules of the securities exchange that
may result in the disciplining of a member of the securities exchange;
or
(b) an appeal under the business rules of the securities exchange from a
proceeding of a kind referred to in paragraph (a).
disciplining, in relation to a member of a securities
exchange, includes expulsion from, or suspension of, membership of the
securities exchange.
information means information given orally, in a document or
otherwise.
listed entity, in relation to a securities exchange, means an
entity included in an official list of the exchange.
member, in relation to a securities exchange, includes a
person who is under an obligation to comply with or enforce the business rules
of the securities exchange.
rules, in relation to a securities exchange, means the
exchange’s business rules or listing rules.
(2) A securities exchange, or a member, officer or employee of a
securities exchange, has qualified privilege in respect of a statement made by a
person, orally or in writing, in the course of, or otherwise for the purposes of
or in connection with, a disciplinary proceeding of the securities
exchange.
(3) Where:
(a) an Exchange subsidiary is acting on behalf of the Exchange;
or
(b) an officer or employee of an Exchange subsidiary is acting on behalf
of the Exchange or of a member, officer or employee of the Exchange;
in connection with a disciplinary proceeding of the Exchange, the Exchange
subsidiary and an officer or employee of the Exchange subsidiary have qualified
privilege in respect of a statement made by a person, orally or in writing, in
the course of, or otherwise for the purposes of or in connection with, the
disciplinary proceeding.
(4) A person has qualified privilege in respect of the publication
of:
(a) a statement made by a person, orally or in writing, in the course of,
or otherwise for the purposes of or in connection with; or
(b) a document prepared, given or produced by a person, in the course of,
or otherwise for the purposes of or in connection with;
a disciplinary proceeding of a securities exchange.
(5) A securities exchange has qualified privilege in respect of the
publication of information, or a document, given to the exchange by a listed
entity under a provision of this Act or of the exchange’s rules.
(6) Subsection (5) does not apply if:
(a) this Act, or the exchange’s rules, as the case may be, expressly
or impliedly authorised the entity to limit the purposes for which it gave the
information or document to the exchange; and
(b) when giving the information or document, the entity limited those
purposes as so authorised; and
(c) the publication is not solely for one or more of the limited
purposes.
(7) A securities exchange has qualified privilege in respect of the
publication of:
(a) information about a request by the exchange to a listed entity for
information in relation to compliance by the entity with, or a contravention by
the entity of, this Act or the exchange’s rules; or
(b) information, or a document, given to the exchange by a listed entity
in response to such a request.
(8) A securities exchange has qualified privilege in respect of the
publication of:
(a) an oral or written statement describing a delisting or suspension
decision or the reasons for, or action taken because of, such a decision;
or
(b) an oral or written statement to the effect that the exchange is
considering whether to make such a decision; or
(c) information given, or a document prepared, given or produced, by a
person (whether an officer of the exchange or not) in the course of, for the
purposes of, or otherwise in connection with, the exchange making such a
decision.
(9) An officer of a securities exchange has qualified privilege in respect
of an act:
(a) that is done in the course of performing functions or exercising
powers as an officer of the exchange; and
(b) in respect of which the exchange would have qualified privilege under
subsection (5), (7) or (8) if it had done the act.
(10) Nothing in this section limits the generality of anything else in
it.
In this Part, unless the contrary intention appears:
disciplinary proceeding, in relation to the securities
clearing house, means:
(a) a proceeding under the SCH business rules that may result in the
disciplining of an SCH participant; or
(b) an appeal under the SCH business rules from such a
proceeding.
disciplining, in relation to a person in the person’s
capacity as an SCH participant, includes, but is not limited to, taking action
that has the effect of revoking or suspending the person’s status as an
SCH participant.
(1) A body corporate may apply to ASIC in writing for approval by the
Minister as the securities clearing house.
(2) If a body so applies, the Minister may by writing approve the body as
the securities clearing house if, and only if, he or she is satisfied
that:
(a) the body’s business rules:
(i) include satisfactory provisions about:
(A) the facilities that the body proposes to provide for the settlement of
transactions involving quoted securities or quoted rights; and
(B) the facilities that the body proposes to provide for the registration
of transfers (within the meaning of Division 3 of Part 7.13) of quoted
securities or quoted rights; and
(C) any other facilities that the body proposes to provide (such as
facilities in relation to dealings in quoted securities or quoted rights);
and
(ii) include satisfactory provisions about the disciplining of persons
(being persons who will be SCH participants if the approval is given) who
contravene the business rules or this Chapter; and
(iii) are otherwise satisfactory; and
(b) the interests of the public will be served by granting the
application.
(3) An approval comes into force on the day specified in the instrument
giving the approval, being the day on which the approval is given or a later
day.
(4) In exercising his or her powers under subsection (2), the
Minister must ensure that no more than one approval is in force at any
particular time.
(5) ASIC must cause a copy of an instrument under this section to be
published in the Gazette.
(1) As soon as practicable after the SCH business rules are amended
(whether by way of rescission, alteration or addition), the securities clearing
house must give written notice of the amendment to ASIC.
(2) A notice must:
(a) set out the text of the amendment; and
(b) specify the day on which the amendment was made; and
(c) explain the purpose of the amendment.
(3) If a notice is not given as required within 21 days after an amendment
is made, the amendment ceases to have effect.
(4) ASIC must send a copy of a notice to the Minister as soon as
practicable after receiving it.
(5) The Minister may, within 28 days after ASIC receives a notice,
disallow the whole or a specified part of the amendment to which the notice
relates.
(6) If the Minister disallows the whole or a part of an amendment, ASIC
must, as soon as practicable, give notice of the disallowance to the securities
clearing house and, when the securities clearing house receives the notice, the
amendment ceases to have effect to the extent of the disallowance.
The securities clearing house must provide such assistance to ASIC, or to
a person acting on behalf of, or with the authority of, ASIC, as ASIC reasonably
requires for the performance of its functions.
If the securities clearing house decides to discipline an SCH
participant, it must, as soon as practicable, lodge written particulars of the
participant’s name and of the reason for, and nature of, the disciplinary
action taken or to be taken.
(1) The SCH business rules have effect, by force of this section, as a
contract under seal:
(a) between the SCH and each issuer; and
(b) between the SCH and each SCH participant; and
(c) between each issuer and each SCH participant; and
(d) between an SCH participant and each other SCH participant;
under which each of the persons mentioned in paragraphs (a) to (d)
agrees to observe and perform the provisions of the SCH business rules as in
force for the time being to the extent, and in the manner, provided by the SCH
business rules.
(2) In this section:
issuer means an issuing body, within the meaning of
Division 3 of Part 7.13, in relation to quoted securities or quoted
rights.
(1) If:
(a) a person is bound to comply with a provision of the SCH business
rules; and
(b) the person contravenes the provision;
then, subject to subsection (2), the Court may, on the application of
the securities clearing house, of ASIC, or of a person aggrieved by the
contravention, make an order giving directions to the first-mentioned person
about complying with the provision.
(2) The Court may not make an order giving directions to a person unless
the person has been given an opportunity of being heard.
(1) The securities clearing house, or a member, officer or employee of the
securities clearing house, or an SCH participant, has qualified privilege in
respect of a statement made by a person, orally or in writing, in the course of,
or otherwise for the purposes of or in connection with, a disciplinary
proceeding of the securities clearing house.
(2) A person has qualified privilege in respect of the publication
of:
(a) a statement made by a person, orally or in writing, in the course of,
or otherwise for the purposes of or in connection with; or
(b) a document prepared, given or produced by a person, in the course of,
or otherwise for the purposes of or in connection with;
a disciplinary proceeding of the securities clearing house.
(1) Nothing that the securities clearing house does in the course of, or
in connection with, providing facilities for the settlement of transactions
constitutes, for the purposes of this Act:
(a) a securities business; or
(b) an offer of securities for subscription or purchase; or
(c) an invitation to subscribe for or buy securities.
(2) The securities clearing house does not, for the purposes of this Act,
have a relevant interest in a security merely because of its provision of
facilities for the settlement of transactions.
(1) A person must not:
(a) carry on a securities business; or
(b) hold out that the person carries on a securities business;
unless the person holds a dealers licence or is an exempt dealer.
(2) A dealers licence may authorise a person to do either or both of the
following:
(a) to carry on a securities business;
(b) to operate:
(i) a managed investment scheme; or
(ii) managed investment schemes of a particular kind.
Note: Only public companies that hold a dealers licence can
be responsible entities for registered managed investment schemes (see
section 601FA).
A person must not:
(a) carry on an investment advice business; or
(b) hold out that the person is an investment adviser;
unless the person is a licensee or an exempt investment adviser.
(1) A person may apply to ASIC, in the prescribed form and manner, for a
dealers licence or an investment advisers licence.
(2) ASIC may require an applicant for a licence to give ASIC such further
information in relation to the application as ASIC thinks necessary.
(1) This section has effect where a natural person applies for a
licence.
(2) ASIC must grant the licence if:
(a) the application was made in accordance with section 782;
and
(b) the person is not an insolvent under administration; and
(c) it is satisfied that the person’s educational qualifications and
experience are adequate having regard to the nature of the duties of a holder of
a licence of the kind applied for; and
(d) it has no reason to believe that the person is not of good fame and
character; and
(e) it has no reason to believe that the person will not perform those
duties efficiently, honestly and fairly.
(3) Otherwise, ASIC must refuse the application.
(4) In determining whether or not it has reason to believe as mentioned in
paragraph (2)(d) or (e), ASIC must have regard to any conviction of the
person, during the 10 years ending on the day of the application, of serious
fraud.
(1) This section has effect where a body corporate applies for a
licence.
(2) ASIC must grant the licence if:
(a) the application was made in accordance with section 782;
and
(b) the applicant is not an externally-administered body corporate;
and
(c) ASIC is satisfied that the educational qualifications and experience
of each responsible officer of the applicant are adequate having regard to the
duties that the officer would perform in connection with the holding of the
licence; and
(d) ASIC has no reason to believe that the applicant will not perform
efficiently, honestly and fairly the duties of a holder of a licence of the kind
applied for; and
(e) if the licence applied for is a licence to operate a managed
investment scheme or schemes, the applicant meets the requirements of
subsection (2A), and any additional requirements determined by ASIC under
subsection (2B).
(2A) For the purpose of paragraph (2)(e), ASIC must be satisfied that
the value of the net tangible assets of the applicant is and will be maintained
at a minimum of $50,000 or, where the value of all scheme property is greater
than $10,000,000, an amount equal to 0.5% of those assets shown in the latest
accounts of the scheme lodged with ASIC, up to a maximum of
$5,000,000.
(2B) ASIC may determine additional requirements for the purpose of
paragraph (2)(e), including, but not limited to, a requirement that scheme
property be held by an agent in particular circumstances.
(2C) In this section:
net tangible assets means the total tangible assets of the
applicant, including any guarantee approved by ASIC, less any adjusted
liabilities as shown in the latest accounts of the applicant lodged with
ASIC.
(2D) ASIC, or a member of ASIC, may exempt an applicant from the
requirements of subsection (2A). This power may not be delegated. ASIC is
to provide details of any exemptions granted under this section in its annual
report.
(3) Otherwise, ASIC must refuse the application.
(4) In determining whether or not it has reason to believe as mentioned in
paragraph (2)(d), ASIC must have regard, in relation to each responsible
officer of the applicant, to:
(a) whether or not the officer is an insolvent under administration;
and
(b) any conviction of the officer, during the 10 years ending on the day
of the application, of serious fraud; and
(c) any reason ASIC has to believe that the officer is not of good fame
and character; and
(d) any reason ASIC has to believe that the officer will not perform
efficiently, honestly and fairly the duties that the officer would perform in
connection with the holding of the licence.
(1) Sections 783 and 784 apply subject to sections 836, 837 and
839 and the regulations.
(2) Nothing in subsection 783(4) or 784(4) limits the matters to which
ASIC may have regard:
(a) in deciding on an application for a licence; or
(b) in connection with performing or exercising any other function or
power under this Part.
(1) A licence is subject to:
(a) such conditions and restrictions as are prescribed; and
(b) subject to section 837, such conditions and restrictions as ASIC
imposes when granting the licence or at any time when the licence is in
force.
(2) Without limiting the generality of subsection (1), conditions and
restrictions referred to in paragraph (1)(a) or (b) may include:
(a) conditions and restrictions relating to the limitation of the
liability that may be incurred by the holder of a dealers licence in connection
with a business of dealing in securities; and
(b) conditions and restrictions relating to the incurring and disclosure
of liabilities arising otherwise than in connection with a business of dealing
in securities; and
(c) conditions and restrictions relating to the financial position of the
holder of a dealers licence, whether in relation to the business of dealing in
securities carried on by the holder or otherwise; and
(d) a condition requiring the holder of a dealers licence or of an
investment advisers licence to lodge and maintain with ASIC a security approved
by ASIC for such amount not exceeding the prescribed amount as is, from time to
time, determined by ASIC in relation to the holder of that licence;
and
(e) conditions about what the holder of a licence is to do, by way of
supervision and otherwise, in order to prevent the holder’s
representatives from contravening:
(i) a securities law; or
(ii) another condition of the licence; and
(f) conditions about what the holder of a licence is to do to ensure that
each representative of the holder has adequate qualifications and experience
having regard to what the representative will do on the holder’s behalf in
connection with a securities business or investment advice business carried on
by the holder.
(3) Without limiting the generality of paragraph (2)(c), the
conditions referred to in that paragraph may include:
(a) a condition that the assets of the holder of a dealers licence
include, or do not include, assets of a particular kind or kinds; and
(b) a condition that the sum of the values of the assets of a particular
kind or kinds included in the assets of the holder of a dealers licence be not
less than, or not more than, an amount ascertained in accordance with the
condition.
(4) A condition referred to in paragraph (3)(b) may provide for the
values of assets of a dealer for the purposes of the application of that
condition to be ascertained in a manner specified in, or determined in
accordance with, the condition.
(5) The provision that may be made in a condition referred to in
paragraph (3)(b) for ascertaining the amount referred to in that paragraph
may be, but is not limited to, a provision that the amount is to be:
(a) a specified percentage of the sum of the values of all the assets of
the holder of a dealers licence; or
(b) a specified percentage of the sum of the values of all the assets of
the holder of the dealers licence that are included in a specified class or
classes of those assets; or
(c) a specified percentage of the sum of the amounts of all the
liabilities of the holder of the dealers licence; or
(d) a specified percentage of the sum of the amounts of all the
liabilities of the holder of the dealers licence that are included in a
specified class or classes of those liabilities.
(6) A reference in this section to the assets of the holder of a dealers
licence is a reference to all the assets of the holder of the licence, whether
or not the assets are used in, or in connection with, the business of dealing in
securities carried on by the holder.
(7) Subject to section 837, ASIC may, at any time, revoke or vary
conditions or restrictions imposed under paragraph (1)(b).
(8) Where ASIC imposes, or varies or revokes, conditions or restrictions
under this section in relation to a licence granted to a member of a securities
exchange, ASIC must inform the securities exchange and, if the member is a
partner in a member firm, the member firm.
(9) Where a security is lodged with ASIC pursuant to a condition to which
a licence is subject in accordance with paragraph (2)(d), the security may
be applied by ASIC in such circumstances, for such purposes and in such manner
as is prescribed.
(1) Within 1 day after the happening of an event constituting a
contravention of a condition of a licence, the licensee must lodge a written
notice setting out particulars of the event.
(2) It is a defence to a charge arising under subsection (1) if it is
proved that:
(a) when the licensee was required to lodge the notice, the licensee was
unaware of a fact or occurrence that gave rise to the requirement; and
(b) in a case where the licensee has since become aware of that fact or
occurrence—the licensee lodged the notice as soon as practicable after
becoming so aware.
(1) The holder of a dealers licence must lodge such written information or
statements in relation to the securities business carried on, or the managed
investment scheme operated, by the licensee as ASIC from time to time
directs.
(2) If ASIC requires the holder of a dealers licence to cause a statement
specified in a direction given under subsection (1) to be audited by a
registered company auditor before it is lodged, the licensee must comply with
the requirement.
(3) ASIC may extend the period for compliance with a direction given under
subsection (1).
(1) ASIC must keep a Register of Licence Holders for the purposes of this
Chapter.
(2) ASIC must include in the Register, in relation to each licence, a copy
of:
(a) the licence; and
(b) each instrument that imposes conditions on the licence, or revokes or
varies conditions of the licence, after the licence is granted.
(3) ASIC must enter in the Register, in relation to each
licence:
(a) the name of the licensee; and
(b) if the licensee is a body corporate—the name of each director,
and of each secretary, of the body; and
(c) the day on which the licence was granted; and
(d) in relation to each business to which the licence relates:
(i) the address of the principal place at which the business is carried
on; and
(ii) the addresses of the other places (if any) at which the business is
carried on; and
(iii) if the business is carried on under a name or style other than the
name of the holder of the licence—that name or style; and
(e) particulars of any suspension of the licence; and
(f) any other prescribed matters.
(4) Where a person no longer holds a particular licence, ASIC must remove
from the Register the documents included in it, and the particulars entered in
it, in relation to that licence.
(5) A person may inspect and make copies of, or take extracts from, the
Register.
The holder of a licence must, within 21 days after:
(a) in the case of a dealers licence—the licensee ceases to carry on
the business to which the licence relates; or
(b) in the case of an investment advisers licence—the licensee
ceases to act as, or to hold himself, herself or itself out to be, an investment
adviser; or
(c) there is a change in a matter particulars of which are required by
virtue of paragraph 789(3)(a), (b), (d) or (f) to be entered, in relation to the
licence, in the Register of Licence Holders;
lodge written particulars, in the prescribed form, of that fact, or of that
change, as the case may be.
(1) The holder of a licence must lodge, in respect of each year or part of
a year during which the licence is in force, a statement in the prescribed form
that:
(a) sets out the number of persons who, when the statement is lodged, hold
proper authorities from the licensee; and
(b) contains any other prescribed information.
(2) A person who has been, but is no longer, a licensee must lodge, in
respect of each year or part of a year during which the licence was in force, a
statement in the prescribed form that:
(a) sets out the number of persons who, when the person last ceased to be
a licensee, held proper authorities from the licensee; and
(b) contains any other prescribed information.
(1) A person required by subsection 791(1) to lodge a statement must lodge
the statement:
(a) if the licence is a dealers licence—during the period within
which a profit and loss statement and balance sheet referred to in
section 860 are required to be lodged; or
(b) otherwise—within 1 month immediately before the anniversary of
the date on which the licence was granted.
(2) A person required by subsection 791(2) to lodge a statement must lodge
the statement within 1 month after ceasing to be a licensee.
(3) A person who fails to lodge a statement required by section 791
within the period specified in subsection (1) or (2), as the case requires,
contravenes this section.
ASIC may extend the period for lodging a statement under
section 791.
A reference in this Division to a client does not include a reference to
a person who is:
(a) a dealer; or
(b) an investment adviser; or
(c) one of 2 or more persons who together constitute a dealer or
investment adviser.
(1) Subdivision B applies where, during a period when a person (in this
section and Subdivision B called the non-licensee) is unlicensed,
the non-licensee and a client of the non-licensee enter into an agreement
that:
(a) constitutes, or relates to, a dealing or proposed dealing in
securities; or
(b) relates to advising the client about securities, or giving the client
securities reports.
(2) Subdivision B applies to an agreement mentioned in subsection (1)
whether or not anyone else is a party to the agreement.
(3) A person is unlicensed during a period when the person:
(a) in contravention of section 780, carries on, or holds out that
the person carries on, a securities business; or
(b) in contravention of section 781, carries on an investment advice
business or holds out that the person is an investment adviser.
(1) Subject to this section, the client may, whether before or after
completion of the agreement, give to the non-licensee a written notice stating
that the client wishes to rescind the agreement.
(2) The client may only give a notice under this section within a
reasonable period after becoming aware of the facts entitling the client to give
the notice.
(3) The client is not entitled to give a notice under this section if the
client engages in conduct by engaging in which the client would, if the
entitlement so to give a notice were a right to rescind the agreement for
misrepresentation by the non-licensee, be taken to have affirmed the
agreement.
(4) The client is not entitled to give a notice under this section if,
within a reasonable period before the agreement was entered into, the
non-licensee informed the client (whether or not in writing) that:
(a) the non-licensee did not hold a dealers licence; or
(b) the non-licensee did not hold a dealers licence and did not hold an
investment advisers licence;
as the case requires.
(5) If, at a time when a dealers licence or investment advisers licence
held by the non-licensee was suspended, the non-licensee informed the client
that the licence was suspended, the non-licensee is taken for the purposes of
subsection (4) to have informed the client at that time that the
non-licensee did not hold a dealers licence or investment advisers licence, as
the case may be.
(6) None of subsections (2), (3) and (4) limits the generality of
either of the others.
(7) Subject to this section, the client may give a notice under this
section whether or not:
(a) the notice will result under section 799 in rescission of the
agreement; or
(b) the Court will, if the notice so results, be empowered to make a
particular order, or any order at all, under section 800.
A notice given under section 798 rescinds the agreement unless
rescission of the agreement would prejudice a right, or an estate in property,
acquired by a person (other than the non-licensee) in good faith, for valuable
consideration and without notice of the facts entitling the client to give the
notice.
(1) If the client gives a notice under section 798 but the notice
does not rescind the agreement because rescission of it would prejudice a right
or estate of the kind referred to in section 799, the client may, within a
reasonable period after giving the notice, apply to the Court for an order under
subsection (4) of this section.
(2) The Court may extend the period for making an application under
subsection (1).
(3) If an application is made under subsection (1), the Court may
make such orders expressed to have effect until the determination of the
application as it would have power to make if the notice had rescinded the
agreement under section 799 and the application were for orders under
section 800.
(4) On an application under subsection (1), the Court may make an
order:
(a) varying the agreement in such a way as to put the client in the same
position, as nearly as can be done without prejudicing such a right or estate
acquired before the order is made, as if the agreement had not been entered
into; and
(b) declaring the agreement to have had effect as so varied at and after
the time when it was originally made.
(5) If the Court makes an order under subsection (4), the agreement
is taken for the purposes of section 800 to have been rescinded under
section 799.
(6) An order under subsection (4) does not affect the application of
section 802 or 804 in relation to the agreement as originally made or as
varied by the order.
(1) Subject to subsection (2), on rescission of the agreement under
section 799, the Court, on the application of the client or the
non-licensee, may make such orders as it would have power to make if the client
had duly rescinded the agreement for misrepresentation by the
non-licensee.
(2) The Court is not empowered to make a particular order under
subsection (1) if the order would prejudice a right, or an estate in
property, acquired by a person (other than the non-licensee) in good faith, for
valuable consideration and without notice of the facts entitling the client to
give the notice.
(1) This section:
(a) applies while both of the following are the case:
(i) the client is entitled to give a notice under
section 798;
(ii) a notice so given will result under section 799 in rescission of
the agreement; and
(b) applies after the agreement is rescinded under
section 799;
but does not otherwise apply.
(2) The non-licensee is not entitled, as against the client:
(a) to enforce the agreement, whether directly or indirectly; or
(b) to rely on the agreement, whether directly or indirectly and whether
by way of defence or otherwise.
(1) Without limiting the generality of section 801, this
section:
(a) applies while the client is entitled to give a notice under
section 798; and
(b) applies after the client so gives a notice, even if the notice does
not result under section 799 in rescission of the agreement;
but does not otherwise apply.
(2) The non-licensee is not entitled to recover by any means (including,
for example, set-off or a claim on a quantum meruit) any brokerage, commission
or other fee for which the client would, but for this section, have been liable
to the non-licensee under or in connection with the agreement.
For the purposes of determining, in a proceeding in a court, whether or
not the non-licensee is, or was at a particular time, entitled as mentioned in
subsection 801(2) or 802(2), it is to be presumed, unless the contrary is
proved, that section 801 or 802, as the case may be, applies, or applied at
that time, as the case may be.
(1) Without limiting the generality of section 800, if the client
gives a notice under section 798, the client may, even if the notice does
not result under section 799 in rescission of the agreement, recover from
the non-licensee as a debt the amount of any brokerage, commission or other fee
that the client has paid to the non-licensee under or in connection with the
agreement.
(2) ASIC may, if it considers that it is in the public interest to do so,
bring an action under subsection (1) in the name of, and for the benefit
of, the client.
The client’s rights and remedies under this Division are additional
to, and do not prejudice, any other right or remedy of the client.
A natural person must not do an act as a representative of a dealer
(other than an exempt dealer) unless:
(a) the dealer holds a dealers licence; and
(b) the person holds a proper authority from the dealer.
A natural person must not do an act as a representative of an investment
adviser (other than an exempt investment adviser) unless:
(a) the investment adviser:
(i) is also a dealer and holds a dealers licence; or
(ii) holds an investment advisers licence; and
(b) the person holds a proper authority from the investment
adviser.
It is a defence to a prosecution for a contravention of section 806
or 807 constituted by an act done by a person as a representative of another
person if it is proved that:
(a) but for the revocation or suspension of a licence held by the other
person, the act would not have been such a contravention; and
(b) when he or she did the act, the first-mentioned person:
(i) believed in good faith that the other person held the licence;
and
(ii) was unaware of the revocation or suspension; and
(c) in all the circumstances it was reasonable for the first-mentioned
person so to believe and to be unaware of the revocation or
suspension.
A body corporate must not do an act as a representative of a dealer or of
an investment adviser.
(1) A licensee must establish a register of the persons who hold proper
authorities from the licensee and must keep it in accordance with this
section.
(2) The register must be in writing or in such other form as ASIC
approves.
(3) The register must contain, in relation to each person (if any) who
holds a proper authority from the licensee:
(a) a copy of the proper authority; and
(b) the person’s name; and
(c) the person’s current residential address; and
(d) unless the person’s current business address is the same as the
licensee’s—the person’s current business address;
and
(e) any other prescribed information.
(4) A copy of a proper authority of a person from the licensee that
subsection (3) provides for the register to contain must be included in the
register within 2 business days after the person begins to hold that proper
authority.
(5) Information that subsection (3) provides for the register to
contain in relation to a person must be entered in the register within 2
business days after:
(a) the person begins to hold a proper authority from the licensee;
or
(b) the licensee receives the information;
whichever happens later.
(6) Within 2 business days after a person ceases to hold a proper
authority from the licensee, the licensee must:
(a) in any case:
(i) include, in a part of the register separate from the part in which
copies of proper authorities are included under subsection (4);
and
(ii) remove from the last-mentioned part;
the copy of the proper authority that was included in the last-mentioned
part; and
(b) unless, at the end of those 2 business days, the person again holds a
proper authority from the licensee:
(i) enter, in a part of the register separate from the part in which
information is entered under subsection (5); and
(ii) remove from the last-mentioned part;
the information that has been entered in the last-mentioned part in
relation to the person.
(7) Information that has been entered under paragraph (6)(b) in a
separate part of the register is taken for the purposes of subsections (3)
and (5) not to be contained or entered in the register.
(8) If a licensee whom subsection (1) requires to establish a
register already keeps one under this section, the licensee need not establish a
new register but must keep the existing one in accordance with this
section.
(1) In this section:
register, in relation to a licensee, means a register that
the licensee keeps for the purposes of section 810.
(2) Within 14 days after establishing a register, the licensee must lodge
written notice of where the register is kept.
(3) As soon as practicable after changing the place where a register is
kept, the licensee must lodge written notice of the new place where the register
is kept.
(4) Within 2 business days after the day on which a person begins to hold
a particular proper authority from a licensee, the licensee must, whether or not
the person has previously held a proper authority from the licensee,
lodge:
(a) a copy of the first-mentioned proper authority; and
(b) a written notice stating that the person began to hold that proper
authority on that day.
(5) The licensee must lodge a written notice, within the period provided
by subsection (6):
(a) setting out the information that the register is required to contain
by paragraph 810(3)(b), (c), (d) or (e); and
(b) stating that the information has been, or is to be, entered in the
register.
(6) A notice under subsection (5) must be lodged within the period
within which subsection 810(5) requires the information to be entered in the
register.
(7) Within 2 business days after a person ceases to hold a proper
authority from a licensee, the licensee must, unless at the end of those 2
business days the person again holds a proper authority from the licensee, lodge
a written notice stating that the person has ceased to hold such a proper
authority.
(1) In this section:
register in relation to a licensee, means a register that the
licensee keeps for the purposes of section 810.
(2) A licensee must ensure that a register is open for inspection without
charge.
(3) Where a person requests a licensee in writing to give to the person a
copy of the whole, or of a specified part, of a register, the licensee must
comply with the request within 2 business days after:
(a) if the licensee requires the person to pay for the copy an amount of
not more than the prescribed amount—receiving the amount from the person;
or
(b) in any other case—receiving the request.
A person (in this section called the representative) must
not do as a representative of another person (in this section called the
principal) an act by virtue of which the principal deals in
securities with a non-dealer on the principal’s own account unless the
representative has informed the non-dealer that the principal is acting in the
transaction as principal and not as agent.
(1) Where ASIC has reason to believe that a person:
(a) holds a proper authority from a licensee; or
(b) has done an act as a representative of another person;
then, whether or not ASIC knows who the licensee or other person is, it may
require the first-mentioned person to produce:
(c) any proper authority from a licensee; or
(d) any invalid securities authority from a person;
that the first-mentioned person holds.
(2) A person must not, without reasonable excuse, refuse or fail to comply
with a requirement under this section.
(1) Where ASIC believes on reasonable grounds that:
(a) a person (in this section called the holder) holds, or
will hold, a proper authority from a licensee; and
(b) having regard to that fact, ASIC should give to the licensee
particular information that ASIC has about the person; and
(c) the information is true;
ASIC may give the information to the licensee.
(2) Where ASIC gives information under subsection (1), the licensee
or an officer of the licensee may, for a purpose connected with:
(a) the licensee making a decision about what action (if any) to take in
relation to the holder, having regard to, or to matters including, the
information; or
(b) the licensee taking action pursuant to such a decision;
or for 2 or more such purposes, and for no other purpose, give to another
person, make use of, or make a record of, some or all of the
information.
(3) A person to whom information has been given, in accordance with
subsection (2) or this subsection, for a purpose or purposes may, for that
purpose or one or more of those purposes, and for no other purpose, give to
another person, make use of, or make a record of, that information.
(4) Subject to subsections (2) and (3), a person must not give to
another person, make use of, or make a record of, information given by ASIC
under subsection (1).
(4A) Subsection 8(3) does not apply in relation to a reference in
subsection (2), (3) or (4) of this section to a provision of this
section.
(5) A person has qualified privilege in respect of an act done by the
person as permitted by subsection (2) or (3).
(6) A person to whom information is given in accordance with this section
must not:
(a) give any of the information to a court; or
(b) produce in a court a document that sets out some or all of the
information;
except:
(c) for a purpose connected with:
(i) the licensee making a decision about what action (if any) to take in
relation to the holder, having regard to, or to matters including, some or all
of the information; or
(ii) the licensee taking action pursuant to such a decision; or
(iii) proving in a proceeding in that court that particular action taken
by the licensee in relation to the holder was so taken pursuant to such a
decision;
or for 2 or more such purposes, and for no other purpose; or
(d) in a proceeding in that court, in so far as the proceeding relates to
an alleged contravention of this section; or
(e) in a proceeding in respect of an ancillary offence relating to an
offence against this section; or
(f) in a proceeding in respect of the giving to a court of false
information being or including some or all of the first-mentioned
information.
(7) A reference in this section to a person taking action in relation to
another person is a reference to the first-mentioned person:
(a) taking action by way of making, terminating or varying the terms and
conditions of a relevant agreement; or
(b) otherwise taking action in relation to a relevant agreement;
in so far as the relevant agreement relates to the other person being
employed by, or acting for or by arrangement with, the first-mentioned person in
connection with a securities business or investment advice business carried on
by the first-mentioned person.
(8) In addition, and without prejudice, to the effect it has of its own
force, subsection (6) has by force of this subsection the effect it would
have if:
(a) the reference in it to information being given in accordance with this
section were a reference to information being given in accordance with
section 815; and
(b) a reference in it to a court were a reference to a court of an
external Territory or of a country outside Australia and the external
Territories; and
(c) paragraphs (6)(d) and (e) were omitted.
(1) Where a person holds a proper authority from a licensee but is neither
employed by, nor authorised to act for or by arrangement with, the licensee, the
licensee may, by writing given to the person, require the person to give the
proper authority to the licensee within a specified period of not less than 2
business days.
(2) Where a person holds an invalid securities authority from another
person, the other person may, by writing given to the first-mentioned person,
require the first-mentioned person to give the invalid securities authority to
the other person within a specified period of not less than 2 business
days.
(3) A person must not, without reasonable excuse, refuse or fail to comply
with a requirement made of the person in accordance with subsection (1) or
(2).
Where a person engages in conduct as a representative of another person
(in this section called the principal), then, as between the
principal and a third person (other than ASIC), the principal is liable in
respect of that conduct in the same manner, and to the same extent, as if the
principal had engaged in it.
(1) This section applies for the purposes of a proceeding in a court
where:
(a) whether in or outside this jurisdiction, a person (in this section
called the representative) engages in particular conduct while the
person is a representative of 2 or more persons (in this section called the
indemnifying principals); and
(b) it is proved for the purposes of the proceeding that the
representative engaged in the conduct as a representative of some person (in
this section called the unknown principal) but it is not proved
for those purposes who the unknown principal is.
(2) If only one of the indemnifying principals is a party to the
proceeding, he, she or it is liable in respect of that conduct as if he, she or
it were the unknown principal.
(3) If 2 or more of the indemnifying principals are parties to the
proceeding, each of those 2 or more is liable in respect of that conduct as if
he, she or it were the unknown principal.
(1) This section applies where:
(a) at a time when a person (in this section called the
representative) is a representative of only one person (in this
section called the indemnifying principal) or of 2 or more persons
(in this section called the indemnifying principals), the
representative, whether in or outside this jurisdiction:
(i) engages in particular conduct; or
(ii) proposes, or represents that the representative proposes, to engage
in particular conduct; and
(b) another person (in this section called the client) does,
or omits to do, a particular act, whether in or outside this jurisdiction,
because the client believes at a particular time in good faith that the
representative engaged in, or proposes to engage in, as the case may be, that
conduct:
(i) on behalf of some person (in this section called the assumed
principal) whether or not identified, or identifiable, at that time by
the client; and
(ii) in connection with a securities business or investment advice
business carried on by the assumed principal; and
(c) it is reasonable to expect that a person in the client’s
circumstances would so believe and would do, or omit to do, as the case may be,
that act because of that belief;
whether or not that conduct is or would be within the scope of the
representative’s employment by, or authority from, any person.
(2) If:
(a) subparagraph (1)(a)(i) applies; or
(b) subparagraph (1)(a)(ii) applies and the representative engages in
that conduct;
then, for the purposes of a proceeding in a court:
(c) as between the indemnifying principal and the client or a person
claiming through the client, the indemnifying principal is liable; or
(d) as between any of the indemnifying principals and the client or a
person claiming through the client, each of the indemnifying principals is
liable;
as the case may be, in respect of that conduct in the same manner, and to
the same extent, as if he, she or it had engaged in it.
(3) Without limiting the generality of subsection (2), the
indemnifying principal, or each of the indemnifying principals, as the case may
be, is liable to pay damages to the client in respect of any loss or damage that
the client suffers as a result of doing, or omitting to do, as the case may be,
the act referred to in paragraph (1)(b).
(3A) Subsection (3) does not apply unless:
(a) the conduct was engaged in, the proposed conduct would have been
engaged in, or the representation was made, in this jurisdiction; or
(b) the act referred to in paragraph (1)(b) was done, or would have
been done, as the case may be, in this jurisdiction; or
(c) some or all of the loss or damage was suffered in this
jurisdiction.
(4) If:
(a) there are 2 or more indemnifying principals; and
(b) 2 or more of them are parties (in this subsection called the
indemnifying parties) to a proceeding in a court; and
(c) it is proved for the purposes of the proceeding:
(i) that the representative engaged in that conduct as a representative of
some person; and
(ii) who that person is; and
(d) that person is among the indemnifying parties;
subsections (2) and (3) do not apply, for the purposes of the
proceeding, in relation to the indemnifying parties other than that
person.
(1) Where it is proved, for the purposes of a proceeding in a court, that
a person (in this subsection called the representative) engaged in
particular conduct, whether in or outside this jurisdiction, while the person
was a representative of:
(a) only one person (in this subsection called the indemnifying
principal); or
(b) 2 or more persons (in this subsection called the indemnifying
principals);
then, unless the contrary is proved for the purposes of the proceeding, it
is to be presumed for those purposes that the representative engaged in the
conduct as a representative of:
(c) the indemnifying principal; or
(d) as a representative of some person among the indemnifying
principals;
as the case may be.
(2) Where, for the purposes of establishing in a proceeding in a court
that section 819 applies, it is proved that a person did, or omitted to do,
a particular act because the person believed at a particular time in good faith
that certain matters were the case, then, unless the contrary is proved for
those purposes, it is to be presumed for those purposes that it is reasonable to
expect that a person in the first-mentioned person’s circumstances would
so believe and would do, or omit to do, as the case may be, that act because of
that belief.
(1) For the purposes of this section, a liability of a person:
(a) in respect of conduct engaged in by another person as a representative
of the first-mentioned person; or
(b) arising under section 819 because another person has engaged in,
proposed to engage in, or represented that the other person proposed to engage
in, particular conduct;
is a liability of the first-mentioned person in respect of the other
person.
(2) Subject to this section, an agreement is void in so far as it purports
to exclude, restrict or otherwise affect a liability of a person in respect of
another person, or to provide for a person to be indemnified in respect of a
liability of the person in respect of another person.
(3) Subsection (2) does not apply in relation to an agreement in so
far as it:
(a) is a contract of insurance; or
(b) provides for a representative of a person to indemnify the person in
respect of a liability of the person in respect of the representative;
or
(c) provides for a licensee from whom a person holds a proper authority to
indemnify another such licensee in respect of a liability of the other licensee
in respect of the person.
(4) A person must not make, offer to make, or invite another person to
offer to make, in relation to a liability of the first-mentioned person in
respect of a person, an agreement that is or would be void, in whole or in part,
by virtue of subsection (2).
(1) Where 2 or more persons are liable under this Division in respect of
the same conduct or the same loss or damage, they are so liable jointly and
severally.
(2) Nothing in section 817, 818, or 819:
(a) affects a liability arising otherwise than by virtue of this Division;
or
(b) notwithstanding paragraph (a) of this subsection, entitles a
person to be compensated twice in respect of the same loss or damage;
or
(c) makes a person guilty of an offence.
ASIC may, by written order, revoke a licence held by a natural person if
the person:
(a) becomes an insolvent under administration; or
(b) is convicted of serious fraud; or
(c) becomes incapable, through mental or physical incapacity, of managing
his or her affairs; or
(d) asks ASIC to revoke the licence.
ASIC may, by written order, revoke a licence held by a body corporate
if:
(a) the body ceases to carry on business; or
(b) the body becomes an externally-administered body corporate;
or
(c) the body asks ASIC to revoke the licence; or
(d) a director, secretary or executive officer of the body contravenes
this Chapter because:
(i) he or she does not hold a licence; or
(ii) a licence held by him or her is suspended.
ASIC may, by written order, revoke a licence held by the responsible
entity of a registered scheme if it is satisfied that the members of the scheme
have suffered, or are likely to suffer, loss or damage because the responsible
entity has contravened this Act.
(1) Subject to section 837, ASIC may, by written order, revoke a
licence if:
(a) the application for the licence contained matter that was false in a
material particular or materially misleading; or
(b) there was an omission of material matter from the application for the
licence; or
(c) the licensee contravenes a securities law; or
(d) the licensee contravenes a condition of the licence; or
(e) the licensee is a natural person and ASIC has reason to believe that
he or she is not of good fame and character; or
(f) the licensee is a body corporate and ASIC is satisfied that the
educational qualifications or experience of a person who:
(i) is an officer of the body; and
(ii) was not an officer of the body when the licence was
granted;
are or is inadequate having regard to the duties that the officer
performs, or will perform, in connection with the holding of the licence;
or
(g) the licensee is a body corporate and ASIC is satisfied that:
(i) an officer of the body performs, or will perform, in connection with
the holding of the licence, duties that are or include duties (in this paragraph
called the different duties) other than those having regard to
which ASIC was satisfied, before granting the licence, that the officer’s
educational qualifications and experience were adequate; and
(ii) the officer’s educational qualifications or experience are or
is inadequate having regard to the different duties; or
(h) the licensee is a body corporate and:
(i) a licence held by a director, secretary or executive officer of the
body is suspended or revoked; or
(ii) an order is made under section 830 against such a director,
secretary or executive officer; or
(j) ASIC has reason to believe that the licensee has not performed
efficiently, honestly and fairly the duties of a holder of a dealers licence or
an investment advisers licence, as the case requires; or
(k) ASIC has reason to believe that the licensee will not perform those
duties efficiently, honestly and fairly.
(2) In determining whether or not it has reason to believe as mentioned in
paragraph (1)(e) or (k) in relation to a licensee, ASIC is not precluded
from having regard to a matter that arose before the time when the licence was
granted unless ASIC was aware of the matter at that time.
(1) Subject to section 837, where:
(a) section 824, 825 or 825A empowers ASIC to revoke a licence
otherwise than because the licensee has asked for the revocation; or
(b) ASIC is empowered by virtue of paragraph 826(1)(c), (d), (f), (g),
(h), (j) or (k) to revoke a licence;
ASIC may, if it considers it desirable to do so, instead:
(c) by written order, suspend the licence for a specified period;
or
(d) by written order, prohibit the licensee, either permanently or for a
specified period, from doing specified acts, being acts that section 780 or
781 would prohibit the licensee from doing if he, she or it did not hold the
licence.
(2) ASIC may at any time, by written order, vary or revoke an order in
force under this section.
(3) For the purposes of sections 780, 781, 806 and 807, a licensee is
taken not to hold the licence at any time during a period for which the licence
is suspended.
(4) Where an order in force under this section prohibits the licensee as
mentioned in paragraph (1)(d):
(a) the licensee must not contravene the order; and
(b) in relation to the doing by a person, as a representative of the
licensee, of an act specified in the order, sections 806 and 807 apply, or
apply during the period specified in the order, as the case requires, as if the
licensee did not hold the licence.
Subject to section 837, where ASIC:
(a) revokes under section 824; or
(b) revokes by virtue of paragraph 826(1)(a), (b), (c), (d), (j) or (k);
or
(c) revokes by virtue of paragraph 826(1)(e); or
(d) suspends by virtue of paragraph 827(1)(a); or
(e) suspends by virtue of paragraph 827(1)(b);
a licence held by a natural person, it may also make a banning order
against the person.
Subject to section 837, ASIC may make a banning order against a
natural person (other than a licensee) if:
(a) he or she becomes an insolvent under administration; or
(b) he or she is convicted of serious fraud; or
(c) he or she becomes incapable, through mental or physical incapacity, of
managing his or her affairs; or
(d) he or she contravenes a securities law; or
(e) ASIC has reason to believe that he or she is not of good fame and
character; or
(f) ASIC has reason to believe that he or she has not performed
efficiently, honestly and fairly the duties of:
(i) a representative of a dealer; or
(ii) a representative of an investment adviser; or
(g) ASIC has reason to believe that he or she will not perform
efficiently, honestly and fairly the duties of:
(i) a representative of a dealer; or
(ii) a representative of an investment adviser.
(1) Where this Division empowers ASIC to make a banning order against a
person, ASIC may, by written order, prohibit the person:
(a) in any case—permanently; or
(b) except where ASIC is empowered by virtue of paragraph 828(c) or 829(e)
to make the order—for a specified period;
from doing an act as:
(c) a representative of a dealer; or
(d) a representative of an investment adviser; or
(e) a representative of a dealer or of an investment adviser;
whichever the order specifies.
(2) ASIC must not vary or revoke a banning order except under
section 831, 832, or 833.
(1) An order made against a person under subsection 830(1) may include a
provision that permits the person, subject to such conditions (if any) as are
specified, to do, or to do in specified circumstances, specified acts that the
order would otherwise prohibit the person from doing.
(2) Subject to section 837, ASIC may, at any time, by written order,
vary a banning order against a person:
(a) by adding a provision that permits the person as mentioned in
subsection (1); or
(b) by varying such a provision in relation to conditions, circumstances
or acts specified in the provision; or
(c) by omitting such a provision and substituting another such provision;
or
(d) by omitting such a provision.
(1) Subject to sections 833 and 837, this section has effect where a
person applies to ASIC to vary or revoke a banning order relating to the
person.
(2) If:
(a) the person is not an insolvent under administration; and
(b) ASIC has no reason to believe that the person is not of good fame and
character; and
(c) ASIC has no reason to believe that the person will not perform
efficiently, honestly and fairly the duties of:
(i) a representative of a dealer; or
(ii) a representative of an investment adviser;
ASIC must, by written order:
(d) if only one of subparagraphs (c)(i) and (ii) applies—vary
the banning order so that it no longer prohibits the person from doing an act as
a representative of a dealer, or of an investment adviser, as the case may be;
or
(e) in any other case—revoke the banning order.
(3) Otherwise, ASIC must refuse the application.
(4) In determining whether or not it has reason to believe as mentioned in
paragraph (2)(b) or (c), ASIC must have regard to any conviction of the
person, during the 10 years ending on the day of the application, of serious
fraud.
(5) Nothing in subsection (4) limits the matters to which ASIC may
have regard:
(a) in deciding on the application; or
(b) in connection with performing or exercising any other function or
power under this Part.
Where:
(a) section 832 requires ASIC to vary a banning order so that it no
longer has a particular operation; and
(b) the order has no other operation;
ASIC must, by written order, instead revoke the banning order.
(1) An order by ASIC under this Division takes effect when served on the
person to whom the order relates.
(2) As soon as practicable on or after the day on which an order by ASIC
under this Division takes effect, ASIC must publish in the Gazette a
notice that sets out a copy of:
(a) if the order is made under section 824, 825, 826, 827 or 830 or
revokes a banning order—the first-mentioned order; or
(b) if the order varies a banning order—the banning order as in
force immediately after the first-mentioned order takes effect;
and states that the first-mentioned order, or the banning order as so in
force, as the case may be, took effect on that day.
(3) Where:
(a) but for this subsection, subsection (2) would require publication
of a notice setting out a copy of a banning order as in force at a particular
time; and
(b) the banning order as so in force includes a provision that permits a
person as mentioned in subsection 831(1); and
(c) in ASIC’s opinion, the notice would be unreasonably long if it
set out a copy of the whole of that provision;
the notice may, instead of setting out a copy of that provision, set out a
summary of the provision’s effect.
A person must not contravene a banning order relating to the
person.
ASIC must not grant a dealers licence or an investment advisers licence
to a person if a banning order prohibits the person (except as permitted by the
order) from doing an act as a representative of a dealer, or of an investment
adviser, as the case may be.
(1) ASIC must not:
(a) refuse, otherwise than by virtue of section 836 or subsection
839(1), an application for a licence; or
(b) impose conditions on a licence; or
(c) vary the conditions of a licence; or
(d) revoke or suspend a licence otherwise than by virtue of
section 824, 825 or 825A or paragraph 827(1)(a); or
(e) make, otherwise than by virtue of paragraph 828(a) or (d) or 829(a),
(b) or (c), an order under section 830 against a person; or
(f) make under subsection 831(2) an order varying a banning order against
a person; or
(g) refuse an application by a person under section 832;
unless ASIC complies with subsection (2) of this section.
(2) ASIC must give the applicant, licensee or person, as the case may be,
an opportunity:
(a) to appear at a hearing before ASIC that takes place in private;
and
(b) to make submissions and give evidence to ASIC in relation to the
matter.
(1) Where ASIC:
(a) revokes under section 824, 825 or 825A or subsection 826(1) a
licence held by a person; or
(b) makes under section 830 against a person an order that is to
operate otherwise than only for a specified period;
ASIC may apply to the Court for an order or orders under this section in
relation to the person.
(2) On an application under subsection (1), the Court may make one or
more of the following:
(a) an order disqualifying the person, permanently or for a specified
period, from holding:
(i) a dealers licence; or
(ii) an investment advisers licence; or
(iii) a dealers licence or an investment advisers licence;
whichever the order specifies;
(b) an order prohibiting the person, permanently or for a specified
period, from doing an act as:
(i) a representative of a dealer; or
(ii) a representative of an investment adviser; or
(iii) a representative of a dealer or of an investment adviser;
whichever the order specifies;
(c) such other order as it thinks fit;
or may refuse the application.
(3) The Court may revoke or vary an order in force under
subsection (2).
(1) ASIC must not grant a dealers licence or an investment advisers
licence to a person whom an order in force under section 838 disqualifies
from holding a dealers licence or an investment advisers licence, as the case
may be.
(2) A person must not contravene an order that:
(a) is of a kind referred to in paragraph 838(2)(b); and
(b) is in force under section 838; and
(c) relates to the person.
(1) A person who is the holder of a licence must not represent or imply,
or knowingly permit to be represented or implied, in any way to a person that
the abilities or qualifications of the holder of the licence have in any respect
been approved by ASIC.
(2) A statement that a person is the holder of a licence is not a
contravention of this section.
(1) This section applies:
(a) in relation to a dealer (other than an exempt dealer) in relation to a
transaction of sale or purchase of securities; or
(b) in relation to an exempt dealer, in relation to a transaction of sale
or purchase of securities that is entered into in the course of a securities
business that the exempt dealer carries on in the capacity of personal
representative of a dead dealer.
(2) A dealer must, in respect of a transaction of sale or purchase of
securities, immediately give a contract note that complies with
subsection (3) to:
(a) where the transaction took place in the ordinary course of business on
a stock market and the dealer entered into the transaction otherwise than as
principal—the person for whom the dealer entered into the transaction;
and
(b) where the transaction did not take place in the ordinary course of
business on a stock market and the dealer entered into the transaction otherwise
than as principal—the person for whom the dealer entered into the
transaction and the person with whom the dealer entered into the transaction;
and
(c) where the transaction did not take place in the ordinary course of
business on a stock market and the dealer entered into the transaction as
principal—the person with whom the dealer entered into the
transaction.
(3) A contract note given by a dealer under subsection (2) must
specify:
(a) the name or style under which the dealer carries on business as a
dealer and the address of the principal place at which the dealer so carries on
business; and
(b) each securities exchange (if any) of which the dealer is a member;
and
(c) if the dealer is dealing as principal with a person who is not the
holder of a dealers licence—that the dealer is so dealing; and
(d) the name of the person to whom the dealer gives the contract note;
and
(e) the day on which the transaction took place and, if the transaction
did not take place in the ordinary course of business on a stock market, a
statement to that effect; and
(f) the number, or amount and description, of the securities that are the
subject of the contract; and
(g) the price per unit of the securities; and
(h) the amount of the consideration; and
(j) the amount of commission charged; and
(k) the amounts of all stamp duties or other duties and taxes payable in
connection with the contract; and
(m) if an amount is to be added to, or deducted from, the settlement
amount in respect of the right to a benefit bought or sold together with the
securities—the first-mentioned amount and the nature of the
benefit.
(4) A dealer must not include in a contract note given under
subsection (2), as the name of the person with or for whom the dealer has
entered into the transaction, a name that the dealer knows, or could reasonably
be expected to know, is not the name by which that person is ordinarily
known.
(5) A reference in this section to a dealer dealing, or entering into a
transaction, as principal includes a reference to a person:
(a) dealing or entering into a transaction on behalf of an associate of
the dealer; or
(b) dealing in securities on behalf of a body corporate in which the
dealer has a controlling interest; or
(c) where the dealer carries on business as a dealer in
partnership—dealing in securities on behalf of a body corporate in which
the dealer’s interest and the interests of the dealer’s partners
together constitute a controlling interest.
(6) For the purposes of this section:
(a) a dealer who is a member of a securities exchange is not taken to have
entered into a transaction as principal merely because the transaction was
entered into with another dealer who is a member of a securities exchange;
and
(b) a transaction takes place in the ordinary course of business on a
stock market if it takes place in prescribed circumstances or is a transaction
that is a prescribed transaction for the purposes of this section.
(7) Despite Division 2 of Part 1.2, a person is not an associate
of another person for the purposes of this section merely because the
first-mentioned person is:
(a) a partner of the other person otherwise than because the
first-mentioned person carries on a business of dealing in securities in
partnership with the other person; or
(b) a director of a body corporate of which the other person is also a
director, whether or not the body corporate carries on a business of dealing in
securities.
(2) Subject to subsection (5), a dealer must not, on the
dealer’s own account, deal in securities with a non-dealer without first
informing the non-dealer that the dealer is acting in the transaction as
principal and not as agent.
(3) A dealer who, on the dealer’s own account, enters into a
transaction of sale or purchase of securities with a non-dealer must state in
the contract note that the dealer is acting in the transaction as principal and
not as agent.
(4) Subject to subsections (5) and (6), a dealer who, on the
dealer’s own account (otherwise than merely because the dealer enters into
a transaction on behalf of an associate of the dealer), enters into a
transaction of sale or purchase of securities with a non-dealer must not charge
the non-dealer brokerage, commission or any other fee in respect of the
transaction.
(5) Subsections (2) and (4) do not apply in relation to a transaction
of sale or purchase of an odd lot of securities that is entered into by a dealer
who is a member of a securities exchange and specialises in transactions
relating to odd lots of securities.
(7) Where a dealer contravenes subsection (2), (3) or (4) in relation
to a contract, then:
(a) if the contract is for the sale of securities by the dealer to a
person—the person may, if the person has not disposed of them;
or
(b) if the contract is for the purchase of securities by the dealer from a
person—the person may;
rescind the contract by written notice given to the dealer within 14 days
after the person receives the contract note.
(8) Nothing in subsection (7) affects any right that a person has
apart from that subsection.
(2) A dealer must not, except as permitted by subsection (3), enter
into, as principal or on behalf of an associate of the dealer, a transaction of
purchase or sale of securities that are permitted to be traded on a stock market
of a securities exchange if a client of the dealer who is not an associate of
the dealer has instructed the dealer to buy or sell, as the case may be,
securities of the same class and the dealer has not complied with the
instruction.
(3) Subsection (2) does not apply in relation to the entering into of
a transaction by a dealer as principal or on behalf of an associate of the
dealer if:
(a) the instructions from the client concerned required the purchase or
sale of securities on behalf of the client to be effected only on specified
conditions relating to the price at which the securities were to be bought or
sold and the dealer has been unable to buy or sell the securities because of
those conditions; or
(b) the transaction is entered into in prescribed circumstances.
(1) A person who is a dealer or an investment adviser and an employee of
that person must not, as principals, jointly buy or subscribe for, or agree to
buy or subscribe for, securities.
(2) A person who is a partner in a partnership that carries on a
securities business or an investment advice business and an employee of the
partnership must not, as principals, jointly buy or subscribe for, or agree to
buy or subscribe for, securities.
(3) A person who is a dealer or investment adviser, or who is a partner in
a partnership that carries on a securities business or an investment advice
business, must not give credit to an employee of the person or partnership, as
the case may be, or to a person who the first-mentioned person knows is an
associate of such an employee if:
(a) the credit is given for the purpose of enabling or assisting the
person to whom the credit is given to buy or subscribe for securities;
or
(b) the person giving the credit knows or has reason to believe that the
credit will be used for the purpose of buying or subscribing for
securities.
(4) A person who is an employee of a sole trader or member firm in
connection with a business of dealing in securities carried on by the sole
trader or member firm must not, as principal, buy or agree to buy securities or
rights or interests in securities unless the sole trader or member firm acts as
the agent of the person in respect of the transaction.
(5) A reference in subsection (1) or (3) to an employee of a person
who is a dealer or investment adviser includes, in the case of a body corporate
that is a dealer or investment adviser, a reference to an officer of the
body.
(6) The reference in subsection (4) to an employee of a sole trader
or member firm includes, in the case of a sole trader that is a body corporate
or a member firm a partner in which is a body corporate, a reference to an
officer of the body.
(1) Subject to this section and the regulations, a person must not sell
securities to a buyer unless, at the time of the sale:
(a) the person has or, where the person is selling as agent, the
person’s principal has; or
(b) the person believes on reasonable grounds that the person has, or
where the person is selling as agent, the person’s principal
has;
a presently exercisable and unconditional right to vest the securities in
the buyer.
(2) For the purposes of subsection (1):
(a) a person who, at a particular time, has a presently exercisable and
unconditional right to have securities vested in the person or in accordance
with the directions of the person has at that time a presently exercisable and
unconditional right to vest the securities in another person; and
(b) a right of a person to vest securities in another person is not
conditional merely because the securities are charged or pledged in favour of
another person to secure the repayment of money.
(3) Subsection (1) does not apply in relation to:
(a) a sale of securities by the holder of a dealers licence who is a
member of a securities exchange and specialises in transactions relating to odd
lots of securities, being a sale made by the holder as principal solely for the
purpose of:
(i) accepting an offer to buy an odd lot of securities; or
(ii) disposing of a parcel of securities that is less than one marketable
parcel of securities by means of a sale of one marketable parcel of those
securities; or
(b) a sale of securities as part of an arbitrage transaction; or
(c) a sale of securities by a person who before the time of sale has
entered into a contract to buy those securities and who has a right to have
those securities vested in the person that is conditional only upon all or any
of the following:
(i) payment of the consideration in respect of the purchase;
(ii) the receipt by the person of a proper instrument of transfer in
respect of the securities;
(iii) the receipt by the person of the documents that are, or are
documents of title to, the securities; or
(d) a sale of securities where:
(i) the person who sold the securities is not an associate of the body
corporate that issued or made available the securities; and
(ii) arrangements are made before the time of the sale that will enable
delivery of securities of the class sold to be made to the buyer within 3
business days after the date of the transaction effecting the sale;
and
(iii) if the sale is made on the stock market of a securities
exchange:
(A) the price per unit in respect of the sale is not below the price at
which the immediately preceding ordinary sale was effected; and
(B) the price per unit is above the price at which the immediately
preceding ordinary sale was made unless the price at which the immediately
preceding ordinary sale was made was higher than the next preceding different
price at which an ordinary sale had been made;
and the securities exchange is informed as soon as practicable that the
sale has been made short in accordance with this subparagraph; or
(e) a sale of securities where:
(i) the securities are included in a class of securities in relation to
which there is in force a declaration, made by the board of a securities
exchange as provided by the business rules of the securities exchange, to the
effect that the class is a class of securities to which this paragraph applies;
and
(ii) the sale is made as provided by the business rules of the securities
exchange; and
(iii) at the time of the sale, neither the person who sold the securities,
nor any person on behalf of whom the first-mentioned person sold the securities,
was an associate, in relation to the sale, of the body corporate that issued or
made available the securities.
(4) A person who requests a holder of a dealers licence to make a sale of
securities that would contravene subsection (1) but for
paragraph (3)(b), (d) or (e) must, when making the request, inform the
holder of the licence that the sale is a short sale.
(5) A person who, on a stock market of a securities exchange, makes,
whether as principal or agent, a sale of securities that would contravene
subsection (1) but for paragraph (3)(d) must endorse on any document
evidencing the sale that is given to the person who, whether as principal or
agent, buys the securities a statement that the sale was a short sale.
(6) For the purposes of this section, a person who:
(a) purports to sell securities; or
(b) offers to sell securities; or
(c) holds himself, herself or itself out as entitled to sell securities;
or
(d) instructs a dealer to sell securities;
is taken to sell the securities.
(1) Where ASIC forms the opinion that it is necessary to prohibit
securities, or a particular class of securities, from being sold on a stock
market of a securities exchange in a manner that, but for paragraph 846(3)(e),
would contravene subsection 846(1), in order to protect persons who might suffer
financial loss if they were to buy or sell those securities in that manner or in
order to protect the public interest, ASIC may give written notice to the
securities exchange stating that it has formed that opinion and setting out the
reasons for that opinion.
(2) If, after receiving such a notice:
(a) the securities exchange does not take action to prevent the selling on
a stock market of the securities exchange of the securities, or class of
securities, specified in the notice in the manner referred to in
subsection (1); and
(b) ASIC is still of the opinion that it is necessary to prohibit the
selling on that stock market of the securities, or class of securities, in that
manner;
ASIC may, by a further written notice given to the securities exchange,
prohibit the selling on that stock market of the securities, or class of
securities, in that manner during a period of not more than 21 days.
(3) As soon as practicable after giving a notice to a securities exchange
under subsection (2), ASIC must give to the Minister a written report
setting out the reasons for the giving of the notice and send a copy of the
report to the securities exchange.
(4) On receiving the report, the Minister may direct ASIC to revoke the
notice given under subsection (2), and, if such a direction is given, ASIC
must immediately revoke the notice.
(5) A securities exchange must not permit the selling of securities on a
stock market of the securities exchange in a way that contravenes a notice given
under subsection (2).
For the purposes of this Division (other than
section 851):
(a) a recommendation made by a partner is taken to have been made by each
partner in the partnership; and
(b) a recommendation made by a director, executive officer or secretary of
a body corporate is taken to have also been made by the body
corporate.
(1) This section applies where a securities adviser makes a securities
recommendation to a person (in this section called the client) who
may reasonably be expected to rely on it.
(2) The securities adviser must:
(a) if the recommendation is made orally—when making the
recommendation, disclose to the client orally; or
(b) if the recommendation is made in writing—set out in that
writing, in such a way as to be no less legible than the other material in that
writing;
particulars of:
(c) any commission or fee, or any other benefit or advantage, whether
pecuniary or not and whether direct or indirect, that the securities adviser or
an associate has received, or will or may receive, in connection with the making
of the recommendation or a dealing by the client in securities as a result of
the recommendation; and
(d) any other pecuniary or other interest, whether direct or indirect, of
the securities adviser or an associate, that may reasonably be expected to be
capable of influencing the securities adviser in making the
recommendation.
(3) Subsection (2) does not apply in relation to a commission or fee
that the securities adviser has received, or will or may receive, from the
client.
(4) If by making the recommendation the securities adviser does an act as
a representative of another person, then:
(a) without limiting the generality of Division 2 of Part 1.2,
the other person is an associate for the purposes of subsection (2);
and
(b) subsection (2) does not apply in relation to a commission or fee
that the other person has received, or will or may receive, from the
client.
(5) For the purposes of Division 2 of Part 1.2, the making of
securities recommendations is the matter to which a reference to an associate in
subsection (2) relates.
(6) Despite Division 2 of Part 1.2 and subsection (5), a
person (in this subsection called the alleged associate) is not an
associate for the purposes of subsection (2) merely because of
being:
(a) a partner of the securities adviser otherwise than because of carrying
on a securities business in partnership with the securities adviser;
or
(b) a director of a body corporate of which the securities adviser is also
a director, whether or not the body carries on a securities business;
unless the securities adviser and the alleged associate act jointly, or
otherwise act together, or under an arrangement between them, in relation to
making securities recommendations.
(1) Where:
(a) a person:
(i) when making a recommendation orally, fails to disclose; or
(ii) when making a recommendation in writing, fails to set out in that
writing;
as required by subsection 849(2), particulars of a matter; and
(b) it is proved that the person was not, and could not reasonably be
expected to have been, aware of that matter when making the
recommendation;
the failure is not a contravention of that subsection.
(2) Where:
(a) a dealer or investment adviser, or a representative of a dealer or
investment adviser:
(i) when making a recommendation orally, fails to disclose; or
(ii) when making a recommendation in writing, fails to set out in that
writing;
as required by subsection 849(2), particulars of a matter; and
(b) in the case of a representative of a dealer or investment
adviser—by making the recommendation, the representative does an act as a
representative of the dealer or investment adviser; and
(c) it is proved that the dealer or investment adviser had in operation,
throughout a period beginning before the decision to make the recommendation was
made and ending after the recommendation was made, arrangements to ensure
that:
(i) the natural person who made the decision knew nothing about that
matter before the end of that period; and
(ii) no advice with respect to the making of the recommendation was given
to the person by anyone who knew anything about that matter; and
(d) it is also proved that:
(i) the person in fact knew nothing about that matter before the end of
that period; and
(ii) no such advice was so given;
the failure is not a contravention of that subsection.
(3) Neither of subsections (1) and (2) limits the generality of the
other.
(1) A securities adviser who:
(a) makes a securities recommendation to a person who may reasonably be
expected to rely on it; and
(b) does not have a reasonable basis for making the recommendation to the
person;
contravenes this section.
(2) For the purposes of subsection (1), a securities adviser does not
have a reasonable basis for making a securities recommendation to a person
unless:
(a) in order to ascertain that the recommendation is appropriate having
regard to the information the securities adviser has about the person’s
investment objectives, financial situation and particular needs, the securities
adviser has given such consideration to, and conducted such investigation of,
the subject matter of the recommendation as is reasonable in all the
circumstances; and
(b) the recommendation is based on that consideration and
investigation.
(3) A person who contravenes subsection (1) is not guilty of an
offence.
(1) This section applies where:
(a) a securities adviser contravenes section 849 or 851 in relation
to a securities recommendation to a person (in this section called the
client); and
(b) the client, in reliance on the recommendation, does, or omits to do, a
particular act; and
(c) it is reasonable, having regard to the recommendation and all other
relevant circumstances, for the client to do, or omit to do, as the case may be,
that act in reliance on the recommendation; and
(d) the client suffers loss or damage as a result of that act or
omission.
(2) Subject to subsections (3) and (4), the securities adviser is
liable to pay damages to the client in respect of that loss or damage.
(3) In the case of a contravention of section 849, the securities
adviser is not so liable if it is proved that a reasonable person in the
client’s circumstances could be expected to have done, or omitted to do,
as the case may be, that act in reliance on the recommendation even if the
securities adviser had complied with that section in relation to the
recommendation.
(4) In the case of a contravention of section 851, the securities
adviser is not so liable if it is proved that the recommendation was, in all the
circumstances, appropriate having regard to the information that, when making
the recommendation, the securities adviser had about the client’s
investment objectives, financial situation and particular needs.
A securities adviser who:
(a) makes a securities recommendation in relation to securities to a
person who may reasonably be expected to rely on it; and
(b) in so making the recommendation, contravenes neither of subsections
849(2) and 851(1);
has qualified privilege in respect of a statement the securities adviser
makes to the person, whether orally or in writing, in the course of, or in
connection with, so making the recommendation.
In this Part, unless the contrary intention appears:
(a) a reference to a licence is a reference to a dealers licence;
and
(b) a reference to a licensee is a reference to a person who holds a
dealers licence; and
(c) a reference to a book, security, trust account or business of or in
relation to a dealer who carries on business in partnership is a reference to
such a book, security, trust account or business of or in relation to the
partnership.
(1) This Part applies in relation to a licensee in relation to his, her or
its securities business, whether carried on in this jurisdiction or
elsewhere.
(2) This Part does not affect, and is taken never to have affected, the
operation of Chapter 2M in relation to a company that is the holder of a
dealers licence or in relation to a securities business that is carried on by
such a company.
(1) This section applies where a person (in this section called the
dealer) holds a licence.
(2) The dealer must:
(a) keep such financial records as correctly record and explain the
transactions and financial position of the securities business carried on by the
dealer; and
(b) keep those records (in this section called the
records) as provided by this section.
(3) The records must be kept in such a way as will enable true and fair
profit and loss statements and balance sheets to be prepared from time to
time.
(4) The records must be kept in such a way as will enable profit and loss
statements and balance sheets of the securities business carried on by the
dealer to be conveniently and properly audited.
(5) The records must be kept in writing in the English language or in such
a manner as will enable them to be readily accessible and readily converted into
writing in the English language.
(6) The records must be kept in sufficient detail to show particulars
of:
(a) all money received or paid by the dealer, including money paid to, or
disbursed from, a trust account; and
(b) all purchases and sales of securities made by the dealer, the charges
and credits arising from them, and the names of the buyer and seller of each of
those securities; and
(c) all income received from commissions, interest, and other sources, and
all expenses, commissions, and interest paid, by the dealer; and
(d) all the assets and liabilities (including contingent liabilities) of
the dealer; and
(e) all securities that are the property of the dealer, showing by whom
the securities, or the documents of title to the securities, are held and, where
they are held by some other person, whether or not they are held as security
against loans or advances; and
(f) all securities that are not the property of the dealer and for which
the dealer or a nominee controlled by the dealer is accountable, showing by
whom, and for whom, the securities or the documents of title to the securities
are held and the extent to which they are either held for safe custody or
deposited with a third party as security for loans or advances made to the
dealer; and
(g) all purchases and sales of options made by the dealer and all fees
(being option money) arising from them; and
(h) all arbitrage transactions entered into by the dealer; and
(j) all underwriting transactions entered into by the dealer.
(7) The records must be kept in sufficient detail to show separately
particulars of every transaction by the dealer.
(8) The records must specify the day on which, or the period during which,
each transaction by the dealer took place.
(9) The records must contain copies of acknowledgments of the receipt of
securities or of documents of title to securities received by the dealer from
clients for sale or safe custody clearly showing the name or names in which the
particular securities are registered.
(10) The records must be kept in sufficient detail to show separately
particulars of all transactions by the dealer with, or for the account
of:
(a) clients of the dealer, excluding, where the dealer carries on business
in partnership, the partners of the firm; and
(b) the dealer or, where the dealer carries on business in partnership,
the partners of the firm; and
(c) other dealers; and
(d) employees of the dealer.
(11) An entry in the records is, unless the contrary is proved, taken to
have been made by, or with the authority of, the dealer.
(12) Where any of the records is not kept in writing in the English
language, the dealer must, if required to convert the financial records
concerned into writing in the English language by a person who is entitled to
examine the record, comply with the requirement within a reasonable
time.
(13) The dealer does not contravene this section merely because some or
all of the records are kept as a part of, or in conjunction with, the records
relating to any other business that is carried on by the dealer.
(14) Where any of the records are kept outside this jurisdiction, the
dealer must:
(a) cause to be sent to and kept at a place in this jurisdiction such
particulars with respect to the business dealt with in those records as will
enable true and fair profit and loss statements and balance sheets to be
prepared; and
(b) if required by ASIC to produce those records at a place in this
jurisdiction, comply with the requirement not later than 28 days after the
requirement is made.
(15) Nothing in this section limits the generality of anything else in
it.
(1) A licensee must, within 1 month after beginning to hold the licence,
appoint as auditor or auditors to audit the licensee’s financial
statements:
(a) a person or persons; or
(b) a firm or firms; or
(c) a person or persons and a firm or firms;
other than a person who, or a firm that, is ineligible by virtue of this
section to act as auditor of the licensee.
(2) Subject to this section, a person is ineligible to act as auditor of
the holder of a licence if:
(a) the person is not a registered company auditor; or
(b) the person, or a body corporate in which the person has a substantial
holding, is indebted in an amount exceeding $5,000 to the holder or, if the
holder is a body corporate, to a related body corporate; or
(c) the person is:
(i) in the case of a holder who is a natural person—a partner or
employee of the holder; or
(ii) in the case of a holder that is a body corporate:
(A) an officer of the body corporate; or
(B) a partner, employer or employee of an officer of the body corporate;
or
(C) a partner or employee of an employee of an officer of the body
corporate.
(3) Subject to this section, a firm is ineligible at a particular time to
act as auditor of the holder of a licence, unless:
(a) at least one member of the firm is a registered company auditor who is
ordinarily resident in a State or Territory; and
(b) where the business name under which the firm is carrying on business
is not registered under a prescribed law of a State or Territory—there has
been lodged a return in the prescribed form showing, in relation to each member
of the firm, the member’s full name and the member’s address as at
that time; and
(c) no member of the firm, and no body corporate in which any member of
the firm is a substantial shareholder for the purposes of Part 6.7, is
indebted in an amount exceeding $5,000 to the holder or, where the holder is a
body corporate, to a related body corporate; and
(d) no member of the firm is:
(i) in the case of a holder who is a natural person—a partner or
employee of the holder; or
(ii) in the case of a holder that is a body corporate:
(A) an officer of the body corporate; or
(B) a partner, employer or employee of an officer of the body corporate;
or
(C) a partner or employee of an employee of an officer of the body
corporate; and
(e) in the case of a holder that is a body corporate, no officer of the
body corporate receives any remuneration from the firm for acting as a
consultant to it on accounting or auditing matters.
(4) For the purposes of paragraphs (2)(b) and (3)(c), disregard a
debt owed by a natural person to a body corporate if:
(a) the body corporate is:
(i) an Australian ADI; or
(ii) a body corporate registered under the Life Insurance Act
1995; and
(b) the debt arose because of a loan that the body corporate or entity
made to the person in the ordinary course of its ordinary business;
and
(c) the person used the amount of the loan to pay the whole or part of the
purchase price of premises that the person uses as their principal place of
residence.
(5) For the purposes of subsections (2) and (3), a person is taken to
be an officer of a body corporate if:
(a) in any case—the person is an officer of a related body
corporate; or
(b) except where ASIC, if it thinks fit in the circumstances of the case,
directs that this paragraph not apply in relation to the person in relation to
the body corporate—the person has, at any time within the immediately
preceding 12 months, been an officer or promoter of the body corporate or of a
related body corporate.
(6) For the purposes of this section, a person is not an officer of a body
corporate merely because of being or having been the liquidator of that body
corporate or of a related body corporate.
(7) For the purposes of this section, a person is not an officer of a body
corporate merely because of having been appointed as auditor of that body
corporate or of a related body corporate or, for any purpose relating to
taxation, a public officer of a body corporate or merely because of being or
having been authorised to accept on behalf of the body corporate or a related
body corporate service of process or any notices required to be served on the
body corporate or related body corporate.
(8) Subject to this section, a person or firm must not, while ineligible
by virtue of this section to act as auditor of the holder of a
licence:
(a) consent to be appointed as auditor of the holder; or
(b) act as auditor of the holder; or
(c) prepare a report that an auditor of the holder is to prepare under
this Chapter.
(9) The appointment of a firm as auditor of the holder of a licence is
taken to be an appointment of all persons who are members of the firm and are
registered company auditors, whether resident in Australia or not, at the date
of the appointment.
(10) Where a firm that has been appointed as auditor of the holder of a
licence is re-constituted because of the death, retirement or withdrawal of a
member or members or because of the admission of a new member or new members, or
both:
(a) a person who was taken under subsection (9) to be an auditor of
the holder and has so retired or withdrawn from the firm as previously
constituted is taken to have resigned as auditor of the holder as from the day
of the person’s retirement or withdrawal but, unless that person was the
only member of the firm who was a registered company auditor and, after the
retirement or withdrawal of that person, there is no member of the firm who is a
registered company auditor, section 858 does not apply to that resignation;
and
(b) a person who is a registered company auditor and is so admitted to the
firm is taken to have been appointed as an auditor of the holder as from the
date of the admission; and
(c) the reconstitution of the firm does not affect the appointment of the
continuing members of the firm who are registered company auditors as auditors
of the holders;
but nothing in this subsection affects the operation of
subsection (3).
(11) Except as provided by subsection (10), the appointment of the
members of a firm as auditors of the holder of a licence that is taken by
subsection (9) to have been made because of the appointment of the firm as
auditor of the holder is not affected by the dissolution of the firm.
(12) A report or notice that purports to be made or given by a firm
appointed as auditor of the holder of a licence is not duly made or given unless
it is signed in the firm name and in his or her own name by a member of the firm
who is a registered company auditor.
(13) Where a person or firm is appointed as an auditor of the licensee
under subsection (1) (other than an appointment that is taken to be made by
virtue of subsection (10)) or under subsection (16), the licensee must
within 14 days after the appointment lodge a written notice stating that the
licensee has made the appointment and specifying the name of the person or
firm.
(14) A person must not:
(a) if the person has been appointed auditor of the holder of a
licence—knowingly disqualify himself or herself while the appointment
continues from acting as auditor of the holder; or
(b) if the person is a member of a firm that has been appointed auditor of
the holder of a licence—knowingly disqualify the firm while the
appointment continues from acting as auditor of the holder.
(15) An auditor of the holder of a licence holds office until death, until
removal or resignation from office in accordance with section 858 or until
becoming prohibited by subsection (8) from acting as auditor of the
holder.
(16) Within 14 days after a vacancy occurs in the office of an auditor of
a licensee, if there is no surviving or continuing auditor of the licensee, the
licensee must appoint a person or persons, a firm or firms or a person or
persons and a firm or firms to fill the vacancy, other than a person who, or a
firm that, is ineligible by virtue of this section to act as auditor of the
licensee.
(17) While a vacancy in the office of an auditor continues, the surviving
or continuing auditor or auditors (if any) may act.
(18) A licensee must not appoint a person or firm as auditor of the
licensee unless that person or firm has, before the appointment, consented by
written notice given to the licensee to act as auditor and has not withdrawn the
consent by written notice given to the licensee.
(19) This section does not apply in relation to a body corporate (except a
proprietary company) in relation to which section 327 applies.
(1) A licensee:
(a) must remove an auditor of the licensee from office if the auditor
becomes ineligible by virtue of section 857 to act as auditor of the
licensee; and
(b) may, with ASIC’s consent, remove an auditor of the licensee from
office.
(2) An auditor of the holder of a licence may, by written notice given to
the holder, resign as auditor of the holder if:
(a) the auditor has, by written notice given to ASIC, applied for consent
to the resignation and, at or about the same time as the auditor gave notice to
ASIC, gave written notice to the holder of the application; and
(b) the auditor has received the consent of ASIC.
(3) ASIC must, as soon as practicable after receiving an application from
an auditor under subsection (2), notify the auditor and the holder whether
it consents to the resignation.
(4) A statement by an auditor in an application under subsection (2)
or in answer to an inquiry by ASIC relating to the reasons for the
application:
(a) is not admissible in evidence in any civil or criminal proceedings in
a court against the auditor other than proceedings for a contravention of
section 1308; and
(b) may not be made the ground of a prosecution (other than a prosecution
for a contravention of section 1308), action or suit against the
auditor;
and a certificate by ASIC that the statement was made in the application or
in answer to an inquiry by ASIC is conclusive evidence that the statement was so
made.
(5) Subject to subsection (6), the resignation of an auditor takes
effect on:
(a) the date (if any) specified for the purpose in the notice of
resignation; or
(b) the date on which ASIC gives its consent to the resignation;
or
(c) the date (if any) fixed by ASIC for the purpose;
whichever last occurs.
(6) Where, on the retirement or withdrawal from a firm of a member, the
firm will no longer be capable, because of paragraph 857(3)(a), of acting as
auditor of the holder of a licence, the member so retiring or withdrawing is, if
not disqualified from acting as auditor of the holder, taken to be the auditor
of the holder until the member obtains the consent of ASIC to the retirement or
withdrawal.
(7) This section does not apply in relation to a body corporate (except a
proprietary company) in relation to which section 329 applies.
The reasonable fees and expenses of an auditor of the holder of a licence
are payable by the holder.
(1) In this section:
financial year, in relation to a licensee, means:
(a) where the licensee is not a body corporate—the year ending on
30 June; and
(b) where the licensee is a body corporate—the financial year of the
body corporate.
prescribed day, in relation to a financial year of a
licensee, means:
(a) where the licensee is not a body corporate—the day that is 2
months after the end of that financial year; or
(b) where the licensee is a body corporate—the day that is 3 months
after the end of that financial year;
or where, in either case, an extension of time is approved under
subsection (3), the day on which the period of the extension
ends.
(2) A licensee must, in respect of each financial year, other than a
financial year that ended before the date on which the licensee started to carry
on business as a dealer, prepare a true and fair profit and loss statement and
balance sheet on the basis of such accounting principles (if any) and containing
such information and matters as are prescribed and lodge them before the
prescribed day for that financial year, together with an auditor’s report
containing the prescribed information and matters.
(3) ASIC may, on application made by the holder of a licence and the
holder’s auditor before the end of the period of 2 months or, as the case
requires, the period of 3 months referred to in the definition of
prescribed day in subsection (1) or, if that period has been
extended by an approval or approvals previously given under this subsection,
before the end of the period as so extended, approve an extension of the
period.
(4) An approval under subsection (3) may be given subject to such
conditions (if any) as ASIC imposes.
(5) Where an approval under subsection (3) in relation to a licensee
is given subject to conditions, the licensee must comply with those
conditions.
(1) Where an auditor, in the performance of duties as auditor of the
holder of a licence, becomes aware of a prescribed matter, the auditor must,
within 7 days after becoming aware of the matter, lodge a written report on the
matter and send a copy of the report to the holder and to each securities
exchange of which the holder is a member.
(2) In this section:
prescribed matter means a matter that, in the opinion of the
auditor:
(a) has adversely affected, is adversely affecting or may adversely affect
the ability of the holder to meet the holder’s obligations as a dealer;
or
(b) constitutes or may constitute a contravention of section 856,
866, 867, 868, 869, 870, 871, 872 or 873, or Part 7.7 or of a condition of
the licence.
(1) Where, in relation to a dealer who is a member of a securities
exchange, the securities exchange becomes aware of a prescribed matter, the
securities exchange must, as soon as practicable after becoming aware of the
matter, lodge a written report on the matter and send a copy of the report to
the dealer.
(2) In this section:
prescribed matter, in relation to a dealer, means a matter
that, in the opinion of the securities exchange concerned:
(a) has adversely affected, is adversely affecting or may adversely affect
the ability of the dealer to meet the dealer’s obligations as a dealer;
or
(b) constitutes or may constitute a contravention of section 856,
866, 867, 868, 869, 870, 871, 872 or 873, or Part 7.7 or of a condition of
a licence held by the dealer.
(1) An auditor of the holder of a licence has qualified privilege in
respect of:
(a) a statement that the auditor makes, orally or in writing, in the
course of his or her duties as auditor; or
(b) the lodging of a report, or the sending of a report to the holder, or
to a securities exchange, under section 861.
(2) A person has qualified privilege:
(a) in respect of the publishing of a document prepared by an auditor of
the holder of a licence in the course of the auditor’s duties or required
by or under this Chapter to be lodged, whether or not the document has been
lodged; or
(b) in respect of the publishing of a statement made by such an auditor as
mentioned in subsection (1).
Nothing in this Part or in Part 7.6 prevents a securities exchange
from imposing on a member of that securities exchange any obligations or
requirements (other than obligations or requirements inconsistent with this
Chapter or with a condition of a licence held by the member) that the securities
exchange thinks fit with respect to:
(a) the audit of books (including the audit of books by an auditor
appointed by the securities exchange); or
(b) the information to be given in reports from auditors; or
(c) the keeping of books.
In this Part, unless the contrary intention appears:
(a) a reference to a licence is a reference to a dealers licence;
and
(b) a reference to a licensee is a reference to a person who holds a
dealers licence; and
(c) a reference to a book, security, trust account or business of or in
relation to a dealer who carries on business in partnership is a reference to
such a book, security, trust account or business of or in relation to the
partnership.
This Part (other than section 872) applies in relation to a licensee
in relation to his, her or its securities business, whether carried on in this
jurisdiction or elsewhere.
(1) A licensee must open and maintain:
(a) an account, designated as a trust account, with an Australian ADI;
or
(b) 2 or more such accounts.
(2) Where a condition of a licence prohibits the licensee from holding
money in trust for the licensee’s clients, subsection (1) does not
apply in relation to the licensee unless and until the licensee receives money
that section 867 requires the licensee to pay into a trust
account.
(3) A person who contravenes subsection (1) is guilty of an
offence.
(4) A person who, with intent to defraud, contravenes subsection (1)
is guilty of an offence.
(1) A licensee must pay into a trust account:
(a) money held by the licensee in trust for a client; and
(b) without limiting the generality of paragraph (a), money received
by the licensee from a client, other than:
(i) money received in respect of brokerage or any other proper charge;
or
(ii) money received in payment or part payment for securities delivered to
the licensee before the money is received; or
(iii) money in relation to which the licensee is required to comply with
section 872.
(2) Subsection (1) does not apply in relation to a payment order
that:
(a) is payable to, or to the order of, a specified person or bearer;
and
(b) the licensee receives from, or on behalf of, a client with express or
implied instructions that it is to be delivered to the person to whom it is
payable;
unless the payee in the payment order is the licensee, a partner of the
licensee or a firm in which the licensee is a partner.
(3) A person who contravenes subsection (1) is guilty of an
offence.
(4) A person who, with intent to defraud, contravenes subsection (1)
is guilty of an offence.
(1) Where section 867 requires a licensee to pay money into a trust
account, the licensee must pay the money into a trust account on or before the
next day after the licensee receives it on which it can be so paid.
(2) A person who contravenes subsection (1) is guilty of an
offence.
(3) A person who, with intent to defraud, contravenes subsection (1)
is guilty of an offence.
(1) A licensee must not withdraw money from a trust account
except:
(a) to make a payment to, or in accordance with the written directions of,
a person entitled to the money; or
(b) to make a payment under section 889 to a stock exchange;
or
(c) to defray brokerage or any other proper charge; or
(d) to pay to the licensee money to which the licensee is entitled, being
money that was paid into the trust account but need not have been so paid;
or
(e) to make a payment that is otherwise authorised by any law of the
Commonwealth or any law of a State or Territory in this jurisdiction.
(2) Nothing in this Part affects a lawful claim or lien that a
person:
(a) has against or on money held in a trust account of a person;
or
(b) has, before money received for the purchase of securities or from the
sale of securities is paid into a trust account of a person, against or on that
money.
(3) A person who contravenes subsection (1) is guilty of an
offence.
(4) A person who, with intent to defraud, contravenes subsection (1)
is guilty of an offence.
(1) This section applies where the holder of a licence withdraws from a
trust account of the holder some or all of the amount of a cheque:
(a) that has been paid into the account; and
(b) that has not been paid, and payment of which has not been refused, by
the banker on which it is drawn.
(2) The holder does not, merely because of the withdrawal, contravene
section 869.
(3) If the banker later refuses payment of the cheque, the holder must,
within one business day after being notified of the refusal, pay into the trust
account by cash, or by cheque that a bank or other institution draws on itself,
an amount equal to the amount of the withdrawal.
(1) Subject to this Part, money in a trust account of the holder of a
licence is not available for the payment of a debt or liability of the
licensee.
(2) Subject to this Part, money in a trust account of the holder of a
licence is not liable to be attached, or taken in execution, under the order or
process of a court at the instance of a person suing in respect of such a debt
or liability.
(1) This section applies where a person (in this section called the
client) lends money to a dealer in connection with a securities
business carried on by the dealer.
(2) The dealer must pay the money into an account that:
(a) the dealer maintains with an Australian ADI; and
(b) contains no money other than money lent to the dealer;
and must so pay the money on or before the next day after the dealer
receives it on which it can be paid into that account.
(3) The dealer must give to the client a document (in this section called
the disclosure document), in the prescribed form, setting
out:
(a) the terms and conditions on which the loan is made and accepted;
and
(b) the purpose for which, and the manner in which, the dealer is to use
the money.
(4) The dealer must keep the money in the account until the client gives
the dealer a written acknowledgment that the client has received the disclosure
document.
(5) The dealer must not use the money except:
(a) for the purpose, and in the manner, set out in the disclosure
document; or
(b) for any other purpose, or in any other manner, agreed on in writing by
the dealer and the client after the dealer gives the disclosure document to the
client.
(1) This section applies where the holder of a licence (in this section
called the dealer) receives for safe custody scrip that is the
property of another person (in this section called the client) and
for which the dealer, or a nominee controlled by the dealer, is
accountable.
(2) If the client requests that the body corporate that issued or made
available the securities underlying the scrip register the scrip in the name of
such a nominee, the dealer must cause the body corporate so to register
them.
(3) If the client requests that the scrip be deposited in safe custody
with an Australian ADI with which the dealer maintains an account, the dealer
must cause the scrip to be so deposited.
(4) If:
(a) neither of subsections (2) and (3) applies; and
(b) the scrip is not registered in the client’s name by the body
corporate that issued or made available the securities underlying the
scrip;
the dealer must cause the scrip to be so registered.
(5) A dealer must not deposit the scrip as security for a loan or advance
to the dealer unless:
(a) the client owes the dealer an amount in connection with a transaction
entered into by the dealer on the client’s behalf; and
(b) the dealer gives the client a written notice that identifies the scrip
and states that the dealer proposes so to deposit it; and
(c) the amount, or the total of the amounts, that the client so owes on
the day of the deposit is not less than the amount of the loan or
advance.
(6) If the dealer deposits the scrip as permitted by subsection (5),
the dealer:
(a) must, within one business day after the amount or amounts first
referred to in paragraph (5)(c) are repaid, withdraw the scrip from that
deposit; and
(b) if, at the end of 3 months after the day of that deposit, or at the
end of any subsequent interval of 3 months, the scrip has not been withdrawn
from that deposit—give the client written notice of that fact.
(1) Subsection (3) of this section applies where, on application by
ASIC, the Court is satisfied that a person holds, or has at any time held, a
licence and that:
(a) there are reasonable grounds for believing that there is a deficiency
in:
(i) a trust account of the person; or
(ii) an account maintained by the person under subsection
872(2);
whether the account is maintained in this jurisdiction or elsewhere;
or
(b) there has been undue delay, or unreasonable refusal, on the
person’s part in paying, applying or accounting for trust money as
provided for by this Part by a condition of the licence or by the business rules
of a securities exchange of which the person is or has been a member;
or
(c) without limiting the generality of paragraph (b) of this
subsection, the person has contravened:
(i) section 868; or
(ii) subsection 872(2).
(2) Subsection (3) also applies where, on application by ASIC, the
Court is satisfied that a person holds, or has at any time held, a licence and
is carrying on, or last carried on, a securities business otherwise than in
partnership and that:
(a) the licence has been revoked or suspended; or
(b) the person is incapable, through mental or physical incapacity, of
managing his or her affairs; or
(c) the person no longer carries on a securities business; or
(d) the person has died.
(3) The Court may by order restrain dealings in respect of specified bank
accounts that the person holds or maintains (whether in Australia or elsewhere),
subject to such terms and conditions as the Court imposes.
(1) Before considering an application under section 874, the Court
may, if it considers it desirable to do so, grant an interim order that is an
order of the kind applied for and is expressed to apply until the application is
determined.
(2) The Court must not require ASIC or any other person, as a condition of
granting an order under subsection (1), to give an undertaking as to
damages.
Where an order made under section 874 is directed to a banker, the
banker must:
(a) disclose to ASIC every account kept at the bank in the name of the
person to whom the order relates, and any account that the banker reasonably
suspects is held or kept at the bank for the benefit of that person;
and
(b) permit ASIC to make a copy of, or to take an extract from, any account
of the person to whom the order relates or any of the banker’s books
relating to that person.
(1) Where an order is made under section 874 or 875, the Court may,
on application by ASIC or a person whom the order affects, make a further order
that does one or more of the following:
(a) deals with such ancillary matters as the Court thinks necessary or
desirable; or
(b) directs that specified amounts in a bank account affected by the
first-mentioned order be paid to ASIC or a person nominated by ASIC;
or
(c) varies or discharges the first-mentioned order or an order under this
section.
(2) An order under this section may be made subject to such terms and
conditions as the Court imposes.
(1) An order made under section 877 may include directions to
the person to whom the money is paid directing that the person:
(a) must pay the money into a separate trust account; or
(b) is authorised to prepare a scheme for distributing the money to
persons who claim, within 6 months after the person receives the money, to be
entitled to the money and satisfy the person that they are so entitled;
or
(c) where the money received is insufficient to pay all proved claims,
may, notwithstanding any rule of law or equity to the contrary, apportion the
money among the claimants in proportion to their proved claims and show in the
scheme how the money is so apportioned.
(2) Where a person prepares a scheme for a distribution of money under
subsection (1), the person must apply to the Court for approval of the
scheme and for directions in respect of it.
(3) The Court may give such directions as to the money held in a separate
trust account under subsection (1), as to the persons to whom and in what
amounts the whole or any portion of that money must be paid, and as to the
payment of the balance of the money (if any) remaining in the account, as the
Court thinks fit.
(1) In this Part:
financial journalist means a person who is not a licensee
and, in the course of the person’s business or employment contributes
advice, or prepares analyses or reports, about securities for
publication:
(a) in a newspaper or periodical; or
(b) in the course of, or by means of, transmissions made by means of an
information service; or
(c) in sound recordings, video recordings or data recordings.
Register, in relation to a person to whom this Part applies,
means the Register required to be kept by the person under subsection
881(1).
securities means securities of:
(a) a public company; or
(b) a body corporate or other person included in the official list of a
securities exchange.
(2) If:
(a) there is in force a written certificate issued by or on behalf of a
securities exchange certifying that a member of that securities exchange is
recognised by that securities exchange as specialising in transactions relating
to odd lots of securities; and
(b) the member concerned enters into a transaction in relation to an odd
lot of securities;
this Part does not apply in relation to any relevant interests in
securities acquired by the member as a result of that transaction or in relation
to any change effected by that transaction in the member’s relevant
interests in any securities.
This Part applies to a person who:
(a) holds a licence; or
(b) holds a proper authority from a person who holds a licence;
or
(c) is a financial journalist.
(1) A person to whom this Part applies must keep a Register, in accordance
with the prescribed form or in the prescribed manner, at a place in this
jurisdiction for the purposes of this Part.
(2) Where:
(a) a person becomes a person to whom this Part applies after the
commencement of this Act; and
(b) the person is aware, upon becoming such a person, that the person has
relevant interests in securities;
the person must, within 7 days after the day on which the person becomes
such a person, if the person has not already done so, enter, as prescribed, in
the Register particulars of those securities and of the nature of the
person’s relevant interests in those securities.
(3) Where a person to whom this Part applies becomes aware that the person
has relevant interests in securities, the person must, within 7 days after the
day on which the person becomes so aware, enter, as prescribed, in the Register
particulars of those securities and of the nature of the person’s relevant
interests in those securities.
(4) Where there is a change in the relevant interests of a person to whom
this Part applies in securities, the person must, within 7 days after the day on
which the person becomes aware of the change, enter particulars of the change in
the Register.
(5) For the purposes of this section, where a person to whom this Part
applies begins or ceases to have relevant interests in securities, there is
taken to be a change in the relevant interests of that person in those
securities.
(6) Where a person to whom this Part applies is required by this section
to enter in the Register particulars of any securities and of the nature of the
person’s relevant interests in those securities, or particulars of a
change in the person’s relevant interests in any securities, the
particulars to be entered include:
(a) the date on which the person began or ceased to have the relevant
interests or on which the change occurred; and
(b) the number of securities to which the relevant interests relate or
related; and
(c) if the relevant interests were acquired or disposed of or the change
occurred for valuable consideration—the amount of the consideration and,
if the consideration did not consist wholly of money, the nature of the part of
the consideration that did not consist of money; and
(d) if the securities are not registered in the name of the
person—the name of the person who is registered as the holder of the
securities or, if any other person is entitled to become registered as the
holder of the securities, the name of that other person.
(7) The Register may include particulars of matters relating to securities
in relation to which this Part does not apply.
(1) An applicant for a licence must include in the application written
notice of where the applicant intends to keep the Register under subsection
881(1).
(2) Within 14 days after beginning to keep the Register, a person who
holds a proper authority from a licensee must lodge written notice of:
(a) where the Register is kept; and
(b) the name and business address of each licensee from whom the
first-mentioned person holds a proper authority.
(3) Within 14 days after beginning to keep the Register, a financial
journalist must lodge written notice of:
(a) where the Register is kept; and
(b) the name and business address of the financial journalist’s
employer (if any); and
(c) the newspapers and periodicals to which the financial journalist
contributes.
(1) As soon as practicable after changing the place where the Register is
kept, a person to whom this Part applies must lodge written notice of the new
place where the Register is kept.
(2) Where, at a particular time during the period beginning when a person
complies with subsection 882(2) and ending immediately after the person next
ceases to be a person to whom this Part applies, the person begins or ceases to
hold a proper authority from a particular licensee, the person must, as soon as
practicable after that time, lodge written notice of that fact and of the
licensee’s name and business address.
(3) Where, at a particular time during the period beginning when a person
complies with subsection 882(3) and ending immediately after the person next
ceases to be a person to whom this Part applies, the person:
(a) begins or ceases to be employed as a financial journalist by a
particular employer; or
(b) begins or ceases to contribute as a financial journalist to a
particular newspaper or periodical;
the person must, as soon as practicable after that time, lodge written
notice of that fact and of:
(c) the employer’s name and business address; or
(d) the name of the newspaper or periodical;
as the case may be.
(4) As soon as practicable after:
(a) the name or business address of a licensee from whom a person to whom
this Part applies holds a proper authority; or
(b) the name or business address of an employer who employs a person to
whom this Part applies as a financial journalist; or
(c) the name of a newspaper or periodical to which a person to whom this
Part applies contributes as a financial journalist;
ceases to be the name or business address of the licensee or employer, or
the name of the newspaper or periodical, as the case may be, as last notified by
the person under section 882 or this section, the person must lodge written
notice of the new name or business address.
(1) It is a defence to a prosecution for contravening section 881,
882 or 883 if it is proved that the contravention was due to the defendant not
being aware of a fact or occurrence the existence of which was necessary to
constitute the contravention and that:
(a) the defendant was not so aware on the date of the information;
or
(b) the defendant became so aware less than 14 days before the date of the
information; or
(c) the defendant became so aware not less than 14 days before the date of
the information and complied with the relevant section within 14 days after
becoming so aware.
(2) For the purposes of this Part, a person is, unless the contrary is
proved, to be presumed to have been aware at a particular time of a fact or
occurrence relating to securities if an employee or agent of the person, being
an employee or agent having duties or acting in relation to the employer’s
or principal’s interest in the relevant securities, was aware of that fact
or occurrence at that time.
(1) ASIC may require a person to whom this Part applies to produce the
Register for inspection by a person authorised by ASIC at such place and within
such period as ASIC specifies and the authorised person may make a copy of, or
take extracts from, the Register.
(2) A person to whom this Part applies must comply with any requirement
made of the person under subsection (1).
ASIC may, by written notice, require a person (in this section called the
principal) to supply ASIC with:
(a) the name and address of the person who contributed or prepared
specified advice or a specified analysis or report; or
(b) the names and addresses of all persons who, during a specified period,
contributed or prepared any advice, analysis or report;
being advice, or an analysis or report, about securities that was
published:
(c) in a newspaper or periodical owned or published by the principal;
or
(d) in the course of, or by means of, transmissions that:
(i) the principal makes by means of an information service; or
(ii) are made by means of an information service that the principal owns,
operates or makes available; or
(e) in sound recordings, video recordings, or data recordings, that the
principal makes available as mentioned in paragraph 77(6)(c).
ASIC may supply a copy of a Register or an extract from a Register to any
person who, in the opinion of ASIC, should in the public interest be informed of
the matters disclosed in the Register or extract.
In this Part, unless the contrary intention appears:
stock exchange does not include an Exchange
subsidiary.
(1) This section applies where a licensee is, or is a partner in a
partnership that is, a member organisation of a stock exchange.
(2) Subject to this section, the licensee or partnership, as the case may
be, must, as provided in this section, lodge and keep a deposit with:
(a) if the licensee or partnership is a member organisation of each of 2
or more stock exchanges—the nominated stock exchange; or
(b) otherwise—the stock exchange referred to in
subsection (1).
(3) If:
(a) while the licensee or partnership, as the case may be, is a member
organisation of at least one stock exchange, he, she or it becomes a member
organisation of another stock exchange; or
(b) the licensee or partnership ceases to be a member organisation of a
particular stock exchange but remains a member organisation of each of 2 or more
other stock exchanges;
the licensee or partnership must as soon as practicable inform in writing
each stock exchange of which he, she or it is a member organisation of the name
of the stock exchange with which he, she or it proposes to lodge and keep a
deposit.
(4) In subsection (2):
nominated stock exchange means the stock exchange named in
notices given as required by subsection (3) or, if notices have been so
given on 2 or more occasions, in the most recent notices so given.
(5) The deposit is payable out of money in a trust account of the licensee
or partnership, as the case may be.
(6) An amount paid from such a trust account as, or as part of, the
deposit continues to be money in the trust account even though it has been
lodged with a stock exchange.
(7) A contravention of subsection (2) is to be disregarded if it was
attributable to the making, out of a trust account of the licensee or
partnership, as the case may be, of a payment that:
(a) paragraph 869(1)(a), (c), (d) or (e) authorised the licensee or
partnership to make out of that trust account; and
(b) the licensee or partnership was unable to make without committing the
contravention.
(1) The deposit to be lodged and kept for the purposes of section 889
must be an amount equal to two-thirds (or, where a lesser proportion is
prescribed, that proportion) of:
(a) if the licensee or partnership, as the case may be, keeps 2 or more
trust accounts—the lowest aggregate of the balances in those trust
accounts; or
(b) otherwise—the lowest balance in the trust account of the
licensee or partnership;
during the 3 months ending on the quarter day last past.
(2) A deposit need not be lodged or kept for the purposes of this Part if,
but for this subsection, the amount of the deposit would be less than
$3,000.
(3) If, because of subsection (1), the amount of a deposit to be
lodged and kept with a stock exchange increases, the licensee or partnership, as
the case may be, must so lodge the amount of the increase within 5 trading days
of that stock exchange after the relevant quarter day that is the last day of
the period by reference to which the amount required to be so lodged is
calculated.
(1) Where a stock exchange receives a deposit from a person or partnership
under section 889, the stock exchange holds the deposit in trust for the
person or partnership and must invest the deposit:
(a) on interest-bearing term deposit with an Australian ADI; or
(b) on deposit with an eligible money market dealer.
(2) A participating exchange must pay into the Fund money received by way
of interest in respect of amounts invested by it under
subsection (1).
(3) A stock exchange (other than a participating exchange) must pay money
received by way of interest in respect of amounts invested by it under
subsection (1) into its fidelity fund.
(4) A stock exchange must, on demand being made by a person or partnership
who has lodged a deposit with the stock exchange, pay to the person or
partnership an amount on deposit with the stock exchange under
section 889.
(5) Nothing in subsection (4) affects section 889.
(6) Where the licensee, or a partnership in which the licensee is a
partner, receives an amount under subsection (4) from a stock exchange, the
licensee or partnership, as the case may be, must pay the amount into a trust
account of the licensee or partnership, as the case may be.
(7) The Fund must guarantee the repayment by a participating exchange of
the amount of a deposit received by the participating exchange from a person or
partnership.
(8) The fidelity fund of a stock exchange (other than a participating
exchange) must guarantee the repayment by the stock exchange of the amount of a
deposit received by the stock exchange from a person or partnership.
(1) A stock exchange must establish and keep proper accounts of deposits
received by the stock exchange under this Part and must, within 1 month after
each quarter day, cause a balance-sheet to be made out as at that day.
(2) A stock exchange must appoint a registered company auditor to audit
its accounts relating to deposits.
(3) An auditor appointed by a stock exchange must audit the accounts
relating to deposits received by the stock exchange and each balance sheet and
must cause a report on the accounts and balance-sheet to be given to the board
of the stock exchange within one month after the balance-sheet is made
out.
(4) A stock exchange must lodge a copy of each report given to the board
of the stock exchange under this section and of the balance-sheet to which the
report relates within 14 days after the report was given to the board.
Nothing done under this Part or under a condition existing by virtue of
this Part affects:
(a) a claim or lien that a member organisation of a stock exchange has in
relation to a deposit; or
(b) the rights or remedies of a person other than a member organisation of
a stock exchange.
In this Part:
participating exchange means:
(a) a participating exchange for the purposes of Part 7.10;
or
(b) an Exchange subsidiary.
(1) A securities exchange (other than a participating exchange) must keep
a fidelity fund, which must be administered by the board on behalf of the
securities exchange.
(2) The assets of a fidelity fund of a securities exchange are the
property of the securities exchange but must be kept separate from all other
property and must be held in trust for the purposes set out in this
Part.
The fidelity fund of a securities exchange consists of:
(aa) in the case of a fidelity fund established before the commencement of
this Act—the money, and other property, of which the fund consisted
immediately before that commencement; and
(a) in the case of a fidelity fund established after the commencement of
this Act—any amount that is paid to the credit of the fund by the
securities exchange on the establishment of the fund; and
(b) money paid into the fidelity fund as required by paragraphs 902(4)(d)
and 904(4)(d); and
(c) the interest on money invested by the securities exchange under
Part 7.8; and
(d) the interest and profits from time to time accruing from the
investment of the fidelity fund; and
(e) other money paid into the fidelity fund by the securities exchange;
and
(f) money recovered by or on behalf of the securities exchange in the
exercise of a right of action conferred by this Part; and
(g) money paid by an insurer under a contract of insurance or indemnity
entered into by the securities exchange under section 917; and
(h) any other money lawfully paid into the fund.
The money in a fidelity fund, until invested or applied in accordance
with this Part, must be kept in a separate account in an Australian
ADI.
Subject to this Part, there must be paid out of the fidelity fund of a
securities exchange in such order as the board of the securities exchange
considers proper:
(a) the amounts of all claims, including costs, allowed by the board or
established against the securities exchange under this Part; and
(b) all legal and other expenses incurred in investigating or defending
claims made under this Part or incurred in relation to the fund or in the
exercise by the securities exchange or the board of the securities exchange of
the rights, powers and authorities vested in it by this Part in relation to the
fund; and
(c) all premiums payable in respect of contracts of insurance or indemnity
entered into by the securities exchange under section 917; and
(d) the expenses incurred in the administration of the fund, including the
salaries and wages of persons employed by the securities exchange or the board
in relation to the fund; and
(e) all other moneys payable out of the fund in accordance with the
provisions of this Chapter.
Where a body corporate that is a securities exchange, or that is related
to a securities exchange, becomes a futures organisation for the purposes of
Part 8.6:
(a) the Minister may approve in writing, on such conditions (if any) as
are specified in the approval:
(i) the payment of an amount specified in the approval out of the fidelity
fund kept under this Part by the body corporate, or by the securities exchange,
as the case may be; and
(ii) the payment of that amount to the credit of the fidelity fund
established or to be established by the body corporate under that Part;
and
(b) if the Minister does so, that amount must, in accordance with the
conditions (if any) so specified:
(i) be paid out of the fidelity fund referred to in
subparagraph (a)(i); and
(ii) be paid to the credit of the fidelity fund referred to in
subparagraph (a)(ii).
(1) A securities exchange must establish and keep proper accounts of its
fidelity fund and must, before 31 August in each year, cause a balance
sheet in respect of those accounts to be made out as at the preceding
30 June.
(2) A securities exchange must appoint a registered company auditor to
audit the accounts of the fidelity fund.
(3) The auditor appointed by a securities exchange must audit the accounts
of the fidelity fund and must audit each balance sheet and give a report on the
accounts and balance sheet to the board of the securities exchange not later
than one month after the balance sheet is made out.
(4) A securities exchange must lodge a copy of each report given to the
board of the securities exchange under this section and of the balance sheet to
which the report relates within 14 days after the report was given to the
board.
(1) The board of a securities exchange may, by resolution, appoint a
management sub-committee of not fewer than 3 nor more than 5 members of the
securities exchange, at least one of whom is also a member of the
board.
(2) The board may, by resolution, delegate to a sub-committee all or any
of its powers, authorities and discretions under a provision of this Part (other
than this section, section 904, subsection 907(8), (10) or (11) or
section 909).
(3) A power, authority or discretion delegated under subsection (2)
may be exercised by members forming a majority of the sub-committee as if that
power, authority or discretion had been conferred by this Part on a majority of
the members of the sub-committee.
(4) A delegation under this section may at any time, by resolution of the
board, be varied or revoked.
(5) The board may at any time, by resolution, remove a member of a
sub-committee and may, by resolution, fill a vacancy arising in the membership
of the sub-committee.
(1) A person is not to be admitted to:
(a) membership of a securities exchange; or
(b) membership of a partnership in a member firm recognised by a
securities exchange;
unless the person has paid to the securities exchange, as agent for the
Commonwealth, the levy known as securities exchange (application for membership)
fidelity fund contribution.
Note: For the imposition and amount of the levy, see the
Corporations (Securities Exchanges Levies) Act 2001.
(2) A person who is a member of a securities exchange must, on or before
31 March in each year, pay to the securities exchange, as agent for the
Commonwealth, the levy known as futures organisation (annual membership)
fidelity fund contribution.
Note: For the imposition and amount of the levy, see the
Corporations (Securities Exchanges Levies) Act 2001.
(3) Whenever an amount of levy (the levy amount) is paid
under this section, or under subsection 8(3) of the Corporations (Securities
Exchanges Levies) Act 2001, to a securities exchange as agent for the
Commonwealth:
(a) the securities exchange must pay an amount equal to the levy amount to
the Commonwealth; and
(b) the Consolidated Revenue Fund is appropriated by that amount for the
purpose of payment to the securities exchange; and
(c) the Commonwealth must pay the amount so appropriated to the securities
exchange; and
(d) the securities exchange must pay the amount it receives under
paragraph (c) into its fidelity fund.
(4) A payment of an amount to a securities exchange as required by
paragraph (3)(c) in respect of a particular levy amount is subject to a
condition that, if the Commonwealth becomes liable to refund the whole or a part
of the levy amount, the securities exchange must pay to the Commonwealth an
amount equal to the amount that the Commonwealth is liable to refund. The
securities exchange may pay, out of its fidelity fund, any amount so required to
be paid to the Commonwealth.
(5) The Financial Management and Accountability Act 1997 does not
apply in relation to the payment of an amount of levy under this section to a
securities exchange as agent for the Commonwealth. However, the operation of
that Act in relation to the following payments is not affected.
(a) the payment of an amount to the Commonwealth as required by
paragraph (3)(a); or
(b) the payment of an amount by the Commonwealth as required by
paragraph (3)(c).
The securities exchange must, in accordance with the regulations, notify
the Commonwealth of payments of levy it receives as agent for the
Commonwealth.
(6) An amount payable by a securities exchange as required by
paragraph (3)(a) may be set off against an amount payable to the securities
exchange as required by paragraph (3)(c).
(1) In this section:
relevant person, in relation to a securities exchange, means
a member of the securities exchange:
(a) who has made 20 or more annual payments of the levy referred to in
subsection 902(2); and
(b) in respect of whom a payment from the fund has not been made or, if
such a payment has been made, has been repaid to the fund.
(3) Where the amount in a fidelity fund of a securities exchange exceeds
$2,000,000 or such lesser amount as is prescribed, the following paragraphs
apply in relation to relevant persons who are natural persons:
(a) on the retirement from business of such a relevant person, the board
may, in its discretion, pay to that person an amount determined in accordance
with subsection (5);
(b) on the death of such a relevant person without any payment having been
made to that person under paragraph (a), the board may, in its discretion,
pay an amount determined in accordance with subsection (5) to his or her
personal representative or to any person who was wholly or partly dependent on
the relevant person at the time of his or her death.
(4) Where the amount in a fidelity fund of a securities exchange exceeds
$2,000,000 or such lesser amount as is prescribed, the board may, in its
discretion, pay to a relevant person, being a body corporate, that ceases to be
a member of the securities exchange an amount determined in accordance with
subsection (5).
(5) The amount that may, under subsection (3) or (4), be paid out of
a fidelity fund to or in respect of a relevant person is the total amount of the
annual payments made by the relevant person of the levy referred to in
subsection 902(2) or such proportion of that amount as is for the time being
determined by the board either generally or in relation to the particular
relevant person, either with or without simple interest at a rate not exceeding
3% per annum.
(6) A determination of the board under subsection (5) must be in
writing and may be in respect of any person or any class of persons.
(7) The securities exchange may, by written notice published in the
Gazette:
(a) suspend the operation of paragraph (3)(a) or (b); or
(b) revoke any such suspension;
but, where the operation of one of those paragraphs is for the time being
suspended, the securities exchange must not suspend the operation of the other
paragraph.
(1) If, at any time, the amount of a fidelity fund is insufficient to pay
all amounts that, at that time are required to be paid under section 898,
the securities exchange concerned may determine that levy known as securities
exchange additional fidelity fund contribution is to be paid by each member of
the securities exchange who is liable to pay the levy referred to in subsection
902(2). When such a determination is made, the levy is payable to the securities
exchange, as agent for the Commonwealth, by each of those members.
Note: For the imposition and amount of the levy, see the
Corporations (Securities Exchanges Levies) Act 2001.
(2) An amount of levy payable under subsection (1) must be paid
within the time and in the manner specified by the securities exchange either
generally or in relation to a particular case.
(3) If a levy is imposed by subsection 8(4) of the Corporations
(Securities Exchanges Levies) Act 2001 on a person, the levy must be paid by
the time by which the levy under subsection 904(1) of the old Corporations Law
referred to in that subsection was required to be paid.
(4) Whenever an amount of levy (the levy amount) is paid
under this section, or under subsection 8(4) of the Corporations (Securities
Exchanges Levies) Act 2001, to a securities exchange as agent for the
Commonwealth:
(a) the securities exchange must pay an amount equal to the levy amount to
the Commonwealth; and
(b) the Consolidated Revenue Fund is appropriated by that amount for the
purpose of payment to the securities exchange; and
(c) the Commonwealth must pay the amount so appropriated to the securities
exchange; and
(d) the securities exchange must pay the amount it receives under
paragraph (c) into its fidelity fund.
(5) A payment of an amount to a securities exchange as required by
paragraph (4)(c) in respect of a particular levy amount is subject to a
condition that, if the Commonwealth becomes liable to refund the whole or a part
of the levy amount, the securities exchange must pay to the Commonwealth an
amount equal to the amount that the Commonwealth is liable to refund. The
securities exchange may pay, out of its fidelity fund, any amount so required to
be paid to the Commonwealth.
(6) The Financial Management and Accountability Act 1997 does not
apply in relation to the payment of an amount of levy under this section to a
securities exchange as agent for the Commonwealth. However, the operation of
that Act in relation to the following payments is not affected.
(a) the payment of an amount to the Commonwealth as required by
paragraph (4)(a); or
(b) the payment of an amount by the Commonwealth as required by
paragraph (4)(c).
The securities exchange must, in accordance with the regulations, notify
the Commonwealth of payments of levy it receives as agent for the
Commonwealth.
(7) An amount payable by a securities exchange as required by
paragraph (4)(a) may be set off against an amount payable to the securities
exchange as required by paragraph (4)(c).
(1) A securities exchange may, from its general funds, give or advance, on
such terms as the board thinks fit, any sums of money to its fidelity
fund.
(2) Money that is advanced under subsection (1) may at any time be
repaid from the fidelity fund to the general funds of the securities
exchange.
Money in a fidelity fund that is not immediately required for its
purposes may be invested by the securities exchange in any way in which trustees
are for the time being authorised by a law of a State or Territory in this
jurisdiction to invest trust funds or on deposit with an eligible money market
dealer.
(1) Subject to this Part, a securities exchange must hold and apply its
fidelity fund for the purpose of compensating persons who have, whether before
or after the commencement of this Part, suffered pecuniary loss because of a
defalcation, or fraudulent misuse of securities or documents of title to
securities or of other property, by:
(a) a member of the securities exchange who, when the loss was suffered,
was a sole trader; or
(b) a person who, when the loss was suffered, was a partner in a member
firm; or
(c) an employee of such a member or firm;
in respect of money, securities, documents of title to securities or other
property that, in the course of or in connection with that member’s or
firm’s business of dealing in securities, was or were entrusted to or
received by the member, a partner in the firm, or an employee of the member or
firm (whether before or after the commencement of this Part):
(d) on behalf of another person; or
(e) because the member, or the firm or a partner in the firm, was a
trustee of the money, securities, documents of title or other
property.
(2) Where a right to compensation does not arise under
subsection (1), a fidelity fund may, subject to this Part, be applied for
the purpose of paying to an official receiver or trustee within the meaning of
the Bankruptcy Act 1966 an amount not greater than the amount that the
official receiver or trustee certifies is required to make up or reduce the
total deficiency arising because the available assets of a bankrupt, being a
member of a securities exchange who is a sole trader or being a partner in a
member firm recognised by a securities exchange, are insufficient to satisfy the
debts arising from dealings in securities that have been proved in the
bankruptcy by creditors of the bankrupt.
(3) Subsection (2) applies in the case of a member of a securities
exchange or a partner in a member firm recognised by a securities exchange who
has made a composition with creditors, or has executed a deed of assignment or a
deed of arrangement, under Part X of the Bankruptcy Act 1966 in the same
way as that subsection applies in the case of such a member or partner who has
become bankrupt.
(4) For the purposes of subsection (2) as applying by virtue of
subsection (3):
(a) the reference in subsection (2) to a trustee is a reference to a
controlling trustee within the meaning of Part X of the Bankruptcy Act
1966; and
(b) the reference to debts proved in the bankruptcy is a reference to
provable debts in relation to the composition or deed within the meaning of that
Part; and
(c) references to the bankrupt are references to the person who made the
composition or executed the deed.
(5) Where a right to compensation does not arise under
subsection (1), a fidelity fund may, subject to this Part, be applied for
the purpose of paying to a liquidator of a body corporate that is being wound up
(being a body corporate that is a member of a securities exchange) an amount not
greater than the amount that the liquidator certifies is required to make up or
reduce the total deficiency arising because the available assets of the body
corporate are insufficient to satisfy the debts arising from dealings in
securities that have been proved in the winding up by creditors of the body
corporate.
(6) Except as otherwise provided in the following provisions of this
section, the amount or the sum of the amounts that may be paid under this
Part:
(a) for the purpose of compensating pecuniary loss as referred to in
subsection (1); or
(b) for the purpose of making payments under subsection (2) or
(5);
must not exceed, in respect of a member of a securities exchange who is a
sole trader or in respect of a member firm recognised by a securities exchange,
$500,000.
(7) For the purpose of calculating the amount or sum referred to in
subsection (6), an amount that is paid from a fidelity fund is, to the
extent to which that amount is repaid to the fund, to be disregarded.
(8) If a securities exchange considers, having regard to the ascertained
or contingent liabilities of the fidelity fund, that the assets of the fund so
permit, the securities exchange may, by notice published in the Gazette,
increase the total amount that may be applied from the fund under
subsection (6), and from the date of the publication of the notice until
the notice is revoked or varied the amount specified in the notice is the total
amount that may be applied as provided by this section.
(10) A notice under subsection (8) may be revoked or varied by the
securities exchange by notice published in the Gazette.
(11) If a securities exchange, having regard to the ascertained or
contingent liabilities of the fidelity fund, considers that the assets of the
fund so permit, the securities exchange may apply out of the fund such sums in
excess of the amount limited by or under this section as the securities
exchange, in its discretion, thinks fit in or towards the compensation of
persons who have suffered pecuniary loss as referred to in subsection (1)
or making a payment under subsection (2) or (5).
(12) If:
(a) any money, securities, documents of title to securities or other
property has been entrusted to or received by, a former member of securities
exchange or an employee of such a former member; and
(b) because of a defalcation, or the fraudulent misuse of the securities,
documents of title or other property, by the former member or employee, the
person by or from whom the securities, documents of title or other property was
so entrusted or received suffered pecuniary loss; and
(c) when the money, securities, documents of title or other property was
so entrusted or received, the person suffering the pecuniary loss had reasonable
grounds for believing and did believe that the former member was a member of the
securities exchange concerned;
a reference in this section to a member of a securities exchange includes a
reference to that former member.
(13) A reference in this section to an employee of a member or former
member of a securities exchange includes, in the case of a member or former
member that is a body corporate, a reference to an officer of the body
corporate.
(14) A reference in this section to a defalcation, or to a fraudulent
misuse of securities or documents of title to securities or of other property,
is a reference to a defalcation, or to such a fraudulent misuse, wherever
occurring.
(1) Subject to this Part, a person who has, whether before or after the
commencement of this Part, suffered pecuniary loss as referred to in subsection
907(1) is entitled to claim compensation from the fidelity fund of the relevant
securities exchange and to take proceedings in the Court as provided in this
Part against the securities exchange to establish that claim.
(2) A person does not have a claim against a fidelity fund of a securities
exchange in respect of:
(a) pecuniary loss suffered before 1 July 1981 or on a day on which
the securities exchange was a participating exchange; or
(b) pecuniary loss in respect of money or other property suffered after
the money or property had, in due course of the administration of a trust,
ceased to be under the sole control of a member of the securities exchange or of
a partner or partners in a member firm recognised by the securities
exchange.
(3) Subject to this Part, the amount that a claimant is entitled to claim
as compensation from a fidelity fund of a securities exchange is the amount of
the actual pecuniary loss suffered by the claimant (including the reasonable
costs of, and disbursements incidental to, the making and proof of the claim)
less the amount or value of all money or other benefits received or receivable
by the claimant from a source other than the fund in reduction of the
loss.
(4) In addition to any compensation that is payable under this Part,
interest is payable out of the fidelity fund on the amount of the compensation
less any amount attributable to costs and disbursements, at the rate of 5% per
annum (or, if another rate is prescribed, that other rate) calculated from and
including the day on which the pecuniary loss was suffered until the day on
which the claim is satisfied.
(1) Where all persons who have submitted claims under section 908
have been fully compensated in accordance with the provisions of this Part for
pecuniary loss as referred to in subsection 907(1) suffered in relation to money
or other property entrusted to or received by a partner in a member firm
recognised by a securities exchange, any other partner in that firm who has made
payment to a person in compensation for loss suffered by that person in relation
to that money or property is subrogated to the extent of that payment to all the
rights and remedies of that person against the fidelity fund if the board,
having regard to all the circumstances, determines that the partner was in no
way a party to the loss and acted honestly and reasonably in the
matter.
(2) If a partner in a member firm feels aggrieved by the determination of
a board under subsection (1), the partner may, within 28 days after
receiving notice of the determination, appeal to the Court against the
determination by lodging a notice of appeal in the prescribed form.
(3) The appellant must, on the day on which notice of appeal is lodged
with the Court, lodge a copy of the notice with the securities
exchange.
(4) The Court must inquire into and decide upon the appeal and, for that
purpose, may do all such matters and things, and may do those matters and things
in the same way and to the same extent, as it is empowered to do in the exercise
of its ordinary jurisdiction.
(5) Without limiting the generality of subsection (4), if the Court
is of opinion having regard to all the circumstances that the appellant was not
a party to the defalcation or fraudulent misuse of securities or documents of
title to the securities or of other property from which the pecuniary loss arose
and acted honestly and reasonably in the matter, it may order that the appellant
is to be, to the extent of any payment made by the appellant, subrogated to the
rights and remedies, in relation to the fidelity fund of the relevant securities
exchange, of the person to whom the appellant made such a payment.
(1) A securities exchange may publish, in each State and Territory, in a
daily newspaper circulating generally in the State or Territory, a notice in the
prescribed form specifying a date, not being earlier than 3 months after the
publication of the notice, on or before which claims for compensation from the
fidelity fund, in relation to the person specified in the notice, may be
made.
(2) A claim for compensation from a fidelity fund of a securities exchange
in respect of a pecuniary loss must be made in writing to the securities
exchange:
(a) where a notice under subsection (1) has been published, on or
before the date specified in the notice; or
(b) where no such notice has been published, within 6 months after the
claimant became aware of the pecuniary loss;
and a claim that is not so made is barred unless the securities exchange
otherwise determines.
(3) A securities exchange, a member of a board of a securities exchange or
a member or employee of a securities exchange has qualified privilege in respect
of the publication of a notice under subsection (1).
(1) Subject to this Part, a board may allow and settle a proper claim for
compensation from a fidelity fund of a securities exchange at any time after the
occurrence of the pecuniary loss in respect of which the claim arose.
(2) Subject to subsection (3), a person must not bring proceedings
under this Part against a securities exchange without leave of the board
unless:
(a) the board has disallowed the claim; and
(b) the claimant has exhausted all relevant rights of action and other
legal remedies for the recovery of the money, securities, documents of title to
securities or other property in respect of which the pecuniary loss occurred,
being rights and remedies that are available against:
(i) the member of the securities exchange in relation to whom the claim
arose; and
(ii) all other persons who are liable in respect of the loss suffered by
the claimant;
other than any right or remedy that the claimant may have under
section 908 against another securities exchange.
(3) A person who has been refused leave by the board of a securities
exchange under subsection (2) may apply to the Court for leave to bring
proceedings against the securities exchange and the Court may make such order in
the matter as it thinks just.
(4)