Commonwealth of Australia Bills Commonwealth of Australia Bills[Index] [Search] [Download] [Related Items] [Help]
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) A board, after disallowing, whether wholly or partly, a claim for
compensation from a fidelity fund of a securities exchange, must serve notice of
the disallowance in the prescribed form on the claimant or the claimant’s
solicitor.
(5) Proceedings against a securities exchange in respect of a claim that
has been disallowed by a board must not be brought after 3 months after the
service of the notice of disallowance referred to in
subsection (4).
(6) In proceedings brought to establish a claim, evidence of an admission
or confession by, or other evidence that would be admissible against, the person
against whom a defalcation or fraudulent misuse of property is alleged is
admissible to prove the defalcation or fraudulent misuse even if the person is
not the defendant in or a party to those proceedings, and all defences that
would have been available to that person are available to the securities
exchange.
(7) The board or, where proceedings are brought to establish a claim, the
Court, if satisfied that there was a defalcation or fraudulent misuse of
property on which to found the claim, may allow the claim and act accordingly,
even if:
(a) the person against whom the defalcation or fraudulent misuse of
property is alleged has not been convicted or prosecuted; or
(b) the evidence on which the board or Court, as the case may be, acts
would not be sufficient to establish the guilt of that person on a criminal
trial in respect of the defalcation or fraudulent misuse of property.
(1) Where in proceedings brought to establish a claim the Court is
satisfied that there was a defalcation or fraudulent misuse of property on which
to found the claim and that otherwise the claimant has a valid claim, the Court
must, by order:
(a) declare the fact and the date of the defalcation or fraudulent misuse
of property and the amount of the claim; and
(b) direct the board to allow the claim as so declared and deal with it in
accordance with this Part.
(2) In any such proceedings all questions of costs are in the discretion
of the Court.
A securities exchange may at any time require a person to produce and
deliver any securities, documents or statements of evidence necessary to support
a claim made or necessary for the purpose either of:
(a) exercising its rights against a member of the securities exchange or a
partner or the partners in a member firm recognised by the securities exchange
or any other person; or
(b) enabling criminal proceedings to be taken against a person in respect
of a defalcation or fraudulent misuse of property;
and in default of delivery of any such securities, documents or statements
of evidence by the first-mentioned person, the board of the securities exchange
may disallow any claim by that person under this Part.
On payment out of a fidelity fund of a securities exchange of any money
in respect of a claim under this Part, the securities exchange is subrogated to
the extent of that payment to all the rights and remedies of the claimant in
relation to the loss suffered by the claimant from the defalcation or fraudulent
misuse of property.
Money or other property belonging to a securities exchange, other than
the fidelity fund, is not available for the payment of a claim under this Part,
whether the claim is allowed by the board or is made the subject of an order of
the Court.
(1) Where the amount in a fidelity fund of a securities exchange is
insufficient to pay the whole of the amount of all claims against it that have
been allowed or in respect of which orders of the Court have been
made:
(a) the amount in the fund must, subject to subsection (2), be
apportioned among the claimants in such manner as the board thinks equitable;
and
(b) such a claim so far as it then remains unpaid is taken to be charged
against future receipts of the fund and paid out of the fund when moneys are
available in the fund.
(2) Where the total of all claims that have been allowed or in respect of
which orders of the Court have been made in relation to defalcation or
fraudulent misuses of property by or in connection with a sole trader or partner
in a member firm recognised by a securities exchange exceeds the total amount
that may, under section 907, be paid under this Part in respect of that
sole trader or member firm:
(a) the total amount must be apportioned among the claimants in such
manner as the board thinks equitable; and
(b) on payment out of the fund of that total amount in accordance with
that apportionment all such claims and any orders relating to those claims and
all other claims against the fund that may subsequently arise or be made in
respect of defalcations or fraudulent misuses of property by or in connection
with that sole trader or member firm are discharged.
(1) A securities exchange may enter into a contract with a person carrying
on fidelity insurance business under which the securities exchange will be
insured or indemnified to the extent and in the manner provided by the contract
against liability in respect of claims under this Part.
(2) Such a contract may be entered into in relation to members of the
securities exchange generally, in relation to particular members named in the
contract, or in relation to members generally excluding particular members named
in the contract.
(3) Each of the following persons, namely, a securities exchange, a member
or employee of a securities exchange or board and a member of a management
sub-committee has qualified privilege in respect of the publication of a
statement that a contract entered into under this section does or does not apply
with respect to a particular member of the securities exchange.
A claimant against a fidelity fund of a securities exchange does not have
a right of action against a person with whom a contract of insurance or
indemnity is made under this Part in respect of such a contract or a right or
claim with respect to any money paid by the insurer in accordance with such a
contract.
(1) In this Part, unless the contrary intention appears:
borrower, in relation to a guaranteed securities loan, has
the meaning given by section 954B.
claim means a claim under Division 6, 6A, 6B, 6C, 7, 7A
or 8.
clearing nominee, in relation to a settlement authority,
means a subsidiary of the settlement authority operated for the purpose of
facilitating the transfer of securities.
eligible exchange means:
(a) the Exchange; or
(b) a securities exchange that is neither the Exchange nor an Exchange
subsidiary.
excluded person has the meaning given by
section 921.
Fund provisions means the provisions of this Part.
guaranteed securities loan has the meaning given by
section 954B.
minimum amount means:
(a) if a determination is in force under section 936—the amount
specified in the determination as the minimum amount of the Fund for the
purposes of the Fund provisions; or
(b) in any other case—$15,000,000.
obligations, in relation to a member or member organisation
of a participating exchange, in relation to a person, includes obligations
arising under a law, under the participating exchange’s business rules,
under the SCH business rules or under an agreement between:
(a) in any case—the member or member organisation and the person;
or
(b) if the member is a partner in a member organisation of the
participating exchange—the last-mentioned member organisation and the
person.
orderly market means an orderly market on a stock market of a
participating exchange or of an Exchange subsidiary.
participating exchange means an eligible exchange that is a
member of SEGC.
property includes money, securities and scrip.
relative, in relation to a person, means a parent or remoter
lineal ancestor, son, daughter or remoter issue, or brother or sister, of the
person.
relevant Act means the Australian Stock Exchange and
National Guarantee Fund Act 1987.
relevant commencement means 1 April 1987.
replacement agreement, in relation to an agreement that has
been novated, has the meaning given by section 924A.
reportable transaction means a sale or purchase, by a member
organisation (in this definition called the first dealer) of a
participating exchange, of securities, where the securities are quoted on a
stock market of a participating exchange or of an Exchange subsidiary when the
agreement for the sale or purchase is made and:
(a) in any case—the participating exchange’s business rules,
as in force when the agreement for the sale or purchase is made, require the
first dealer to report the sale or purchase to the participating exchange;
or
(b) if the sale or purchase is to or from, as the case may be, a member
organisation (in this definition called the second dealer) of a
participating exchange—the last-mentioned participating exchange’s
business rules, as in force when the agreement for the sale or purchase is made,
require the second dealer to report to the last-mentioned participating exchange
the purchase or sale of the securities by the second dealer from or to, as the
case may be, the first dealer.
securities:
(a) except in Division 7—includes marketable securities, or
marketable rights, within the meaning of Division 3 of Part 7.13;
and
(b) in Division 7—has the meaning given by subsection
955(1).
settlement authority means a participating exchange or the
securities clearing house.
settlement documents, in relation to a transaction (other
than a guaranteed securities loan), means documents the supply of which in
accordance with the agreement for the transaction:
(a) if the agreement has not been discharged—is sufficient;
or
(b) if the agreement has been discharged, whether by performance or
otherwise—would, if the agreement had not been discharged, be
sufficient;
to discharge the obligations of the seller under the agreement, in so far
as those obligations relate to the supply of documents in connection with the
transaction.
TDS nominee, in relation to the transfer delivery service
provisions of a settlement authority, means the clearing nominee referred to in
the definition of transfer delivery service provisions.
transaction, except in Division 6B, means a sale or
purchase of securities or a guaranteed securities loan.
transfer, except in Division 7, has a meaning affected
by section 924.
transfer delivery service provisions, in relation to a
settlement authority, means provisions of the business rules of the settlement
authority under which a person or partnership may elect to bring about a
transfer of securities of a particular kind and number to another person or
partnership by:
(a) the first-mentioned person or partnership transferring securities of
that kind and number to a clearing nominee of the settlement authority;
and
(b) the clearing nominee transferring securities of that kind and number
to the other person or partnership.
transfer documents, except in Division 7, has the
meaning given by section 924.
(2) For the purposes of this Part, a sale and purchase of securities are
taken to consist of 2 distinct transactions, namely, the sale of the securities
by the seller to the buyer and the purchase of the securities by the buyer from
the seller.
(3) Except so far as the contrary intention appears, a reference in this
Part to a sale, or to a purchase, includes a reference to a sale or purchase the
agreement for which is made outside this jurisdiction, whether in Australia or
not.
(5) A reference in this Part to a business being carried on in this
jurisdiction includes a reference to the business being carried on both in this
jurisdiction and outside it, whether in Australia or not.
(6) A person who, or a partner in a partnership that, contravenes a
provision of this Part is not guilty of an offence.
(1) In this Part, excluded person, in relation to a member
of a participating exchange, means:
(a) in any case—the member; or
(b) if the member is a member organisation of the participating exchange
and is not a body corporate:
(i) a person who is the spouse, or who is a relative, of the member;
or
(ii) a trustee of a trust in relation to which the member or a person of a
kind referred to in subparagraph (i) is capable of benefiting; or
(iii) a body corporate of which the member is an officer, or in which the
member or a person of a kind referred to in subparagraph (i) has, or the
member and such a person, the member and 2 or more such persons, or 2 or more
such persons, together have, a controlling interest; or
(c) if the member is a member organisation of the participating exchange
and is a body corporate:
(i) a person who is an officer of the body corporate; or
(ii) a body corporate that is related to the first-mentioned body
corporate; or
(iii) a person who is the spouse, or who is a relative, of a person of a
kind referred to in subparagraph (i); or
(iv) a trustee of a trust in relation to which a person of a kind referred
to in subparagraph (i) or (iii) is capable of benefiting; or
(v) a body corporate in which a person of a kind referred to in
subparagraph (i) or (iii) has, or 2 or more such persons together have, a
controlling interest; or
(d) if the member is a partner in a member organisation of the
participating exchange and is not a body corporate:
(i) a person who is a partner in the member organisation; or
(ii) a person who is the spouse, or who is a relative, of a partner (not
being a body corporate) in the member organisation; or
(iii) a trustee of a trust in relation to which a person of a kind
referred to in subparagraph (i) or (ii) is capable of benefiting;
or
(iv) a person who is an officer of a body corporate that is a partner in
the member organisation; or
(v) a body corporate of which a person of a kind referred to in
subparagraph (i), (ii) or (iii) is an officer, or in which such a person
has, or 2 or more such persons together have, a controlling interest;
or
(e) if the member is a partner in a member organisation of the
participating exchange and is a body corporate:
(i) a person who is an officer of a body corporate that is a partner in
the member organisation; or
(ii) a body corporate that is related to the first-mentioned body
corporate; or
(iii) a person who is a partner in the member organisation; or
(iv) a person who is the spouse, or who is a relative, of a person (other
than a body corporate) of a kind referred to in subparagraph (i) or (iii);
or
(v) a trustee of a trust in relation to which a person of a kind referred
to in subparagraph (i), (iii) or (iv) is capable of benefiting;
or
(vi) a body corporate in which a person of a kind referred to in
subparagraph (i), (iii) or (iv) has, or 2 or more such persons together
have, a controlling interest.
(2) A reference in subsection (1) to a relative of a person includes
a reference to a relative of the spouse (if any) of the person.
(3) A reference in subsection (1) to an officer of a body corporate
is a reference to:
(a) a director, secretary or executive officer of the body corporate;
or
(b) a person who is an officer of the body corporate by virtue of
paragraph (b), (c), (d) or (e) of the definition of officer
in section 9.
(1) For the purposes of this Part, a body corporate becomes insolvent at a
particular time if, and only if, at that time:
(aa) an administrator of the body corporate is appointed under
section 436A, 436B or 436C; or
(a) the body corporate commences to be wound up or ceases to carry on
business; or
(b) a receiver, or a receiver and manager, of property of the body
corporate is appointed, whether by a court or otherwise; or
(c) the body corporate enters into a compromise or arrangement with its
creditors or a class of them.
(3) For the purposes of this Part, a natural person becomes insolvent at a
particular time if, and only if, at that time:
(a) a creditor’s petition or a debtor’s petition is presented
under Division 2 or 3, as the case may be, of Part IV of the Bankruptcy
Act 1966 against:
(i) the person; or
(ii) a partnership in which the person is a partner; or
(iii) 2 or more joint debtors who include the person; or
(b) the person’s property becomes subject to control under
Division 2 of Part X of the Bankruptcy Act 1966; or
(c) the person executes a deed of assignment or deed of arrangement under
Part X of the Bankruptcy Act 1966; or
(d) the person’s creditors accept a composition under Part X of the
Bankruptcy Act 1966.
(4) A reference in subsection (3) to a Division or Part of the
Bankruptcy Act 1966 includes a reference to provisions of a law of an
external Territory, or a country other than Australia or an external Territory,
that correspond to that Division or Part.
For the purposes of this Part, money is taken to be invested in a
permitted manner if, and only if, it is invested:
(a) in a 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
(b) on deposit with an eligible money market dealer.
(1) This section has effect for the purposes of this Part (other than
Division 7).
(2) A person (the transferor) transfers securities to
another person (the transferee) if, and only if:
(a) in the case of an SCH-regulated transfer—the transferor does, or
causes to be done, all things that the SCH business rules require to be done by
or on behalf of the transferor to effect the transfer; or
(b) in any other case—the transferor delivers, or causes to be
delivered, to the transferee documents (transfer documents) that
are sufficient to enable the transferee:
(i) except in the case of marketable rights within the meaning of
Division 3 of Part 7.13—to become registered as the holder of
the securities; or
(ii) in the case of such marketable rights—to obtain the issue to
the transferee of the securities to which the marketable rights
relate;
without the transferor doing anything more, or causing anything more to
be done, by way of executing or supplying documents.
(3) If a person:
(a) causes property (other than securities or money) to be transferred to
another person; or
(b) causes documents that are sufficient to enable another person to
become the legal owner of property (other than securities or money) to be
delivered to another person;
the first-mentioned person is taken to have transferred the property to the
other person.
(4) If a person causes money to be paid to another person, the
first-mentioned person is taken to have paid the money to the other
person.
(5) In this section:
person includes a partnership.
For the purposes of this Part, an agreement is novated if, and only if,
because of the operation of a settlement authority’s business rules, the
agreement is discharged and replaced with one or more other agreements (each of
which is called a replacement agreement).
If:
(a) either:
(i) a number of securities are transferred to a participating exchange or
a member organisation of a participating exchange in respect of a number of
transactions; or
(ii) a payment is made to a participating exchange or a member
organisation of a participating exchange in respect of a number of transactions;
and
(b) apart from this section, it is not possible to tell, for the purposes
of this Part, how many of the securities are transferred, or how much of the
payment is made, in respect of each of the transactions; and
(c) the business rules of the participating exchange include provisions
determining how many of the securities are transferred, or how much of the
payment is made, in respect of each of the transactions;
those provisions have effect accordingly for the purposes of this
Part.
(1) Subject to subsection (3), the Minister may nominate in writing
as the Securities Exchanges Guarantee Corporation a body corporate (whenever
incorporated) that is, for the purposes of the national corporate laws, a
company limited by guarantee.
(2) ASIC must cause a copy of a nomination by the Minister under
subsection (1) to be published in the Gazette.
(3) The Minister may only nominate a body corporate under
subsection (1) if he or she is satisfied that:
(a) the Exchange is a member of the body corporate; and
(b) none of the members of the body corporate is a person other than an
eligible exchange; and
(c) the body corporate’s constitution provides that no person, other
than a person of a kind referred to in paragraph (b), may become or remain
a member of the body corporate; and
(d) the body corporate will, if nominated under subsection (1), be
able to perform and exercise SEGC’s functions and powers under the Fund
provisions adequately and with due regard to the interests of the public;
and
(e) the body corporate has obtained, or will within a reasonable period
after being nominated under subsection (1) obtain, indemnity insurance in
respect of its liabilities for:
(i) negligence in; and
(ii) defalcation, or fraudulent misuse of property, by an officer,
employee or agent of the body corporate in connection with;
the performance or exercise of SEGC’s functions or powers under the
Fund provisions, or has made or will make other satisfactory provisions for
meeting those liabilities; and
(f) the body corporate’s business rules make satisfactory
provision:
(i) for ensuring the safety of property received by the body corporate;
and
(ii) generally for the protection of the interests of the
public.
(1) In addition to the legal capacity and powers it has because of
section 124, SEGC has such functions and powers as are conferred, or
expressed to be conferred, on it by this Part.
(2) Section 125 does not apply in relation to a function or power
conferred, or expressed to be conferred, as mentioned in subsection (1) of
this section.
(3) SEGC must perform the functions, and may exercise the powers, that are
conferred, or expressed to be conferred, on it by or under this Part.
(1) The Board may, by resolution, appoint a management sub-committee of
not fewer than 3 nor more than 5 persons, at least one of whom is a member of
the Board.
(2) The Board may, by resolution, delegate to a sub-committee appointed by
it under this section all or any of its powers, authorities and discretions
under a provision of this Part (other than this section, section 944, and
subsections 954(5), 954F(2), 954Q(2), 954Y(2), 959(3), 961E(3) and
969(3)).
(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 by the Board 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 appointed by it under this section and may, by resolution, fill a
vacancy arising in the membership of the sub-committee.
(5A) A delegation under this section continues in force even if there is a
change in the membership of the Board or of the sub-committee.
(6) Any power, authority or discretion exercised under this section by, or
by a majority of, a sub-committee is taken to have been exercised by the
Board.
(7) Any remuneration or expenses paid to a member of a sub-committee
appointed under this section are taken to be expenses incurred in the
administration of the Fund.
(1) A management sub-committee may delegate to:
(a) a member of the Board; or
(b) a member of the sub-committee; or
(c) an officer of SEGC;
all or any of the powers, authorities and discretions that have been
delegated under subsection 927(2) to the sub-committee.
(2) A delegation must be in writing signed by a majority of the members of
the sub-committee.
(3) A delegation may be varied or revoked at any time by writing signed by
a majority of the members of the sub-committee.
(4) A delegation continues in force even if there is a change in the
membership of the sub-committee.
(5) A power, authority or discretion performed or exercised by a person
under a delegation is taken to have been exercised by the Board.
(6) A delegation of a power, authority or discretion does not prevent the
performance or exercise of the power, authority or discretion by the Board or by
the sub-committee that made the delegation.
(7) Section 109ZE has effect in relation to a delegation subject to
this section.
(8) In this section:
delegation means a delegation under this section.
management sub-committee means a management sub-committee
appointed under subsection 927(1).
(1) Where an amendment is made, by way of rescission, alteration or
addition, to its business rules, SEGC must, as soon as practicable after the
making of the amendment, give written notice of the amendment to ASIC.
(2) A notice under subsection (1) must:
(a) set out the text of the amendment; and
(b) specify the date on which the amendment was made; and
(c) contain an explanation of the purpose of the amendment.
(3) If the notice required to be given by subsection (1) is not given
within 21 days after the making of the amendment, the amendment ceases to have
effect.
(4) Where ASIC receives a notice under this section, it must as soon as
practicable send a copy of the notice to the Minister.
(5) The Minister may, within 28 days after the receipt by ASIC of a notice
under this section, disallow the whole or a specified part of the amendment to
which the notice relates.
(6) Where the Minister disallows the whole or a part of an amendment to
which a notice under this section relates, ASIC must as soon as practicable give
notice of the disallowance to SEGC and, upon receipt by SEGC of the notice of
disallowance, the amendment, to the extent of the disallowance, ceases to have
effect.
In this Division, a reference to borrowing money includes a reference to
obtaining credit.
(1) The National Guarantee Fund established by the SEGC under the old
Corporations Laws of the States and Territories continues in existence as the
National Guarantee Fund for the purposes of this Part.
(2) Without limiting subsection (1), the assets of the National
Guarantee Fund kept under the old Corporations Laws of the States and
Territories immediately before the commencement of this Act are assets of the
National Guarantee Fund kept under this Part.
(1) SEGC must keep the Fund and the Board must administer it on
SEGC’s behalf.
(2) The assets of the Fund are the property of SEGC, but must be kept
separate from all other property and must be held in trust for the purposes set
out in the Fund provisions.
The Fund consists of:
(a) the assets covered by subsection 928B(2); and
(b) money paid into the Fund under subsection 985(1); and
(c) property that has vested in SEGC, and become part of the Fund by
virtue of subsection 985(2); and
(d) money paid into the Fund under subsection 891(2); and
(e) money paid into the Fund under section 938 or 940; and
(f) the interest and profits from time to time accruing from the
investment of the Fund and paid into the Fund under subsection 935(2);
and
(fa) money paid into the Fund under subsection 930B(2); and
(g) money recovered by or on behalf of SEGC in the exercise of a right of
action that SEGC has by virtue of the Fund provisions; and
(h) money paid by an insurer under a contract of insurance or indemnity
entered into by SEGC under section 982; and
(j) money paid to SEGC for the purposes of a claim under Division 6,
6A or 6C; and
(k) all other money or other property lawfully paid into, or forming part
of, the Fund.
(1) If the Board considers that, in the interests of the sound financial
management of the Fund, money should be borrowed for the purpose of meeting a
payment due out of the Fund, SEGC may borrow money for that purpose on such
terms and conditions as the Board thinks appropriate.
(2) SEGC may give security, including security over the assets of the
Fund, in respect of SEGC’s obligations in relation to a borrowing under
subsection (1).
(3) If:
(a) money borrowed under subsection (1) is a loan from a
participating exchange; and
(b) the participating exchange borrowed money for the purpose of making
the loan to SEGC;
SEGC may give security, including security over the assets of the Fund, in
relation to the participating exchange’s obligations in respect of the
borrowing referred to in paragraph (b).
(1) This section applies where money borrowed by SEGC under subsection
930A(1) is paid to SEGC.
(2) SEGC must pay the money into the Fund.
(3) If:
(a) the money was borrowed for the purpose of meeting a payment due out of
the Fund; and
(b) the borrowed money has been paid into the Fund; and
(c) the payment due out of the Fund has not yet been made;
then, for the purposes of Division 4, the amount in the Fund is taken
to be reduced by the amount of the borrowed money.
(1) This section applies where money borrowed by SEGC under subsection
930A(1) is not paid to SEGC but is payable to other persons at the direction of
SEGC.
(2) SEGC must not direct that any of the money be paid to a person unless
the payment is of a kind that can, under section 932, be made out of the
Fund.
The money in the Fund must, until invested or applied in accordance with
the Fund provisions, be kept in an account, or, at the discretion of the Board,
in 2 accounts, in an Australian ADI separate from any account or accounts in
which money not forming part of the Fund is kept.
(1) Subject to this Part, there must be paid out of the Fund, in such
order as the Board considers appropriate:
(a) amounts, including costs, disbursements and interest, that the Fund
provisions require to be paid in connection with claims; and
(b) all legal and other expenses incurred in investigating or defending
claims or incurred in relation to the Fund or in the exercise by SEGC or the
Board of the rights and powers vested in it by the Fund provisions in relation
to the Fund; and
(ba) money payable to a person or partnership under section 972A;
and
(c) money payable to a participating exchange under section 944;
and
(da) to the extent that the money referred to in section 935 is
insufficient for the purpose, payments of principal, interest and other amounts
payable by SEGC in respect of money borrowed, and security given, under
section 930A; and
(d) to the extent that the money referred to in section 935 is
insufficient for the purpose, premiums payable in respect of contracts of
insurance or indemnity entered into by SEGC under section 982;
and
(e) to the extent that the money referred to in section 935 is
insufficient for the purpose, the expenses incurred in the administration of the
Fund, including the salaries and wages of persons employed by SEGC or the Board
in relation to the Fund; and
(f) any other money payable out of the Fund in accordance with this
Chapter.
(2) In paragraphs (1)(a) and (b), claim means a claim
under Division 6, 6A, 6B, 6C, 7, 7A or 8 or a claim that, for the purposes
of Division 10, is a transferred claim in relation to a joining
exchange.
(3) Where:
(a) an amount is payable out of the Fund in connection with a claim by a
person against SEGC under Division 6, 6A, 6B, 6C, 7 or 7A that has been
allowed; and
(b) an amount is payable out of the Fund in connection with a claim by a
person against SEGC under Division 8 that has been allowed;
then, regardless of the order in which those persons became respectively
entitled to make those claims, the amount referred to in paragraph (a) must
be paid out of the Fund in priority to the amount referred to in
paragraph (b).
(1) SEGC must establish and keep proper accounts of the 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) SEGC must appoint a registered company auditor to audit the accounts
of the Fund.
(3) The auditor must audit the accounts of the Fund and each balance sheet
and must give a report on the accounts and balance sheet to the Board within one
month after the balance sheet is made out.
(4) SEGC must, within 14 days after a report is given to the Board, give
to ASIC a copy of the report and a copy of the balance sheet.
(5) SEGC must cause a copy of each report, and a copy of the balance sheet
to which it relates, to be laid before the annual general meeting of each
participating exchange next following the making of that report.
(1) Money in the Fund that, in the opinion of the Board, is not
immediately required for the purposes of SEGC may be invested by SEGC in a
permitted manner.
(2) Property in which money is invested under subsection (1) forms
part of the Fund.
(3) Subject to subsection (4), the Board may, with the approval of
ASIC, appoint a person to invest on behalf of SEGC money to which
subsection (1) applies.
(4) ASIC must not grant approval to the appointment of a person under
subsection (3) unless it is satisfied that:
(a) the person has appropriate qualifications and expertise to perform the
duties of the appointment; and
(b) SEGC has adequate indemnity insurance in respect of its liabilities
for any negligence, or any defalcation or fraudulent misuse of property, by the
person in the performance of those duties or has made other satisfactory
provisions for meeting those liabilities.
(5) A person appointed under subsection (3) must perform the duties
of the appointment in accordance with the directions of the Board and subject to
such conditions (if any) as the Board imposes.
(1) The interest and profits from time to time accruing from the
investment of the Fund must be applied by SEGC to pay:
(a) the expenses incurred in the administration of the Fund, including the
salaries and wages of persons employed by SEGC or the Board in relation to the
Fund; and
(b) all premiums payable in respect of contracts of insurance or indemnity
entered into by SEGC under section 982; and
(c) principal, interest and other amounts payable by SEGC in respect of
money borrowed, and security given, under section 930A.
(2) An amount of interest or profit that accrues from the investment of
the Fund and is not immediately required for the purposes referred to in
subsection (1) must be paid into the Fund.
SEGC may, with the written approval of the Minister, determine, by notice
published in the Gazette, an amount (whether greater than, or less than,
$15,000,000) to be the minimum amount of the Fund for the purposes of the Fund
provisions.
In this Division:
dealer means a member organisation of a participating
exchange.
(1) In this section:
leviable dealer, in relation to a transaction,
means:
(a) if, when the transaction is entered into, a determination under
subsection (10) is in force in relation to a class of transactions that
includes the first-mentioned transaction—the dealer prescribed by the
determination; or
(b) otherwise:
(i) in the case of a sale of securities—the dealer selling the
securities; or
(ii) in the case of a purchase of securities—the dealer buying the
securities; or
(iii) in the case of a guaranteed securities loan—the
borrower.
leviable transaction means:
(a) a sale or purchase of securities by a person or partnership where, as
at the time when the agreement for the sale or purchase is made:
(i) the sale or purchase is a reportable transaction as defined in
subsection 920(1); and
(ii) the person or partnership is a member organisation of a participating
exchange and carries on a securities business in this jurisdiction; or
(b) a guaranteed securities loan where, as at the time when the loan is
entered into, the borrower carries on a securities business in this
jurisdiction.
(2) If the amount in the Fund is less than the minimum amount, SEGC may,
whether or not it also makes a determination under section 940, determine
in writing that a levy is payable on leviable transactions. The levy is payable
to the Commonwealth in accordance with this section.
Note: For the imposition and rate of the levy, see the
Corporations (National Guarantee Fund Levies) Act 2001.
(3) A levy under subsection (2) is payable in respect of a leviable
transaction included in a class of transactions, or in any of 2 or more classes
of transactions, determined in writing by SEGC for the purposes of the
levy.
(4) If SEGC makes or varies a determination under subsection (3), it
must give to each participating exchange a copy of the determination, or of the
variation and of the determination as varied, as the case may be.
(5) If an amount of levy is payable under this section in respect of a
leviable transaction, the leviable dealer in relation to the transaction
must:
(a) pay the amount of the levy to a participating exchange of which the
dealer is a member, as agent for the Commonwealth; and
(b) if, but for this subsection, the dealer would not be required by a
provision of a law or by the participating exchange’s business rules to
give to the participating exchange particulars of the transaction sufficient to
enable the participating exchange to ascertain the amount of levy—so give
such particulars to the participating exchange;
within the period, and in the manner, specified by the participating
exchange in writing either generally or in relation to a class of transactions
that includes the first-mentioned transaction.
(6) Whenever an amount of levy (the levy amount) is paid
under this section, or under subsection 6(1) of the Corporations (National
Guarantee Fund Levies) Act 2001, to a participating exchange as agent for
the Commonwealth:
(a) the participating exchange must pay an amount equal to the levy amount
to SEGC, as agent for the Commonwealth; and
(b) SEGC must pay an amount equal to the amount so paid to it to the
Commonwealth; and
(c) the Consolidated Revenue Fund is appropriated by that amount for the
purpose of payment to SEGC; and
(d) the Commonwealth must pay the amount so appropriated to SEGC;
and
(e) SEGC must pay the amount it receives under paragraph (d) into the
Fund.
(7) A payment of an amount to SEGC as required by paragraph (6)(d) 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,
SEGC must pay to the Commonwealth an amount equal to the amount that the
Commonwealth is liable to refund. SEGC may pay, out of the Fund, any amount so
required to be paid to the Commonwealth.
(8) 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
participating exchange, or to SEGC, 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 (6)(b); or
(b) the payment of an amount by the Commonwealth as required by
paragraph (6)(d).
The participating exchange must, in accordance with the regulations, notify
the Commonwealth of payments of levy it receives as agent for the
Commonwealth.
(9) An amount payable by SEGC as required by paragraph (6)(b) may be
set off against an amount payable to SEGC as required by
paragraph (6)(d).
(10) SEGC may make a written determination prescribing, in relation to a
class or classes of transactions, the dealer who is to be the leviable dealer in
relation to a transaction in that class or in any of those classes.
If SEGC revokes a determination made under subsection 938(2), the
revocation does not affect a liability to pay an amount of levy that became
payable before the revocation.
(1) If the amount in the Fund is less than the minimum amount, SEGC may,
whether or not it also makes a determination under subsection 938(2), determine
in writing:
(a) if there are 2 or more participating exchanges that are securities
exchanges:
(i) that a specified participating exchange that is a securities exchange
must pay a levy; or
(ii) that each of 2 or more specified participating exchanges that are
securities exchanges must pay a levy; or
(b) otherwise—that the Exchange must pay a levy
The levy is payable to SEGC, as agent for the Commonwealth, in accordance
with this section.
Note: For the imposition and rate of the levy, see the
Corporations (National Guarantee Fund Levies) Act 2001.
(2) A levy payable under this section by a securities exchange must be
paid within the period and in the manner determined in writing by SEGC for the
purposes of the levy.
(3) If a levy is payable under this section, SEGC must give to each
participating exchange a notice setting out the name of the participating
exchange that must pay the levy and the amount of the levy.
(4) For the purpose of paying the whole or a part of a levy under this
section, a participating exchange may borrow money on such terms as the board of
the participating exchange thinks fit.
(5) Whenever an amount of levy (the levy amount) is paid
under this section, or under subsection 6(2) of the Corporations (National
Guarantee Fund Levies) Act 2001, to SEGC as agent for the
Commonwealth:
(a) SEGC 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 SEGC; and
(c) the Commonwealth must pay the amount so appropriated to SEGC;
and
(d) SEGC must pay the amount it receives under paragraph (c) into the
Fund.
(6) A payment of an amount to SEGC as required by paragraph (5)(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,
SEGC must pay to the Commonwealth an amount equal to the amount that the
Commonwealth is liable to refund. SEGC may pay, out of the Fund, any amount so
required to be paid to the Commonwealth.
(7) The Financial Management and Accountability Act 1997 does not
apply in relation to the payment of an amount of levy under this section to SEGC
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 (5)(a); or
(b) the payment of an amount by the Commonwealth as required by
paragraph (5)(c).
SEGC must, in accordance with the regulations, notify the Commonwealth of
payments of levy it receives as agent for the Commonwealth.
(8) An amount payable by SEGC as required by paragraph (5)(a) may be
set off against an amount payable to SEGC as required by
paragraph (5)(c).
(1) A participating exchange by which a levy is payable under
section 940 may determine that members, or member organisations, of
the participating exchange must pay a levy for payment towards the
first-mentioned levy. The levy is payable to the participating exchange as agent
for the Commonwealth.
Note: For the imposition and rate of the levy, see the
Corporations (National Guarantee Fund Levies) Act 2001.
(2) If a determination is made under subsection (1), a levy is
payable by a member, or member organisation, as the case requires, of the
participating exchange who or that, when the determination is made:
(a) carries on a securities business; and
(b) is included in a class, or in any of 2 or more classes, of members, or
of member organisations, of the participating exchange determined in writing by
the participating exchange for the purposes of the levy.
(3) The amount of a levy payable under a determination by a participating
exchange under subsection (1) must be paid within the period, and in the
manner, specified in writing by the participating exchange either generally or
in relation to:
(a) particular members; or
(b) particular classes of members; or
(c) particular member organisations; or
(d) particular classes of member organisations;
of the participating exchange.
(4) Whenever an amount of levy (the levy amount) is paid
under this section, or under subsection 6(3) of the Corporations (National
Guarantee Fund Levies) Act 2001, to a participating exchange as agent for
the Commonwealth:
(a) the participating 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 participating exchange; and
(c) the Commonwealth must pay the amount so appropriated to the
participating exchange; and
(d) the participating exchange must pay an amount equal to the amount it
receives under paragraph (c) in payment of the levy payable by it under
section 940.
(5) A payment of an amount to a participating 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 participating exchange must pay to the Commonwealth an
amount equal to the amount that the Commonwealth is liable to refund.
(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
participating 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 participating 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 participating exchange as required by
paragraph (5)(a) may be set off against an amount payable to the
participating exchange as required by paragraph (5)(c).
In this Division:
development account means an account kept for the purposes of
subsection 945(1).
(1) Where the amount in the Fund exceeds the minimum amount, the Board
may, in its discretion, determine in writing that a specified amount equal to
the whole or a part of the excess be paid out of the Fund:
(a) if the Exchange is the only participating exchange—to the
Exchange; or
(b) if there are 2 or more participating exchanges:
(i) to a specified participating exchange; or
(ii) to 2 or more specified participating exchanges in specified
proportions.
(2) Where there are 2 or more participating exchanges, a determination
under subsection (1) must be fair and equitable having regard, in relation
to each participating exchange, to:
(a) the amounts that have been paid into the Fund and that are
attributable to, or to members or member organisations of, that participating
exchange; and
(b) the amounts that have been paid out of the Fund and that are so
attributable.
(3) Where a determination is made in accordance with this section, the
amount specified in the determination must be paid out of the Fund in accordance
with the determination.
(4) For the purposes of subsection (2), where:
(a) money in the fidelity fund of a securities exchange has been paid into
the Fund under subsection 985(1); or
(b) property of the fidelity fund of a securities exchange (other than
money in that fidelity fund) has vested in SEGC, and become part of the Fund, by
virtue of subsection 985(2);
the amount of that money is taken, or an amount equal to the value of that
property is taken, as the case may be, to have been paid into the Fund and to be
attributable to:
(c) in the case of an Exchange subsidiary—the Exchange; or
(d) otherwise—that securities exchange.
(5) For the purposes of subsection (2), where an amount is paid out
of the Fund in connection with a claim that is, for the purposes of
Division 10, a transferred claim in relation to a securities exchange, the
amount is taken to be attributable to:
(a) in the case of an Exchange subsidiary—the Exchange; or
(b) otherwise—that securities exchange.
(1) Subject to this section, a participating exchange must keep money paid
to it under section 944 in a separate account designated as a securities
industry development account.
(2) A participating exchange must not make a payment out of a development
account unless the payment is made:
(a) for a purpose in relation to which an approval is in force under
subsection (3) in relation to the payment; or
(b) into the Fund.
(3) The Minister may approve in writing, in relation to payments to be
made out of development accounts, purposes that are permitted purposes when the
approval is given.
(4) An approval under subsection (3) may include conditions relating
to the payments to which the approval relates.
(5) A participating exchange that makes, in contravention of
subsection (2), a payment out of a development account must pay into the
account, from its general funds, an amount equal to the amount of the
first-mentioned payment.
(6) A participating exchange that:
(a) makes as permitted by virtue of paragraph (2)(a) a payment out of
a development account; and
(b) contravenes a condition that, when the payment was made, was included
in an approval in force under subsection (3) in relation to the
payment;
must pay into the account, from its general funds, an amount equal to the
amount of the first-mentioned payment.
(7) In this section:
permitted purpose means:
(a) a purpose relating to the development of the securities industry in
Australia or in a part of Australia; or
(b) a prescribed purpose; or
(c) without limiting the generality of paragraph (a) or (b), a
purpose of reimbursing a person in respect of money that the person spent,
before the relevant commencement, for a purpose of a kind referred to in
paragraph (a) or (b).
(1) Money that is in a development account kept by a participating
exchange and is not immediately required for the purpose of making payments as
permitted by subsection 945(2) may be invested by the participating exchange in
a permitted manner.
(2) The interest and profits from time to time accruing from the
investment of money in a development account must be paid into the
account.
A participating exchange that is a securities exchange must, in respect
of each financial year at any time during which there is money in a development
account kept by the participating exchange, lodge with ASIC, within 3 months
after the end of that financial year, a statement containing, in relation to
payments out of such an account during that year, such information as is
prescribed.
In this Division, unless the contrary intention appears:
claim means a claim under this Division against
SEGC.
completion period, in relation to a sale or purchase of
securities by a dealer, means:
(a) if the business rules of a participating exchange of which the dealer
is a member organisation, being those business rules as in force when the
agreement for the sale or purchase is made, prescribe a period, for the purposes
of this paragraph, in relation to a class of sales or purchases that includes
the sale or purchase—that period; or
(b) otherwise—a period that is reasonable, having regard to all the
circumstances relating to the sale or purchase.
dealer means a person who, or a partnership that, is or has
at any time been a member organisation of a participating exchange.
Exchange body means the Exchange or a subsidiary of the
Exchange.
prescribed period, in relation to a sale or purchase of
securities by a dealer, means:
(a) if the business rules of a participating exchange of which the dealer
is a member organisation, being those business rules as in force when the
agreement for the sale or purchase is made, prescribe a period, for the purposes
of this paragraph, in relation to a class of sales or purchases that includes
the sale or purchase—that period; or
(b) otherwise—a period that is reasonable, having regard to all the
circumstances relating to the sale or purchase.
purchase price, in relation to a purchase of securities by a
dealer on behalf of a person, means the total of:
(a) the amount of the consideration for the purchase; and
(b) any brokerage fees and other charges, and any stamp duty and other
duties and taxes, payable by the person to the dealer in connection with the
purchase.
reportable transaction means a transaction, entered into
before or after the commencement of this Act in relation to securities, that is
or has at any time been a reportable transaction as defined in subsection
920(1).
If:
(a) under an agreement for the sale or purchase of securities, or under a
replacement agreement in relation to such an agreement that has been novated, a
person or partnership is obliged to transfer securities of a particular kind and
number to another person or partnership; and
(b) for the purpose of discharging the obligation, the first-mentioned
person or partnership:
(i) elects, in accordance with the transfer delivery service provisions of
a settlement authority, to bring about a transfer of securities of that kind and
number to the other person or partnership by the means provided for in those
provisions; and
(ii) for the purpose of so bringing about that transfer, transfers
securities of that kind and number to the TDS nominee;
then, for the purposes of the application of this Division in relation to
the sale or purchase, the obligation of the first-mentioned person or
partnership to supply settlement documents in relation to the sale or purchase
is taken to be discharged by the transfer of securities to the TDS
nominee.
(1) Where, as at the end of the completion period in relation to a
reportable transaction that is a sale by a dealer to another dealer:
(a) the first-mentioned dealer:
(i) if a transfer of the securities concerned pursuant to the sale would
be an SCH-regulated transfer—has done, or is ready, willing and able to
do, all things that that dealer is required to do under the SCH business rules
to effect a transfer of the securities pursuant to the sale; or
(ii) in any other case—has supplied, or is ready, willing and able
to supply, to the other dealer, under the agreement for the sale, settlement
documents in relation to the sale; and
(b) the other dealer has not paid to the first-mentioned dealer, under
that agreement, the consideration for the sale;
the first-mentioned dealer may make a claim in respect of the
sale.
(2) A dealer may make a single claim under this section in respect of the
total amount of the unpaid consideration in respect of 2 or more
sales.
(3) If the business rules of an Exchange body purport to authorise that
body to make under this section on behalf of a dealer who is a member
organisation of the Exchange a claim that the dealer is entitled to make, that
body is entitled to make that claim on behalf of that dealer.
(4) If an Exchange body is entitled under subsection (3) to make
claims under this section on behalf of 2 or more dealers, that body is entitled
to make a single claim under this section on behalf of both or all of those
dealers in respect of the sum of the amounts in respect of which it is entitled
to make separate claims on behalf of each of those dealers.
(4A) If the SCH business rules purport to authorise the securities
clearing house to make under this section on behalf of a dealer who is or was an
SCH participant a claim that the dealer is entitled to make, the securities
clearing house is entitled to make that claim on behalf of that
dealer.
(4B) If the securities clearing house is entitled under
subsection (4A) to make claims under this section on behalf of 2 or more
dealers, the securities clearing house is entitled to make a single claim under
this section on behalf of both or all of those dealers in respect of the sum of
the amounts in respect of which it is entitled to make separate claims on behalf
of each of those dealers.
(5) Where a dealer, or an Exchange body or the securities clearing house
on behalf of a dealer, makes a claim in respect of a sale of securities by the
dealer to another dealer and the Board is satisfied that:
(a) subsection (1), (3) or (4A) entitles the claimant to make the
claim; and
(aa) if a transfer of the securities pursuant to the sale would be an
SCH-regulated transfer—the dealer:
(i) has done all things that the dealer is required to do under the SCH
business rules to effect a transfer of the securities pursuant to the sale;
or
(ii) has, for the purposes of the claim, in accordance with the SCH
business rules, transferred to SEGC or to an Exchange body securities of the
same kind and number as the first-mentioned securities; and
(b) if paragraph (aa) does not apply—the dealer has:
(i) for the purposes of the claim, supplied to SEGC; or
(ii) under the agreement for the sale, supplied to the other
dealer;
settlement documents in relation to the sale; and
(c) the consideration for the sale has not been paid to the dealer under
the agreement for the sale; and
(d) the agreement has not been discharged or otherwise
terminated;
SEGC must allow the claim and pay to the claimant an amount equal to the
amount of the consideration.
(6) A claim made under subsection (2), (4) or (4B) is treated for the
purposes of subsection (5) as if it consisted of a separate claim in
respect of each of the sales to which it relates.
(7) If a dealer transfers securities to an Exchange body as mentioned in
subparagraph (5)(aa)(ii), the Exchange body must account to SEGC for those
securities in accordance with the SCH business rules.
(1) Where, as at the end of the completion period in relation to a
reportable transaction that is a purchase by a dealer from another
dealer:
(a) the first-mentioned dealer has supplied, or is ready, willing and able
to supply, to the other dealer, under the agreement for the purchase, the
consideration for the purchase; and
(b) the other dealer:
(i) if a transfer of the securities concerned pursuant to the purchase
would be an SCH-regulated transfer—has not done all things that that
dealer is required to do under the SCH business rules to effect a transfer of
the securities pursuant to the purchase; or
(ii) in any other case—has not supplied to the first-mentioned
dealer, under that agreement, settlement documents in relation to the
purchase;
the first-mentioned dealer may make a claim in respect of the
purchase.
(1A) A dealer may make a single claim under this section in respect of 2
or more purchases.
(1B) A claim made under subsection (1A) is to be treated for the
purposes of subsection (2) as if it consisted of a separate claim in
respect of each of the purchases to which it relates.
(2) Where a dealer makes a claim in respect of a purchase of securities by
the claimant from another dealer and the Board is satisfied that:
(a) subsection (1) entitles the claimant to make the claim;
and
(b) the claimant has:
(i) for the purposes of the claim, paid to SEGC; or
(ii) under the agreement for the purchase, paid to the other
dealer;
the amount of the consideration for the purchase; and
(ba) if a transfer of the securities pursuant to the purchase would be an
SCH-regulated transfer—the other dealer has not done all things that that
dealer is required to do under the SCH business rules to effect a transfer of
the securities pursuant to the purchase; and
(c) if paragraph (ba) does not apply—settlement documents in
relation to the purchase have not been supplied to the claimant under the
agreement for the purchase; and
(d) the agreement has not been discharged or otherwise
terminated;
SEGC must allow the claim.
(3) If:
(a) SEGC allows under subsection (2) a claim in respect of a purchase
of securities; and
(b) a transfer of the securities pursuant to the purchase would be an
SCH-regulated transfer;
SEGC must, subject to section 952A, transfer to the claimant
securities of the same kind and number as the first-mentioned
securities.
(4) If:
(a) SEGC allows under subsection (2) a claim in respect of a purchase
of securities; and
(b) subsection (3) does not apply;
SEGC must, subject to section 953, supply to the claimant settlement
documents in relation to the purchase.
(1) Where:
(a) a dealer (in this section called the buyer) agrees to
buy securities from another dealer (in this section called the
seller); and
(b) the purchase is a reportable transaction; and
(c) the agreement for the purchase is novated; and
(d) under a replacement agreement, the seller becomes obliged to transfer
securities to the buyer;
this section has effect for the purposes of:
(e) making a claim under section 950 in respect of the purchase;
and
(f) the application of this Part (other than section 980) in relation
to such a claim.
(2) Subject to subsections (3) and (4), the novation is to be
disregarded.
(3) If:
(a) the buyer’s obligation to supply to the seller, under the
agreement for the purchase, the consideration for the purchase is replaced by an
obligation under a replacement agreement to pay an amount; and
(b) that obligation under the replacement agreement has been, or is to be,
taken into account for the purposes of provisions of the business rules of a
settlement authority that are of the kind referred to in subsection
954N(1);
the buyer is taken to have so supplied the consideration for the
purchase.
(4) If the replacement agreement or agreements is or are discharged or
otherwise terminated, the agreement for the purchase is taken to be discharged
or otherwise terminated.
(1) Where, as at the end of the prescribed period in relation to a
reportable transaction that is a sale by a dealer on behalf of a
person:
(aa) if a transfer of the securities concerned pursuant to the sale would
be an SCH-regulated transfer—the person:
(i) in a case to which subparagraph (ii) does not apply—has
done all things necessary to enable the dealer to do all things that the dealer
is required to do under the SCH business rules to effect a transfer of the
securities pursuant to the sale; or
(ii) if the dealer has been suspended by the participating exchange
concerned, or the dealer’s status as an SCH participant has been suspended
under the SCH business rules, and that suspension has not been removed—has
done, or is ready, willing and able to do, all things necessary to enable the
dealer to do all things that the dealer is required to do under the SCH business
rules to effect a transfer of the securities pursuant to the sale; and
(a) if paragraph (aa) does not apply—the person:
(i) in a case to which subparagraph (ii) does not apply—has
supplied to the dealer settlement documents for the purposes of the sale;
or
(ii) if the dealer has been suspended by the participating exchange
concerned and the suspension has not been removed—has supplied, or is
ready, willing and able to supply, to the dealer settlement documents for the
purposes of the sale; and
(b) the dealer’s obligations to the person in respect of the sale,
in so far as they relate to the consideration for the sale, have not been
discharged;
the person may make a claim in respect of the sale.
(2) Where a person is entitled to make claims under subsection (1) in
respect of 2 or more sales by the one dealer, the person may make a single claim
in respect of 2 or more of those sales but a claim so made is treated for the
purposes of subsection (3) as if it consisted of a separate claim in
respect of each of those sales.
(3) Where a person makes a claim in respect of a sale of securities by a
dealer on behalf of the claimant and the Board is satisfied that:
(a) subsection (1) entitles the claimant to make the claim;
and
(aa) if a transfer of the securities pursuant to the sale would be an
SCH-regulated transfer—the claimant:
(i) has done all things necessary to enable the dealer to do all things
that the dealer is required to do under the SCH business rules to effect a
transfer of the securities pursuant to the sale; or
(ii) has, for the purposes of the claim, in accordance with the SCH
business rules, transferred to SEGC or to an Exchange body securities of the
same kind and number as the first-mentioned securities; and
(b) if paragraph (aa) does not apply—the claimant
has:
(i) under the agreement for the sale, supplied to the dealer; or
(ii) for the purposes of the claim, supplied to SEGC;
settlement documents in relation to the sale; and
(c) the dealer’s obligations to the claimant in respect of the sale,
in so far as they relate to the consideration for the sale, have not been
discharged;
SEGC must allow the claim and pay to the claimant the amount of that
consideration less so much (if any) of the total of any brokerage fees and other
charges, and any stamp duty and other duties and taxes, payable by the claimant
in connection with the sale as has not already been paid by the
claimant.
(4) If a person transfers securities to an Exchange body as mentioned in
subparagraph (3)(aa)(ii), the Exchange body must account to SEGC for those
securities in accordance with the SCH business rules.
(1) Where, as at the end of the prescribed period in relation to a
reportable transaction that is a purchase by a dealer on behalf of a
person:
(a) the person:
(i) in a case to which subparagraph (ii) does not apply—has
paid to the dealer the purchase price in relation to the purchase; or
(ii) if the dealer has been suspended by the participating exchange
concerned, or the dealer’s status as an SCH participant has been suspended
under the SCH business rules, and that suspension has not been removed—has
paid, or is ready, willing and able to pay, to the dealer the purchase price in
relation to the purchase; and
(aa) if a transfer of the securities concerned pursuant to the purchase
would be an SCH-regulated transfer—the dealer’s obligations to the
person in respect of the purchase, in so far as they relate to the transfer of
securities to the person, have not been discharged; and
(b) if paragraph (aa) does not apply—the dealer’s
obligations to the person in respect of the purchase, in so far as they relate
to settlement documents in relation to the purchase, have not been
discharged;
the person may make a claim in respect of the purchase.
(2) Where a person is entitled to make claims under subsection (1) in
respect of 2 or more purchases by the one dealer, the person may make a single
claim in respect of 2 or more of those purchases but a claim so made is treated
for the purposes of subsection (3) as if it consisted of a separate claim
in respect of each of those purchases.
(3) Where a person makes a claim in respect of a purchase of securities by
a dealer on behalf of the claimant and the Board is satisfied that:
(a) subsection (1) entitles the claimant to make the claim;
and
(b) the claimant has:
(i) under the agreement for the purchase, paid to the dealer; or
(ii) for the purposes of the claim, paid to SEGC;
the amount of the consideration for the purchase; and
(ba) if a transfer of the securities pursuant to the purchase would be an
SCH-regulated transfer—the dealer’s obligations to the claimant in
respect of the purchase, in so far as they relate to the transfer of securities
to the claimant, have not been discharged; and
(c) if paragraph (ba) does not apply—the dealer’s
obligations to the claimant in respect of the purchase, in so far as they relate
to settlement documents in relation to the purchase, have not been
discharged;
SEGC must allow the claim.
(4) If:
(a) SEGC allows under subsection (3) a claim in respect of a purchase
of securities by a dealer on behalf of a person; and
(b) a transfer of the securities pursuant to the purchase would be an
SCH-regulated transfer;
SEGC must, subject to section 952A, transfer to the claimant
securities of the same kind and number as the first-mentioned
securities.
(5) If:
(a) SEGC allows under subsection (3) a claim in respect of a purchase
of securities by a dealer on behalf of a person; and
(b) subsection (4) does not apply;
SEGC must, subject to section 953, supply to the claimant settlement
documents in relation to the purchase.
If:
(a) SEGC:
(i) allows under subsection 950(2) a claim in respect of a purchase of
securities by the claimant from a dealer; or
(ii) allows under subsection 952(3) a claim in respect of a purchase of
securities by a dealer on behalf of the claimant; and
(b) a transfer of the securities pursuant to the purchase would be an
SCH-regulated transfer; and
(c) it is not reasonably practicable for SEGC to obtain securities of the
same kind and number as the first-mentioned securities from the dealer before
the end of:
(i) if the SCH business rules, as in force when the Board allows the
claim, prescribe a period, for the purposes of this section, in relation to a
class of claims that includes the claim—that period; or
(ii) otherwise—such period as the Board, having regard to all the
circumstances of the claim, considers reasonable; and
(d) it is not reasonably practicable for SEGC to obtain, otherwise than
from the dealer, securities of that kind and number before the end of that
period because:
(i) whether because that dealing in those securities is suspended or for
any other reason, there exists at no time during that period an orderly market
in those securities; or
(ii) the total number of those securities offered for sale on stock
markets of participating exchanges or Exchange subsidiaries at times during that
period when there exists an orderly market in those securities is
insufficient;
SEGC must satisfy the claim by paying to the claimant the amount that, when
the claimant became entitled to make the claim, was the amount of the actual
pecuniary loss suffered by the claimant in respect of the purchase.
Where:
(a) SEGC:
(i) allows under subsection 950(2) a claim in respect of a purchase of
securities by the claimant from a dealer; or
(ii) allows under subsection 952(3) a claim in respect of a purchase of
securities by a dealer on behalf of the claimant; and
(aa) a transfer of the securities pursuant to the purchase would not be an
SCH-regulated transfer; and
(b) it is not reasonably practicable for SEGC to obtain from the dealer,
before the end of:
(i) if the business rules of a participating exchange of which the dealer
is a member organisation, being those business rules as in force when the Board
allows the claim, prescribe a period, for the purposes of this section, in
relation to a class of claims that includes the claim—that period;
or
(ii) otherwise—such period as the Board, having regard to all the
circumstances relating to the claim, considers reasonable;
settlement documents in relation to the purchase; and
(c) because:
(i) whether by reason that dealing in those securities is suspended or for
any other reason, there exists at no time during that period an orderly market
in those securities; or
(ii) the total number of those securities offered for sale on stock
markets of participating exchanges or Exchange subsidiaries at times during that
period when there exists an orderly market in those securities is insufficient;
and
it is not reasonably practicable for SEGC to obtain before the end of
that period, otherwise than from the dealer, settlement documents in relation to
the purchase;
SEGC must satisfy the claim by paying to the claimant the amount that, when
the claimant became entitled to make the claim, was the amount of the actual
pecuniary loss suffered by the claimant in respect of the purchase.
(1) Neither subsection 949(1) nor 950(1) entitles a person to make a claim
in respect of:
(a) a sale of securities by the person to another person; or
(b) a purchase of securities by the person from another person;
as the case may be, unless, on the day on which the agreement for the sale
or purchase was entered into:
(c) the first-mentioned person was a member organisation of a
participating exchange and carried on in this jurisdiction a securities
business; and
(d) the other person was a member organisation of a participating
exchange.
(2) Neither subsection 951(1) nor 952(1) entitles a person to make a claim
in respect of:
(a) a sale of securities by another person on behalf of the
first-mentioned person; or
(b) a purchase of securities by another person on behalf of the
first-mentioned person;
as the case may be, unless, on the day on which the agreement for the sale
or purchase was entered into, the other person was a member organisation of a
participating exchange and carried on in this jurisdiction a securities
business.
(3) In subsections (1), (2) and (2A):
person includes a partnership.
(4) A claim must be in writing and must be served on SEGC within 6 months
after the day on which the claimant became entitled to make the claim.
(5) A claim that is not made within the period prescribed by
subsection (4) is barred unless the Board otherwise determines.
(1) In this Division:
borrower, in relation to a guaranteed securities loan, has
the meaning given by section 954B.
claim means a claim under this Division against
SEGC.
compliance period, in relation to an obligation under a
guaranteed securities loan, means:
(a) if the business rules of the lender as in force when the loan is made
prescribe a period in relation to the obligation for the purposes of this
paragraph—that period; or
(b) otherwise—a period that is reasonable having regard to the
obligation and all the circumstances relating to the loan.
excluded amount, in relation to a guaranteed securities loan,
means an amount payable by the borrower by way of a fee or charge, or by way of
interest or a penalty, in respect of the loan.
guaranteed securities loan has the meaning given by
section 954B.
lender, in relation to a guaranteed securities loan, has the
meaning given by section 954B.
security benefit means:
(a) property (other than securities) or money transferred or paid to a
person because the person is or was the holder of a security; or
(b) a right that a person has because the person is or was the holder of a
security, including, for example:
(i) a right to be paid an amount or to be issued with additional
securities; or
(ii) a right that arises out of a reduction in share capital, a scheme of
arrangement or compromise or a takeover bid.
(2) A reference in the definition of security benefit in
subsection (1) to a right is a reference to a right, whether existing or
future, and whether contingent or not.
(1) For the purposes of this Part, an agreement is a guaranteed securities
loan if:
(a) under the agreement:
(i) a participating exchange is to transfer securities of a specified kind
and number to, or as directed by, a person or partnership; and
(ii) in order to put the participating exchange in the same position (as
nearly as practicable) as if the agreement had not been made, the person or
partnership is later to transfer to, or as directed by, the participating
exchange such securities and security benefits as the agreement requires;
and
(b) the person or partnership is a member organisation of the
participating exchange on the day when the agreement is entered into;
and
(c) the agreement is or was entered into after 18 December 1991;
and
(d) the agreement is of a kind that, according to the business rules of
the participating exchange, is to be guaranteed under this Division.
(2) For the purposes of the application of this Part in relation to a
guaranteed securities loan:
(a) the participating exchange referred to in subparagraph (1)(a)(i)
is the lender; and
(b) the person or partnership referred to in subparagraph (1)(a)(i)
is the borrower; and
(c) the securities transferred as mentioned in subparagraph (1)(a)(i)
are borrowed securities.
(3) The fact that an agreement includes obligations in addition to those
mentioned in subsection (1) does not prevent the agreement from being a
guaranteed securities loan.
If:
(a) under a guaranteed securities loan, or under a replacement agreement
in relation to a guaranteed securities loan that has been novated, a person or
partnership is obliged to transfer securities of a particular kind to, or as
directed by, another person or partnership; and
(b) for the purpose of wholly or partly discharging the obligation, the
first-mentioned person or partnership:
(i) elects, in accordance with the transfer delivery service provisions of
a settlement authority, to bring about a transfer of a particular number of
securities of that kind to, or as directed by, the other person or partnership
by the means provided for in those provisions; and
(ii) for the purpose of so bringing about that transfer, transfers that
number of securities of that kind to the TDS nominee;
then, for the purposes of the application of this Division in relation to
the guaranteed securities loan, the obligations of the first-mentioned person or
partnership to transfer securities under the loan are taken to be discharged, to
the extent of that number of securities of that kind, by the transfer of
securities to the TDS nominee.
(1) If, as at the end of the compliance period in relation to an
obligation of the borrower under a guaranteed securities loan to transfer or pay
securities or security benefits, or to pay some other amount (except an excluded
amount):
(a) the lender has transferred borrowed securities in accordance with the
agreement; and
(b) the obligation remains undischarged to any extent;
the lender may make a claim in respect of the obligation.
(2) A participating exchange may make a single claim under this section in
respect of a number of obligations, whether arising under the same or different
guaranteed securities loans.
(3) A claim made under subsection (2) is to be treated for the
purposes of sections 954G and 954H as if it were a separate claim in
respect of each of the obligations to which it relates.
(1) Where:
(a) an agreement is novated; and
(b) before the novation, the agreement was a guaranteed securities
loan;
this section has effect for the purposes of:
(c) making a claim under section 954D in respect of the loan;
and
(d) the application of this Part (other than section 980) in relation
to such a claim.
(2) Subject to subsections (3) and (4), the novation is to be
disregarded.
(3) If:
(a) an obligation under the loan to pay an amount is replaced by an
obligation under a replacement agreement to pay an amount; and
(b) that obligation under the replacement agreement has been, or is to be,
taken into account for the purposes of provisions of the business rules of a
settlement authority that are of the kind referred to in subsection
954N(1);
the obligation to pay that amount under the loan is taken to be
discharged.
(4) If the replacement agreement or agreements is or are discharged or
otherwise terminated, the loan agreement is taken to be discharged or otherwise
terminated.
(1) A claim must be in writing and must be served on SEGC within 6 months
after the day when the claimant became entitled to make the claim.
(2) A claim that is not made within the period required by
subsection (1) is barred unless the Board otherwise determines.
(1) SEGC must allow a claim in respect of an obligation under a guaranteed
securities loan to transfer securities or security benefits (other than money)
if the Board is satisfied that:
(a) the claimant is entitled to make the claim; and
(b) the obligation is still undischarged to the extent of a particular
number of securities or security benefits of a particular kind (in this section
called the outstanding items).
(2) Subject to subsection (3), if:
(a) SEGC allows the claim; and
(b) the claimant has:
(i) under the guaranteed securities loan, paid as directed by the
borrower; or
(ii) for the purposes of the claim, paid to SEGC;
each amount (if any) required to be paid under the loan by the claimant
upon the discharge of the obligation;
SEGC must transfer to, or as directed by, the claimant, securities or
security benefits of the same kind and number as the outstanding
items.
(3) If:
(a) SEGC allows the claim; and
(b) either:
(i) paragraph (2)(b) is not satisfied; or
(ii) paragraph (2)(b) is satisfied but the Board is satisfied that it
is not reasonably practicable for SEGC to obtain securities or security benefits
of the same kind and number as the outstanding items within the pre-cash
settlement period;
SEGC must satisfy the claim by paying to the claimant the amount that, as
at the time when the Board decides it is so satisfied, is the actual pecuniary
loss suffered by the claimant in respect of the failure to discharge the
obligation.
(4) In working out the amount of the actual pecuniary loss suffered in
respect of the failure to discharge the obligation, regard may be had to the
cost to the claimant of any securities or security benefits of the same kind as
the outstanding items that the claimant obtained because the obligation was not
discharged.
(5) In this section:
pre-cash settlement period means:
(a) if the business rules of the claimant, as in force when the Board
allows the claim, prescribe a period, for the purposes of this section, in
relation to a class of claims that includes the claim—that period;
or
(b) otherwise—such period as the Board, having regard to all the
circumstances of the claim, considers reasonable.
(1) SEGC must allow a claim in respect of an obligation under a guaranteed
securities loan to pay a security benefit that is an amount of money, or to pay
some other amount, if the Board is satisfied that:
(a) the claimant is entitled to make the claim; and
(b) the obligation is still undischarged to the extent of a particular
amount (in this section called the outstanding amount).
(2) If SEGC allows the claim, it must pay to, or as directed by, the
claimant an amount equal to the outstanding amount.
In this Division:
claim means a claim under this Division against
SEGC.
dealer, in relation to a participating exchange, means the
participating exchange or a member organisation of the participating
exchange.
If:
(a) a person or partnership (in this section called the
transferor) is, under provisions of a kind referred to in
subsection 954P(1), obliged to transfer securities of a particular kind to
another person or partnership (in this section called the
transferee); and
(b) for the purpose of wholly or partly discharging the obligation, the
transferor:
(i) elects, in accordance with the transfer delivery service provisions of
a settlement authority, to bring about a transfer of a particular number of
securities of that kind to the transferee by the means provided for in those
provisions; and
(ii) for the purpose of so bringing about the transfer, transfers that
number of securities of that kind to the TDS nominee;
then, for the purposes of the application of this Division, the obligation
is taken to have been discharged, to the extent of that number of securities of
that kind, by the transfer of securities to the TDS nominee.
(1) If:
(a) under provisions of the business rules of a settlement authority, the
total of the amounts that become due and payable to a dealer by a subsidiary of
the settlement authority on a particular day in respect of transactions (as
defined in the business rules) of a kind or kinds specified in the business
rules is set off against the total of the amounts that become due and payable by
the dealer to the subsidiary on that day in respect of transactions (as so
defined) of that kind or those kinds; and
(b) depending on which of those totals is the greater, the provisions
oblige:
(i) the dealer to pay to the subsidiary, or to some other person or
persons nominated under the provisions; or
(ii) the subsidiary, or some other dealer or dealers nominated under the
provisions, to pay to the dealer, or to some other person or persons nominated
under the provisions;
within a specified period, the difference between those totals;
and
(c) as at the end of that period, that obligation remains undischarged to
the extent of a particular amount;
the person to which the amount is payable may make a claim in respect of
the obligation.
(2) Entitlement to make the claim is not affected by a dealer ceasing to
be a member organisation of a participating exchange after the obligation
arose.
(3) For the purposes of this section, a total may be a nil
amount.
(4) In this section:
person includes a partnership.
(1) This section applies if:
(a) under provisions of the business rules of a settlement authority, the
total number of securities of a particular kind to be transferred on a
particular day to a dealer by a subsidiary of the settlement authority in
respect of transactions (as defined in the business rules) of a kind or kinds
specified in the business rules is set off against the total number of
securities of that kind to be transferred on that day by the dealer to the
subsidiary in respect of transactions (as so defined) of that kind or those
kinds; and
(b) depending on which of those totals is the greater, the provisions
oblige:
(i) the dealer to transfer to some other person or persons nominated under
the provisions; or
(ii) some other dealer or dealers nominated under the provisions to
transfer to the dealer, or to some other person or persons nominated under the
provisions;
within a specified period, securities of that kind equal in number to the
difference between those totals; and
(c) as at the end of that period, the obligation to transfer, or any of
the obligations to transfer, as the case requires, remains undischarged to the
extent of a particular number of securities of that kind (in this section called
the default securities).
(2) If the settlement authority has not taken action as mentioned in
subsection (3), the person to which the default securities should have been
transferred may make a claim in respect of the failure to transfer the default
securities.
(3) If, for the purpose of remedying the failure to transfer the default
securities, the settlement authority has transferred securities of the same kind
and number as the default securities to the person to which the default
securities should have been transferred:
(a) the settlement authority is subrogated to all the rights and remedies
of the person in relation to the failure to transfer the default securities;
and
(b) the settlement authority may make a claim in respect of its actions to
remedy the failure; and
(c) any claim made under subsection (2) in respect of the failure is
taken not to have been entitled to be made.
(4) Entitlement to make a claim is not affected by a dealer ceasing to be
a member organisation of a participating exchange after the obligation to
transfer arose.
(5) For the purposes of this section, a total number of marketable
securities of a particular kind may be zero.
(6) In this section:
person includes a partnership.
(1) A claim must be in writing and must be served on SEGC within 6 months
after the day on which the claimant became entitled to make the claim.
(2) A claim that is not made within the period required by
subsection (1) is barred unless the Board otherwise determines.
(1) SEGC must allow a claim under subsection 954N(1) if the Board is
satisfied that:
(a) the claimant is entitled to make the claim; and
(b) the obligation referred to in paragraph 954N(1)(c) still remains
undischarged to the extent of a particular amount.
(2) If SEGC allows the claim, SEGC must pay to the claimant the amount
referred to in paragraph (1)(b).
(1) SEGC must allow a claim under subsection 954P(2) if the Board is
satisfied that:
(a) the claimant is entitled to make the claim; and
(b) the obligation referred to in paragraph 954P(1)(c) still remains
undischarged to the extent of a particular number of securities of a particular
kind (in this section called the outstanding
securities).
(2) Subject to subsection (3), if SEGC allows the claim, it must
transfer to the claimant securities of the same kind and number as the
outstanding securities.
(3) If the Board is satisfied that it is not reasonably practicable for
SEGC to obtain securities of the same kind and number as the outstanding
securities within the pre-cash settlement period, SEGC must satisfy the claim by
paying to the claimant the amount that, as at the time when the Board decides it
is so satisfied, is the actual pecuniary loss suffered by the claimant in
respect of the failure to transfer the outstanding securities.
(4) In working out the amount of the actual pecuniary loss suffered in
respect of the failure to transfer the outstanding securities, regard may be had
to the cost to the claimant of any securities of the same kind as the
outstanding securities that the claimant obtained because the outstanding
securities were not transferred.
(5) In this section:
pre-cash settlement period means:
(a) if the business rules of the settlement authority that is referred to
in paragraph 954P(1)(a), as in force when the Board allows the claim, prescribe
a period, for the purposes of this section, in relation to a class of claims
that includes the claim—that period; or
(b) otherwise—such period as the Board, having regard to all the
circumstances of the claim, considers reasonable.
(1) SEGC must allow a claim by a settlement authority under subsection
954P(3) if the Board is satisfied that:
(a) the settlement authority is entitled to make the claim; and
(b) the settlement authority has paid or transferred to SEGC any money or
property it has obtained because of the right of subrogation given by paragraph
954P(3)(a) in relation to the failure to transfer the default
securities.
(2) If SEGC allows the claim, it must pay to the settlement authority the
amount that, as at the time when the claim is allowed, is the actual pecuniary
loss suffered by the settlement authority because of the actions it has taken to
remedy its subsidiary’s default.
(3) In working out the amount of the actual pecuniary loss suffered in
respect of the actions taken by the settlement authority to remedy its
subsidiary’s default, regard may be had to the cost to the settlement
authority of obtaining the securities transferred as mentioned in subsection
954P(3).
(4) Money or property paid or transferred to SEGC under
paragraph (1)(b) forms part of the Fund.
In this Division:
claim means a claim under this Division against
SEGC.
claimable obligation means:
(a) an obligation to transfer securities under an agreement for the
purchase of securities, where the purchase is, for the purposes of
Division 6, a reportable transaction; or
(b) an obligation to transfer securities under a replacement agreement in
relation to an agreement of the kind referred to in paragraph (a) that has
been novated; or
(c) an obligation to transfer securities under a guaranteed securities
loan; or
(d) an obligation to transfer securities under a replacement agreement in
relation to a guaranteed securities loan that has been novated; or
(e) an obligation to transfer securities that arose as mentioned in
paragraph 954P(1)(b).
discharge, in relation to an obligation, means:
(a) except in the case of a purchase obligation—discharge the whole
or a part of the obligation; or
(b) in the case of a purchase obligation—discharge the whole of the
obligation.
purchase obligation means an obligation of the kind referred
to in paragraph (a) of the definition of claimable
obligation.
(1) This section applies if:
(a) a person or partnership (in this Division called the
transferor) is obliged to transfer securities of a particular kind
to, or as directed by, another person or partnership (in this Division called
the transferee); and
(b) the obligation is a claimable obligation; and
(c) for the purpose of discharging the obligation, the
transferor:
(i) elects, in accordance with the transfer delivery service provisions of
a settlement authority, to bring about a transfer of a particular number of
securities of that kind to, or as directed by, the transferee by the means
provided for in those provisions; and
(ii) for the purpose of so bringing about the transfer, transfers that
number of securities of that kind to the TDS nominee; and
(d) for the purpose of bringing about the transfer of securities referred
to in subparagraph (c)(i) by the means provided for in those provisions,
the TDS nominee later purports to transfer that number of securities of that
kind to, or as directed by, the transferee; and
(e) the TDS nominee is in default under the transfer delivery service
provisions because the transfer documents in relation to the purported transfer,
so far as they relate to a particular number of securities of that kind (in this
Division called the default securities), are not sufficient for
the purpose referred to in subsection 924(2); and
(f) if the obligation is a purchase obligation—the transferee has
paid, or is ready, willing and able to pay, to the transferor, under the
agreement for the purchase, the consideration for the purchase.
(2) If the settlement authority has not taken action as mentioned in
paragraph (3)(a) or (b), the transferee (even if it is the settlement
authority) may make a claim in respect of the TDS nominee’s
default.
(3) If the settlement authority has, for the purpose of remedying the TDS
nominee’s default:
(a) where the settlement authority is also the transferee—obtained
marketable securities of the same kind and number as the default securities;
or
(b) otherwise—transferred securities of the same kind and number as
the default securities to, or as directed by, the transferee;
the following provisions have effect:
(c) unless the settlement authority is also the transferee—the
settlement authority is subrogated to all the rights and remedies of the
transferee in relation to the purported transfer of securities by the TDS
nominee; and
(d) the settlement authority may make a claim in respect of its actions to
remedy the default; and
(e) any claim made under subsection (2) in respect of the TDS
nominee’s default is taken not to have been entitled to be made.
(4) A person or partnership may make a single claim under
subsection (2) or (3) in respect of 2 or more defaults.
(5) A claim made under subsection (4) is to be treated for the
purposes of sections 954Z and 954ZA as if it were a separate claim in
respect of each of the defaults to which it relates.
(6) Entitlement to make a claim in respect of a claimable obligation is
not affected by a person or partnership ceasing after the obligation arose to be
a member organisation of a participating exchange.
(1) A claim must be in writing and must be served on SEGC within 6 months
after the day on which the claimant became entitled to make the claim.
(2) A claim that is not made within the period required by
subsection (1) is barred unless the Board otherwise determines.
(1) SEGC must allow a claim under subsection 954X(2) if the Board is
satisfied that:
(a) the claimant is entitled to make the claim; and
(b) if paragraph 954X(1)(f) applies—the claimant has:
(i) paid to the transferor; or
(ii) for the purposes of the claim, paid to SEGC;
the consideration, under the agreement for the purchase, for the
purchase.
(2) Subject to subsection (3), if SEGC allows the claim, it must
transfer to, or as directed by, the claimant securities of the same kind and
number as the default securities.
(3) If the Board is satisfied that it is not reasonably practicable for
SEGC to obtain securities of the same kind and number as the default securities
within the pre-cash settlement period, SEGC must satisfy the claim by paying to
the claimant the amount that, as at the time when the Board decides that it is
so satisfied, is the actual pecuniary loss suffered by the claimant in respect
of the TDS nominee’s default.
(4) In working out the amount of the actual pecuniary loss suffered in
respect of the TDS nominee’s default, regard may be had to the cost to the
claimant of any securities of the same kind as the default securities that the
claimant obtained because the TDS nominee failed to transfer the default
securities.
(5) In this section:
pre-cash settlement period means:
(a) if the business rules of the settlement authority concerned, as in
force when the Board allows the claim, prescribe a period, for the purposes of
this section, in relation to a class of claims that includes the
claim—that period; or
(b) otherwise—such period as the Board, having regard to all the
circumstances of the claim, considers reasonable.
(1) Subject to section 954ZD, SEGC must allow a claim under
subsection 954X(3) if the Board is satisfied that:
(a) the claimant is entitled to make the claim; and
(b) if paragraph 954X(1)(f) applies—the transferee has paid to the
transferor the consideration payable, under the agreement for the purchase, for
the purchase; and
(c) the claimant has paid or transferred to SEGC any money or property it
has obtained because of the right of subrogation given by paragraph 954X(3)(c)
in relation to the purported transfer of securities by the TDS
nominee.
(2) If SEGC allows the claim, it must pay to the claimant the amount that,
as at the time when the claim is allowed, is the actual pecuniary loss suffered
by the claimant because of the actions it has taken to remedy the TDS
nominee’s default.
(3) In working out the amount of the actual pecuniary loss suffered in
respect of actions taken by the claimant to remedy the TDS nominee’s
default, regard may be had to the cost to the claimant of obtaining the
securities obtained or transferred as mentioned in paragraph 954X(3)(a) or (b),
as the case requires.
(4) Money or property paid or transferred to SEGC under
paragraph (1)(c) forms part of the Fund.
(1) In this Division, unless the contrary intention appears:
claim means a claim under this Division against
SEGC.
dealer means a member of a participating exchange.
securities means marketable securities or marketable rights
within the meaning of Division 3 of Part 7.13.
transferor has the meaning given by paragraph
956(3)(b).
transferred securities has the meaning given by paragraph
956(3)(c).
unauthorised execution has the meaning given by paragraph
956(3)(a).
(2) For the purposes of subsection 956(1), a dealer is taken to have
executed a document of transfer in relation to securities on behalf of a person
as transferor of the securities if the document states that the person is the
transferor of the securities and purports to have been stamped with the
dealer’s stamp as the transferor’s broker.
(1) If a declaration by ASIC under subsection 1113A(1) is in force in
relation to particular non-marketable securities, or a particular class of
non-marketable securities:
(a) this Division, including the regulations made for the purposes of the
provisions of this Division, applies in relation to those non-marketable
securities, or non-marketable securities of that class, as if they were
securities as defined in subsection 955(1); and
(b) ASIC may, by writing, declare that this Division, and regulations made
for the purposes of this Division, are to have effect in relation to their
application to those non-marketable securities, or non-marketable securities of
that class, subject to modifications specified in the declaration.
(2) A declaration under paragraph (1)(b) has effect
accordingly.
(3) ASIC must cause a copy of a declaration under paragraph (1)(b) to
be published in the Gazette.
(4) In this section:
non-marketable securities has the same meaning as in
section 1113A.
(1) This Division applies if:
(a) a dealer executes a document of transfer of securities on behalf of a
person as transferor of the securities; and
(b) the transfer is not an SCH-regulated transfer; and
(c) apart from the effect of paragraph 1105(3)(a), the person did not
authorise the dealer to execute the document.
(2) This Division also applies if:
(a) a dealer effects, or purports to effect, a proper SCH transfer of
securities on behalf of a person; and
(b) apart from the effect of section 1109B, the person did not
authorise the dealer to effect the transfer.
(3) In this Division:
(a) the dealer’s action referred to in whichever of
paragraphs (1)(a) and (2)(a) is applicable is called the unauthorised
execution; and
(b) the person referred to in whichever of those paragraphs is applicable
is called the transferor; and
(c) the securities referred to in whichever of those paragraphs is
applicable are called the transferred securities.
If, as a result of the unauthorised execution, the transferor suffers
loss in respect of any of the transferred securities, the transferor may make a
claim in respect of the loss.
(1) If, as a result of the unauthorised execution, a person (in this
section called the claimant), being:
(a) in any case:
(i) if subsection 956(1) applies—the person stated in the document
as the transferee of the transferred securities; or
(ii) if subsection 956(2) applies—the person in whose favour the
proper SCH transfer was effected, or purported to be effected; or
(b) if that person has disposed of any of the transferred
securities—a successor in title of that person to any of the transferred
securities;
suffers loss in respect of any of the transferred securities, the claimant
may make a claim in respect of that loss.
(2) A person is not entitled to make a claim under this section if the
person:
(a) had actual knowledge that the transferor did not in fact authorise the
unauthorised execution; or
(b) is an excluded person in relation to the dealer.
(1) A claim must:
(a) be in writing; and
(b) be served on SEGC:
(i) if a notice under subsection (4) applies to the
claim—before the end of the last application day specified in the notice;
or
(ii) in any other case—within 6 months after the day on which the
claimant first became aware that the claimant had suffered loss as a result of
the unauthorised execution.
(2) For the purposes of subsection (1), a notice under
subsection (4) applies to a claim if the claim is in respect of an
unauthorised execution, by the dealer named in the notice, during the applicable
period specified in the notice.
(3) A claim that is not served on SEGC by the time required by
paragraph (1)(b) is barred unless the Board otherwise determines.
(4) SEGC may publish, in each State and Territory in a daily newspaper
circulating in that State or Territory, a notice that:
(a) is in the prescribed form; and
(b) names a particular dealer; and
(c) requires that all claims in respect of unauthorised executions, by the
named dealer, during a period (in this section called the applicable
period) specified in the notice in accordance with subsection (5)
must be served on SEGC before the day (in this section called the last
application day) specified in the notice in accordance with
subsection (6).
(5) The applicable period must be a period that starts and ends
before:
(a) if each publication of the notice occurs on the same day—the day
on which the notice is published; or
(b) in any other case—the first day on which the notice is
published.
(6) The last application day must be at least 3 months after:
(a) if each publication of the notice occurs on the same day—the day
on which the notice is published; or
(b) in any other case—the last day on which the notice is
published.
(7) SEGC, a member of the Board and any employee of, or person acting on
behalf of, SEGC each have qualified privilege in respect of the publication of a
notice under subsection (4).
(1) Where the Board is satisfied that a claimant under section 957 or
958 is entitled to make the claim, SEGC must allow the claim.
(2) If SEGC allows the claim and the claimant has, as a result of the
unauthorised execution, ceased to hold some or all of the transferred
securities, SEGC must:
(a) subject to paragraph (b), supply to the claimant securities of
the same kind and number as those of the transferred securities that the
claimant has so ceased to hold; or
(b) if the Board is satisfied that it is not practicable for SEGC to
obtain such securities, or to obtain such securities within a reasonable
time—pay to the claimant the amount that, as at the time when the Board
decides that it is so satisfied, is the actual pecuniary loss suffered by the
claimant, in respect of the transferred securities, as a result of the
unauthorised execution (other than loss suffered as mentioned in
subsection (3)).
(3) If SEGC allows the claim, it must pay to the claimant the amount that,
as at the time when the claim is allowed, or when the Board decides as mentioned
in paragraph (2)(b), as the case requires, is the actual pecuniary loss
suffered by the claimant, as a result of the unauthorised execution, in respect
of payments or other benefits:
(a) in any case—to which the claimant would have become entitled, as
the holder of such of the transferred securities as the claimant has, as a
result of the unauthorised execution, ceased to hold, if the claimant had
continued to hold the securities concerned until that time; or
(b) if the claim was made under section 958—that the claimant
has received as holder of any of the transferred securities.
(4) For the purposes of this section, where securities are purportedly
transferred from a person to another person, the first-mentioned person is taken
to cease to hold, and the other person is taken to hold, the securities even if
the other person did not by virtue of the transfer get a good title to the
securities.
(1) If SEGC allows a claim made under section 957 and the Board is
satisfied that the supply of securities, or the payment of money, or both, as
the case requires, to the claimant in accordance with section 960 will not
adequately compensate the claimant in respect of a pecuniary or other gain that
the claimant might, if the claimant had continued to hold the transferred
securities, have made but did not in fact make, the Board may determine in
writing that there be paid to the claimant in respect of that gain a specified
amount that the Board considers to be fair and reasonable in all the
circumstances.
(2) If a determination is made under subsection (1), SEGC must pay to
the claimant the amount specified in it.
In this Division:
claim means a claim under this Division against
SEGC.
dealer means a member of a participating exchange.
(1) Subject to this section, a person who suffers pecuniary loss in
respect of a contravention, by a dealer, of the SCH certificate cancellation
provisions may make a claim in respect of the loss.
(2) The loss must not be a loss in respect of an unauthorised execution
(within the meaning of section 956) in respect of which the person has
made, or is entitled to make, a claim under Division 7.
(3) The person must not have been involved in the contravention.
(4) The dealer must have been a member of a participating exchange on the
day of the contravention.
(1) A claim must:
(a) be in writing; and
(b) be served on SEGC:
(i) if a notice under subsection (4) applies to the
claim—before the end of the last application day specified in the notice;
or
(ii) in any other case—within 6 months after the day on which the
claimant first became aware that the claimant had suffered loss as a result of
the dealer’s contravention of the SCH certificate cancellation
provisions.
(2) For the purposes of subsection (1), a notice under
subsection (4) applies to a claim if the claim is in respect of a
contravention of the SCH certificate cancellation provisions, by the dealer
named in the notice, during the applicable period specified in the
notice.
(3) A claim that is not served on SEGC by the time required by
paragraph (1)(b) is barred unless the Board otherwise determines.
(4) SEGC may publish, in each State and Territory in a daily newspaper
circulating in that State or Territory, a notice that:
(a) is in the prescribed form; and
(b) names a particular dealer; and
(c) requires that all claims in respect of contraventions of the SCH
certificate cancellation provisions, by the named dealer, during a period (the
applicable period) specified in the notice in accordance with
subsection (5) must be served on SEGC before the day (the last
application day) specified in the notice in accordance with
subsection (6).
(5) The applicable period must be a period that starts and ends
before:
(a) if each publication of the notice occurs on the same day—the day
on which the notice is published; or
(b) in any other case—the first day on which the notice is
published.
(6) The last application day must be at least 3 months after:
(a) if each publication of the notice occurs on the same day—the day
on which the notice is published; or
(b) in any other case—the last day on which the notice is
published.
(7) SEGC, a member of the Board and any employee of, or person acting on
behalf of, SEGC each have qualified privilege in respect of the publication of a
notice under subsection (4).
(1) SEGC must allow a claim if the Board is satisfied that the claimant is
entitled to make the claim.
(2) If SEGC allows the claim, it must pay to the claimant the amount that,
when the claim is allowed, is the actual pecuniary loss suffered by the claimant
because of the contravention in respect of which the claim was made.
(3) For the purposes of subsection (2), the actual pecuniary loss
suffered by the claimant does not include any loss in respect of an unauthorised
execution (within the meaning of section 956) in respect of which the
claimant has made, or is entitled to make, a claim under
Division 7.
(1) If:
(a) SEGC allows a claim; and
(b) the Board is satisfied that the payment of money to the claimant under
section 961F will not adequately compensate the claimant for a pecuniary or
other gain that the claimant did not make, but might have made, were it not for
the contravention in respect of which the claim was made;
the Board may determine in writing that the claimant should be paid in
respect of that gain a specified amount that the Board considers to be fair and
reasonable in all the circumstances.
(2) If a determination is made under subsection (1), SEGC must pay
the claimant the specified amount.
(1) In this Division, unless the contrary intention appears:
claim means a claim against SEGC under this
Division.
dealer means a member of a participating exchange.
member organisation means a member organisation of a
participating exchange.
(2) A reference in this Part to property being entrusted to, or received
by, a person or partnership includes a reference to the property being entrusted
to, or received by, the person or partnership outside this jurisdiction, whether
in Australia or not.
(1) Subject to this Division, where:
(a) a dealer has at a particular time, whether before or after the
commencement of this Part, become insolvent; and
(b) at an earlier time (whether before or after that commencement),
property was, in the course of, or in connection with, the dealer’s
business of dealing in securities, entrusted to, or received by:
(i) if the dealer was, at the earlier time, a partner in a member
organisation—the member organisation, or a partner in, or an employee of,
the member organisation; or
(ii) otherwise—the dealer or an employee of the dealer;
and was so entrusted or received on behalf of, or because the dealer was
a trustee of the property for, a person (other than an excluded person in
relation to the dealer); and
(c) as at the first-mentioned time, the obligations of the dealer, or of a
member organisation in which the dealer is a partner, as the case requires, to
the person in respect of the property have not been discharged;
the person may make a claim in respect of the property.
(2) Where a person makes a claim in respect of property and, at a
particular time, the Board is satisfied that:
(a) because of a dealer having become insolvent, this Division entitles
the claimant to make the claim; and
(b) as at that time, the obligations of the dealer, or of a member
organisation in which the dealer is a partner, as the case requires, to the
claimant in respect of the property have not been discharged;
SEGC must allow the claim and:
(c) if the property is, or includes, money—pay to the claimant an
amount equal to the amount of that money; and
(d) if the property is, or includes, property other than
money—subject to subsection (3) and section 964, supply the
last-mentioned property to the claimant.
(3) Where:
(a) SEGC allows a claim that, because of a dealer having become insolvent,
this Division entitles a person to make in respect of property that is, or
includes, a number of securities of a particular kind or documents of title to a
number of securities of a particular kind; and
(b) it is not reasonably practicable for SEGC to obtain those securities,
or those documents of title to securities, as the case may be, from the dealer
or, if the dealer has disposed of them, from the dealer’s successor in
title, before the end of:
(i) if the business rules of a participating exchange of which the dealer
is a member, being those business rules as in force when the Board allows the
claim, prescribe a period, for the purposes of this section, in relation to a
class of claims that includes that claim—that period; or
(ii) otherwise—such period as the Board, having regard to all the
circumstances relating to the claim, considers reasonable;
SEGC must, subject to section 964, supply to the person, instead of
those securities, or those documents of title to securities, that number of
securities of that kind, or documents of title to that number of securities of
that kind, as the case may be.
(1) Where:
(a) SEGC allows a claim that, because of a dealer having become insolvent,
this Division entitles a person to make in respect of property that is, or
includes, a number of securities of a particular kind or documents of title to a
number of securities of a particular kind; and
(b) it is not reasonably practicable for SEGC to obtain those securities,
or those documents of title to securities, as the case may be, from the dealer
or, if the dealer has disposed of them, from the dealer’s successor in
title, before the end of:
(i) if the business rules of a participating exchange of which the dealer
is a member, being those business rules as in force when the Board allows the
claim, prescribe a period, for the purposes of this section, in relation to a
class of claims that includes the claim—that period; or
(ii) otherwise—such period as the Board, having regard to all the
circumstances relating to the claim, considers reasonable; and
(c) because:
(i) whether by reason that dealing in securities of that kind is suspended
or for any other reason, there exists at no time during that period an orderly
market in such securities; or
(ii) the total number of securities of that kind offered for sale on stock
markets of participating exchanges or Exchange subsidiaries at times during that
period when there exists an orderly market in such securities is insufficient;
and
it is not reasonably practicable for SEGC to obtain that number of
securities of that kind, or documents of title to that number of securities of
that kind, as the case may be, before the end of that period;
the Board may decide to pay to the claimant the amount that, when the
decision is made, is the actual pecuniary loss suffered by the claimant in
respect of the first-mentioned securities, or the first-mentioned documents of
title, as the case may be, and if the Board does so, SEGC must pay that amount
to the claimant.
(2) Where:
(a) the Board allows a claim that, because of a dealer having become
insolvent, this Division entitles a person to make in respect of property that
is, or includes, property (in this subsection called the relevant
property) other than money, securities or documents of title to
securities; and
(b) it is not reasonably practicable for SEGC to obtain the relevant
property from the dealer or, if the dealer has disposed of it, from the
dealer’s successor in title, before the end of such period as the Board
considers reasonable;
the Board may decide to pay to the claimant the amount that, when the
decision is made, is the actual pecuniary loss suffered by the claimant in
respect of the relevant property, and if the Board does so, SEGC must pay that
amount to the claimant.
(1) Where:
(a) a member organisation has received under the agreement for a sale or
purchase of securities by the member organisation on behalf of a person, the
consideration for the sale or settlement documents in relation to the purchase,
as the case may be; and
(b) subsection 951(1) or 952(1), as the case may be, entitles the person
to make a claim against SEGC under Division 6 in respect of the sale or
purchase;
subsection (2) applies.
(2) This Division does not, because of:
(a) a dealer, being the member organisation or a partner in the member
organisation, having become insolvent at a particular time; and
(b) the member organisation having received, under the agreement, the
consideration or the settlement documents;
entitle the person to make a claim in respect of the consideration or the
settlement documents, as the case may be, unless the member organisation’s
obligations to the person in respect of the sale or purchase, as the case may
be, in so far as those obligations related to the consideration or the
settlement documents, were discharged before that time.
(3) Where:
(a) because of a dealer having become insolvent on a particular day, this
Division entitles a person to make a claim (in this subsection called the
first claim) in respect of property; and
(b) because of a dealer having become insolvent on a later day, this
Division entitles a person to make another claim in respect of the
property;
SEGC must not allow the other claim unless:
(c) the person has made the first claim and SEGC has allowed or disallowed
it; or
(d) the Board is satisfied that if the first claim had been made SEGC
would have disallowed it; or
(e) the Board is satisfied that, when the person first became aware of the
dealer referred to in paragraph (b) having become insolvent on the later
day:
(i) the first claim was barred; or
(ii) it was no longer reasonably practicable for the person to make the
first claim before it became barred.
(4) Where:
(a) at a particular time, SEGC allows a claim made by a person under this
Division in respect of property; and
(b) because of:
(i) a dealer having become insolvent (whether before, at or after that
time); and
(ii) the property having, before that time, been entrusted or received as
mentioned in paragraph 963(1)(b);
this Division entitles the person to make another claim in respect of the
property;
SEGC must not allow the other claim.
Where, as at the time when a dealer becomes insolvent:
(a) a person has lent money to the dealer; and
(b) the liability of the dealer to repay the money remains
undischarged;
this Division does not, because of the dealer having become insolvent at
that time, entitle the person to make a claim in respect of the money.
This Division does not, because of a dealer having become insolvent on a
particular day, entitle a person to make a claim in respect of property
if:
(a) before that day the property had, in due course of the administration
of a trust, ceased to be under the sole control of the dealer; or
(b) the Board, or the Court, is satisfied that circumstances that
materially contributed to the dealer becoming insolvent on that day were due to,
or caused directly or indirectly by, an act or omission of the person.
(1) The total amounts paid out of the Fund in connection with claims
that:
(a) because of:
(i) a dealer having become insolvent on a particular day; or
(ii) if 2 or more partners in the same member organisation have become
insolvent on a particular day—those partners having become insolvent on
that day;
this Division entitles persons to make; and
(b) are allowed by SEGC;
must not exceed an amount equal to 14% of the minimum amount of the Fund as
at the end of that day.
(2) In determining, for the purposes of subsection (1), the total of
the amounts paid out of the Fund in connection with claims in respect of
property:
(a) an amount paid out of the Fund in connection with any of the claims
is, to the extent to which it is repaid to the Fund, to be disregarded;
and
(b) where, by virtue of the exercise of a right or remedy in relation to
property that is, or is included in, the first-mentioned property, being a right
or remedy of the claimant, or of any of the claimants, to which SEGC is, by
virtue of section 980, subrogated, money or other property has been
recovered by, or on behalf, of SEGC—so much of the amount, or of the total
of the amounts, paid out of the Fund in connection with any of the claims as
does not exceed:
(i) the amount of that money; or
(ii) the value of so much (if any) of that other property as has not been,
and is not required to be, supplied under subsection 963(2) in respect of any of
the claims;
as the case may be, is to be disregarded.
(3) In order to ensure compliance with subsection (1) as it applies
in relation to particular claims:
(a) the Board may, in relation to each of those claims, determine in
writing an amount to be the maximum amount in relation to the claim;
and
(b) where paragraph (a) empowers the Board to make determinations in
relation to the respective claims of 2 or more claimants—the Board must,
in making those determinations:
(i) take into account, in relation to each of those claimants, any money
or other property that the claimant has received, or is likely to receive, from
sources other than the Fund as compensation for property to which the
claimant’s claim relates; and
(ii) strive to ensure that the proportion of the property to which a claim
relates that is represented by the money and other property received from all
sources (including the Fund) as compensation for property to which the claim
relates is, as nearly as practicable, the same for each of those
claimants.
(4) Where a determination of an amount as the maximum amount in relation
to a claim is in force under subsection (3), the amount, or the total of
the amounts, paid out of the Fund in connection with the claim must not exceed
the first-mentioned amount.
(5) In this section, claim means a claim under this
Division.
(1) SEGC may publish, in each State and Territory, in a daily newspaper
circulating generally in that State or Territory, a notice in the prescribed
form specifying a day, not being earlier than 3 months after the publication of
the notice, on or before which claims against SEGC may be made, being claims
that, because of a dealer specified in the notice having become insolvent, this
Division entitles persons to make.
(2) Where, because of a dealer having become insolvent on a particular
day, this Division entitles a person to make a claim, the claim must be in
writing and must be served on SEGC:
(a) if there has been published in accordance with subsection (1) a
notice specifying a day on or before which claims may be made, being claims
that, because of the dealer having become insolvent on that day, this Division
entitles persons to make—on or before that day; or
(b) otherwise—within 6 months after the person becomes aware of the
dealer having become insolvent on that day.
(3) A claim that is not made in accordance with subsection (2) is
barred unless the Board otherwise determines.
(4) SEGC, a member of the Board and any employee of, or person acting on
behalf of, SEGC each have qualified privilege in respect of the publication of a
notice under subsection (1).
Subject to this Part, SEGC may, at any time after a person becomes
entitled to make a claim, allow and settle the claim.
If:
(a) a person (in this section called the claimant) has made
a claim in respect of a liability of another person (in this section called the
defaulter); and
(b) the claimant has a right, whether under an agreement or otherwise, to
set off a liability of the claimant to the defaulter against the liability
referred to in paragraph (a);
SEGC may refuse to allow the claim until the claimant has exercised the
right.
(1) If:
(a) SEGC allows a claim by a person (in this section called the
claimant) in respect of a liability of another person (in this
section called the defaulter); and
(b) the liability of the defaulter to the claimant has been reduced, by an
amount of money or a number of securities (in this section called the
set-off reduction), because of:
(i) the exercise by the claimant or the defaulter of a right of set-off,
whether under an agreement or otherwise; or
(ii) the operation of an agreement so far as it provides for the automatic
set-off of liabilities; and
(c) but for this section, the reduction of the defaulter’s liability
would not be taken into account when working out the obligations of SEGC in
respect of the claim;
this section applies for the purposes of working out those
obligations.
(2) If:
(a) SEGC is required to satisfy the claim by paying an amount;
and
(b) the set-off reduction consists of an amount;
the amount SEGC must pay in respect of the claim is reduced by the amount
of the set-off reduction.
(3) If:
(a) SEGC is required to satisfy the claim by paying an amount;
and
(b) the set-off reduction consists of a number of securities;
then:
(c) the Board must work out the value of the securities; and
(d) the amount SEGC must pay in respect of the claim is reduced by the
value worked out under paragraph (c).
(4) If:
(a) SEGC is required to satisfy the claim by transferring securities of a
particular kind; and
(b) the set-off reduction consists of a number of securities of that
kind;
the number of securities that SEGC must transfer in respect of the claim is
reduced by the number referred to in paragraph (b).
(5) If:
(a) SEGC is required to satisfy the claim by transferring securities of a
particular kind; and
(b) the set-off reduction consists of a number of securities that are not
of that kind;
then:
(c) the Board must work out:
(i) the value of the securities that constitute the set-off reduction;
and
(ii) the number of securities of the kind referred to in
paragraph (a) that are equal in value to the value worked out under
subparagraph (i); and
(d) the number of securities that SEGC is required to transfer in respect
of the claim is reduced by the number worked out under
subparagraph (c)(ii).
(6) If:
(a) SEGC is required to satisfy the claim by transferring securities of a
particular kind; and
(b) the set-off reduction consists of an amount of money;
then:
(c) the Board must work out the number of securities of that kind that are
equal in value to that amount; and
(d) the number of securities that SEGC must transfer in respect of the
claim is reduced by the number worked out under paragraph (c).
Where a claim is allowed, then, in addition to the claimant’s other
rights under this Part, the claimant is entitled to be paid out of the Fund an
amount equal to the total of the reasonable costs of, and the reasonable
disbursements incidental to, the making and proof of the claim.
(1) In addition to an amount that is payable to a person out of the Fund
in respect of a claim, interest at the rate of 5% per annum or, if another rate
is determined in writing by the Board, at that other rate, is payable to the
person out of the Fund, on so much of that amount as is not attributable to
costs and disbursements, in respect of the period beginning on the day on which
the person became entitled to make the claim and ending on:
(a) if the Board has made a determination under subsection 983(1) to pay
that amount in instalments—the day on which that amount would, if no such
determination had been made and the money in the Fund were unlimited, have been
paid to the person; or
(b) if, because of insufficiency of the Fund, no part of that amount is
paid to the person on the day on which that amount would, if the money in the
Fund were unlimited, have been so paid—that day; or
(c) otherwise—the day on which that amount is paid to the
person.
(1A) A rate of interest determined by the Board for the purposes of
subsection (1):
(a) must not exceed the rate that, when the determination is made, is
fixed by Rules of Court for the purposes of paragraph 52(2)(a) of the Federal
Court of Australia Act 1976; and
(b) must not be less than 5% per year.
(1B) As soon as practicable after determining a rate of interest for the
purposes of subsection (1), the Board must cause a copy of the
determination to be published in the Gazette.
(2) Where:
(a) under subsection (1), interest is payable to a person on an
amount in respect of a period; and
(b) that amount, or a part of that amount, remains unpaid throughout a
period beginning immediately after the period referred to in
paragraph (a);
then, in addition to that amount and that interest, interest at the
prescribed rate is payable to the person out of the Fund on that amount, or on
that part of that amount, as the case may be, in respect of that period first
referred to in paragraph (b).
(1) If the Board is satisfied that:
(a) a person or partnership (in this section called the
defaulter) has failed to discharge an obligation to transfer
securities to another person or partnership (in this section called the
entitled entity); and
(b) the entitled entity:
(i) has made a claim under Division 6, 6A, 6B or 6C in respect of the
failure and has had securities transferred to it, or an amount paid to it, in
satisfaction of the claim; or
(ii) unless it is a settlement authority—would have been entitled to
make a claim under Division 6B or 6C in respect of the failure if a
settlement authority had not transferred securities to it for the purpose of
remedying the failure; or
(iii) if it is a settlement authority—would have been entitled to
make a claim under Division 6C in respect of the failure if it had not
obtained securities for the purpose of remedying the failure; and
(c) if the defaulter had duly transferred securities in accordance with
the obligation, an amount would have been paid, or property would have been
transferred, to the entitled entity as the holder of the securities;
and
(d) the entitled entity has not received, and is not entitled to receive
(otherwise than from the defaulter):
(i) the amount or property; or
(ii) an equivalent amount or equivalent property in respect of securities
transferred or obtained as mentioned in paragraph (b); and
(e) if subparagraph (b)(i) applies and an amount has been paid in
satisfaction of the claim—the amount paid does not adequately compensate
the entitled entity for the loss of the amount or property referred to in
paragraph (c);
the Board may determine in writing that there be paid to the entitled
entity, in respect of the loss of the amount or property referred to in
paragraph (c), a specified amount that the Board considers to be fair and
reasonable in all the circumstances.
(2) If a determination is made under subsection (1), SEGC must pay to
the entitled entity the amount specified in it.
(1) SEGC:
(a) may buy securities for the purpose of complying with subsection
950(3), 950(4), 952(4), 952(5), 954G(2), 954S(2) or 954Z(2), paragraph 960(2)(a)
or subsection 963(3); and
(b) may pay money out of the Fund for the purpose of so buying securities
or for any other purpose connected with complying with that subsection or
paragraph.
(2) Securities bought by SEGC as mentioned in subsection (1) form
part of the Fund until they are supplied in accordance with this Part to a
claimant or sold in accordance with subsection (3).
(3) If:
(a) SEGC buys securities for the purpose of complying, in relation to a
claim, with a provision referred to in paragraph (1)(a); and
(b) SEGC satisfies the claim by paying an amount to the
claimant;
SEGC must, as soon as practicable after satisfying the claim, sell the
securities and pay the proceeds of the sale into the Fund.
(4) In this section:
securities includes security benefits, within the meaning of
Division 6A, other than amounts of money.
Where SEGC allows a claim, neither the allowing of the claim, nor any act
done by SEGC as a result of allowing the claim, is taken for any purpose to
constitute an admission by any person of liability in respect of any matter,
other than an admission of SEGC of its liability in respect of the
claim.
SEGC must, after wholly or partly disallowing a claim, serve on the
claimant, or on the claimant’s solicitor, notice of the disallowance in
the prescribed form.
(1) Where SEGC has disallowed a claim, the claimant may, within 3 months
after notice of the disallowance has been served on the claimant, or on the
claimant’s solicitor, in accordance with section 975, bring
proceedings in the Court to establish the claim.
(2) Where, as at the end of a reasonable period after a claim was made,
SEGC has neither allowed nor disallowed the claim, the claimant may bring
proceedings in the Court to establish the claim.
(1) Where:
(a) a cash settlement provision requires SEGC to pay an amount in respect
of a claim; and
(b) that amount cannot be determined by agreement between SEGC and the
claimant;
that amount must be determined by arbitration in accordance with this
section.
(1A) Where:
(a) in relation to a claim, paragraph 970B(3)(c), (5)(c) or (6)(c)
requires the Board to work out the value of securities, or the number of
securities that are equal in value to some other value or amount; and
(b) the value or number cannot be determined by agreement between the
Board and the claimant;
the value or number is to be determined by arbitration in accordance with
this section.
(2) The reference to arbitration must be made to persons appointed, in
accordance with subsection (3), for the purposes of the reference and the
agreed arbitration law applies in relation to the reference.
(2A) Parties to the arbitration may agree on the State or Territory whose
law is to govern the arbitration. The agreed arbitration law is
the law of that State or Territory relating to commercial arbitration.
(3) The participating exchange must appoint, or the participating
exchanges must jointly appoint, as the case requires, for the purposes of the
reference to arbitration, 3 persons whose appointment under this subsection has
been approved in writing by the Minister and at least 2 of whom are neither
members of a participating exchange nor officers or employees of SEGC, of a
participating exchange, or of a member organisation of a participating
exchange.
(7) In this section:
cash settlement provision means section 952A or 953,
subsection 954G(3), 954H(2), 954R(2), 954S(3), 954T(2), 954Z(3) or 954ZA(2),
section 960 or 961F or subsection 964(1) or (2).
(1) Where, in a proceeding to establish a claim, the Court is satisfied
that the claim should be allowed, the Court:
(a) must, by order, make a declaration accordingly and direct SEGC to
allow the claim and deal with it in accordance with this Chapter; and
(b) may, at any time after making the order, give, upon application made
by the claimant or SEGC, such directions relating to the claim as the Court
thinks just and reasonable.
(2) In a proceeding to establish a claim, or in an application under
paragraph (1)(b), all questions of costs are in the discretion of the
Court.
(1) The Board may, by notice served on a person, require the person to
give to SEGC specified securities, documents, or statements of evidence,
necessary to support a claim or necessary for the purpose of:
(a) exercising SEGC’s rights against a member, or a member
organisation, of a participating exchange or against any other person;
or
(b) enabling criminal proceedings to be taken against a person.
(1A) The Board may, for the purposes of section 970A or 970B, by
notice in writing served on a person, require the person to give SEGC specified
information relating to the existence or exercise of rights of
set-off.
(2) Where a person fails, without reasonable excuse, to comply with a
requirement under subsection (1) or (1A), SEGC may disallow a claim made by
the person.
(1) Where SEGC:
(a) allows under subsection 949(5) or 951(3) a claim made under
Division 6 in respect of a sale of securities; or
(b) allows under subsection 950(2) or 952(3) a claim made under
Division 6 in respect of a purchase of securities;
SEGC is subrogated to all the claimant’s rights and remedies in
relation to the sale or purchase, as the case may be.
(1A) Where SEGC allows a claim under section 950 in respect of a
purchase the agreement for which has been novated, SEGC is subrogated to all the
rights and remedies of the claimant in relation to the replacement agreement or
agreements.
(1B) Where SEGC allows a claim under Division 6A in respect of an
obligation under a guaranteed securities loan, SEGC is subrogated to all the
claimant’s rights and remedies in relation to that obligation.
(1C) Where SEGC allows a claim under section 954D in respect of an
obligation under a guaranteed securities loan that has been novated, SEGC is
subrogated to all the claimant’s rights and remedies in relation to the
obligation, under a replacement agreement, that replaced the first-mentioned
obligation.
(1D) Where SEGC allows a claim under subsection 954N(1) or 954P(2) in
respect of an obligation to pay an amount or to transfer securities, SEGC is
subrogated to all the claimant’s rights and remedies in relation to that
obligation.
(1E) Where SEGC allows a claim under subsection 954P(3) in respect of a
failure to transfer securities, SEGC is subrogated to all the rights and
remedies that the claimant has in relation to that failure because of the
subrogation effected by paragraph 954P(3)(a).
(1F) Where SEGC allows a claim under subsection 954Y(2) in respect of a
purported transfer of securities, SEGC is subrogated to all the claimant’s
rights and remedies in relation to that purported transfer.
(1G) Where SEGC allows a claim under subsection 954Y(3) in respect of a
purported transfer of securities, SEGC is subrogated to:
(a) if the claimant is also the transferee referred to in that
subsection—all the claimant’s rights and remedies in relation to
that purported transfer; or
(b) otherwise—all the rights and remedies that the claimant has in
relation to that purported transfer because of the subrogation effected by
paragraph 954Y(3)(c).
(2) Where SEGC allows a claim made under Division 7 in respect of an
unauthorised execution (within the meaning of that Division), SEGC is subrogated
to all the claimant’s rights and remedies in relation to the conduct that
constitutes the unauthorised execution.
(2A) Where SEGC allows a claim made under Division 7A in respect of a
contravention of the SCH certificate cancellation provisions, SEGC is subrogated
to all the claimant’s rights and remedies in relation to the
contravention.
(3) Where SEGC allows a claim made under Division 8 in respect of
property, SEGC is subrogated to all the claimant’s rights and remedies in
relation to the property.
(4) Where, by virtue of this section, SEGC is subrogated to a right or
remedy that a person has against another person, then:
(a) if SEGC has reason to believe that an insurer may be liable to
indemnify the other person in respect of the subject matter of the right or
remedy—SEGC must serve a notice on the insurer setting out particulars of
the right or remedy and stating that SEGC is, by virtue of this section,
subrogated to the right or remedy; and
(b) an insurer that considers that it may be liable so to indemnify the
other person may, whether or not SEGC has served a notice on the insurer under
paragraph (a), apply to be joined as a party to a proceeding that relates
to the right or remedy and to which the first-mentioned person or SEGC is a
party; and
(c) the first-mentioned person or SEGC may, to the extent of the liability
of an insurer so to indemnify the other person, enforce against the insurer a
judgment or order obtained in such a proceeding in so far as the proceeding
relates to the right or remedy.
(5) Except as provided in this section, nothing in this Part affects a
right or remedy that a claimant under Division 6, 6A, 6B, 6C, 7, 7A or 8
has against a person other than SEGC.
Property of SEGC, other than property forming part of the Fund, is not
available to be applied in respect of a claim that has been allowed by SEGC,
whether or not under an order of the Court.
(1) SEGC may enter into a contract with a person carrying on fidelity
insurance business under which SEGC will be insured or indemnified, to the
extent and in the manner provided by the contract, against liability in respect
of claims.
(2) A contract entered into under subsection (1) may relate to
dealers generally, particular classes of dealers specified in the contract,
particular dealers so specified, or dealers generally with the exclusion of
particular classes of dealers, or particular dealers, so specified.
(3) SEGC, a participating exchange, a member of the Board and any employee
of SEGC or of a participating exchange each have qualified privilege in respect
of the publication of a statement that a contract entered into under
subsection (1) does or does not apply with respect to a dealer.
(4) Where SEGC has entered into a contract of insurance or indemnity with
an insurer under this section, a person who has made a claim does not have a
right of action against the insurer in respect of the contract or a right or
claim in respect of money paid by the insurer in accordance with the
contract.
(5) In this section:
dealer means a member, or a member organisation, of a
participating exchange.
(1) Where, at a particular time, the Board is of the opinion that, if all
the amounts that, as at that time, are payable out of the Fund in connection
with claims were so paid, the Fund would be exhausted or substantially depleted,
the Board may determine in writing that amounts so payable as at that time must
be so paid in instalments of specified amounts payable on specified
days.
(2) In subsection (1):
claim means a claim under Division 6, 6A, 6B, 6C, 7, 7A
or 8 or a claim that, for the purposes of Division 10, is a transferred
claim in relation to a joining exchange.
(3) A determination under subsection (1) applies subject to
subsection 932(3).
(1) ASIC may, in writing, declare that the provisions of a claims Division
are to have effect in their application in relation to a particular transaction,
or a particular class of transactions, either generally or as otherwise provided
in the declaration, as if specified modifications were made to the
provisions.
(2) A declaration may relate to transactions whether entered into before
or after the making of the declaration.
(3) A declaration has effect accordingly.
(4) ASIC must cause a copy of a declaration to be published in the
Gazette.
(5) A reference in this section to the provisions of a claims Division
includes a reference to regulations made for the purposes of the provisions, or
any of the provisions, of the Division.
(6) In this section:
claims Division means Division 6, 6A, 6B, 6C, 7, 7A or
8.
In this Division, unless the contrary intention appears:
joining day, in relation to a joining exchange, means the day
on which the joining exchange became:
(a) an Exchange subsidiary; or
(b) a participating exchange.
joining exchange means:
(a) a securities exchange that:
(i) at a particular time after 1 January 1991 became or becomes an
Exchange subsidiary; and
(ii) was not, immediately before that time, an exchange subsidiary;
or
(b) a securities exchange that:
(i) at a particular time after the commencement of this Part becomes a
participating exchange; and
(ii) was not, immediately before that time, a participating
exchange.
liability provisions means sections 907 to 916,
inclusive.
transferred claim, in relation to a joining exchange,
means:
(a) a claim made, before the joining day in relation to the joining
exchange, for compensation from the joining exchange’s fidelity fund;
or
(b) a claim that, as at the time immediately before the joining day in
relation to the joining exchange, the liability provisions entitled a person to
make for compensation from the joining exchange’s fidelity fund, but that,
as at that time, had not been made; or
(c) a claim that purports to be a claim of a kind referred to in
paragraph (b).
(1) The money that at the end of the joining day in relation to a joining
exchange was in the joining exchange’s fidelity fund must, as soon as
practicable after that day, be paid out of that fidelity fund and into the
Fund.
(2) At the beginning of the next day after the joining day in relation to
a joining exchange:
(a) the investments and other property of the joining exchange’s
fidelity fund that at the end of the joining day were vested in the joining
exchange vest in SEGC and become part of the Fund; and
(b) the rights that at the end of the joining day the joining exchange
had, whether under a previous law or otherwise, in connection with the
administration of the joining exchange’s fidelity fund vest in SEGC;
and
(c) SEGC becomes liable to pay and discharge the debts, liabilities and
obligations of the joining exchange that arose, whether under a previous law or
otherwise, in connection with the administration of the joining exchange’s
fidelity fund and that existed at the end of the joining day.
(3) A reference in subsection (2) to rights or to debts, liabilities
and obligations does not include a reference to rights, or to debts, liabilities
and obligations, as the case may be, arising under a contract of employment or
under a contract for services.
(4) Investments that at the end of the joining day in relation to a
joining exchange were held, by a person other than the joining exchange, for the
purposes of the joining exchange’s fidelity fund are held after that day
for the purposes of the Fund.
(5) After the joining day in relation to a joining exchange, an agreement
(other than a contract of employment or a contract for services) that was
entered into:
(a) by or on behalf of the joining exchange as a party; and
(b) in connection with the administration of the joining exchange’s
fidelity fund;
and was in force at the end of that day applies, with such modifications as
the circumstances require, as if:
(c) SEGC were substituted for the joining exchange as a party to the
agreement; and
(d) a reference in the agreement to the joining exchange were, except in
relation to a time on or before that day, a reference to SEGC.
(6) Without limiting the generality of another provision of this section,
where, as at the end of the joining day in relation to a joining exchange, an
amount advanced under subsection 905(1) by the joining exchange to its fidelity
fund has not been repaid, an amount equal to the first-mentioned amount is,
after that day, payable, on demand, by SEGC to the joining exchange.
(7) Where, at the end of the joining day in relation to a joining
exchange, proceedings:
(a) to which the joining exchange was a party; and
(b) that arose out of, or were otherwise connected with, the
administration of the joining exchange’s fidelity fund;
were pending in a court or tribunal, SEGC is, at the beginning of the next
day after the joining day, substituted for the joining exchange as a party to
the proceedings and has the same rights in the proceedings as the party for
which it was substituted.
(8) An amount that, as a result of the operation of this section, is or
becomes payable by SEGC is payable out of the Fund.
(9) This section applies subject to section 987.
(1) A joining exchange must, as soon as practicable, and in any event
within 2 months, after the joining day in relation to the joining
exchange:
(a) prepare a statement of the assets and liabilities of its fidelity fund
as on that day; and
(b) appoint a registered company auditor to audit the statement.
(2) Without limiting the generality of subsection (1), a statement
prepared under that subsection must set out full particulars, so far as known
when the statement is prepared, of all liabilities (including contingent
liabilities) of the joining exchange’s fidelity fund in respect of
transferred claims.
(3) An auditor appointed to audit a statement prepared under
subsection (1) in relation to a joining exchange’s fidelity fund
must, within 1 month after the statement is prepared:
(a) audit the statement; and
(b) cause a report on the statement to be given to the Board and a copy of
the report to be given to the board of the joining exchange.
(4) The Board must give to ASIC a copy of a report given to the Board
under this section, and a copy of the statement to which the report relates,
within 14 days after the report is given to the Board.
On and after the joining day in relation to a joining exchange, the
liability provisions apply, for the purposes of a transferred claim in relation
to the joining exchange, as if, except in relation to a time before that
day:
(a) a reference in those provisions to the fidelity fund of a securities
exchange were a reference to the Fund; and
(b) a reference in those provisions to the board of a securities exchange
were a reference to the Board; and
(c) a reference in those provisions to a securities exchange were a
reference to SEGC;
and with such other modifications as the circumstances
require.
(2) A person must not, in or in connection with:
(a) any dealing in securities; or
(b) without limiting the generality of paragraph (a):
(i) the allotment or issue of securities; or
(ii) a notice published in relation to securities; or
(iii) the making of, or the making of an evaluation of, or of a
recommendation in relation to, offers under a takeover bid; or
(iv) the carrying on of any negotiations, the making of any arrangements
or the doing of any other act preparatory to or in any other way related to any
matter referred to in subparagraph (i), (ii) or (iii);
engage in conduct that is misleading or deceptive or is likely to mislead
or deceive.
(2A) Conduct that contravenes:
(a) section 670A (misleading or deceptive takeover document);
or
(b) section 728 (misleading or deceptive fundraising
document);
does not contravene subsection (2). For this purpose, conduct
contravenes the provision even if the conduct does not constitute an offence, or
does not lead to any liability, because of the availability of a
defence.
(3) A person who contravenes this section is not guilty of an
offence.
(4) Nothing in the following provisions of this Part or in the provisions
of Chapter 6D is taken as limiting by implication the generality of
subsection (2).
This Division operates in relation to dealings in securities in this
jurisdiction to the exclusion of the provisions of the State Fair Trading Act of
any State or Territory.
(1) A person must not enter into or carry out, either directly or
indirectly, 2 or more transactions in securities of a body corporate, being
transactions that have, or are likely to have, the effect of increasing the
price of securities of the body corporate on a stock market, with intention to
induce other persons to buy or subscribe for securities of the body corporate or
of a related body corporate.
(4) A person must not enter into, or carry out, either directly or
indirectly, 2 or more transactions in securities of a body corporate, being
transactions that have, or are likely to have, the effect of reducing the price
of securities of the body corporate on a stock market, with intent to induce
other persons to sell securities of the body corporate or of a related body
corporate.
(7) A person must not enter into, or carry out, either directly or
indirectly, 2 or more transactions in securities of a body corporate, being
transactions that have, or are likely to have, the effect of maintaining or
stabilising the price of securities of the body corporate on a stock market,
with intent to induce other persons to sell, buy or subscribe for securities of
the body corporate or of a related body corporate.
(10) A reference in this section to a transaction, in relation to
securities, includes:
(a) a reference to the making of an offer to sell or buy securities;
and
(b) a reference to the making of an invitation, however expressed, that
expressly or impliedly invites a person to offer to sell or buy
securities.
(1) A person must not create, or do anything that is intended or likely to
create, a false or misleading appearance of active trading in any securities on
a stock market or a false or misleading appearance with respect to the market
for, or the price of, any securities.
(3) A person must not, by means of purchases or sales of any securities
that do not involve a change in the beneficial ownership of those securities or
by any fictitious transactions or devices, maintain, increase, reduce, or cause
fluctuations in, the market price of any securities.
(5) Without limiting the generality of subsection (1), a person
who:
(a) enters into, or carries out, either directly or indirectly, any
transaction of sale or purchase of any securities, being a transaction that does
not involve any change in the beneficial ownership of the securities;
or
(b) offers to sell any securities at a specified price where the person
has made or proposes to make, or knows that an associate of the person has made
or proposes to make, an offer to buy the same number, or substantially the same
number, of securities at a price that is substantially the same as the
first-mentioned price; or
(c) offers to buy any securities at a specified price where the person has
made or proposes to make, or knows that an associate of the person has made or
proposes to make, an offer to sell the same number, or substantially the same
number, of securities at a price that is substantially the same as the
first-mentioned price;
is taken to have created a false or misleading appearance of active trading
in those securities on a stock market.
(6) In a prosecution of a person for a contravention of
subsection (1) constituted by an act referred to in subsection (5), it
is a defence if it is proved that the purpose or purposes for which the person
did the act was not, or did not include, the purpose of creating a false or
misleading appearance of active trading in securities on a stock
market.
(7) A purchase or sale of securities does not involve a change in the
beneficial ownership for the purposes of this section if a person who had an
interest in the securities before the purchase or sale, or an associate of the
person in relation to those securities, has an interest in the securities after
the purchase or sale.
(8) In a prosecution for a contravention of subsection (3) in
relation to a purchase or sale of securities that did not involve a change in
the beneficial ownership of those securities, it is a defence if it is proved
that the purpose or purposes for which the securities were bought or sold was
not, or did not include, the purpose of creating a false or misleading
appearance with respect to the market for, or the price of,
securities.
(9) The reference in paragraph (5)(a) to a transaction of sale or
purchase of securities includes:
(a) a reference to the making of an offer to sell or buy securities;
and
(b) a reference to the making of an invitation, however expressed, that
expressly or impliedly invites a person to offer to sell or buy
securities.
A person must not make a statement, or disseminate information, that is
false in a material particular or materially misleading and:
(aa) is likely to induce other persons to subscribe for securities;
or
(a) is likely to induce the sale or purchase of securities by other
persons; or
(b) is likely to have the effect of increasing, reducing, maintaining or
stabilising the market price of securities;
if, when the person makes the statement or disseminates the
information:
(c) the person does not care whether the statement or information is true
or false; or
(d) the person knows or ought reasonably to have known that the statement
or information is false in a material particular or materially
misleading.
(1) A person must not:
(a) by making or publishing a statement, promise or forecast that the
person knows to be misleading, false or deceptive; or
(b) by a dishonest concealment of material facts; or
(c) by the reckless making or publishing (dishonestly or otherwise) of a
statement, promise or forecast that is misleading, false or deceptive;
or
(d) by recording or storing in, or by means of, any mechanical, electronic
or other device information that the person knows to be false in a material
particular or materially misleading;
induce or attempt to induce another person to deal in securities.
(3) It is a defence to a prosecution for a contravention of
subsection (1) constituted by recording or storing information as mentioned
in paragraph (1)(d) if it is proved that, when the information was so
recorded or stored, the defendant had no reasonable grounds for expecting that
the information would be available to any other person.
A person must not circulate or disseminate any statement or information
to the effect that the price of any securities of a body corporate will or is
likely to rise or fall or be maintained because of any transaction entered into
or other act or thing done in relation to securities of that body corporate or
of a body corporate that is related to that body corporate, in contravention of
section 997, 998, 999 or 1000 if:
(a) the person, or an associate of the person, has entered into any such
transaction or done any such act or thing; or
(b) the person, or an associate of the person, has received, or expects to
receive, directly or indirectly, any consideration or benefit in respect of the
circulation or dissemination of the statement or information.
(1) This section applies to a listed disclosing entity if provisions of
the listing rules of a securities exchange:
(a) apply to the entity; and
(b) require the entity to notify the securities exchange of information
about specified events or matters as they arise for the purpose of the
securities exchange making that information available to a stock market
conducted by the securities exchange.
(2) The disclosing entity must not contravene those provisions by
intentionally, recklessly or negligently failing to notify the securities
exchange of information:
(a) that is not generally available; and
(b) that a reasonable person would expect, if it were generally available,
to have a material effect on the price or value of ED securities of the
entity.
(3) A contravention of subsection (2) is only an offence if the
failure concerned is intentional or reckless.
(4) For the purposes of the application of this section to a listed
disclosing entity that is an undertaking to which interests in a registered
scheme relate, the obligation of the entity not to contravene provisions as
mentioned in subsection (2) is an obligation of the responsible
entity.
(1) If:
(a) an unlisted disclosing entity becomes aware of information:
(i) that is not generally available; and
(ii) that a reasonable person would expect, if it were generally
available, to have a material effect on the price or value of ED securities of
the entity; and
(b) the information is not required to be included in a supplementary
disclosure document or a replacement disclosure document in relation to the
entity;
the entity must, as soon as practicable, lodge a document containing the
information.
(2) An unlisted disclosing entity does not contravene subsection (1)
except by an intentional, reckless or negligent act or omission.
(3) A contravention of subsection (1) is only an offence if the
failure concerned is intentional or reckless.
(4) For the purposes of the application of this section to an unlisted
disclosing entity that is an undertaking to which interests in a registered
scheme relate:
(a) the entity is aware of information if, and only if, the responsible
entity is aware of the information; and
(b) the obligation of the entity to lodge a document under
subsection (1) is an obligation of the responsible entity; and
(c) subsection (2) applies as if the reference in it to an unlisted
disclosing entity were instead a reference to the responsible entity.
(1) This section has effect for the purposes of sections 1001A and
1001B.
(2) Information is generally available if:
(a) it consists of readily observable matter; or
(b) without limiting the generality of paragraph (a), both the
following subparagraphs apply:
(i) it has been made known in a manner that would, or would be likely to,
bring it to the attention of persons who commonly invest in securities of a kind
whose price or value might be affected by the information; and
(ii) since it was so made known, a reasonable period for it to be
disseminated among such persons has elapsed.
(3) Information is also generally available if it consists of deductions,
conclusions or inferences made or drawn from either or both of the
following:
(a) information referred to in paragraph (2)(a);
(b) information made known as mentioned in
subparagraph (2)(b)(i).
For the purposes of sections 1001A and 1001B, a reasonable person
would be taken to expect information to have a material effect on the price or
value of securities if the information would, or would be likely to, influence
persons who commonly invest in securities in deciding whether or not to
subscribe for, or buy or sell, the first-mentioned securities.
This Division applies to:
(a) acts and omissions in this jurisdiction in relation to securities of
any body corporate, whether formed or carrying on business in this jurisdiction
or in Australia or not; and
(b) acts and omissions outside this jurisdiction, whether in Australia or
not, in relation to securities of a body corporate that is formed or carries on
business in this jurisdiction.
(1) In this Division and in section 1013:
information includes:
(a) matters of supposition and other matters that are insufficiently
definite to warrant being made known to the public; and
(b) matters relating to the intentions, or the likely intentions, of a
person.
purchase, in relation to securities, includes, in the case of
an option contract under which a party acquires an option or right from another
party, acquire the option or right under the contract, or take an assignment of
the option or right, whether or not on another’s behalf.
securities, in relation to a body corporate, means any of the
following:
(a) shares in the body corporate;
(b) debentures (including convertible notes) issued by the body
corporate;
(c) interests in a managed investment scheme made available by the body
corporate;
(d) units of shares referred to in paragraph (a);
(e) an option contract under which a party acquires from another party an
option or right, exercisable at or before a specified time, to buy from, or sell
to, that other party a number of securities of a kind referred to in
paragraph (a), (b), (c) or (d) at a price specified in, or to be determined
in accordance with, the contract;
but does not include a futures contract or an excluded security.
sell, in relation to securities, includes, in the case of an
option contract under which a party acquires an option or right from another
party:
(a) grant or assign the option or right; or
(b) take, or cause to be taken, such action as releases the option or
right;
whether or not on another’s behalf.
(2) A provision of this Division or of section 1013 that applies in
relation to securities of a body corporate:
(a) also applies in relation to securities (as defined by subsection
92(1)) issued by a government, an unincorporated body or any other person;
and
(b) applies, in relation to securities so issued, in the same way, as
nearly as practicable, as if the government, body or person were a body
corporate.
(1) This section has effect for the purposes of this Division and
section 1013.
(2) Information is generally available if:
(a) it consists of readily observable matter; or
(b) without limiting the generality of paragraph (a), both the
following subparagraphs apply:
(i) it has been made known in a manner that would, or would be likely to,
bring it to the attention of persons who commonly invest in securities of bodies
corporate of a kind whose price or value might be affected by the information;
and
(ii) since it was so made known, a reasonable period for it to be
disseminated among such persons has elapsed.
(3) Information is also generally available if it consists of deductions,
conclusions or inferences made or drawn from either or both of the
following:
(a) information referred to in paragraph (2)(a);
(b) information made known as mentioned in
subparagraph (2)(b)(i).
For the purposes of this Division and section 1013, a reasonable
person would be taken to expect information to have a material effect on the
price or value of securities of a body corporate if the information would, or
would be likely to, influence persons who commonly invest in securities in
deciding whether or not to subscribe for, buy or sell the first-mentioned
securities.
(1) Trading in securities of a body corporate that is ordinarily permitted
on the stock market of a securities exchange is taken for the purposes of this
Division to be permitted on that stock market even though trading in any such
securities on that stock market is suspended by action taken by that securities
exchange or is prohibited by a notice given to that securities exchange by ASIC
under subsection 775(2).
(2) For the purposes of this Division and section 1013 but without
limiting the meaning that the expression procure has apart from
this section, if a person incites, induces, or encourages an act or omission by
another person, the first-mentioned person is taken to procure the act or
omission by the other person.
For the purposes of this Division and section 1013:
(a) a body corporate is taken to possess any information which an officer
of the body corporate possesses and which came into his or her possession in the
course of the performance of duties as such an officer; and
(b) if an officer of a body corporate knows or ought reasonably to know
any matter or thing because he or she is an officer of the body corporate, it is
to be presumed that the body corporate knows or ought reasonably to know that
matter or thing.
For the purposes of this Division and section 1013:
(a) a member of a partnership is taken to possess any
information:
(i) which another member of the partnership possesses and which came into
the other member’s possession in the other member’s capacity as a
member of the partnership; or
(ii) which an employee of the partnership possesses and which came into
his or her possession in the course of the performance of duties as such an
employee; and
(b) if a member or employee of a partnership knows or ought reasonably to
know any matter or thing because the member or employee is such a member or
employee, it is to be presumed that every member of the partnership knows or
ought reasonably to know that matter or thing.
(1) Subject to this Division, where:
(a) a person (in this section called the insider) possesses
information that is not generally available but, if the information were
generally available, a reasonable person would expect it to have a material
effect on the price or value of securities of a body corporate; and
(b) the person knows, or ought reasonably to know, that:
(i) the information is not generally available; and
(ii) if it were generally available, it might have a material effect on
the price or value of those securities;
the following subsections apply.
(2) The insider must not (whether as principal or agent):
(a) subscribe for, purchase or sell, or enter into an agreement to
subscribe for, purchase or sell, any such securities; or
(b) procure another person to subscribe for, purchase or sell, or to enter
into an agreement to subscribe for, purchase or sell, any such
securities.
(3) Where trading in the securities referred to in subsection (1) is
permitted on the stock market of a securities exchange, the insider must not,
directly or indirectly, communicate the information, or cause the information to
be communicated, to another person if the insider knows, or ought reasonably to
know, that the other person would or would be likely to:
(a) subscribe for, purchase or sell, or enter into an agreement to
subscribe for, purchase or sell, any such securities; or
(b) procure a third person to subscribe for, purchase or sell, or to enter
into an agreement to subscribe for, purchase or sell, any such
securities.
Subsection 1002G(2) does not apply in respect of a member’s
withdrawal from a registered scheme if the amount paid to the member on
withdrawal is calculated (so far as is reasonably practicable) by reference to
the underlying value of the assets of the financial or business undertaking or
scheme, common enterprise, investment contract or time-sharing scheme to which
the member’s interest relates, less any reasonable charge for buying the
member’s interest.
(1) Subsection 1002G(2) does not apply in respect of:
(a) subscribing for securities under an underwriting agreement or a
sub-underwriting agreement; or
(b) entering into an agreement referred to in paragraph (a);
or
(c) selling securities subscribed for under an agreement referred to in
paragraph (a).
(2) Subsection 1002G(3) does not apply in respect of:
(a) the communication of information in relation to securities to a person
solely for the purpose of procuring the person to enter into an underwriting
agreement in relation to any such securities; or
(b) the communication of information in relation to securities by a person
who may be required under an underwriting agreement to subscribe for any such
securities if the communication is made to another person solely for the purpose
of procuring the other person to do either or both of the following:
(i) enter into a sub-underwriting agreement in relation to any such
securities;
(ii) subscribe for any such securities.
Subsection 1002G(2) does not apply in respect of the purchase of
securities pursuant to a requirement imposed by this Act.
Subsection 1002G(3) does not apply in respect of the communication of
information pursuant to a requirement imposed by the Commonwealth, a State, a
Territory or any regulatory authority.
A body corporate does not contravene subsection 1002G(2) by entering into
a transaction or agreement at any time merely because of information in the
possession of an officer of the body corporate if:
(a) the decision to enter into the transaction or agreement was taken on
its behalf by a person or persons other than that officer; and
(b) it had in operation at that time arrangements that could reasonably be
expected to ensure that the information was not communicated to the person or
persons who made the decision and that no advice with respect to the transaction
or agreement was given to that person or any of those persons by a person in
possession of the information; and
(c) the information was not so communicated and no such advice was so
given.
(1) The members of a partnership do not contravene subsection 1002G(2) by
entering into a transaction or agreement at any time merely because one or more
(but not all) of the members, or an employee or employees of the partnership,
are in actual possession of information if:
(a) the decision to enter into the transaction or agreement was taken on
behalf of the partnership by any one or more of the following persons:
(i) a member or members who are taken to have possessed the information
merely because another member or other members, or an employee or employees of
the partnership, were in possession of the information;
(ii) an employee or employees of the partnership who was not or were not
in possession of the information; and
(b) the partnership had in operation at that time arrangements that could
reasonably be expected to ensure that the information was not communicated to
the person or persons who made the decision and that no advice with respect to
the transaction or agreement was given to that person or any of those persons by
a person in possession of the information; and
(c) the information was not so communicated and no such advice was so
given.
(2) A member of a partnership does not contravene subsection 1002G(2) by
entering into a transaction or agreement otherwise than on behalf of the
partnership merely because the member is taken to possess information that is in
the possession of another member or an employee of the partnership.
A natural person does not contravene subsection 1002G(2) by entering into
a transaction or agreement in relation to securities of a body corporate merely
because the person is aware that he or she proposes to enter into, or has
previously entered into, one or more transactions or agreements in relation to
securities of that body corporate.
(1) A body corporate does not contravene subsection 1002G(2) by entering
into a transaction or agreement in relation to securities of another body
corporate merely because the first-mentioned body corporate is aware that it
proposes to enter into or has previously entered into, one or more transactions
or agreements in relation to securities of the other body corporate.
(2) Subject to subsection (3), a body corporate does not contravene
subsection 1002G(2) by entering into a transaction or agreement in relation to
securities of another body corporate merely because an officer of the
first-mentioned body corporate is aware that the first-mentioned body corporate
proposes to enter into, or has previously entered into, one or more transactions
or agreements in relation to securities of the other body corporate.
(3) Subsection (2) does not apply unless the officer of the body
corporate first-mentioned in that subsection became aware of the matters
referred to in that subsection in the course of the performance of duties as
such an officer.
(1) Subject to subsection (2), a person does not contravene
subsection 1002G(2) by entering into a transaction or agreement on behalf of a
body corporate in relation to securities of another body corporate merely
because the person is aware that the first-mentioned body corporate proposes to
enter into, or has previously entered into, one or more transactions or
agreements in relation to securities of the other body corporate.
(2) Subsection (1) does not apply unless the person became aware of
the matters referred to in that subsection in the course of the performance of
duties as an officer of the first-mentioned body corporate or in the course of
acting as an agent of the first-mentioned body corporate.
A person (in this section called the agent) does not
contravene subsection 1002G(2) by subscribing for, purchasing or selling, or
entering into an agreement to subscribe for, purchase or sell, securities of a
body corporate that are permitted by a securities exchange to be traded on the
stock market of that securities exchange if:
(a) the agent is the holder of a dealers licence or a representative of
the holder of such a licence; and
(b) the agent entered into the transaction or agreement concerned on
behalf of another person (in this section called the principal)
under a specific instruction by the principal to enter into that transaction or
agreement; and
(c) the holder of the dealers licence had in operation at the time when
that transaction or agreement was entered into arrangements that could
reasonably be expected to ensure that any information in the possession of the
holder or of any representative of the holder as a result of which the person in
possession of the information would be prohibited by subsection 1002G(2) from
entering into that transaction or agreement was not communicated to the agent
and that no advice with respect to the transaction or agreement was given to the
principal or to the agent by a person in possession of the information;
and
(d) the information was not so communicated and no such advice was so
given; and
(e) the principal is not an associate of the holder or of any
representative of the holder;
but nothing in this section affects the application of subsection 1002G(2)
in relation to the principal.
(1) In a prosecution of a person for an act or omission that is alleged to
constitute a contravention of subsection 1002G(2) or (3), it is not necessary
for the prosecution to prove the non-existence of facts or circumstances which,
if they existed, would, by virtue of section 1002H, 1002J, 1002K, 1002L,
1002M, 1002N, 1002P, 1002Q, 1002R or 1002S, preclude the act or omission from
constituting a contravention of subsection 1002G(2) or (3), as the case may be,
but it is a defence if the Court is satisfied that the facts or circumstances
existed.
(2) In a prosecution brought against a person for an offence against
subsection 1002G(2) because the person entered into, or procured another person
to enter into, a transaction or agreement at a time when certain information was
in the first-mentioned person’s possession:
(a) it is a defence if the Court is satisfied that the information came
into the first-mentioned person’s possession solely as a result of the
information having been made known as mentioned in subparagraph 1002B(2)(b)(i);
and
(b) it is a defence if the Court is satisfied that the other party to the
transaction or agreement knew, or ought reasonably to have known, of the
information before entering into the transaction or agreement.
(3) In a prosecution against a person for an offence against subsection
1002G(3) because the person communicated information, or caused information to
be communicated, to another person:
(a) it is a defence if the Court is satisfied that the information came
into the first-mentioned person’s possession solely as a result of the
information having been made known as mentioned in subparagraph 1002B(2)(b)(i);
and
(b) it is a defence if the Court is satisfied that the other person knew,
or ought reasonably to have known, of the information before the information was
communicated.
Where, in a proceeding instituted under this Act, the Court finds that a
contravention of section 1002G has occurred, the Court may, in addition to
any other orders that it may make under any other provision of this Act, make
such order or orders as it thinks just, including, but without limiting the
generality of the above, any one or more of the following orders:
(a) an order restraining the exercise of any voting or other rights
attached to shares;
(b) an order restraining the exercise of any rights attached to securities
other than shares;
(c) an order restraining the issue or allotment of shares;
(d) an order restraining the issue of securities other than
shares;
(e) an order restraining the acquisition or disposal of
securities;
(f) an order directing the disposal of securities;
(g) an order vesting securities in ASIC;
(h) an order cancelling an agreement for the acquisition or disposal of
securities;
(j) an order cancelling a securities licence;
(k) for the purpose of securing compliance with any other order made under
this section, an order directing a person to do or refrain from doing a
specified act.
(1) Subject to the following sections of this Division, a person who
suffers loss or damage by conduct of another person that was engaged in
contravention of a provision of this Part may recover the amount of the loss or
damage by action against that other person or against any person involved in the
contravention, whether or not that other person or any person involved in the
contravention has been convicted of an offence in respect of the
contravention.
(2) An action under subsection (1) or under subsection 1013(5) may be
begun at any time within 6 years after the day on which the cause of action
arose.
(3) This Division does not affect any liability that a person has under
any other law.
(4) In a proceeding under this Part in relation to a contravention of this
Part committed by the publication of an advertisement, it is a defence if it is
proved that the defendant is a person whose business it is to publish or arrange
for the publication of advertisements and that the person received the
advertisement for publication in the ordinary course of business and did not
know and had no reason to suspect that its publication would amount to a
contravention of a provision of this Part.
(1) Where:
(a) a person (in this section called the insider) possesses
information that is not generally available but, if the information were
generally available, a reasonable person would expect it to have a material
effect on the price or value of securities of a body corporate (other than an
option contract); and
(b) the person knows, or ought reasonably to know, that:
(i) the information is not generally available; and
(ii) if the information were generally available, it might have a material
effect on the price or value of those securities; and
(c) the insider (whether as principal or agent) in contravention of
subsection 1002G(2):
(i) subscribes for, purchases or sells, or enters into an agreement to
subscribe for, purchase or sell, any such securities; or
(ii) procures another person to subscribe for, purchase or sell, or to
enter into an agreement to subscribe for, purchase or sell, any such
securities;
the following subsections apply.
(2) Where the insider subscribed for or agreed to subscribe for, or
procured another person to subscribe for or to agree to subscribe for, the
securities, the body corporate that issued the securities may, by action under
section 1005 against the insider, the other person or any other person
involved in the contravention, recover, as a loss suffered by the body
corporate, the amount (if any) by which the price at which the securities were
subscribed for, or agreed to be subscribed for, by the insider or the other
person was less than the price at which they would have been likely to have been
sold in a sale made at the time of the subscription or the time of the
agreement, as the case may be, if the information had been generally
available.
(3) Where the insider purchased or agreed to purchase, or procured another
person to purchase or to agree to purchase, the securities from a person (in
this subsection and subsection (5) called the seller) who did
not possess the information, the seller may, by action under section 1005
against the insider, the other person or any other person involved in the
contravention, recover, as a loss suffered by the seller, the amount (if any) by
which the price at which the securities were purchased, or agreed to be
purchased, by the insider or the other person from the seller was less than the
price at which they would have been likely to have been purchased in a purchase
made at the time of the first-mentioned purchase or the time of the agreement,
as the case may be, if the information had been generally available.
(4) Where the insider sold or agreed to sell, or procured another person
to sell or to agree to sell, the securities to a person (in this subsection and
subsection (5) called the buyer) who did not possess the
information, the buyer may, by action under section 1005 against the
insider, the other person or any other person involved in the contravention,
recover, as a loss suffered by the buyer, the amount (if any) by which the price
at which the securities were sold, or agreed to be sold, by the insider or the
other person to the buyer was greater than the price at which they would have
been likely to have been sold at the time of the first-mentioned sale or the
time of the agreement, as the case may be, if the information had been generally
available.
(5) In addition to any action that may be brought by a person as provided
by subsection (3) or (4), the body corporate may, in the case of a purchase
or sale of, or an agreement to purchase or sell, securities by the insider or
another person in the circumstances mentioned in that subsection, by action
under section 1005 against the insider, the other person or any other
person involved in the contravention, recover:
(a) in the case of a purchase or agreement to purchase
securities—the amount (if any) by which the price at which the securities
were purchased, or agreed to be purchased, by the insider or other person from
the seller was less than the price at which they were likely to have been
purchased in a purchase made at the time of the first-mentioned purchase or the
time of the agreement, as the case may be, if the information had been generally
available; or
(b) in the case of a sale or an agreement to sell securities—the
amount (if any) by which the price at which the securities were sold, or agreed
to be sold, by the insider or other person to the buyer was greater than the
price at which they would have been likely to have been sold at the time of the
first-mentioned sale or the time of the agreement, as the case may be, if the
information had been generally available.
(6) ASIC may, if it considers that it is in the public interest to do so,
bring an action in accordance with subsection (2) or (5) in the name of,
and for the benefit of, a body corporate for the recovery of an amount that the
body is entitled to recover by virtue of that subsection.
(7) In an action brought against a person in accordance with this section
because the person entered into, or procured another person to enter into, a
transaction or agreement at a time when certain information was in the
first-mentioned person’s possession, it is a defence if the Court is
satisfied that the information came into the first-mentioned person’s
possession solely as a result of the information having been made known as
mentioned in subparagraph 1002B(2)(b)(i).
(8) If:
(a) the responsible entity for a registered scheme; or
(b) ASIC in the name of, and for the benefit of, the responsible entity
for a registered scheme;
brings an action in accordance with subsection (2) in respect of a
subscription for, or any agreement to subscribe for, any interests in the
scheme, any amount recovered in the action:
(c) is to be held by the responsible entity on behalf of the persons who,
at the time of the subscription or agreement, had rights or interests in the
relevant financial or business undertaking or scheme, common enterprise,
investment contract or time-sharing scheme; and
(d) is to be held on their behalf in the respective proportions that, at
that time, their individual rights or interests bore to the total of all those
rights or interests.
(8A) If:
(a) the responsible entity for a registered scheme; or
(b) ASIC in the name of, and for the benefit of, the responsible entity
for a registered scheme;
brings an action in accordance with subsection (5) in respect of a
purchase or sale of, or an agreement to purchase or sell, interests in the
scheme, any amount recovered in the action:
(c) is to be held by the responsible entity on behalf of the persons who,
at the time of the sale, purchase or agreement, had rights or interests in the
relevant financial or business undertaking or scheme, common enterprise,
investment contract or time-sharing scheme; and
(d) is to be held on their behalf in the respective proportions that, at
that time, their individual rights or interests bore to the total of all those
rights or interests.
(9) Any right of action that a person has by virtue of this section is in
addition to any right that any other person has under
section 1005.
Where a person contravenes section 997, 998, 999, 1000 or 1001,
then, without limiting the generality of section 1005, any other person who
entered into a transaction for the sale or purchase of securities with the
first-mentioned person or with a person acting on behalf of the first-mentioned
person may, by action under section 1005 against the first-mentioned person
or against any person involved in the contravention, recover the amount of any
loss suffered by the person bringing the action because of the difference
between the price at which the securities were dealt in that transaction and the
price at which they would have been likely to have been dealt in such a
transaction when the first-mentioned transaction took place if the contravention
had not occurred.
(1) The amount that a person may recover by action against another person
in the circumstances mentioned in section 1013 or 1014 is:
(a) if the second-mentioned person has been found by a court to be liable,
or has been ordered by a court, to pay an amount or amounts to any other person
or persons under this Part or under Part 9.4B because of the same act or
transaction—the amount of the loss suffered by the first-mentioned person
or the amount of the profit referred to in paragraph 1013(1)(d), as the case may
be, less the amount or the sum of the amounts that the second-mentioned person
has been so found to be liable, or has been so ordered, to pay; or
(b) otherwise—the amount of that loss or profit.
(2) For the purposes of subsection (1), the onus of proving that the
liability of a person to pay an amount to another person arose from the same act
or transaction from which another liability arose lies on the person liable to
pay the amount.
(1) A share or other interest of a member in a company:
(a) is personal property; and
(b) is transferable or transmissible as provided by the company’s
constitution, or, if they are applicable, the SCH business rules; and
(c) subject to the company’s constitution (if any) and any
replaceable rules that apply to the company, and, if they are applicable, the
SCH business rules, is capable of devolution by will or by operation of
law.
(2) Subject to subsection (1):
(a) the laws applicable to ownership of and dealing with personal property
apply to a share or other interest of a member in a company as they apply to
other property; and
(b) equitable interests in respect of a share or other interest of a
member in a company may be created, dealt with and enforced as in the case of
other personal property.
(3) For the purposes of any law, a share or other interest of a member in
a company is taken to be situated:
(a) if the share or other interest is entered on the register kept under
section 169—in the State or Territory where that register is kept;
or
(b) if the share or other interest is entered on an overseas branch
register kept under section 178—in the foreign country where that
register is kept.
(1) Each share in a company must be distinguished by an appropriate
number.
(2) Despite subsection (1):
(a) if at any time all the issued shares in a company, or all the issued
shares in a company of a particular class, are fully paid up and rank equally
for all purposes, none of those shares is required to have a distinguishing
number so long as each of those shares remains fully paid up and ranks equally
for all purposes with all shares of the same class for the time being issued and
fully paid up; and
(b) if all the issued shares in a company are evidenced by certificates in
accordance with the provisions of section 1087, each certificate is
distinguished by an appropriate number and that number is recorded in the
register of members, none of those shares is required to have a distinguishing
number; and
(c) a share need not have a distinguishing number if the SCH business
rules provide that it need not have such a number.
(1) A certificate specifying the shares held by a member of a company must
state:
(a) the name of the company and the fact that it is registered
under this Act; and
(b) the class of the shares; and
(c) the amount (if any) unpaid on the shares.
(2) A certificate issued in accordance with subsection (1) specifying
shares held by a member of a company is prima facie evidence of the title of the
member to the shares.
(3) A failure to comply with subsection (1) does not affect the
rights of a holder of shares.
(1) Subject to subsection (2), where a certificate or other document
of title to shares, debentures or interests in a managed investment scheme is
lost or destroyed, the company must, on application by the owner of the shares,
debentures or interests, issue a duplicate certificate or document to the
owner:
(a) if the company requires the payment of an amount not exceeding the
prescribed amount—within 21 days after the payment is received by the
company or within such longer period as ASIC approves; or
(b) in a case to which paragraph (a) does not apply—within 21
days after the application is made or within such longer period as ASIC
approves.
(2) The application must be accompanied by:
(a) a statement in writing that the certificate or document has been lost
or destroyed, and has not been pledged, sold or otherwise disposed of, and, if
lost, that proper searches have been made; and
(b) an undertaking in writing that if it is found or received by the owner
it will be returned to the company.
(3) The directors of a company may, before accepting an application for
the issue of a duplicate certificate or document, require the
applicant:
(a) to cause an advertisement to be inserted in a daily newspaper
circulating in a place specified by the directors stating that the certificate
or document has been lost or destroyed and that the owner intends, after the end
of 14 days after the publication of the advertisement, to apply to the company
for a duplicate; or
(b) to give a bond for an amount equal to at least the current market
value of the shares, debentures or interests indemnifying the company against
loss following the production of the original certificate or document;
or to do both those things.
(4) If:
(a) a certificate of title to shares, debentures or interests is cancelled
under the SCH certificate cancellation provisions; and
(b) having regard to those provisions, the certificate should not have
been cancelled;
this section applies to the certificate as though it were destroyed on its
cancellation.
In this Division:
interest includes an interest in a managed investment
scheme.
(1AA) This section does not apply to an SCH-regulated transfer.
(1) Notwithstanding anything in its constitution or in a deed relating to
debentures or interests, a company must not register a transfer of shares,
debentures or interests unless a proper instrument of transfer has been
delivered to the company.
(1A) An instrument of transfer is not a proper instrument of transfer for
the purposes of subsection (1) unless:
(a) in the case of a transfer of marketable securities (within the meaning
of Division 3 of Part 7.13)—it is a sufficient transfer of the
marketable securities under that Division; or
(b) in any case—it shows the prescribed details in relation to the
company concerned.
(2) Subsection (1) does not prejudice the power of the company to
register as a shareholder, debenture holder or interest holder a person to whom
the right to any shares in, debentures of, or interests made available by, the
company has devolved by will or by operation of law.
(3) Subsections (4) to (11) deal with a transfer of a share,
debenture or interest of a dead holder by the dead holder’s personal
representative.
(4) The rules depend on whether the personal representative is a local
representative or not.
(5) The personal representative is a local representative if
the representative is duly constituted as personal representative under the law
of the State or Territory in which the share, debenture or interest is
situated.
Note: Subsection 1085(3) provides that the share, debenture
or interest is situated where the relevant register is kept.
(6) If the personal representative is a local representative, a transfer
of the share, debenture or interest by the representative is as valid as if the
representative had been registered as the holder of the share, debenture or
interest at the time when the instrument of transfer was executed.
(7) If:
(a) the personal representative is not a local representative;
and
(b) the representative:
(i) executes an instrument of transfer of the share, debenture or interest
to the representative or to another person; and
(ii) delivers the instrument to the company; and
(iii) delivers to the company with the instrument a statement in writing
made by the representative to the effect that, to the best of the
representative’s knowledge, information and belief, no grant of
representation of the estate of the deceased holder has been applied for or made
in the State or Territory in which the share, debenture or interest is located
and no application for such a grant will be made; and
(c) the statement is made within the period of 3 months immediately before
the date on which the statement is delivered to the company;
the company must register the transfer and pay to the representative any
dividends or other money accrued in respect of the share, debenture or interest
up to the time when the instrument was executed.
(8) Subsection (7) does not operate so as to require the company to
do anything that it would not have been required to do if the personal
representative were a local representative.
(9) A transfer or payment made under subsection (7) and a receipt or
acknowledgment of such a payment is, for all purposes, as valid and effectual as
if the personal representative were a local representative.
(10) For the purposes of this section, an application by a personal
representative of a dead person for registration as the holder of a share,
debenture or interest in place of the dead person is taken to be an instrument
of transfer effecting a transfer of the share, debenture or interest to the
personal representative.
(11) The production to a company of a document that is, under the law of a
State or Territory, sufficient evidence of probate of the will, or letters of
administration of the estate, of a dead person having been granted to a person
must be accepted by the company, notwithstanding anything in its constitution,
or in a deed relating to debentures or interests, as sufficient evidence of the
grant.
If shares not held jointly
(1) If a shareholder who does not own shares jointly dies, the company
will recognise only the personal representative of the deceased shareholder as
being entitled to the deceased shareholder’s interest in the
shares.
(2) If the personal representative gives the directors the information
they reasonably require to establish the representative’s entitlement to
be registered as holder of the shares:
(a) the personal representative may:
(i) by giving a written and signed notice to the company, elect to be
registered as the holder of the shares; or
(ii) by giving a completed transfer form to the company, transfer the
shares to another person; and
(b) the personal representative is entitled, whether or not
registered as the holder of the shares, to the same rights as the deceased
shareholder.
(3) On receiving an election under subparagraph (2)(a)(i), the
company must register the personal representative as the holder of the
shares.
(4) A transfer under subparagraph (2)(a)(ii) is subject to the same
rules (for example, about entitlement to transfer and registration of transfers)
as apply to transfers generally.
If shares held jointly
(5) If a shareholder who owns shares jointly dies, the company will
recognise only the survivor as being entitled to the deceased
shareholder’s interest in the shares. The estate of the deceased
shareholder is not released from any liability in respect of the
shares.
(1) If a person entitled to shares because of the bankruptcy of a
shareholder gives the directors the information they reasonably require to
establish the person’s entitlement to be registered as holder of the
shares, the person may:
(a) by giving a written and signed notice to the company, elect to
be registered as the holder of the shares; or
(b) by giving a completed transfer form to the company, transfer
the shares to another person.
(2) On receiving an election under paragraph (1)(a), the company must
register the person as the holder of the shares.
(3) A transfer under paragraph (1)(b) is subject to the same rules
(for example, about entitlement to transfer and registration of transfers) as
apply to transfers generally.
(4) This section has effect subject to the Bankruptcy Act
1966.
(1) Where:
(a) because of the Bankruptcy Act 1966, a share in a company, being
part of the property of a bankrupt, vests in the trustee of the bankrupt’s
estate; and
(b) the bankrupt is the registered holder of that share;
this section applies whether or not the trustee has been registered as the
holder of the share.
(2) On producing such information as the company’s directors
properly require, the trustee is entitled to:
(a) the same dividends and other benefits; and
(b) the same rights, for example, but without limitation, rights in
relation to:
(i) meetings of the company; or
(ii) documents, including notices of such meetings; or
(iii) voting; or
(iv) inspection of the company’s records;
as the bankrupt would be entitled to if he or she were not a
bankrupt.
(3) The trustee has the same rights:
(a) to transfer the share; and
(b) to require a person to do an act or give a consent in connection with
completing or registering a transfer of the share;
as the bankrupt would have if he or she were not a bankrupt.
(4) If the trustee transfers the share, the transfer is as valid as if the
trustee had been registered as the holder of the share when the trustee executed
the instrument of transfer.
(5) A person or body whose consent or approval is required for the
transfer of shares in the company must not unreasonably withhold consent or
approval for the transfer of the share by the trustee.
(6) A person who contravenes subsection (5) is not guilty of an
offence.
(7) If:
(a) the company’s constitution requires:
(i) the share to be offered for purchase to a member of the company;
or
(ii) an invitation to buy the share to be issued to such a member;
and
(b) as at the end of a reasonable period after the trustee so offers the
share, or so issues such an invitation, no such member has agreed to buy the
share from the trustee at a reasonable price;
the trustee may sell and transfer the share to a person other than such a
member.
(8) A provision of the company’s constitution is void as against the
trustee in so far as, apart from this section, it would affect rights attached
to the share:
(a) because the bankrupt is a bankrupt; or
(b) because of some event that led to the bankrupt becoming, or that
indicated that the bankrupt was about to become, or might be about to become, a
bankrupt; or
(c) for reasons including a reason referred to in paragraph (a) or
(b).
(9) Nothing in this section limits the generality of anything else in
it.
(10) This section has effect despite anything in the company’s
constitution.
(1) If a person entitled to shares because of the mental incapacity of a
shareholder gives the directors the information they reasonably require to
establish the person’s entitlement to be registered as the holder of the
shares:
(a) the person may:
(i) by giving a written and signed notice to the company, elect to be
registered as the holder of the shares; or
(ii) by giving a completed transfer form to the company, transfer the
shares to another person; and
(b) the person is entitled, whether or not registered as the holder
of the shares, to the same rights as the shareholder.
(2) On receiving an election under subparagraph (1)(a)(i), the
company must register the person as the holder of the shares.
(3) A transfer under subparagraph (1)(a)(ii) is subject to the same
rules (for example, about entitlement to transfer and registration of transfers)
as apply to transfers generally.
(1) In this section:
share, in relation to a body corporate, means a share in the
body that is registered in a register kept in this jurisdiction.
(2) A trustee, executor or administrator of the estate of a dead person
who was the registered holder of a share in a corporation may be registered as
the holder of that share as trustee, executor or administrator of that
estate.
(3) A trustee, executor or administrator of the estate of a dead person
who was entitled in equity to a share in a corporation may, with the consent of
the corporation and of the registered holder of that share, be registered as the
holder of that share as trustee, executor or administrator of that
estate.
(4) Where:
(a) a person is appointed, under a law of a State or Territory relating to
the administration of the estates of persons who, through mental or physical
infirmity, are incapable of managing their affairs, to administer the estate of
a person who is so incapable; and
(b) the incapable person is the registered holder of a share in a
corporation;
the first-mentioned person may be registered as the holder of that share as
administrator of that estate.
(5) Where:
(a) a person is appointed, under a law of a State or Territory relating to
the administration of the estates of a person who, through mental or physical
infirmity, are incapable of managing their affairs, to administer the estate of
a person who is so incapable; and
(b) the incapable person is entitled in equity to a share in a
corporation;
the first-mentioned person may, with the consent of the corporation and of
the registered holder of that share, be registered as the holder of the share as
administrator of that estate.
(6) Where:
(a) by virtue of the Bankruptcy Act 1966, a share in a body
corporate, being the property of a bankrupt, vests in the Official Trustee in
Bankruptcy; and
(b) the bankrupt is the registered holder of that share;
the Official Trustee may be registered as the holder of that share as the
Official Trustee in Bankruptcy.
(7) Where:
(a) by virtue of the Bankruptcy Act 1966, a share in a body
corporate, being the property of a bankrupt, vests in the Official Trustee in
Bankruptcy; and
(b) the bankrupt is entitled in equity to that share;
the Official Trustee may, with the consent of the body and of the
registered holder of that share, be registered as the holder of that share as
the Official Trustee in Bankruptcy.
(8) A person registered under subsection (2), (3), (4), (5), (6) or
(7), is, while registered as mentioned in that subsection, subject:
(a) to the same liabilities in respect of the share as those to which he,
she or it would have been subject if the share had remained, or had been, as the
case requires, registered in the name of the dead person, the incapable person
or the bankrupt, as the case may be; and
(b) to no other liabilities in respect of the share.
(9) Shares in a corporation registered in a register and held by a trustee
in respect of a particular trust may, with the consent of the corporation, be
marked in the register in such a way as to identify them as being held in
respect of the trust.
(10) Except as provided in this section and section 216B:
(a) no notice of a trust, whether express, implied or constructive, is to
be entered on a register kept in this jurisdiction or be receivable by ASIC;
and
(b) no liabilities are affected by anything done under a preceding
subsection of this section or under section 216B; and
(c) nothing so done affects the body corporate concerned with notice of a
trust.
(11) A person must, within one month after beginning to hold shares in a
proprietary company as trustee for, or otherwise on behalf of or on account of,
a body corporate, serve on the company notice in writing that the person so hold
the shares.
(1) A person transferring shares remains the holder of the shares until
the transfer is registered and the name of the person to whom they are being
transferred is entered in the register of members in respect of the
shares.
(2) The directors are not required to register a transfer of shares in the
company unless:
(a) the transfer and any share certificate have been lodged at the
company’s registered office; and
(b) any fee payable on registration of the transfer has been paid;
and
(c) the directors have been given any further information they
reasonably require to establish the right of the person transferring the shares
to make the transfer.
(3) The directors may refuse to register a transfer of shares in the
company if:
(a) the shares are not fully-paid; or
(b) the company has a lien on the shares.
(4) The directors may suspend registration of transfers of shares in the
company at the times and for the periods they determine. The periods of
suspension must not exceed 30 days in any 1 calendar year.
The directors of a proprietary company may refuse to register a transfer
of shares in the company for any reason.
(1) On the written request of the transferor of a share in, debenture of,
or interest made available by, a company, the company must enter in the
appropriate register the name of the transferee in the same manner and subject
to the same conditions as if the application for the entry were made by the
transferee.
(2) On the request in writing of the transferor of a share in, debenture
of, or interest made available by, a company, the company must, by written
notice, require the person having the possession, custody or control of the
share certificate or debenture or any document evidencing title to the interest
(as the case may be) and the instrument of transfer of the share, debenture or
interest, or either of them, to bring it or them into the office of the company
within a stated period, being not less than 7 and not more than 28 days after
the date of the notice, to have the share certificate, debenture or document
cancelled or rectified and the transfer registered or otherwise dealt
with.
(3) If a person refuses or fails to comply with a notice given under
subsection (2), the transferor may apply to the Court for the issue of a
summons for that person to appear before the Court and show cause why the
documents mentioned in the notice should not be delivered up or produced as
required by the notice.
(4) Upon appearance of a person so summoned, the Court may examine the
person upon oath or affirmation and receive other evidence or, if the person
does not appear after being duly served with the summons, the Court may receive
evidence in the person’s absence, and, in either case, the Court may order
the person to deliver up such documents to the company upon such terms or
conditions as the Court considers just and reasonable, and the costs of the
summons and of proceedings on the summons are in the discretion of the
Court.
(5) Lists of share certificates, debentures and other documents required
to be brought in under this section and not brought in must be exhibited in the
office of the company and must be advertised in the Gazette and in such
newspapers and at such times as the company thinks fit.
If a company refuses to register a transfer of any shares in, debentures
of, or interests made available by, the company, it must, within 2 months after
the date on which the transfer was lodged with it, send to the transferee notice
of the refusal.
(1) Where a relevant authority in relation to a company refuses or fails
to register, or refuses or fails to give its consent or approval to the
registration of, a transfer or transmission of shares in, debentures of, or an
interest made available by, the company, the transferee or transmittee may apply
to the Court for an order under this section.
(2) Where, on an application made under subsection (1), the Court is
satisfied that the refusal or failure was without just cause, the Court
may:
(a) order that the transfer or transmission be registered; or
(b) make such other order as it thinks just and reasonable, including, in
the case of a transfer or transmission of shares, an order providing for the
purchase of the shares by a specified member of the company or by the company
and, in the case of a purchase by the company, providing for the reduction
accordingly of the capital of the company.
(3) In this section:
relevant authority, in relation to a company,
means:
(a) a person who has, 2 or more persons who together have, or a body that
has, authority to register a transfer or transmission of shares in, debentures
of, or interests made available by, the company; or
(b) a person, 2 or more persons, or a body, whose consent or approval is
required before a transfer or transmission of shares in, debentures of, or
interests made available by, the company is registered.
(1) The certification by a company of an instrument of transfer of shares
in, debentures of, or interests made available by, the company is taken to be a
representation by the company to any person acting on the faith of the
certification that there have been produced to the company such documents as on
the face of them show prima facie title to the shares, debentures or interests
in the transferor named in the instrument of transfer but not as a
representation that the transferor has any title to the shares, debentures or
interests.
(2) Where a person acts on the faith of a false certification by a company
made negligently, the company is under the same liability to the person as if
the certification had been made fraudulently.
(3) Where a certification is expressed to be limited to 42 days or any
longer period from the date of certification, the company and its officers are
not, in the absence of fraud, liable in respect of the registration of any
transfer of shares, debentures or interests comprised in the certification after
the end of the period so limited or any extension of that period given by the
company if the instrument of transfer has not, within that period, been lodged
with the company for registration.
(4) For the purposes of this section:
(a) an instrument of transfer is taken to be certified if it bears the
words “certificate lodged” or words to the like effect;
and
(b) the certification of an instrument of transfer is taken to be made by
a company if:
(i) the person issuing the instrument is a person authorised to issue
certified instruments of transfer on the company’s behalf; and
(ii) the certification is signed by a person authorised to certify
transfers on the company’s behalf or by an officer of the company or of a
body corporate so authorised; and
(c) a certification that purports to be authenticated by a person’s
signature or initials (whether handwritten or not) is taken to be signed by the
person unless it is shown that the signature or initials was not or were not
placed there by the person and was not or were not placed there by any other
person authorised to use the signature or initials for the purpose of certifying
transfers on the company’s behalf.
(1) Subject to subsection (1A), within 2 months after the allotment
of any shares in, the issue of debentures of, or the making available of
interests by, a company, the company must:
(a) complete and have ready for delivery to the allottee, debenture holder
or interest holder, as the case may be, (in this subsection called the
relevant person), all the appropriate certificates, debentures or
other documents in connection with the allotment of the shares, the issue of the
debentures or the making available of the interests unless, in the case of
shares, the conditions of the allotment otherwise provide; and
(b) unless otherwise instructed by the relevant person, send or deliver
the completed certificates, debentures or other documents to the relevant person
or, where the relevant person has instructed the company in writing to send them
to a nominated person, to that person.
(1A) If the SCH business rules include a provision to the effect
that:
(a) no document is required by subsection (1) to be completed and
delivered by a company in relation to the allotment, issue or making available
of a share, debenture or interest in specified circumstances; or
(b) the only document required by subsection (1) to be completed and
delivered by a company in relation to the allotment, issue or making available
of a share, debenture or interest in specified circumstances is such document as
the provision requires;
the provision has effect accordingly.
(2) Within one month after the date on which a transfer of any shares,
debentures or interests is lodged with a company (other than a transfer that the
company is for any reason entitled to refuse to register and does not register)
the company must:
(a) complete and have ready for delivery to the transferee all the
appropriate certificates, debentures or other documents in connection with the
transfer; and
(b) unless otherwise instructed by the transferee, send or deliver the
completed certificates, debentures or other documents to the transferee or,
where the transferee has instructed the company in writing to send them to a
nominated person, to that person.
(2A) The only document required by subsection (2) to be completed and
delivered by a company in relation to an SCH-regulated transfer is such document
(if any) as the SCH business rules require to be so completed and
delivered.
(3) A company need not comply:
(a) with subsection (1) in relation to the allotment of any shares
in, the issue of debentures of, or the making available of interests by, the
company; or
(b) with subsection (2) in relation to a transfer of shares,
debentures or interests;
if the allottee, debenture holder or interest holder, or the transferee, as
the case may be, is a person who has applied to ASIC for the making of a
declaration under this subsection and has been declared by ASIC, by writing
published in the Gazette, to be a person in relation to whom this section
does not apply.
(4) If a company on which a notice has been served requiring the company
to remedy any contravention of a provision of this section fails to remedy the
contravention within 10 days after the service of the notice, the Court may, on
the application of the person entitled to have the certificates, debentures or
other documents delivered to him, her or it, make an order directing the company
and any officer of the company to remedy the contravention within such period as
is specified in the order, and the order may provide that all costs of and
incidental to the application must be borne by the company or by any officer of
the company who was involved in the contravention in such proportions as the
Court thinks just and reasonable.
(1) Where, at a particular time:
(a) an instrument of transfer of shares in a company is lodged, by or on
behalf of the transferee, with the company for registration of the transfer;
and
(b) having regard to all relevant circumstances, it may reasonably be
expected that, upon registration of the transfer, the transferee will hold
non-beneficially particular shares (in this subsection called the relevant
shares), being any of the shares to which the instrument of transfer
relates; and
(c) the instrument of transfer does not include a notice that:
(i) contains a statement to the effect that, upon registration of the
transfer, the transferee will hold the relevant shares non-beneficially;
and
(ii) sets out particulars of the relevant shares; and
(iii) is signed by or on behalf of the transferee;
the transferee contravenes this subsection.
(2) The fact that a person has contravened subsection (1) does not
affect the validity of the registration of a transfer of shares in a
company.
(3) Where:
(a) an instrument of transfer of shares in a company includes a notice of
the kind referred to in paragraph (1)(c) and is lodged with the company for
registration of the transfer; and
(b) upon registration of the transfer, the transferee holds beneficially
particular shares (in this subsection called the relevant shares),
being any of the shares particulars of which are set out in the
notice;
then, before the end of the period of 14 days beginning on registration of
the transfer, the transferee must, whether or not the transferee begins before
the end of that period to hold any of the relevant shares non-beneficially, give
to the company a notice that:
(c) sets out the name and address of the transferee; and
(d) contains a statement to the effect that, as from registration of the
transfer, the transferee holds the relevant shares beneficially; and
(e) sets out particulars of the relevant shares; and
(f) is signed by or on behalf of the transferee.
(4) Where:
(a) an instrument of transfer of shares in a company is lodged with the
company for registration of the transfer; and
(b) upon registration of the transfer, the transferee holds
non-beneficially particular shares (in this subsection called the relevant
shares), being any of the shares to which the instrument of transfer
relates (other than, in a case where the instrument of transfer includes a
notice of the kind referred to in paragraph (1)(c), the shares particulars
of which are set out in the notice);
then, before the end of the period of 14 days beginning on registration of
the transfer, the transferee must, whether or not the transferee begins before
the end of that period to hold any of the relevant shares beneficially, give to
the company a notice that:
(c) sets out the name and address of the transferee; and
(d) contains a statement to the effect that, as from registration of the
transfer, the transferee holds the relevant shares non-beneficially;
and
(e) sets out particulars of the relevant shares; and
(f) is signed by or on behalf of the transferee.
(5) Where:
(a) at a particular time, a person holds beneficially shares in a company;
and
(b) immediately after that time, the person holds non-beneficially
particular shares (in this subsection called the relevant shares),
being any of the shares referred to in paragraph (a);
then, before the end of the period of 14 days beginning at that time, the
person must, whether or not the person recommences before the end of that period
to hold any of the relevant shares beneficially, give to the company a notice
that:
(c) sets out the name and address of the person; and
(d) contains a statement to the effect that, after that time, the person
holds the relevant shares non-beneficially; and
(e) specifies that time and sets out particulars of the relevant shares;
and
(f) is signed by or on behalf of the person.
(6) Where:
(a) at a particular time, a person holds non-beneficially shares in a
company; and
(b) immediately after that time, the person holds beneficially particular
shares (in this subsection called the relevant shares), being any
of the shares referred to in paragraph (a);
then, before the end of the period of 14 days beginning at that time, the
person must, whether or not the person recommences before the end of that period
to hold any of the relevant shares non-beneficially, give to the company a
notice that:
(c) sets out the name and address of the person; and
(d) contains a statement to the effect that, after that time, the person
holds the relevant shares beneficially; and
(e) specifies that time and sets out particulars of the relevant shares;
and
(f) is signed by or on behalf of the person.
(7) In proceedings under this section, a person is, unless the contrary is
established, presumed to have been aware at a particular time of a circumstance
of which an employee or agent of the person, being an employee or agent having
duties or acting in relation to the transfer to, or ownership by, the person of
a share or shares in the company concerned, was aware at that time.
(8) In this section, unless the contrary intention appears:
any includes all.
(9) For the purposes of this section and of section 216B:
(a) where, at a particular time, a person:
(i) holds shares in a capacity other than that of sole beneficial owner;
or
(ii) without limiting the generality of subparagraph (i), holds
shares as trustee for, as nominee for, or otherwise on behalf of or on account
of, another person;
the first-mentioned person is taken to hold the shares non-beneficially
at that time; and
(b) a person who holds shares at a particular time is taken to hold the
shares beneficially at that time unless the person holds the shares
non-beneficially at that time.
(1) In this Division, unless the contrary intention appears:
associate, in relation to a broker, means:
(a) if the broker is a member of a firm of brokers and is not a
broker’s agent—any other member of the firm; or
(b) if the broker is another broker’s agent or employee—the
other broker or, if the other broker is a member of a firm of brokers, any
member of that firm.
beneficial owner, in relation to a marketable security or a
marketable right, means a person for whom an authorised trustee corporation
holds (whether alone or together with any other person or persons) the security
or right in trust in the ordinary course of its business.
broker means a member of a securities exchange.
broker’s agent means a broker’s agent or
employee.
Division 3 transfer means:
(a) a sufficient transfer under this Division of marketable securities or
marketable rights; or
(b) a proper SCH transfer.
document, in relation to a transfer, includes, in the case of
an SCH-regulated transfer, an electronic message or other electronic
communication.
duly completed, in relation to a document, has a meaning
affected by section 1098.
duly completed Part 1 means a document that has been
duly completed in accordance with Part 1 of Form 1, 2, 3, 5, 6 or
7.
eligible body means:
(a) a company; or
(b) a body corporate (other than a company) that:
(i) is incorporated in a State or Territory in this jurisdiction;
and
(ii) is prescribed for the purposes of this paragraph; or
(c) an unincorporated society, association or body, that:
(i) is formed or established in a State or Territory in this jurisdiction;
and
(ii) is included in the official list of a securities exchange;
and
(iii) is prescribed for the purposes of this paragraph.
execution time, in relation to a document, means the
time:
(a) in the case of a sufficient transfer under
section 1101—when the document was stamped with a stamp purporting to
be that of the transferee’s broker; or
(b) in the case of a sufficient transfer under
section 1102—when the document was executed by the
transferor.
identification code, in relation to a member organisation,
means a code that, for the purposes of the SCH business rules, is the member
organisation’s identification code, or one of its identification codes, as
the case may be.
in accordance with includes to the effect of.
issuing body, in relation to a marketable security or a
marketable right, means the body (whether incorporated or not) that, or other
person who, issued or made available, or proposes to issue or make available,
the security or right.
legal representative means the executor, original or by
representation, of a will, or the administrator of the estate, of a dead
person.
marketable right means a right, whether existing or future,
and whether contingent or not, of a person to have a marketable security issued
to the person, whether or not on payment of any money or for any other
consideration.
marketable security means:
(a) a share in, or a debenture of, an eligible body; or
(b) a prescribed security.
member organisation means a member organisation of a
securities exchange.
prescribed security means an interest in a managed investment
scheme that is prescribed for the purposes of this definition.
securities exchange means a prescribed body
corporate.
stamp has the meaning given by section 1099.
transfer, in relation to a marketable security or a
marketable right, includes:
(a) in the case of a quoted security or a quoted right—any change in
the ownership of the security or right; and
(b) in the case of a marketable right—the renunciation and transfer
of the right.
transfer document, in relation to a proper SCH transfer,
means the document that is taken under the SCH business rules to effect the
transfer.
(2) A reference in this Division to a form by number is a reference to the
form so numbered in Schedule 2 or to a form to the like effect.
(3) A reference in a form in Schedule 2 to the full name of the
transferor of marketable securities or marketable rights includes a reference to
the name of the person shown in the records of the issuing body in relation to
those securities or rights as the holder of those securities or
rights.
(4) If the SCH business rules include provisions determining:
(a) which member organisation effected a proper SCH transfer; or
(b) when a proper SCH transfer takes effect;
those provisions have effect for the purposes of this Division.
(1) A quoted security is a marketable security in a class of marketable
securities listed for quotation on a stock market of a securities
exchange.
(2) A quoted right is a marketable right in a class of marketable rights
listed for quotation on a stock market of a securities exchange.
(3) For the purposes of subsections (1) and (2), securities or rights
in a class of marketable securities or marketable rights are not taken to have
stopped being listed for quotation on a stock market of a securities exchange
merely because of a temporary suspension of quotation of securities or rights in
that class.
(4) If:
(a) there is a suspension of the quotation, on a stock market of a
securities exchange, of marketable securities in a class of marketable
securities, or of marketable rights in a class of marketable rights;
and
(b) during the suspension, the issuing body in relation to the securities
or rights ceases to be included in an official list of the securities
exchange;
then, for the purposes of subsections (1) and (2), marketable
securities or marketable rights in that class are taken to stop being listed for
quotation on a stock market of the securities exchange when the issuing body
ceases to be so included.
(5) Subsection (4) does not limit the circumstances in which
marketable securities in a class of marketable securities, or marketable rights
in a class of marketable rights, may be taken to have stopped being listed for
quotation on a stock market of a securities exchange.
(1) If the SCH business rules provide that marketable securities or
marketable rights that stop being quoted securities or quoted rights are taken
to continue to be quoted securities or quoted rights for a specified period,
then, for the purposes of the provisions mentioned in subsection (3), those
securities or rights are taken to be quoted securities or quoted rights during
that period.
(2) If the SCH business rules provide that marketable securities or
marketable rights that:
(a) are approved, by a securities exchange, to be listed for quotation on
a stock market of a securities exchange, but that are not yet so listed;
and
(b) have been issued;
are taken to be quoted securities or quoted rights for a specified period,
then, for the purposes of the provisions mentioned in subsection (3), those
securities or rights are taken to be quoted securities or quoted rights during
that period.
(3) These are the provisions:
(a) the definitions of proper SCH transfer, SCH
certificate cancellation provisions, SCH-regulated
transfer and SCH subregister in section 9;
and
(b) section 653A and the provisions of Parts 7.2A and 7.13, and
of any regulations made for the purposes of those Parts.
(1) ASIC may, by writing, declare that this Act, and the regulations, or
that specified provisions of this Act and the regulations, have effect (subject
to any modifications specified in the declaration) in relation to particular
securities, or a particular class of securities, that are not quoted securities
or quoted rights as if those securities, or securities of that class, were
quoted securities or quoted rights.
(2) A declaration under subsection (1) has effect
accordingly.
(3) ASIC must cause a copy of a declaration under subsection (1) to
be published in the Gazette.
For the purposes of this Division, if the securities clearing house
determines under the SCH business rules that an SCH-regulated transfer
substantially complies with the applicable provisions of those business rules,
the transfer is taken to be, and always to have been, a proper SCH
transfer.
(1) For the purposes of this Division, a document is not duly completed in
accordance with one of Forms 1, 2, 3, 4, 5, 6, 7 and 8, or a part of one of
those forms, unless it:
(a) where the form or part refers to the name and address of the
transferee—purports to state that name and address; and
(b) where the form or part refers to the transferor’s broker’s
stamp—bears a stamp that purports to be such a stamp; and
(c) where the form or part refers to the transferee’s broker’s
stamp—bears a stamp that purports to be such a stamp; and
(d) where the form or part refers to a securities exchange
stamp—bears a stamp that purports to be a stamp of a securities
exchange.
(2) Where a document (in this section called the first
document) relates to particular marketable securities or marketable
rights, subsections (3), (4) and (5) apply for the purposes of determining
whether the first document and another document (in this section called the
second document) are, or together with another document or
documents are, a sufficient transfer of the securities or rights.
(3) The first document is not duly completed in accordance with
Part 3 of Form 1, 2, 3, 5, 6 or 7 unless, where that part refers to the
transferee’s broker’s stamp, the first document bears a stamp that
purports to be such a stamp and includes a string of characters that purports to
be the transfer consolidation number of the first document.
(4) The second document is not duly completed in accordance with
Part 1 of Form 4 or 8 unless, where that part refers to a transfer
consolidation number or transfer consolidation numbers, the second document sets
out the string of characters referred to in subsection (3).
(5) The second document is not taken not to be duly completed in
accordance with Part 1 of Form 4 or 8 merely because of either or both of
the following:
(a) the second document sets out, where that part refers to a transfer
consolidation number or transfer consolidation numbers, a string or strings of
characters other than the string referred to in subsection (3);
(b) the second document fails to set out correctly the number of
marketable securities or marketable rights to which it relates.
(1) In this Division (other than section 1112):
(a) a reference to the stamping of a document is a reference to stamping
in ink; and
(b) a reference to a stamp on a document, or to a stamp borne by a
document, is a reference to a stamp stamped on the document in ink.
(2) A reference in section 1112 to the stamping of a document is a
reference to stamping the document:
(a) in ink; or
(b) by affixing a stamp; or
(c) by impressing a stamp; or
(d) in any other manner.
Nothing in this Subdivision applies in relation to:
(a) an SCH-regulated transfer; or
(b) a document that relates to such a transfer.
(1) A document that is under this Division a sufficient transfer of
marketable securities may be used:
(a) as a proper instrument of transfer for the purposes of
section 1091; and
(b) as an instrument of transfer for the purposes of any other law or
instrument governing or relating to those securities.
(2) A document that is under this Division a sufficient transfer of
marketable rights may be used as an instrument of transfer of those rights for
the purposes of any law or instrument governing or relating to those rights or
the marketable securities to which those rights relate.
(1) A document is a sufficient transfer of marketable securities if it
relates to those securities and is duly completed in accordance with:
(a) Parts 1 and 2 of Form 1; or
(b) Part 1 of Form 1 and Parts 1 and 2 of Form 2 or 3;
or
(c) Parts 1 and 3 of Form 1 and both parts of Form 4; or
(d) Part 1 of Form 1, Parts 1 and 3 of Form 2 or 3 and both
parts of Form 4.
(2) A document is a sufficient transfer of marketable rights if it relates
to those rights and is duly completed in accordance with:
(a) Parts 1 and 2 of Form 5; or
(b) Part 1 of Form 5 and Parts 1 and 2 of Form 6 or 7;
or
(c) Parts 1 and 3 of Form 5 and both parts of Form 8; or
(d) Part 1 of Form 5, Parts 1 and 3 of Form 6 or 7 and both
parts of Form 8.
(1) In respect of the transfer of marketable securities, otherwise than by
way of sale, gift or exchange, by an authorised trustee corporation (whether
alone or together with any other person or persons) to the beneficial owner of
the securities, a document is a sufficient transfer if it relates to those
securities and is duly completed in accordance with Form 9.
(2) In respect of the transfer of marketable rights, otherwise than by way
of sale, gift or exchange, by an authorised trustee corporation (whether alone
or together with any other person or persons) in favour of the beneficial owner
of those rights, a document is a sufficient instrument of transfer if it relates
to those rights and is duly completed in accordance with Form 10.
(1) This section applies where marketable securities are transferred by
means of a sufficient transfer under this Division.
(2) The transferee is taken to have agreed at the execution time to accept
the securities subject to the terms and conditions on which the transferor held
them at that time, being the terms and conditions applicable as between the
issuing body in relation to, and the holder for the time being of, the
securities.
(3) If the securities are shares, the transferee is taken to have agreed
at the execution time to become a member of the issuing body and to be bound, on
being registered as the holder of the shares, by the issuing body’s
constitution.
(1) This section has effect where marketable rights relating to marketable
securities are transferred by means of a sufficient transfer under this
Division.
(2) The transferee is taken:
(a) to have applied at the execution time to the issuing body in relation
to the securities for the allotment to him, her or it of the securities;
and
(b) to have agreed at the execution time to accept the securities subject
to the terms and conditions on which the issuing body offers them for
subscription.
(3) If the securities are shares, the transferee is taken to have agreed
at the execution time to become a member of the issuing body and to be bound, on
being registered as the holder of the shares, by the issuing body’s
constitution.
(1) This section applies where a document relating to marketable
securities or marketable rights:
(a) is a duly completed Part 1; and
(b) bears a stamp that purports to be that of the transferor’s
broker.
(2) Each associate (if any) of the broker (in this section called the
designated broker) of whom the stamp referred to in
paragraph (1)(b) purports to be the stamp and, unless the designated broker
is a broker’s agent, the designated broker is taken to have
warranted:
(a) that the statements in the document that purport to be certified by
the transferor’s broker are accurate; and
(b) that the transferor:
(i) is the registered holder of, or entitled to be registered as the
holder of, the securities; or
(ii) is entitled to the rights;
as the case may be, and is legally entitled or authorised to sell or
dispose of the securities or rights.
(3) If the document has been duly completed in accordance with Part 1
of Form 1 or 5, then:
(a) if, when the document was stamped with the stamp referred to in
paragraph (1)(b), the designated broker had authority to sell the
securities or rights, on the transferor’s behalf, to:
(i) the transferee; or
(ii) particular persons who include, or particular classes of persons at
least one of which includes, the transferee; or
(iii) any person at all;
the designated broker is taken to have been authorised to execute, and to
have executed, the document on the transferor’s behalf; and
(b) each associate (if any) of the designated broker and, unless the
designated broker is a broker’s agent, the designated broker is or are, as
the case requires, liable to indemnify:
(i) the issuing body in relation to the securities or rights;
and
(ii) the transferor; and
(iii) the transferee; and
(iv) the transferee’s broker;
against any loss or damage arising if:
(v) the stamp referred to in paragraph (1)(b) is not in fact the
designated broker’s stamp; or
(vi) apart from the effect of paragraph (a) of this subsection, the
designated broker was not authorised to execute the document on the
transferor’s behalf.
(1) This section applies where a document:
(a) has been duly completed in accordance with Part 1 of Form 3 or 7;
and
(b) bears a stamp that purports to be that of a securities
exchange.
(2) The securities exchange is taken to have warranted that:
(a) the statements in the document that purport to be certified by a
securities exchange are accurate; and
(b) the transferor is:
(i) the registered holder of, or entitled to be registered as the holder
of, the securities; or
(ii) entitled to the rights;
as the case may be, and is legally entitled or authorised to sell or
dispose of the securities or rights.
(1) This section applies where:
(a) a document (in this section called the first document)
relating to marketable securities or marketable rights:
(i) has been duly completed in accordance with Part 1 of Form 1 or 5;
and
(ii) bears a stamp that purports to be that of the transferor’s
broker; and
(b) another document:
(i) relates to any or all of the securities or rights; and
(ii) has been duly completed in accordance with Part 1 of Form 3 or
7; and
(iii) bears a stamp that purports to be that of a particular securities
exchange.
(2) The securities exchange is liable to indemnify:
(a) the issuing body in relation to the securities or rights;
and
(b) the transferor in relation to the other document; and
(c) the transferee in relation to the other document; and
(d) the broker of the transferee in relation to the other
document;
against any loss or damage arising if:
(e) the stamp referred to in subparagraph (1)(a)(ii) is not in fact
the stamp of the broker (in this section called the designated
broker) of whom it purports to be the stamp; or
(f) apart from the effect of paragraph 1105(3)(a), the designated broker
was not authorised to execute the first document on behalf of the transferor in
relation to the first document.
(3) Each associate (if any) of the designated broker and, unless the
designated broker is a broker’s agent, the designated broker is or are, as
the case requires, liable to indemnify the securities exchange against any loss
or damage arising as mentioned in subsection (2).
(4) Nothing in this section limits the operation of anything in
section 1105 or 1106 or of anything else in this section.
(1) If 2 or more persons are taken to have warranted as mentioned in
paragraph 1105(2)(a) or (b), they are taken to have so warranted jointly and
severally.
(2) If 2 or more persons are liable as mentioned in paragraph 1105(3)(b)
or subsection 1107(3), they are so liable jointly and severally.
An eligible body with which a sufficient transfer under this Division is
lodged for the purpose of registering a transfer, or obtaining the allotment or
issue, of marketable securities is, and its officers are, in the absence of
knowledge to the contrary, entitled to assume without inquiry that:
(a) in the case of a sufficient transfer under
section 1101:
(i) a stamp on the document that purports to be the transferor’s
broker’s stamp is the stamp of that broker; and
(ii) a stamp on the document that purports to be the transferee’s
broker’s stamp is the stamp of that broker; and
(iii) a stamp on the document that purports to be the stamp of a
securities exchange is the stamp of that securities exchange; or
(b) in the case of a sufficient transfer under
section 1102:
(i) at the execution time, the authorised trustee corporation named in the
instrument held (whether alone or together with any other person or persons) in
the ordinary course of its business, in trust for or on behalf of the
transferee, the marketable securities or marketable rights to which the
sufficient transfer relates; and
(ii) the transfer was not made by way of a sale, gift or exchange of the
securities or rights.
If:
(a) a person authorises a member organisation to enter into a transaction
(for example, a sale) involving the disposal of quoted securities or quoted
rights; and
(b) the person dies before the member organisation enters into the
transaction; and
(c) the authority is still in force immediately before the person
dies;
then:
(d) the authority continues, despite the person’s death, as if the
person were still alive, but can be revoked by the person’s legal
representative just as the person could revoke it if the person were still
alive; and
(e) if the member organisation enters into the transaction while the
authority so continues—the transaction is binding on the person’s
legal representative.
(1) If a person authorises a member organisation to enter into a
transaction (for example, a sale) involving the disposal of quoted securities or
quoted rights, the person is taken also to have authorised the member
organisation to effect any proper SCH transfer of all or any of those securities
or rights that the member organisation effects, even if the transfer has no
connection with the transaction.
Note: The transfer may have no connection with the
transaction because of the operation of the provisions of the SCH business rules
referred to in subsection 954P(1).
(2) The authority that the person is taken, by subsection (1), to
have given:
(a) is revoked if, before the transaction is entered into, the authority
to enter into the transaction is revoked or otherwise ceases to have effect;
and
(b) cannot otherwise be revoked; and
(c) if the person dies after the transaction is entered
into—continues in force, despite the person’s death, as if the
person were still alive (but cannot be revoked).
(1) A proper SCH transfer of quoted securities is valid and effective for
the purposes of any law or instrument governing or relating to the way in which
the securities may be transferred.
(2) A proper SCH transfer of quoted rights is valid and effective for the
purposes of any law or instrument governing or relating to the way in which the
rights may be transferred.
(1) If a proper SCH transfer of quoted securities takes effect at a
particular time:
(a) the transferee is taken to have agreed at that time to accept the
securities subject to the terms and conditions on which the transferor held them
immediately before that time, being the terms and conditions applicable as
between the issuing body in relation to, and the holder for the time being of,
the securities; and
(b) if the securities are shares—the transferee is also taken to
have agreed at that time to become a member of the issuing body and to be bound
by the issuing body’s constitution.
(2) If a proper SCH transfer of quoted rights relating to marketable
securities takes effect at a particular time:
(a) the transferee is taken:
(i) to have applied at that time to the issuing body in relation to the
securities for the allotment to him, her or it of the marketable securities;
and
(ii) to have agreed at that time to accept the marketable securities
subject to the terms and conditions on which the issuing body offers them for
subscription; and
(b) if the marketable securities are shares—the transferee is also
taken to have agreed, at that time, to become a member of the issuing body and
to be bound, on being registered as the holder of the shares, by the issuing
body’s constitution.
(1) This section applies if the transfer document for a proper SCH
transfer of quoted securities or quoted rights includes a member
organisation’s identification code as the identification code of the
member organisation effecting the transfer.
(2) If the member organisation is the transferor, the member organisation
or, if it is a partnership, each of the partners in the member organisation, is
taken to have warranted that:
(a) the transfer was effected by the member organisation; and
(b) the transferor was legally entitled or authorised to transfer the
securities or rights.
(3) If:
(a) the member organisation is not the transferor; and
(b) the transfer is pursuant to a transaction in relation to which, or to
transactions in relation to each of which, one of the following conditions is
satisfied:
(i) the transaction was entered into in the ordinary course of trading on
a stock market; and
(ii) the transaction is, under the business rules or listing rules of a
stock exchange, described, or to be described, as “special” when it
is reported to the stock exchange;
the member organisation or, if it is a partnership, each of the partners in
the member organisation, is taken to have warranted that:
(c) the transferor was legally entitled or authorised to transfer the
securities or rights; and
(d) the transfer was effected by the member organisation; and
(e) the member organisation was authorised by the transferor to effect the
transfer.
(4) If:
(a) the member organisation is not the transferor; and
(b) subsection (3) does not apply;
the member organisation or, if it is a partnership, each of the partners in
the member organisation, is taken to have warranted that:
(c) the transfer was effected by the member organisation; and
(d) the member organisation was authorised by the transferor to effect the
transfer.
(1) If:
(a) a member organisation, or each of the partners in a partnership that
is a member organisation, is taken by section 1109E to have warranted, in
relation to a proper SCH transfer of quoted securities or quoted rights, that
the transfer was effected by the member organisation; and
(b) the transfer was not effected by the member organisation;
the member organisation, or, if it is a partnership, each of the partners
in the member organisation, is liable to indemnify:
(c) the issuing body in relation to the securities or rights;
and
(d) the transferor; and
(e) the transferee; and
(f) if a member organisation acted as the transferee’s agent in the
transfer—that member organisation; and
(g) the securities clearing house;
against any loss or damage arising from the transfer not having been
effected by the first-mentioned member organisation.
(2) If:
(a) a member organisation, or each of the partners in a partnership that
is a member organisation, is taken by section 1109E to have warranted, in
relation to a proper SCH transfer of quoted securities or quoted rights, that
the transferor was legally entitled or authorised to transfer the securities or
rights; and
(b) the transferor was not legally entitled or authorised to transfer the
securities or rights;
the member organisation, or, if it is a partnership, each of the partners
in the member organisation, is liable to indemnify:
(c) the issuing body in relation to the securities or rights;
and
(d) the transferee; and
(e) if a member organisation acted as the transferee’s agent in the
transfer—that member organisation; and
(f) the securities clearing house;
against any loss or damage arising from the transferor not having been
legally entitled or authorised to transfer the securities or rights.
(3) If:
(a) a member organisation, or each of the partners in a partnership that
is a member organisation, is taken by section 1109E to have warranted, in
relation to a proper SCH transfer of quoted securities or quoted rights, that
the member organisation was authorised by the transferor to effect the transfer;
and
(b) the member organisation was not authorised by the transferor to effect
the transfer;
the member organisation or, if it is a partnership, each of the partners in
the member organisation, is liable to indemnify:
(c) the issuing body in relation to the securities or rights;
and
(d) the transferor; and
(e) the transferee; and
(f) if a member organisation acted as the transferee’s agent in the
transfer—that member organisation; and
(g) the securities clearing house;
against any loss or damage arising from the first-mentioned member
organisation not having been authorised by the transferor to effect the
transfer.
(4) The effect of section 1109B is to be disregarded in determining,
for the purposes of this section, whether a person or partnership:
(a) was legally entitled or authorised to transfer quoted securities or
quoted rights; or
(b) was authorised by another person or partnership to effect a transfer
of quoted securities or quoted rights.
(1) If 2 or more persons are taken to have warranted as mentioned in
subsection 1109E(2), (3) or (4), they are taken to have so warranted jointly and
severally.
(2) If 2 or more persons are liable as mentioned in subsection 1109F(1),
(2) or (3), they are so liable jointly and severally.
(1) The securities clearing house is entitled to assume without inquiry,
in the absence of knowledge to the contrary, that anything purporting to be done
under the SCH business rules in connection with a transfer of a quoted security
or quoted right has been done in accordance with those rules.
(2) If, in reliance on subsection (1), the securities clearing house
assumes that a thing was done in accordance with the SCH business rules then,
for the purposes of this Act (including the definition of proper SCH
transfer in section 9), the thing is taken to have been done in
accordance with those rules.
(3) If the securities clearing house is acting on behalf of the issuing
body in relation to quoted securities or quoted rights when, in reliance on
subsection (1), it assumes that a thing was done in accordance with the SCH
business rules, then the issuing body is also taken to assume, and to be
entitled to assume, that the thing was so done.
(1) The issuing body in relation to a quoted security or quoted right must
not register, or otherwise give effect to, an SCH-regulated transfer of the
security or right unless the transfer is a proper SCH transfer.
(2) Subsection (1) has effect despite anything in:
(a) the body’s constitution; or
(b) a deed relating to debentures; or
(c) the constitution of a registered scheme; or
(d) a deed relating to interests.
The issuing body in relation to a quoted security or a quoted right must
not refuse or fail to register, or to give effect to, a proper SCH transfer of
the security or right.
(1) A trustee, or a legal representative of a dead person, who, as trustee
or legal representative, holds a quoted security or a quoted right
may:
(a) subject to the requirements of the SCH business rules, be an SCH
participant; and
(b) have the security or right converted into, and hold it in, a form in
which it may be transferred in accordance with the SCH business rules.
(2) Nothing in subsection (1) authorises the trustee or legal
representative to do a thing that the trustee or legal representative is
expressly prohibited from doing by any law or by the terms and conditions on
which he, she or it holds office.
(1) This section applies to a meeting of:
(a) the holders of securities of a body corporate, provided some or all of
the securities are quoted securities; or
(b) the holders of a class of securities of a body corporate, provided
some or all of the securities in that class are quoted securities.
(2) The convener of the meeting may determine that:
(a) if paragraph (1)(a) applies—all the securities of the body
corporate that are quoted securities at a specified time before the meeting;
or
(b) if paragraph (1)(b) applies—all the securities of the body
corporate in the relevant class that are quoted securities at a specified time
before the meeting;
are taken, for the purposes of the meeting, to be held by the persons who
held them at the specified time.
(3) The specified time must not be more than 48 hours before the
meeting.
(4) Subject to subsection (3), the specified time must satisfy any
applicable requirements of the SCH business rules.
(5) The determination must be made in accordance with any applicable
requirements of the SCH business rules as to the way in which it must be
made.
(6) The determination must be made before notice of the meeting is
given.
(7) Particulars of the determination must be included in the notice of the
meeting, but a failure to do so does not invalidate the determination.
(8) The determination has effect accordingly despite anything
in:
(a) this Act or the regulations; and
(b) any other laws (written or unwritten) that apply to the meeting;
and
(c) any documents (for example, the body corporate’s constitution or
any relevant trust deed) that apply to the meeting.
(1) If the SCH business rules include provisions relating to the
determination, for the purposes of conferring security benefits, of who holds or
is taken to hold quoted securities at a particular time, those provisions have
effect accordingly despite anything in:
(a) this Act or the regulations; and
(b) any other laws (written or unwritten) that apply to the conferral;
and
(c) any documents (for example, the body corporate’s constitution or
any relevant trust deed) that apply to the conferral.
(2) For the purposes of this section, conferring a security
benefit means:
(a) paying or transferring money or property to a person because the
person holds or held a security; or
(b) issuing securities to a person because the person holds or held a
security; or
(c) conferring a right on a person because the person holds or held a
security.
(1) This Division applies in relation to a transfer of marketable
securities or marketable rights despite anything to the contrary in this Act
(other than this Division) or in another law or instrument relating to the
transfer of the securities or rights.
(2) Except as provided in this Division, this Division does not affect the
terms and conditions on which marketable securities or marketable rights are
sold.
(3) Nothing in this Division (other than section 1109L) affects any
right of an eligible body to refuse:
(a) to acknowledge or register a person as the holder of marketable
securities; or
(b) to allot or issue marketable securities to a person;
on a ground other than an objection to the form of document that is lodged
with or sent to the eligible body and purports to transfer to the person the
securities, or marketable rights relating to the securities.
(4) The registration of a transfer, or the allotment or issue, of a
marketable security by means of a Division 3 transfer does not breach any
law, constitution, trust deed or other instrument relating to marketable
securities.
(5) Nothing in this Division (except section 1109K) prevents or
affects the use of:
(a) any other form of transfer of marketable securities or marketable
rights; or
(b) any other mode of executing a document transferring marketable
securities or marketable rights;
that is otherwise permitted by law.
(6) A transfer of marketable securities or marketable rights by or to a
trustee or legal representative may be effected by means of a Division 3
transfer despite any law or the provisions of the instrument (if any) creating,
or having effect in relation to, the trust or will under which the trustee or
legal representative is appointed.
(1) A document transferring marketable securities or marketable rights
need not state the occupation of the transferor or transferee and, if the
document is signed by a person, the signature need not be witnessed.
(2) Subsection (1) applies despite anything in:
(a) the constitution of an eligible body; or
(b) the terms and conditions on which marketable securities or marketable
rights are created or issued.
(3) The omission from a register, certificate or other document relating
to marketable securities of a statement of the occupation of a person who is, or
is entitled to be, registered as the holder of the securities does not breach
any law, constitution, trust deed or other document relating to the
securities.
(1) A broker must not, in this jurisdiction or elsewhere, stamp with a
broker’s stamp a document that relates to marketable securities or
marketable rights and may be used as a sufficient transfer under this Division
unless the document relates to a sale or purchase of the securities or rights,
in the ordinary course of the broker’s business, for a consideration of
not less than their unencumbered market value at the time of the sale or
purchase.
(2) A person, must not, in this jurisdiction or elsewhere, stamp with a
stamp that purports to be that of the transferor’s broker a document that
relates to marketable securities or marketable securities or marketable rights
and may be used as a sufficient transfer under this Division unless:
(a) the stamp is in fact that of the transferor’s broker;
and
(b) apart from the effect of paragraph 1105(3)(a), the transferor’s
broker is authorised to execute the document on the transferor’s behalf;
and
(c) the person is the transferor’s broker or is authorised so to
stamp the document on the transferor’s broker’s behalf.
(3) A securities exchange must not, in this jurisdiction or elsewhere,
stamp with a stamp of the securities exchange a document that may be used as a
sufficient transfer under this Division of marketable securities or marketable
rights, unless:
(a) there has been lodged; or
(b) the securities exchange holds a duly completed Part 1 bearing a
certificate that purports to be that of the transferor’s broker and states
that there has been or will be lodged;
with the issuing body in relation to the securities or rights a duly
completed Part 1 relating to the securities or rights.
(4) A person must not, in this jurisdiction or elsewhere execute a
document that may be used as a sufficient transfer under section 1102 and
relates to a transfer of marketable securities or of marketable
rights:
(a) made by way of a sale, gift or exchange of the securities or rights;
or
(b) to or in favour of a person who is not the beneficial owner of the
securities or rights.
(5) A person other than an authorised trustee corporation must not, in
this jurisdiction or elsewhere, knowingly cause, authorise or permit to be
executed a document that relates to marketable securities or marketable rights
and may be used as a sufficient transfer under section 1102 but is not in
fact a sufficient transfer under that section.
(6) A person must not, in this jurisdiction or elsewhere, knowingly lodge
or cause to be lodged with an eligible body a document that has been stamped in
contravention of subsection (1), (2) or (3), or that has been executed in
contravention of subsection (4), for the purpose of securing the
registration of the transfer of, or the allotment or issue of, marketable
securities to the transferee named in the document.
A person must not, in this jurisdiction or elsewhere, include a member
organisation’s identification code in a document that may be used to
effect a proper SCH transfer unless:
(a) the person:
(i) is the member organisation or, if it is a partnership, is a partner in
the member organisation; or
(ii) is authorised so to include the identification code by the member
organisation; and
(b) if:
(i) the identification code is so included as the identification code of
the member organisation effecting the transfer; and
(ii) the member organisation is not the transferor;
the member organisation is, apart from the effect of section 1109B,
authorised by the transferor to effect the transfer.
A broker must not, intentionally or recklessly, contravene the SCH
certificate cancellation provisions by affixing, or failing to affix, a
cancellation stamp to a certificate or other document of title to quoted
securities or quoted rights.
(1) A person who suffers loss or damage because of conduct of a broker
that was engaged in contravention of the SCH certificate cancellation provisions
may, unless the person was involved in the contravention, recover the amount of
the loss or damage by action against the broker, whether or not the broker has
been convicted of an offence in respect of the contravention.
(2) An action under subsection (1) must be begun within 6 years after
the day on which the cause of action arose.
(3) This section does not affect a liability that a person has under any
other law.
If:
(a) a broker contravenes the SCH certificate cancellation provisions in
relation to particular quoted securities or quoted rights; and
(b) the issuing body in relation to the securities or rights is not
involved in the contravention;
the issuing body is not liable to an action or other proceeding for damages
in relation to the broker’s contravention.
(1) This section applies to Divisions 1, 2 and 3.
(1A) In this section:
securities includes marketable securities, and marketable
rights, within the meaning of Division 3.
(2) The power of ASIC to grant an exemption or make a declaration under
this section may be exercised in relation to securities or a class of securities
only where ASIC is satisfied that:
(a) if the exemption were granted or the declaration were made, the
interests of the holders of those securities or of securities in that class
would continue to have adequate protection; and
(b) the granting of the exemption or the making of the declaration would
make transfer of those securities, or of securities in that class, more
efficient.
(3) ASIC may, by writing, exempt particular securities, or a particular
class of securities, either generally or as otherwise provided in the exemption,
and either unconditionally or subject to such conditions (if any) as are
specified in the exemption, from the operation of all or any of the provisions
of:
(a) the Divisions of this Part to which this section applies;
and
(b) regulations made for the purposes of the provisions of those Divisions
or any of them.
(4) A person must not contravene a condition to which an exemption under
subsection (3) is subject.
(5) Where a person has contravened a condition to which an exemption under
subsection (3) is subject, the Court may, on the application of ASIC, order
the person to comply with the condition.
(6) ASIC may, by writing, declare that a Division to which this section
applies, and regulations made for the purposes of the provisions of that
Division or any of them, have effect in their application in relation to
particular securities, or a particular class of securities, either generally or
otherwise as provided in the declaration, as if a specified provision or
provisions of that Division or of those regulations were omitted, modified or
varied in a manner specified in the declaration, and, where such a declaration
is made, that Division and those regulations have effect accordingly.
(6A) Subsection (6) applies in relation to Division 3 as if the
forms in Schedule 2 were provisions of that Division.
(1) ASIC may, by writing, declare that Division 3, and regulations
made for the purposes of the provisions of that Division, are to apply to
particular non-marketable securities, or a particular class of non-marketable
securities, as if those securities, or securities of that class, were marketable
securities or marketable rights within the meaning of that Division.
(2) In a declaration under subsection (1), ASIC may also specify
modifications of Division 3, and of regulations made for the purposes of
the provisions of that Division, that are to have effect in relation to the
application of that Division and those regulations to the non-marketable
securities, or the class of non-marketable securities, to which the declaration
relates.
(3) A declaration under subsection (1) has effect
accordingly.
(4) ASIC must cause a copy of a declaration under subsection (1) to
be published in the Gazette.
(5) In this section:
non-marketable securities means securities that are not
marketable securities or marketable rights within the meaning of
Division 3.
(7) ASIC must cause a copy of an exemption or declaration under this
section to be published in the Gazette.
(1) Where:
(a) on the application of ASIC, it appears to the Court that a
person:
(i) has contravened this Chapter, or any other law relating to trading or
dealing in securities; or
(ii) has contravened the conditions or restrictions of a licence, the
business rules or listing rules of a securities exchange, or the SCH business
rules; or
(iii) is about to do an act with respect to trading or dealing in
securities that, if done, would be such a contravention; or
(b) on the application of a securities exchange, it appears to the Court
that a person has contravened the business rules or listing rules of the
securities exchange; or
(ba) on the application of the securities clearing house, it appears to
the Court that a person has contravened the SCH business rules; or
(bb) on the application of a person claiming to be aggrieved by an alleged
contravention by another person of the business rules or listing rules of a
securities exchange, it appears to the Court that:
(i) the other person did contravene those rules; and
(ii) the applicant is aggrieved by the contravention;
the Court may make such order or orders as it thinks fit, including, but
without limiting the generality of the foregoing, one or more of the following
orders:
(c) in the case of persistent or continuing contraventions of this
Chapter, or of any other law relating to trading or dealing in securities, of
the conditions or restrictions of a licence, of the business rules or listing
rules of a securities exchange, or of the SCH business rules—an order
restraining a person from carrying on a business, or doing an act or classes of
acts, in relation to securities;
(ca) in the case of a contravention by a person of the business rules or
listing rules of a securities exchange:
(i) an order giving directions concerning compliance with or enforcement
of those rules to:
(A) the person; and
(B) if the person is a body corporate—the directors of the body
corporate; and
(ii) if the contravention relates to the disclosure or provision of
information—an order of either or both of the following kinds:
(A) an order requiring the person, or a person involved in the
contravention, to disclose to the public or to specified persons, in accordance
with the order, specified information which the person to whom the order is
directed possesses or to which that person has access;
(B) an order requiring the person, or a person involved in the
contravention, to publish advertisements in accordance with the order at that
person’s expense;
(d) an order restraining a person from acquiring, disposing of or
otherwise dealing with any securities that are specified in the order;
(e) an order appointing a receiver of the property of a dealer or of
property that is held by a dealer on behalf of another person, whether in trust
or otherwise;
(f) an order declaring a contract relating to securities to be void or
voidable;
(g) for the purpose of securing compliance with any other order under this
section, an order directing a person to do or refrain from doing a specified
act;
(h) any ancillary order considered to be just and reasonable in
consequence of the making of an order under any of the preceding provisions of
this subsection.
(1A) For the purposes of paragraph (1)(bb), if a body corporate
contravenes 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 contravention.
(1B) Subsection (1A) does not limit the circumstances in which a
person may be aggrieved by a contravention for the purposes of
paragraph (1)(bb).
(2) Where an application is made to the Court for an order under
subsection (1), the Court may, if in the opinion of the Court it is
desirable to do so, before considering the application, make an interim order,
being an order of the kind applied for that is expressed to apply pending the
determination of the application.
(3) Where ASIC or the Exchange applies to the Court for an order under
subsection (1), the Court must not require the applicant or any other
person, as a condition of making an interim order under subsection (2), to
give any undertakings as to damages.
(4) The Court must not make an order under subsection (1) if it is
satisfied that the order would unfairly prejudice any person.
(5) Before making an order under subsection (1), the Court may direct
that notice of the application be given to such persons as it thinks fit or
direct that notice of the application be published in such manner as it thinks
fit, or both.
(6) A person appointed by order of the Court under subsection (1) as
a receiver of the property of a dealer:
(a) may require the dealer to deliver to the person any property of which
the person has been appointed receiver or to give to the person all information
concerning that property that may reasonably be required; and
(b) may acquire and take possession of any property of which the person
has been appointed receiver; and
(c) may deal with any property that the person has acquired or of which
the person has taken possession in any way in which the dealer might lawfully
have dealt with the property; and
(d) has such other powers in respect of the property as the Court
specifies in the order.
(7) In paragraph (1)(e) and subsection (6):
property, in relation to a dealer, includes money, securities
and documents of title to securities or other property entrusted to or received
on behalf of any other person by the dealer or another person in the course of
or in connection with a securities business carried on by the dealer.
(8) A person must not, without reasonable excuse, contravene:
(a) an order under this section; or
(b) a requirement of a receiver appointed by order of the Court under
subsection (1).
(9) The Court may rescind or vary an order made by it under this section
or suspend the operation of such an order.
(10) In this section:
securities includes marketable securities and marketable
rights within the meaning of Division 3 of Part 7.10.
(1) A person who is not a member of a stock exchange must not take or use,
or by inference adopt, the name or title of stockbroker or sharebroker or take
or use or have attached to or exhibited at any place a name, title or
description implying or tending to create the belief that the person is a
stockbroker or a sharebroker.
(3) A body corporate that is not a stock exchange must not take or use, or
by inference adopt, the name or title of stock exchange or take or use or have
attached to or exhibited at any place a name, title or description implying or
tending to create the belief that the body corporate is a stock
exchange.
(1) A person who is required by a provision of this Chapter to maintain,
make or keep a register or any financial record or other record in relation to a
business carried on by the person must preserve that register or record for the
prescribed period, whether or not the person ceases to carry on that business
before the end of that period.
(2) The prescribed period for the purposes of subsection (1)
is:
(a) in relation to a register or a record other than a financial record,
the 5 years next after the day on which the last entry was made in the register
or record; or
(b) in relation to a financial record, the 7 years after the transactions
covered by the record are completed.
(3) Subsections (1) and (2) do not apply in relation to a contract
note or copy of a contract note received or issued by a dealer who is a member
of a securities exchange if the matters referred to in subsection 842(3) in
relation to the contract note are recorded:
(a) by the securities exchange; or
(b) subject to such conditions (if any) as ASIC imposes, by the
dealer;
in a manner approved by ASIC and the record of those matters is retained
for not less than 5 years.
(4) A matter that a securities exchange records under subsection (3)
is taken to have been so recorded with the member’s authority.
(5) ASIC may, if of the opinion that it is no longer necessary or
desirable to retain it, destroy or otherwise dispose of any document that is
lodged under or for the purposes of this Chapter and has been in the possession
of ASIC for such period as is prescribed for the purposes of this subsection,
either generally or in relation to a particular document or class of
documents.
(1) A person must not:
(a) conceal, destroy, mutilate or alter a book relating to the business
carried on by a dealer or required under this Chapter to be kept by the holder
of a licence, by a person who holds a proper authority from the holder of a
licence or by a financial journalist within the meaning of Part 7.7;
or
(b) send the book out of this jurisdiction or out of Australia.
(2) In a prosecution of a person for a contravention of
subsection (1), it is a defence if it is proved that the person did not act
with intent to defraud, to defeat the purposes of this Chapter or to prevent,
delay or obstruct the carrying out of an examination, investigation or audit, or
the exercise of a power, under this Chapter.
(1) Where matter that is used or intended to be used in connection with
the keeping of a book required to be kept under this Chapter or a register or
any accounting or other record referred to in section 1116 is recorded or
stored in an illegible form by means of a mechanical device, an electronic
device or any other device, a person must not:
(a) record or store by means of that device matter that the person knows
to be false in a material particular or materially misleading; or
(b) destroy, remove or falsify matter that is recorded or stored by means
of that advice, or has been prepared for the purpose of being recorded or
stored, or for use in compiling other matter to be recorded or stored, by means
of that device; or
(c) fail to record or store matter by means of that device with intent to
falsify any entry made or intended to be compiled, wholly or in part, from that
matter.
(2) In a prosecution of a person for a contravention of
subsection (1), it is a defence if it is proved that the person acted
honestly and that in all the circumstances the act or omission constituting the
offence should be excused.
A person required by this Chapter to keep a book or record must take
reasonable precautions for guarding against falsification of the book or record
and for facilitating discovery of any falsification.
For the purposes of this Chapter, the business rules of a body corporate
that is, or proposes to be, a futures association are such of the rules,
regulations and by-laws made by the body or contained in its constitution as
govern the activities and conduct of the body and its members in relation to the
body’s operation as a futures association.
For the purposes of this Chapter, the business rules of a body corporate
that provides, or proposes to provide, clearing house facilities for a futures
market are such of the rules, regulations and by-laws made by the body or
contained in its constitution as govern:
(a) the activities and conduct of the body and its members; and
(b) the activities and conduct of other persons in relation to the
body’s provision of clearing house facilities for a futures
market.
For the purposes of this Chapter, the business rules of a body corporate
that conducts, or proposes to establish or conduct, a futures market are such of
the rules, regulations and by-laws made by the body corporate or contained in
its constitution as govern:
(a) the activities and conduct of the body and its members; and
(b) the activities and conduct of each clearing house for the body;
and
(c) the activities and conduct of other persons in relation to each
futures market run by the body.
A person must not establish or conduct, assist in establishing or
conducting, or hold out that the person conducts, an unauthorised futures
market.
(1) A body corporate may apply to ASIC in writing for approval by the
Minister as a futures exchange.
(2) Where a body applies under subsection (1) of this section, the
Minister may by writing approve the body as a futures exchange if, and only if,
he or she is satisfied that:
(c) the body’s business rules make satisfactory provision:
(i) for the admission as members of persons licensed, or proposing to
apply to be licensed, under Part 8.3, or of a specified class of such
persons; and
(ii) for the qualifications for membership, including the necessary
standards of training and experience for:
(A) responsible officers of bodies corporate that; and
(B) natural persons who;
are, or propose to be, members;
(iii) for the manner in which members are to conduct their business of
dealing in futures contracts so as to ensure efficiency, honesty and fair
practice in relation to such dealing; and
(iiia) for the exclusion of a body corporate from membership where a
responsible officer of the body corporate would be excluded from membership;
and
(iv) for the exclusion of a person from membership where:
(A) if the person is a body corporate—a responsible officer, or an
employee, of the body corporate; or
(B) otherwise—the person or an employee of the person;
is not of good character and high business integrity; and
(v) 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 or of this Chapter;
and
(vi) for an appropriate mechanism whereby a person whose application for
membership of the body is refused, or whose membership of the body is cancelled
or suspended, in circumstances where the person does not have a right to appeal
to the Court under subsection 1135(1) against the decision to refuse the
application, or to cancel or suspend the membership, as the case may be, may
appeal against the decision; and
(vii) for an appropriate mechanism whereby a person who has been
disciplined by the body otherwise than by way of cancellation or suspension of
the person’s membership of the body may appeal against the decision to
discipline the person; and
(viii) for the inspection and audit of the financial records that this
Chapter requires members to keep; and
(ix) with respect to the classes of futures contracts that may be dealt in
by members; and
(xi) prohibiting a member from accepting or executing, otherwise than in
accordance with the business rules, instructions from another person to deal in
futures contracts; and
(xii) prohibiting a member from dealing in futures contracts on behalf of
another person otherwise than in accordance with instructions accepted by the
member from the person; and
(xiii) prohibiting a member from dealing in futures contracts, on behalf
of another person, on a futures market of a futures exchange or of a recognised
futures exchange, otherwise than in accordance with the business rules of the
futures exchange or recognised futures exchange, as the case may be;
and
(xiv) prohibiting a member, except as permitted by the business rules,
from executing the instructions of another person to deal in futures contracts
unless the instructions are executed in such a manner that the dealing is
effected on a futures market of a futures exchange or of a recognised futures
exchange or on an exempt futures market; and
(xv) with respect to the conditions under which members may deal in
futures contracts; and
(xvi) for the equitable and expeditious settlement of claims and
grievances between members, being claims and grievances relating to the
transaction of business by members in their capacity as members; and
(xvii) for appropriate mechanisms for the conciliation and settlement of
disputes between members and their clients, being disputes concerning dealings
in futures contracts by members on behalf of their clients or concerning
transactions between members and their clients in connection with such dealings;
and
(xviii) generally for carrying on the business of the proposed futures
exchange with due regard for the interests and protection of the public;
and
(d) 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 8.6; and
(e) the interests of the public will be served by granting the
application.
(1) The Minister may by writing declare a specified futures market to be,
subject to any specified conditions, an exempt futures market.
(1A) A person must not contravene a condition specified in a declaration
in force under this section.
(1B) If a person has contravened a condition specified in a declaration in
force under this section, the Court may, on ASIC’s application, order the
person to comply with the condition.
(2) Without limiting the matters to which the Minister may have regard in
considering whether to vary or revoke a declaration in force under this section,
he or she may, in so considering, have regard to a breach of a condition
specified in the declaration.
A person must not provide, or hold out that the person provides, clearing
house facilities for a futures market (other than an exempt futures market)
unless:
(a) the futures market is conducted by a futures exchange; and
(b) the person is a body corporate; and
(c) an approval of the person under section 1131 as a clearing house
for that futures exchange is in force.
(1) A body corporate that proposes to provide clearing house facilities
for a futures market of a futures exchange may apply to ASIC in writing for
approval by the Minister as a clearing house for that futures
exchange.
(2) Where a body applies under subsection (1), the Minister may by
writing approve the body as a clearing house for the futures exchange if, and
only if, he or she is satisfied that:
(b) the body’s business rules are satisfactory, in particular such
of those business rules as relate to the registration of futures contracts made
on a futures market of the futures exchange; and
(c) the body’s business rules make satisfactory provision for the
expulsion, suspension or disciplining of members for a contravention of the
business rules or for a contravention of this Chapter; and
(d) the interests of the public will be served by granting the
application.
(3) Without limiting the matters to which the Minister may have regard in
considering an application under subsection (1), he or she may, in
considering the application, have regard to any business rules of the applicant
that relate to the guaranteeing, to members of the applicant, of the performance
of futures contracts made on a futures market of the futures
exchange.
(1) A body corporate that proposes to be a futures association may apply
to ASIC in writing for approval by the Minister as a futures
association.
(2) Where a body applies under subsection (1), the Minister may by
writing approve the body as a futures association if, and only if, he or she is
satisfied:
(c) that the body’s nature is such that the body may properly
exercise its functions as a futures association, being the functions
of:
(i) regulating the association’s affairs in the interests of the
public; and
(ii) administering and enforcing the association’s business rules;
and
(d) that the body’s business rules make satisfactory
provision:
(i) for the admission as members of persons licensed, or proposing to
apply to be licensed, under Part 8.3, or of a specified class of such
persons; and
(ii) for the qualifications for membership, including the necessary
standards of training and experience for:
(A) responsible officers of bodies corporate that; and
(B) natural persons who;
are, or propose to be, members; and
(iii) for the manner in which members are to conduct their business of
dealing in futures contracts so as to ensure efficient, honest and fair
practices in relation to such dealing; and
(iiia) for the exclusion of a body corporate from membership where a
responsible officer of the body corporate would be excluded from membership;
and
(iv) for the exclusion of a person from membership where:
(A) if the person is a body corporate—a responsible officer, or an
employee, of the body corporate; or
(B) otherwise—the person or an employee of the person;
is not of good character and high business integrity; and
(v) 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 or of this Chapter;
and
(vi) for an appropriate mechanism whereby a person whose application for
membership of the body is refused, or whose membership of the body is cancelled
or suspended, in circumstances where the person does not have a right to appeal
to the Court under subsection 1135(1) against the decision to refuse the
application, or to cancel or suspend the membership, as the case may be, may
appeal against the decision; and
(vii) for an appropriate mechanism whereby a person who has been
disciplined by the body otherwise than by way of cancellation or suspension of
the person’s membership of the body may appeal against the decision to
discipline the person; and
(viii) for the inspection and audit of the financial records that this
Chapter requires members to keep; and
(x) prohibiting a member from accepting or executing, otherwise than in
accordance with the business rules, instructions from another person to deal in
futures contracts; and
(xi) prohibiting a member from dealing in futures contracts on behalf of
another person otherwise than in accordance with instructions accepted by the
member from the person; and
(xii) prohibiting a member from dealing in futures contracts, on behalf of
another person, on a futures market of a futures exchange or of a recognised
futures exchange, otherwise than in accordance with the business rules of the
futures exchange or recognised futures exchange, as the case may be;
and
(xiii) prohibiting a member, except as permitted by the business rules,
from executing the instructions of another person to deal in futures contracts
unless the instructions are executed in such a manner that the dealing is
effected on a futures market of a futures exchange or of a recognised futures
exchange or on an exempt futures market; and
(xiv) for the equitable and expeditious settlement of claims and
grievances between members, being claims and grievances relating to the
transaction of business by members in their capacity as members; and
(xv) for appropriate mechanisms for the conciliation and settlement of
disputes between members and their clients, being disputes concerning dealings
in futures contracts by members on behalf of their clients or concerning
transactions between members and their clients in connection with such
dealings;
(e) if the body is expected to be a futures organisation within the
meaning of Part 8.6—that:
(i) 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 8.6; or
(ii) the body will enter into a contract, in a form approved by the
Minister, with an insurer approved by the Minister, under which the insurer
undertakes to supplement the fund, if a claim is made on the fund, so that the
total amount available to satisfy the claim will be not less than an amount so
approved; and
(f) that the interests of the public will be served by granting the
application.
(1) The Minister may cause to be served on a body corporate a written
notice requiring the body to show cause, at a hearing before a specified person,
why the body’s approval as a futures association should not be suspended
or cancelled on specified grounds.
(2) A notice under subsection (1) must specify, and give reasonable
notice of, the time and place at which the hearing is to occur, but the
specified person may, with the body’s consent, fix a different time, a
different place, or both, for the hearing.
(3) Where a notice is served under subsection (1), the specified
person must, after giving the body an opportunity to be heard at the hearing,
submit to the Minister a report about the hearing and a recommendation about the
matters to which the notice related.
(4) After considering a report and recommendation under
subsection (3), the Minister may:
(a) decide to take no further action in relation to the matter;
or
(b) by writing, suspend for a specified period, or cancel, the
body’s approval as a futures association.
(5) A body corporate is taken not to be a futures association at any time
during a period for which the body’s approval as a futures association is
suspended.
(6) A body corporate’s approval as a futures association must not be
suspended or cancelled except under this section.
ASIC must cause a copy of an instrument executed under subsection
1126(2), 1127(1), 1131(2), 1132(2) or 1133(4) to be published in the
Gazette.
(1) Where a body corporate, being a futures exchange or futures
association:
(a) decides, at a time when a person is a member of no futures
organisation, to refuse an application by the person for membership of the body
corporate; or
(b) decides, at a time when a person is a member of no other futures
organisation, to suspend or cancel the person’s membership of the body
corporate;
the body corporate must, within 14 days after so deciding, give to the
person, and to ASIC, a notice in writing setting out the decision and the
reasons for the decision, and the person may, within the period of 21 days
beginning when the notice is so given or within that period as extended by the
Court, appeal to the Court against the decision by filing a written notice of
appeal.
(2) A person whose membership of a futures organisation is suspended for a
period:
(a) is taken, for the purposes of paragraph (1)(a), to be a member of
that futures organisation throughout that period; and
(b) is taken, for the purposes of paragraph (1)(b), not to be a
member of that futures organisation at any time during that period.
(3) A person must, on the day on which the person files a notice of appeal
with the Court under subsection (1), lodge a copy of the notice.
(4) Where a body corporate decides as mentioned in paragraph (1)(b),
then:
(a) subject to paragraph (c) of this subsection and to
subsection (6), the decision takes effect at the end of the day on which a
notice relating to the decision is given by the body corporate in accordance
with subsection (1); and
(b) if the person to whom the decision relates appeals to the Court under
subsection (1) against the decision—the Court may, at any time before
it determines the appeal, make such order as it thinks fit concerning the
effect, pending determination of the appeal, of the decision, including, without
limiting the generality of the foregoing, an order that is subject to conditions
specified in the order; and
(c) an order made by the Court under paragraph (b) has effect
accordingly.
(5) The Court may, after hearing an appeal under subsection (1),
dismiss the appeal or:
(a) in the case of an appeal against a decision to refuse an application
for membership—decide that the application should be granted, or should be
granted subject to specified conditions; or
(b) in the case of an appeal against a decision to suspend for a period a
person’s membership—decide that the person’s
membership:
(i) should not be suspended; or
(ii) should be suspended for a specified lesser period; or
(c) in the case of an appeal against a decision to cancel a person’s
membership—decide that the person’s membership:
(i) should not be cancelled; or
(ii) should not be cancelled, but should be suspended for a specified
period.
(6) Where, on an appeal against a decision of a body corporate, the Court
decides as mentioned in paragraph (5)(a), (b) or (c), then, as from the day
on which the appeal is decided:
(a) the first-mentioned decision ceases to have effect; and
(b) the decision of the Court has effect, except for the purposes of
subsection (1), as a decision of the body corporate and takes effect
accordingly.
(1) Where an amendment is made by way of rescission or alteration of, or
addition to, the business rules of a futures exchange, of a clearing house for a
futures exchange, or of a futures association, the futures exchange, clearing
house or futures association, as the case may be, must, forthwith after the
making of the amendment, give written notice of the amendment to ASIC.
(2) A notice under subsection (1) must:
(a) set out the text of the amendment to which it relates; and
(b) specify the date on which the amendment was made; and
(c) contain an explanation of the purpose of the amendment.
(3) If a notice required by subsection (1) to be given in relation to
an amendment is not given within 21 days after the making of the amendment, the
amendment ceases to have effect.
(4) Where ASIC receives a notice under this section, ASIC must forthwith
send a copy of the notice to the Minister.
(5) The Minister may, within 28 days after the receipt by ASIC of a notice
under this section, disallow the whole or a specified part of the amendment to
which the notice relates.
(6) Where the Minister disallows under this section the whole or a part of
an amendment of the business rules of a body corporate, ASIC must forthwith give
notice of the disallowance to the body corporate and, upon receipt by the body
corporate of the notice of disallowance, the amendment ceases, to the extent of
the disallowance, to have effect.
(1) A futures exchange, and a clearing house for a futures exchange, must,
to the extent that it is reasonably practicable to do so, take all steps, and do
all things, necessary to ensure an orderly and fair market for dealings in
futures contracts on a futures market of the futures exchange.
(2) A futures exchange may, for the purpose of performing its functions
under subsection (1), give to a person who is not a member of the futures
exchange but in whose name a futures contract entered into on a futures market
of the futures exchange is registered a direction:
(a) to do a particular act or thing; or
(b) to refrain from doing a particular act or thing.
(3) A person must comply with a direction given to the person in
accordance with subsection (2), but a person who contravenes this
subsection is not guilty of an offence.
(1) Subject to subsections (2) and (6), ASIC may, in relation to a
futures market of a futures exchange, give a direction in writing to the futures
exchange:
(a) to close the futures market; or
(b) to suspend dealing on the futures market in a specified class of
futures contracts; or
(c) to limit transactions on the futures market to the closing out of
futures contracts; or
(d) to defer for a specified period the completion date for all futures
contracts, or for a specified class of futures contracts, made on the futures
market; or
(e) to cause a specified futures contract made on the futures market, or
each futures contract included in a specified class of futures contracts so
made, to be:
(i) closed out forthwith as the result of the matching up of the futures
contract with a futures contract of the same kind whose price or value is equal
to a price or value determined by the futures exchange; or
(ii) invoiced back to a specified date at a price or value determined by
the futures exchange; or
(f) to require a futures contract made on the futures market, or each
futures contract included in a specified class of futures contracts so made, to
be discharged by:
(i) the tendering of a merchantable lot of a commodity determined by the
futures exchange, being a commodity of a quality or standard that is:
(A) different from the quality or standard of the commodity specified in
the futures contract; and
(B) determined by the futures exchange; and
(ii) the tendering of a price adjusted by an amount that is:
(A) appropriate having regard to the quality or standard of the commodity
referred to in subparagraph (i); and
(B) determined by the futures exchange; or
(g) to require a member of the futures exchange to act in a specified
manner in relation to dealings in futures contracts on the futures market, or in
relation to a specified class of such dealings.
(2) ASIC must not give a direction under subsection (1) in relation
to a futures market of a futures exchange unless:
(a) it has determined that a direction should be so given because it is of
the opinion that:
(i) subsection 1137(1) has not been complied with in relation to that
futures market; and
(ii) it is necessary to protect the interests of persons on behalf of whom
futures contracts are or may be dealt with on that futures market; and
(iii) it would be in the public interest for a direction to be so given;
and
(b) it has given to the futures exchange a notice in writing stating that
it has formed that opinion and specifying:
(i) its reasons for forming that opinion; and
(ii) the direction that it considers should be so given; and
(iii) a time, or a date and time, before which it will not so give the
direction; and
(c) it has given a copy of the notice to each clearing house for that
futures market; and
(d) the direction is so given after the time, or date and time, as the
case may be, specified pursuant to subparagraph (b)(iii).
(3) ASIC must, before determining in relation to a futures market of a
futures exchange as mentioned in paragraph (2)(a), consult the futures
exchange and each clearing house for that futures market.
(4) A failure by ASIC to comply with subsection (3) does not affect
the validity of:
(a) a determination under paragraph (2)(a); or
(b) a direction given under subsection (1) pursuant to such a
determination.
(5) ASIC must, as soon as practicable after giving a notice under
paragraph (2)(b) in relation to a futures market of a futures
exchange:
(a) give to the Minister a copy of the notice and a written report setting
out the reasons for the giving of the notice; and
(b) give a copy of the report to the futures exchange; and
(c) give a copy of the report to each clearing house for that futures
market.
(6) ASIC must not give a direction under subsection (1) in relation
to a futures market of a futures exchange if:
(a) the Minister has directed ASIC not to give the direction; or
(b) the futures exchange has acted as if the direction had been
given.
(7) ASIC must, as soon as practicable after giving a direction under
subsection (1) in relation to a futures market of a futures
exchange:
(a) give to the Minister a copy of the direction; and
(b) give to each clearing house for that futures market:
(i) a copy of the direction; and
(ii) a direction in writing prohibiting the clearing house from acting in
a manner inconsistent with, and requiring the clearing house to do all that it
is reasonably capable of doing to give effect to, the direction under
subsection (1) while the last-mentioned direction remains in
force.
(8) The Minister may determine in writing the period throughout which a
particular direction under subsection (1) is to remain in force.
(9) A direction given under subsection (1) remains in
force:
(a) in a case where a determination under subsection (8) is in
force—throughout the period specified in the determination; or
(b) in any other case—unless sooner revoked, until the end of the
period of 21 days, or such shorter period (if any) as is specified in the
direction, commencing when the direction is given.
(10) A futures exchange must not, while a direction given under
subsection (1) in relation to a futures market of the futures exchange
remains in force, fail to comply with the direction.
(11) A clearing house for a futures exchange must not fail to comply with
a direction given to the clearing house under
subparagraph (7)(b)(ii).
(12) A document may be given to a person under this section by sending to
the person, by telegraph, telex, facsimile service or other similar means of
communication, a message to the effect of the document.
(1) A futures exchange, a clearing house for a futures exchange, and a
futures association, must each 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 under this Chapter.
(2) Where:
(a) a body corporate, being a futures exchange, a clearing house for a
futures exchange, or a futures association, decides to reprimand, fine, suspend,
expel or otherwise take disciplinary action against, a member of the body
corporate; and
(b) subsection 1135(1) does not require the body corporate to give to ASIC
a notice relating to the decision;
the body corporate must, within 14 days after so deciding, give to ASIC a
notice in writing setting out particulars of the name of the member, the
decision, the reasons for the decision and, in the case of a decision to fine a
member, the amount of the fine.
(2A) A futures exchange, a clearing house for a futures exchange or a
futures association that believes that a person has committed, is committing or
is about to commit a serious contravention of its business 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.
(3) Where a clearing house for a futures exchange:
(a) refuses to register a dealing in a futures contract; or
(b) closes out a futures contract because of a failure to meet a call for
deposit or margin;
it must forthwith give ASIC particulars of its action.
(4) A person authorised by ASIC is entitled at all reasonable times to
full and free access for any of the purposes of this Act to the trading floor of
a futures market of a futures exchange.
(5) A person who refuses or fails, without lawful excuse, to allow a
person authorised by ASIC access in accordance with subsection (4) to the
trading floor of a futures market of a futures exchange contravenes this
subsection.
Where a person who is under an obligation to comply with, observe,
enforce or give effect to the business rules of a futures exchange, of a
clearing house for a futures exchange, or of a futures association, fails to
comply with, observe, enforce or give effect to those rules, the Court may, on
the application of the futures exchange, clearing house or futures association,
as the case may be, of ASIC, or of a person aggrieved by the failure, and after
giving to the person against whom the order is sought an opportunity of being
heard, make an order giving directions to the last-mentioned person concerning
compliance with, observance or enforcement of, or giving effect to, those
rules.
(1) Despite any law of a State or Territory in this jurisdiction about
gaming or wagering:
(a) a person may enter into a futures contract:
(i) on a futures market of a futures exchange or of a recognised futures
exchange; or
(ii) on an exempt futures market; or
(iii) as permitted by the business rules of a futures association, of a
futures exchange or of a recognised futures exchange; 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 Chapter 8 agreement of a kind
prescribed for the purposes of paragraph 72A(1)(b); and
(b) the agreement is valid and enforceable.
(1) In this section:
disciplinary proceeding, in relation to a futures
organisation, means:
(a) a proceeding under the business rules of the futures organisation that
may result in the disciplining of a member of the futures organisation;
or
(b) an appeal under the business rules of the futures organisation from a
proceeding of a kind referred to in paragraph (a).
disciplining, in relation to a member of a futures
organisation, includes expulsion from, or suspension of, membership of the
futures organisation.
member, in relation to a futures organisation, includes a
person who is under an obligation to comply with or enforce the business rules
of the futures organisation.
(2) A futures organisation, or a member, officer or employee of a futures
organisation, 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 futures
organisation.
(3) 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 futures organisation.
A person must not:
(a) deal in a futures contract on another person’s behalf;
or
(b) hold out that the person carries on a futures broking
business;
unless the first-mentioned person holds a futures brokers licence or is an
exempt broker.
A person must not:
(a) carry on a futures advice business; or
(b) hold out that the person is a futures adviser;
unless the person is a licensee or an exempt futures adviser.
(1) A person may apply to ASIC, in the prescribed form and manner, for a
futures brokers licence or a futures 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 applies where a natural person applies for a
licence.
(2) ASIC must grant the licence if:
(a) the application was made in accordance with section 1144;
and
(b) the person is not an insolvent under administration; and
(c) if the application is for a futures brokers licence—the person
is a member of a futures organisation; and
(d) ASIC 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
(e) ASIC has no reason to believe that the person is not of good fame and
character; and
(f) ASIC 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)(e) or (f), 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 applies where a body corporate applies for a
licence.
(2) ASIC must grant the licence if:
(a) the application was made in accordance with section 1144;
and
(c) the applicant is not an externally-administered body corporate;
and
(d) if the application is for a futures brokers licence—the
applicant is a member of a futures organisation; and
(e) 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
(f) 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.
(3) Otherwise, ASIC must refuse the application.
(4) In determining whether or not it has reason to believe as mentioned in
paragraph (2)(f), 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 1144A and 1145 apply subject to sections 1199A,
1200 and 1202 and the regulations.
(2) Nothing in subsection 1144A(4) or 1145(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.
A licence is subject to:
(a) such conditions and restrictions as are prescribed; and
(b) subject to section 1200, such conditions and restrictions as ASIC
imposes when granting the licence or while it is in force.
(1) A futures brokers licence is subject to:
(a) a condition that the licensee be, throughout the currency of the
licence, a member of a futures organisation; and
(b) a condition that the licence is suspended throughout a period
throughout which the licensee:
(i) is a member of no futures organisation; and
(ii) would, but for the suspension of the licensee’s membership of a
futures organisation, be a member of the last-mentioned futures
organisation.
(2) A person whose membership of a futures organisation is suspended for a
period:
(a) is, for the purposes of paragraph (1)(a), a member of that
futures organisation throughout that period; and
(b) is, for the purposes of paragraph (1)(b), a member of that
futures organisation at no time during that period.
(1) Without limiting the generality of section 1147, one or more of
the following may be imposed under that section on a futures brokers
licence:
(a) a condition or restriction about limiting the liability that the
licensee may incur in connection with a business of dealing in futures
contracts;
(b) a condition or restriction about incurring, or a condition about
disclosing, liabilities of the licensee that arise otherwise than in connection
with such a business;
(c) a condition or restriction about the licensee’s financial
position, whether or not in relation to such a business;
(d) without limiting the generality of paragraph (c), a condition
that the licensee’s assets include, or not include, specified
assets;
(e) without limiting the generality of paragraph (c), a condition
that the sum of the values of specified assets included in the licensee’s
assets be not less than, or not greater than, an amount ascertained in
accordance with the condition.
(2) A condition imposed by virtue of paragraph (1)(e) may provide for
the values of assets to be ascertained, for the purposes of applying the
condition, in a manner specified in, or determined in accordance with, the
condition.
(3) Without limiting the generality of paragraph (1)(e), a condition
imposed by virtue of that paragraph may provide for the amount referred to in
that paragraph to be a specified percentage of the sum of:
(a) the values of all the licensee’s assets; or
(b) the values of specified assets included in the licensee’s
assets; or
(c) the amounts of all the licensee’s liabilities; or
(d) the amounts of specified liabilities included in the licensee’s
liabilities.
Without limiting the generality of section 1147, one or more of the
following may be imposed under that section on a licence:
(a) a condition about what the licensee is to do to, by way of supervision
or otherwise, in order to prevent the licensee’s representatives from
contravening:
(i) a futures law; or
(ii) other conditions of the licence;
(b) a condition about what the licensee is to do to ensure that each
representative of the licensee has adequate qualifications and experience having
regard to what the representative will do on the licensee’s behalf in
connection with a futures broking business or futures advice business carried on
by the licensee.
Subject to section 1200, ASIC may at any time revoke or vary a
condition of a licence unless it was imposed by the regulations.
(1) As soon as practicable after imposing a condition on, or revoking or
varying a condition of, a futures brokers licence, ASIC must inform in
writing:
(a) each futures organisation of which the licensee is a member;
and
(b) each corporation that is a clearing house for a futures exchange of
which the licensee is a member.
(2) A contravention of subsection (1) does not affect the validity of
an act done by ASIC.
(1) Within one business day after the happening of an event constituting a
contravention of a condition of a licence held by a corporation, the licensee
must give to:
(a) ASIC; and
(b) each futures organisation of which the licensee is a member;
a written notice setting out particulars of the event.
(2) It is a defence to a prosecution for failing to give a particular
notice to a person as required by this section if it is proved that:
(a) when the requirement arose, the defendant was unaware of the event
that gave rise to the requirement; and
(b) the defendant:
(i) did not become aware of the event before the date of the information;
or
(ii) did become so aware before that date but gave the notice to that
person as soon as reasonably practicable after becoming so aware.
(1) ASIC may, by writing given to the holder of a futures brokers licence,
direct the holder to give ASIC specified information about, or a specified
statement relating to, a business of dealing in futures contracts that the
holder carries on or has carried on.
(2) A direction under subsection (1) to give a specified statement
may also direct the holder to cause the statement to be audited by a registered
company auditor before it is given to ASIC.
(3) A person must comply with a direction under this section:
(a) if the direction specifies a reasonable period for
compliance—within that period; or
(b) in any other case—within a reasonable period;
or within that period as extended by ASIC by writing given to the
person.
(1) ASIC must keep a Register of Futures Licensees for the purposes of
this Part.
(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 licensee; 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 of business 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 licensee—that name or style; and
(e) in the case of a futures brokers licence—the name, and the
address of the principal place of business, of each futures organisation of
which the licensee is a member; and
(f) particulars of any suspension of the licence; and
(g) such other matters (if any) as are prescribed.
(4) Where a person ceases to hold 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 may make copies of, or take extracts from,
the Register.
Within 21 days after:
(a) the holder of a futures brokers licence ceases to carry on the
business to which the licence relates; or
(b) the holder of a futures advisers licence ceases to act as, or to hold
out that the holder is, a futures adviser; or
(c) there is a change in a matter particulars of which are required by
virtue of any of paragraphs 1155(3)(a) to (e), inclusive, to be entered, in
relation to a licence, in the Register of Futures Licensees;
the holder of the licence must give ASIC written particulars, in the
prescribed form, of that fact, or of that change, as the case may be.
(1) A person who is or has been a licensee must lodge, in respect of each
year or part of a year during which the licence is or was in force, a statement
in the prescribed form that complies with this section.
(2) The statement must set out the number of persons:
(a) who, when the statement is lodged, hold; or
(b) who, when the person last ceased to be a licensee, held;
as the case may be, proper authorities from the person.
(3) The statement must also contain such information as is
prescribed.
A person required by section 1157 to lodge a statement must lodge
the statement:
(a) if the licence is a futures brokers licence—within the period
within which the person must lodge with ASIC a profit and loss statement and
balance sheet referred to in section 1218; or
(b) if the licence is a futures advisers licence—within the period
of 1 month immediately before the anniversary of the day on which the licence
was granted;
or within that period as extended by ASIC by writing given to the
person.
In this Division:
excluded client means a person who is:
(a) a futures broker; or
(b) a futures adviser; or
(c) one of 2 or more persons who together constitute a futures broker or
futures adviser.
Where a person (in this section and Subdivision B called the
non-licensee) and another person (in this section and Subdivision
B called the client), not being an excluded client, enter into an
agreement relating to a dealing or proposed dealing in a futures contract by the
non-licensee on the client’s behalf, being a dealing or proposed dealing
involving a contravention by the non-licensee of section 1142, Subdivision
B applies, whether or not anyone else is a party to the agreement.
Where, during a period when a person (in this section and Subdivision B
called the non-licensee), in contravention of section 1143,
carries on a futures advice business or holds out that the person is a futures
adviser, the non-licensee and a client (other than an excluded client) of the
non-licensee enter into an agreement that relates to advising the client about
futures contracts or to giving the client futures reports, Subdivision B
applies, whether or not anyone else is a party to the agreement.
(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 futures brokers licence; or
(b) the non-licensee did not hold a futures brokers licence and did not
hold a futures advisers licence;
as the case requires.
(5) If, at a time when a futures brokers licence or futures 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 futures brokers licence or futures 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 1165 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 1166.
A notice given under section 1164 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 1164 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 1165, 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 1165 and the application were for orders under
section 1166.
(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 1166 to have been rescinded under
section 1165.
(6) An order under subsection (4) does not affect the application of
section 1168 or 1170 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 1165, the Court may, on the application of the client or the
non-licensee, 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 1164;
(ii) a notice so given will result under section 1165 in rescission
of the agreement; and
(b) applies after the agreement is rescinded under
section 1165;
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 1167, this
section:
(a) applies while the client is entitled to give a notice under
section 1164; and
(b) applies after the client so gives a notice, even if the notice does
not result under section 1165 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 1167(2) or 1168(2), it is presumed, unless the contrary is proved,
that section 1167 or 1168, as the case may be, applies, or applied at that
time, as the case may be.
(1) Without limiting the generality of section 1166, if the client
gives a notice under section 1164, the client may, even if the notice does
not result under section 1165 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.