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This is a Bill, not an Act. For current law, see the Acts databases.
1996-97-98
The Parliament of
the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Corporate Law
Economic Reform Bill 1998
No. ,
1998
(Treasury)
A Bill
for an Act to amend the Corporations Law and the Australian Securities and
Investments Commission Act 1989, and for related
purposes
Contents
Part 1—Amendments relating to new Chapter 6D
(Fundraising) 8cler0h1.html
Part 2—Amendments relating to new Chapter 2L
(Debentures) 8cler0h1.html
Part 3—Amendments relating to new Chapter 2D
(Officers) 8cler0h1.html
Part 4—Amendments relating to new Chapter 2E (Related
Parties) 8cler0h1.html
Part 5—Amendments relating to new Part 2F.1 (Oppressive conduct of
affairs) 8cler0h1.html
Part 6—Amendments relating to new Part 2F.1A (Proceedings on behalf
of a company by members and others) 8cler0h1.html
Part 7—Amendments relating to new Part 9.4B (Civil penalty
provisions) 8cler0h1.html
Part 8—Amendments relating to new Part 12 of the ASIC Act (Accounting
standards) 8cler0h1.html
Part 9—Amendments relating to new Chapters 6 to 6C
(Takeovers) 8cler0h1.html
Australian Securities and Investments Commission Act
1989 8cler0h1.html
Part 1—Amendments relating to new Chapter 6D
(Fundraising) 8cler0h1.html
Part 2—Amendments relating to new Chapter 2F.1
(Oppression) 8cler0h1.html
Part 3—Amendments relating to new accounting standards provisions in
ASIC Act 8cler0h1.html
Part 4—Amendments relating to new Chapter 6
(Takeovers) 8cler0h1.html
Commonwealth Authorities and Companies Act
1998 8cler0h1.html
Corporations Act 1989 8cler0h1.html
Australian Securities and Investments Commission Act
1989 8cler0h1.html
Financial Sector Reform (Consequential Amendments) Act
1998 8cler0h1.html
A Bill for an Act to amend the Corporations Law and the
Australian Securities and Investments Commission Act 1989, and for
related purposes
The Parliament of Australia enacts:
This Act may be cited as the Corporate Law Economic Reform Act
1998.
(1) Sections 1 and 2 commence on the day on which this Act receives the
Royal Assent.
(2) Section 3 and the Schedules (other than item 12 of Schedule 7)
commence on a day to be fixed by Proclamation.
(3) If that section and those Schedules do not commence under subsection
(2) within the period of 6 months beginning on the day on which this Act
receives the Royal Assent, they commence on the first day after that the end of
that period.
(4) Item 12 of Schedule 7 is taken to have commenced on the day on which
the Financial Sector Reform (Consequential Amendments) Act 1998 received
the Royal Assent.
(1) Subject to section 2, the Corporations Law set out in section 82 of
the Corporations Act 1989 is amended as set out in Schedules 1, 3 and 6
to this Act, and any other item in those Schedules has effect according to its
terms.
(2) Subject to section 2, each Act that is specified in another Schedule
to this Act is amended or repealed as set out in the applicable items in the
Schedule concerned, and any other item in the Schedule has effect according to
its terms.
Repeal the Chapters, substitute:
(1) This Part sets out some of the most significant duties of directors,
secretaries, other officers and employees of corporations. Other duties are
imposed by other provisions of this Law and other laws (including the general
law).
(2) Section 9 defines both director and
officer. Officer includes, as well as
directors and secretaries, some other people who manage the corporation or its
property (such as receivers and liquidators).
Care and diligence—directors and other officers
(1) A director or other officer of a corporation must exercise their
powers and discharge their duties with the degree of care and diligence that a
reasonable person would exercise if they:
(a) were a director or officer of a corporation in the corporation’s
circumstances; and
(b) occupied the office held by, and had the same responsibilities within
the corporation as, the director or officer.
Note: This subsection is a civil penalty provision (see
section 1317DA).
Business judgment rule
(2) A director or other officer of a corporation who makes a business
judgment is taken to meet the requirements of subsection (1), and their
equivalent duties at common law and in equity, in respect of the judgment if
they:
(a) make the judgment in good faith for a proper purpose; and
(b) do not have a material personal interest in the subject matter of the
judgment; and
(c) inform themselves about the subject matter of the judgment to the
extent they reasonably believe to be appropriate; and
(d) rationally believe that the judgment is in the best interests of the
corporation.
The director’s or officer’s belief that the judgment is in the
best interests of the corporation is a rational one unless the belief is one
that no reasonable person in their position would hold.
Note: This subsection only operates in relation to duties
under this section and their equivalent duties at common law or in equity
(including the duty of care that arises under the common law principles
governing liability for negligence)—it does not operate in relation to
duties under any other provision of this Law or under any other
laws.
(3) In this section:
business judgment means any decision to take or not take
action in respect of a matter relevant to the business operations of the
corporation.
Good faith—directors and other officers
(1) A director or other officer of a corporation must exercise their
powers and discharge their duties:
(a) in good faith in what they believe to be in the best interests of the
corporation; and
(b) for a proper purpose.
Note 1 : This subsection is a civil penalty provision (see
section 1317DA).
Note 2: Section 187 deals with the situation of directors of
wholly-owned subsidiaries.
(2) A person who is involved in a contravention of subsection (1)
contravenes this subsection.
Note 1: Section 79 defines
involved.
Note 2: This subsection is a civil penalty provision (see
section 1317DA).
Use of position—directors, other officers and
employees
(1) A director, secretary, other officer or employee of a corporation must
not improperly use their position to:
(a) gain an advantage for themselves or someone else; or
(b) cause detriment to the corporation.
Note: This subsection is a civil penalty provision (see
section 1317DA).
(2) A person who is involved in a contravention of subsection (1)
contravenes this subsection.
Note 1: Section 79 defines
involved.
Note 2: This subsection is a civil penalty provision (see
section 1317DA).
Use of information—directors, other officers and
employees
(1) A person who obtains information because they are, or have been, a
director or other officer or employee of a corporation must not improperly use
the information to:
(a) gain an advantage for themselves or someone else; or
(b) cause detriment to the corporation.
Note 1: This duty continues after the person stops being an
officer or employee of the corporation.
Note 2: This subsection is a civil penalty provision (see
section 1317DA).
(2) A person who is involved in a contravention of subsection (1)
contravenes this subsection.
Note 1: Section 79 defines
involved.
Note 2: This subsection is a civil penalty provision (see
section 1317DA).
Good faith—directors and other officers
(1) A director or other officer of a corporation commits an offence if
they intentionally or recklessly fail to exercise their powers and discharge
their duties:
(a) in good faith in the best interests of the corporation; or
(b) for a proper purpose;
and they do so dishonestly.
Note: Section 187 deals with the situation of directors of
wholly-owned subsidiaries.
Use of position—directors, other officers and
employees
(2) A director, other officer or employee of a corporation commits an
offence if they use their position dishonestly:
(a) with the intention of directly or indirectly gaining an advantage for
themselves, or someone else, or causing detriment to the corporation;
or
(b) recklessly as to whether the use may result in themselves or someone
else directly or indirectly gaining an advantage, or in causing detriment to the
corporation.
Use of information—directors, other officers and
employees
(3) A person who obtains information because they are, or have been, a
director or other officer or employee of a corporation commits an offence if
they use the information dishonestly:
(a) with the intention of directly or indirectly gaining an advantage for
themselves, or someone else, or causing detriment to the corporation;
or
(b) recklessly as to whether the use may result in themselves or someone
else directly or indirectly gaining an advantage, or in causing detriment to the
corporation.
Sections 180 to 184:
(a) have effect in addition to, and not in derogation of, any rule of law
relating to the duty or liability of a person because of their office or
employment in relation to a corporation; and
(b) do not prevent the commencement of civil proceedings for a breach of a
duty or in respect of a liability referred to in paragraph (a).
This section does not apply to subsections 180(2) and (3) to the extent to
which they operate on the duties at common law and in equity that are equivalent
to the requirements of subsection 180(1).
Sections 180 to 184 do not apply to an act or omission by a director or
other officer or employee of a foreign company unless the act or omission
occurred in connection with:
(a) the foreign company carrying on business in Australia; or
(b) an act that the foreign company does, or proposes to do, in Australia;
or
(c) a decision by the foreign company whether or not to do, or refrain
from doing, an act in Australia.
A director of a corporation that is a wholly-owned subsidiary of a body
corporate is to be taken to act in good faith in the best interests of the
subsidiary if:
(a) the constitution of the subsidiary expressly authorises the director
to act in the best interests of the holding company; and
(b) the director acts in good faith in the best interests of the holding
company; and
(c) the subsidiary is not insolvent at the time the director acts and does
not become insolvent because of the director’s act.
Secretary’s functions
(1) A secretary of a company contravenes this subsection if the company
contravenes:
(a) section 142 (requirement for companies to have registered office);
or
(b) section 145 (requirement for registered office of public company to be
open to public); or
(c) section 345 (annual returns); or
(d) section 205B (lodgment of notices with ASIC).
Note: See section 203C for the circumstances in which a
company must have a secretary.
Consequence if director of proprietary company without secretary does
not fulfil secretary’s function
(2) Each director of a proprietary company contravenes this subsection
if:
(a) the proprietary company contravenes section 142, 145, 345 or 205B;
and
(b) the proprietary company does not have a secretary when it contravenes
that section.
Defence
(3) A person does not contravene subsection (1) or (2) if they show that
they took all reasonable steps to ensure that the company complied with the
section.
If:
(a) a director relies on information, or professional or expert advice,
given or prepared by:
(i) an employee of the corporation whom the director believes on
reasonable grounds to be reliable and competent in relation to the matters
concerned; or
(ii) a professional adviser or expert in relation to matters that the
director believes on reasonable grounds to be within the person’s
professional or expert competence; or
(iii) another director or officer in relation to matters within the
director’s or officer’s authority; or
(iv) a committee of directors on which the director did not serve in
relation to matters within the committee’s authority; and
(b) the reliance was made:
(i) in good faith; and
(ii) after making proper inquiry if the circumstances indicated the need
for inquiry; and
(c) the reasonableness of the director’s reliance on the information
or advice arises in proceedings brought to determine whether a director has
performed a duty under this Part or an equivalent general law duty;
the director’s reliance on the information or advice is taken to be
reasonable unless the contrary is proved.
(1) If the directors delegate a power under section 198D, a director is
responsible for the exercise of the power by the delegate as if the power had
been exercised by the directors themselves.
(2) A director is not responsible under subsection (1) if:
(a) the director believed on reasonable grounds at all times that the
delegate would exercise the power in conformity with the duties imposed on
directors of the company by this Law and the company’s constitution (if
any); and
(b) the director believed:
(i) on reasonable grounds; and
(ii) in good faith; and
(iii) after making proper inquiry if the circumstances indicated the need
for inquiry;
that the delegate was reliable and competent in relation to the power
delegated.
Director’s duty to notify other directors of material personal
interest when conflict arises
(1) A director of a company who has a material personal interest in a
matter that relates to the affairs of the company must give the other directors
notice of the interest unless subsection (2) says otherwise.
(2) The director does not need to give notice of an interest under
subsection (1) if:
(a) the interest:
(i) arises because the director is a member of the company and is held in
common with the other members of the company; or
(ii) arises in relation to the director’s remuneration as a director
of the company; or
(iii) relates to a contract the company is proposing to enter into that is
subject to approval by the members and will not impose any obligation on the
company if it is not approved by the members; or
(iv) arises merely because the director is a guarantor or has given an
indemnity or security for all or part of a loan (or proposed loan) to the
company; or
(v) arises merely because the director has a right of subrogation in
relation to a guarantee or indemnity referred to in subparagraph (iv);
or
(vi) relates to a contract that insures, or would insure, the director
against liabilities the director incurs as an officer of the company (but only
if the contract does not make the company or a related body corporate the
insurer); or
(vii) relates to any payment by the company or a related body corporate in
respect of an indemnity permitted under section 199A or any contract relating to
such an indemnity; or
(viii) is in a contract, or proposed contract, with, or for the benefit
of, or on behalf of, a related body corporate and arises merely because the
director is a director of the related body corporate; or
(b) the company is a proprietary company and the other directors are aware
of the nature and extent of the interest and its relation to the affairs of the
company; or
(c) all the following conditions are satisfied:
(i) the director has already given notice of the nature and extent of the
interest and its relation to the affairs of the company under subsection
(1)
(ii) if a person who was not a director of the company at the time when
the notice under subsection (1) was given is appointed as a director of the
company—the notice is given to that person
(iii) the nature or extent of the interest has not materially increased
above that disclosed in the notice; or
(d) the director has given a standing notice of the nature and extent of
the interest under section 192 and the notice is still effective in relation to
the interest.
Note: Subparagraph (c)(ii)—the notice may be given to
the person referred to in this subparagraph by someone other than the director
to whose interests it relates (for example, by the secretary).
(3) The notice required by subsection (1) must:
(a) give details of:
(i) the nature and extent of the interest; and
(ii) the relation of the interest to the affairs of the company;
and
(b) be given at a directors’ meeting as soon as practicable after
the director becomes aware of their interest in the matter.
The details must be recorded in the minutes of the meeting.
Effect of contravention by director
(4) A contravention of this section by a director does not affect the
validity of any act, transaction, agreement, instrument, resolution or other
thing.
Section does not apply to single director proprietary
company
(5) This section does not apply to a proprietary company that has only 1
director.
Power to give notice
(1) A director of a company who has an interest in a matter may give the
other directors standing notice of the nature and extent of the interest in the
matter in accordance with subsection (2). The notice may be given at any time
and whether or not the matter relates to the affairs of the company at the time
the notice is given.
Note: The standing notice may be given to the other
directors before the interest becomes a material personal
interest.
(2) The notice under subsection (1) must:
(a) give details of the nature and extent of the interest; and
(b) be given:
(i) at a directors’ meeting (either orally or in writing); or
(ii) to the other directors individually in writing.
The standing notice is given under subparagraph (b)(ii) when it has been
given to every director.
Standing notice must be tabled at meeting if given to directors
individually
(3) If the standing notice is given to the other directors individually in
writing it must be tabled at the next directors’ meeting after it is
given.
Nature and extent of interest must be recorded in minutes
(4) The director must ensure that the nature and extent of the interest
disclosed in the standing notice is recorded in the minutes of the meeting at
which the standing notice is given or tabled.
Dates of effect and expiry of standing notice
(5) The standing notice:
(a) takes effect as soon as it is given; and
(b) ceases to have effect if a person who was not a director of the
company at the time when the notice was given is appointed as a director of the
company.
A standing notice that ceases to have effect under paragraph (b) commences
to have effect again if it is given to the person referred to in that
paragraph.
Note: The notice may be given to the person referred to in
paragraph (b) by someone other than the director to whose interests it relates
(for example, by the secretary).
Effect of material increase in nature or extent of
interest
(6) The standing notice ceases to have effect in relation to a particular
interest if the nature or extent of the interest materially increases above that
disclosed in the notice.
Effect of contravention by director
(7) A contravention of this section by a director does not affect the
validity of any act, transaction, agreement, instrument, resolution or other
thing.
Sections 191 and 192 have effect in addition to, and not in derogation
of:
(a) any general law rule about conflicts of interest; and
(b) any provision in a company’s constitution (if any) that
restricts a director from
(i) having a material personal interest in a matter; or
(ii) holding an office or possessing property;
involving duties or interests that conflict with their duties or
interests as a director.
If a director of a proprietary company has a material personal interest
in a matter that relates to the affairs of the company and:
(a) under section 191 the director discloses the nature and extent of the
interest and its relation to the affairs of the company at a meeting of the
directors; or
(b) the interest is one that does not need to be disclosed under section
191;
then:
(c) the director may vote on matters that relate to the interest;
and
(d) any transactions that relate to the interest may proceed;
and
(e) the director may retain benefits under the transaction even though the
director has the interest; and
(f) the company cannot avoid the transaction merely because of the
existence of the interest.
If disclosure is required under section 191, paragraphs (e) and (f) apply
only if the disclosure is made before the transaction is entered into.
Note: A director may need to give notice to the other
directors if the director has a material personal interest in a matter relating
to the affairs of the company (see section 191).
Restrictions on voting and being present
(1) A director of a public company who has a material personal interest in
a matter that is being considered at a directors’ meeting must
not:
(a) be present while the matter is being considered at the meeting;
or
(b) vote on the matter;
unless:
(c) subsection (2) or (3) allows the director to be present; or
(d) the interest does not need to be disclosed under section
191.
Participation with approval of other directors
(2) The director may be present and vote if directors who do not have a
material personal interest in the matter have passed a resolution
that:
(a) identifies the director, the nature and extent of the director’s
interest in the matter and its relation to the affairs of the company;
and
(b) states that those directors are satisfied that the interest should not
disqualify the director from voting or being present.
Participation with ASIC approval
(3) The director may be present and vote if they are so entitled under a
declaration or order made by ASIC under section 196.
Director may consider or vote on resolution to deal with matter at
general meeting
(4) If there are not enough directors to form a quorum for a
directors’ meeting because of subsection (1), 1 or more of the directors
(including those who have a material personal interest in that matter) may call
a general meeting and the general meeting may pass a resolution to deal with the
matter.
Effect of contravention by director
(5) A contravention by a director of:
(a) this section; or
(b) a condition attached to a declaration or order made by ASIC under
section 196;
does not affect the validity of any resolution.
ASIC’s power to make specific declarations
(1) ASIC may declare in writing that a director of a public company who
has a material personal interest in a matter that is being, or is to be,
considered at a directors’ meeting may, despite the director’s
interest, be present while the matter is being considered at the meeting, vote
on the matter, or both be present and vote. However, ASIC may only make the
declaration if:
(a) the number of directors entitled to be present and vote on the matter
would be less than the quorum for a directors’ meeting if the director
were not allowed to vote on the matter at the meeting; and
(b) the matter needs to be dealt with urgently, or there is some other
compelling reason for the matter being dealt with at the directors’
meeting, rather than by a general meeting called under subsection
195(4).
(2) The declaration may:
(a) apply to all or only some of the directors; or
(b) specify conditions that the company or director must comply
with.
ASIC’s power to make class orders
(3) ASIC may make an order in writing that enables directors who have a
material personal interest in a matter to be present while the matter is being
considered at a directors’ meeting, vote on that matter, or both be
present and vote. The order may be made in respect of a specified class of
public companies, directors, resolutions or interests.
(4) The order may be expressed to be subject to conditions.
(5) Notice of the making, revocation or suspension of the order must be
published in the Gazette.
(1) A person who is a director of a corporation when it incurs a liability
while acting, or purporting to act, as trustee, is liable to discharge the whole
or a part of the liability if the corporation:
(a) has not, and cannot, discharge the liability or that part of it;
and
(b) is not entitled to be fully indemnified against the liability out of
trust assets.
This is so even if the trust does not have enough assets to indemnify the
trustee. The person is liable both individually and jointly with the corporation
and anyone else who is liable under this subsection.
(2) The person is not liable under subsection (1) if the person would be
entitled to have been fully indemnified by 1 of the other directors against the
liability had all the directors of the corporation been trustees when the
liability was incurred.
(3) This section does not apply to a liability incurred outside Australia
by a foreign company.
(1) The business of a company is to be managed by or under the direction
of the directors.
Note: See section 198E for special rules about the powers of
directors who are the single director/shareholder of proprietary
companies.
(2) The directors may exercise all the powers of the company except any
powers that this Law or the company’s constitution (if any) requires the
company to exercise in general meeting.
Note: For example, the directors may issue shares, borrow
money and issue debentures.
(1) Any 2 directors of a company that has 2 or more directors, or the
director of a proprietary company that has only 1 director, may sign, draw,
accept, endorse or otherwise execute a negotiable instrument.
(2) The directors may determine that a negotiable instrument may be
signed, drawn, accepted, endorsed or otherwise executed in a different
way.
(1) The directors of a company may confer on a managing director any of
the powers that the directors can exercise.
(2) The directors may revoke or vary a conferral of powers on the managing
director.
(1) Unless the company’s constitution provides otherwise, the
directors of a company may delegate any of their powers to:
(a) a committee of directors; or
(b) a director; or
(c) an employee of the company; or
(d) any other person.
Note: The delegation must be recorded in the company’s
minute book (see section 251A).
(2) The delegate must exercise the powers delegated in accordance with any
directions of the directors.
(3) The exercise of the power by the delegate is as effective as if the
directors had exercised it.
Powers of director
(1) The director of a proprietary company who is its only director and
only shareholder may exercise all the powers of the company except any powers
that this Law or the company’s constitution (if any) requires the company
to exercise in general meeting. The business of the company is to be managed by
or under the direction of the director.
Note: For example, the director may issue shares, borrow
money and issue debentures.
Negotiable instruments
(2) The director of a proprietary company who is its only director and
only shareholder may sign, draw, accept, endorse or otherwise execute a
negotiable instrument. The director may determine that a negotiable instrument
may be signed, drawn, accepted, endorsed or otherwise executed in a different
way.
Right while director
(1) A director of a company may inspect the books of the company (other
than its financial records) at all reasonable times for the purposes of a legal
proceeding:
(a) to which the person is a party; or
(b) that the person proposes in good faith to bring; or
(c) that the person has reason to believe will be brought against
them.
Note: Section 290 gives the director a right of access to
financial records.
Right during 7 years after ceasing to be director
(2) A person who has ceased to be a director of a company may inspect the
books of the company (including its financial records) at all reasonable times
for the purposes of a legal proceeding:
(a) to which the person is a party; or
(b) that the person proposes in good faith to bring; or
(c) that the person has reason to believe will be brought against
them.
This right continues for 7 years after the person ceased to be a director
of the company.
Right to take copies
(3) A person authorised to inspect books under this section for the
purposes of a legal proceeding may make copies of the books for the purposes of
those proceedings.
Company not to refuse access
(4) A company must allow a person to exercise their rights to inspect or
take copies of the books under this section.
Interaction with other rules
(5) This section does not limit any right of access to company books that
a person has apart from this section.
Exemptions not allowed
(1) A company or a related body corporate must not exempt a person
(whether directly or through an interposed entity) from a liability to the
company incurred as an officer or auditor of the company.
When indemnity for liability (other than for legal costs) not
allowed
(2) A company or a related body corporate must not indemnify a person
(whether by agreement or by making a payment and whether directly or through an
interposed entity) against any of the following liabilities incurred as an
officer or auditor of the company:
(a) a liability owed to the company or a related body corporate;
or
(b) a liability for a pecuniary penalty order under section 1317G or a
compensation order under section 1317H; or
(c) a liability that is owed to someone other than the company or a
related body corporate and did not arise out of conduct in good faith.
This subsection does not apply to a liability for legal costs.
When indemnity for legal costs not allowed
(3) A company or related body corporate must not indemnify a person
(whether by agreement or by making a payment and whether directly or through an
interposed entity) against legal costs incurred in defending an action for a
liability incurred as an officer or auditor of the company if the costs are
incurred:
(a) in defending or resisting proceedings in which the person is found to
have a liability for which they could not be indemnified under subsection (2);
or
(b) in defending or resisting criminal proceedings in which the person is
found guilty; or
(c) in defending or resisting proceedings brought by ASIC or a liquidator
for a court order if the grounds for making the order are found by the court to
have been established; or
(d) in connection with proceedings for relief to the person under this Law
in which the Court denies the relief.
Paragraph (c) does not apply to costs incurred in responding to actions
taken by ASIC or a liquidator as part of an investigation before commencing
proceedings for the court order.
Note 1: Paragraph (c)—This includes proceedings by
ASIC for an order under section 206C, 206D or 206E (disqualification), section
232 (oppression), section 1317E, 1317G or 1317H (civil penalties) or section
1324 (injunction).
Note 2: The company may be able to give the person a loan or
advance in respect of the legal costs (see section 212).
(4) For the purposes of subsection (3), the outcome of proceedings is the
outcome of the proceedings and any appeal in relation to the
proceedings.
A company or a related body corporate must not pay, or agree to pay, a
premium for a contract insuring a person who is or has been an officer or
auditor of the company against a liability (other than one for legal costs)
arising out of:
(a) conduct involving a wilful breach of duty in relation to the company;
or
(b) a contravention of section 182 or 183.
This section applies to a premium whether it is paid directly or through an
interposed entity.
(1) Sections 199A and 199B do not authorise anything that would otherwise
be unlawful.
(2) Anything that purports to indemnify or insure a person against a
liability, or exempt them from a liability, is void to the extent that it
contravenes section 199A or 199B.
(1) For the purposes of this Division:
(a) a benefit is given in connection with a person’s retirement from
an office if the benefit is given:
(i) by way of compensation for, or otherwise in connection with, the loss
by the person of the office; or
(ii) in connection with the person’s retirement from the office;
and
(b) giving a benefit includes:
(i) if the benefit is a payment—making the payment; and
(ii) if the benefit is an interest in property—transferring the
interest; and
(c) a person gives a benefit even if the person is obliged to give the
benefit under a contract; and
(d) a pension or lump sum is paid or payable in connection with the
person’s retirement from an office if the pension or lump sum is paid or
payable:
(i) by way of compensation for, or otherwise in connection with, the loss
by the person of the office; or
(ii) in connection with the person’s retirement from the office;
and
(e) retirement from an office includes:
(i) loss of the office; and
(ii) resignation from the office; and
(iii) death of a person at a time when they hold the office.
(2) For the purposes of this Division, if:
(a) a person (person A) gives another person a benefit
(benefit A); and
(b) person A gives benefit A for the purpose, or for purposes including
the purpose, of enabling or assisting someone to give a person a benefit in
connection with the retirement of a person (person B) from an
office;
person A is taken to give benefit A in connection with the person B’s
retirement from that office.
Benefits in connection with retirement from board or managerial
office
(1) The following must not give a person a benefit in connection with that
person’s, or someone else’s, retirement from a board or managerial
office in a company, or a related body corporate, without member approval under
section 200E:
(a) the company
(b) an associate of the company (other than a body corporate that is
related to the company and is itself a company)
(c) a prescribed superannuation fund in relation to the company.
Note 1: Sections 200F, 200G and 200H provide for exceptions
to this rule.
Note 2: Section 9 defines board or managerial
office.
Prescribed superannuation funds
(2) For the purposes of this section:
(a) a superannuation fund is taken to be a prescribed superannuation fund
in relation to a company if the company, or an associate of the company, gives a
benefit to the superannuation fund in prescribed circumstances; and
(b) if a prescribed superannuation fund in relation to a company gives a
benefit to another superannuation fund in prescribed circumstances, the other
superannuation fund is taken to be a prescribed superannuation fund in relation
to the company.
Prescribed circumstances
(3) For the purposes of this section, if:
(a) a company, or an associate of a company, gives a benefit to a
superannuation fund solely for the purpose of enabling or assisting the
superannuation fund to give to a person a benefit in connection with a
person’s retirement from an office in the company or a related body
corporate; or
(b) a superannuation fund gives a benefit to another superannuation fund
solely for the purpose of enabling or assisting the other superannuation fund to
give to a person a benefit in connection with a person’s retirement from
an office in a company or a related body corporate;
the benefit first referred to in paragraph (a) or (b) is taken to be given
in prescribed circumstances.
(4) In this section:
superannuation fund means a provident, benefit,
superannuation or retirement fund.
A person must not give a benefit to a person who:
(a) holds, or has at any previous time held, a board or managerial office
in a company or a related body corporate; or
(b) is the spouse of a person referred to in paragraph (a); or
(c) is a relative of a person referred to in paragraph (a) or of the
spouse of such a person; or
(d) is an associate of a person referred to in paragraph (a) or the spouse
of an associate of such a person;
in connection with the transfer of the whole or any part of the undertaking
or property of the company without member approval under section 200E.
Note: Section 9 defines board or managerial
office.
A person who:
(a) holds, or has at any previous time held, a board or managerial office
in a company or related body corporate; or
(b) is the spouse of a person referred to in paragraph (a); or
(c) is a relative of a person referred to in paragraph (a) or of the
spouse of such a person; or
(d) is an associate of a person referred to in paragraph (a) or the spouse
of an associate of such a person;
must not receive a benefit if the giving of the benefit contravenes section
200B or 200C.
Note: Section 9 defines board or managerial
office.
(1) If section 200B or 200C requires member approval for giving a person a
benefit, it must be approved by a resolution passed at a general meeting
of:
(a) the company; and
(b) if the company is a subsidiary of a listed domestic
corporation—the listed corporation; and
(c) if the company has a holding company that:
(i) is a domestic corporation that is not listed; and
(ii) is not itself a subsidiary of a domestic corporation—the
holding company.
(2) Details of the benefit must be set out in, or accompany, the notice of
the meeting at which the resolution is to be considered. The details must
include:
(a) if the proposed benefit is a payment:
(i) the amount of the payment; or
(ii) if that amount cannot be ascertained at the time of the
disclosure—the manner in which that amount is to be calculated and any
matter, event or circumstance that will, or is likely to, affect the calculation
of that amount; and
(b) otherwise:
(i) the money value of the proposed prescribed benefit; or
(ii) if that value cannot be ascertained at the time of the
disclosure—the manner in which that value is to be calculated and any
matter, event or circumstance that will, or is likely to, affect the calculation
of that value.
These requirements are in addition to, and not in derogation of, any other
law that requires disclosure to be made with respect to giving or receiving a
benefit.
(3) The approval extends to the giving of another benefit to the person
if:
(a) the other benefit is given to the person instead of the proposed
benefit; and
(b) the amount or money value of the benefit is less than the amount or
money value of the proposed benefit.
(4) The approval does not relieve a director of a body corporate from any
duty to the body corporate (whether under section 180,181,182,183 or 184 or
otherwise and whether of a fiduciary nature or not) in connection with the
giving of the benefit.
Subsection 200B(1) does not apply to:
(a) a benefit given in connection with a person’s retirement from an
office in relation to a company if the benefit is:
(i) given under an agreement entered into before 1 January 1991 if giving
the benefit in accordance with the agreement would have been lawful if the
benefit were given when the agreement was entered into; or
(ii) a genuine payment by way of damages for breach of contract;
or
(iii) given to the person under an agreement made between the company and
the person before the person became the holder of the office as the
consideration, or part of the consideration, for the person agreeing to hold the
office; or
(iv) a payment made in respect of leave of absence to which the person is
entitled under an industrial instrument; or
(b) a benefit given in prescribed circumstances.
(1) Subsection 200B(1) does not apply to a benefit if:
(a) the benefit is a payment in connection with a person’s
retirement from a board or managerial office (the relevant office)
in a company or a related body corporate; and
(b) the payment is for past services the person rendered to:
(i) the company; or
(ii) a related body corporate; or
(iii) a body that was a related body corporate of the company when the
past services were rendered; and
(c) the value of the benefit, when added to the value of all other
payments (if any) already made or payable in connection with the person’s
retirement from board or managerial offices in the company and related bodies
corporate does not exceed the payment limit set by subsection (1A).
In applying paragraph (c), disregard any pensions or lump sums that section
200F applies to.
(2) The payment limit is:
(a) the amount worked out under subsection (3) if the person:
(i) was an eligible employee in relation to the company at the time when
the person retired from the relevant office; and
(ii) has been an eligible employee in relation to the company throughout a
period (the relevant period), or throughout periods totalling a
period (also the relevant period), of more than 3 years;
or
(b) otherwise—the total remuneration of the person from the company
and related bodies corporate during the period of 3 years ending when the person
retired from the relevant office.
Note: Section 9 defines
remuneration.
(3) The amount worked out under this subsection is the amount worked out
in accordance with the formula:
where:
total remuneration is the amount of the total remuneration of
the person from the company and related bodies corporate during the last 3 years
of the relevant period.
relevant period is the number of years in the relevant period
or 7, whichever is the lesser number.
(4) In determining for the purposes of paragraph (1)(c) the value of a
pension or lump sum payment, disregard any part of the pension or lump sum
payment that is attributable to:
(a) a contribution made by the person; or
(b) a contribution made by a person other than:
(i) the company; or
(ii) a body corporate (a relevant body corporate) that is a
related body corporate of the company, or that was, when the contribution was
made, such a related body corporate; or
(iii) an associate of the company, or of a relevant body corporate, in
respect of:
(A) the payment of the pension, or the making of the lump sum payment, as
the case may be; or
(B) the making of the contribution.
(5) For the purposes of subparagraph (2)(a), a person is taken to have
been an eligible employee in relation to a company at a particular time
if:
(a) the person was a genuine full-time employee of the company at that
time; or
(b) the person was a genuine full-time employee of a body corporate at
that time and the body corporate was related to the company at that
time.
(6) In this section:
payment means a payment by way of pension or lump sum and
includes a superannuation, retiring allowance, superannuation gratuity or
similar payment.
Subsection 200B(1) does not apply to a benefit given by a person if
failure to give the benefit would constitute a contravention of a law in force
in Australia or elsewhere (otherwise than because of breach of contract or
breach of trust).
(1) If giving a benefit to a person contravenes section 200B,
then:
(a) if the benefit is a payment—the amount of the payment;
or
(b) otherwise—the money value of the prescribed benefit;
is taken to be received by the person in trust for the company
concerned.
(2) Subsection (1) applies to the whole of the amount of a payment or of
the money value of the benefit even though giving the benefit would not have
contravened section 200B if that amount or value of the benefit had been
less.
Proprietary companies
(1) A proprietary company must have at least 1 director. That director
must ordinarily reside in Australia.
Public companies
(2) A public company must have at least 3 directors (not counting
alternate directors). At least 2 directors must ordinarily reside in
Australia.
(1) Only an individual who is at least 18 may be appointed as a director
of a company.
(2) A person who is disqualified from managing corporations under Part
2D.6 may only be appointed as director of a company if the appointment is made
with permission granted by ASIC under section 206F or leave granted by the Court
under section 206G.
(1) A person who has turned 72 may only be appointed or act as a director
of:
(a) a public company; or
(b) a company that is a subsidiary of a public company;
if authorised to do so under this section.
(2) A person may act as a director of a company during the period
that:
(a) starts on the day on which they turn 72; and
(b) ends at the conclusion of the AGM beginning next after that
day.
(3) The office of a director of a public company, or of a subsidiary of a
public company, becomes vacant at the conclusion of the AGM of the public
company, or the subsidiary, beginning next after the director turns
72.
(4) If a proprietary company is a subsidiary of a public
company:
(a) subsection (3) does not apply to it; and
(b) a person may continue to act as a director of the proprietary company
until the next AGM of the public company after the person turns 72;
and
(c) the person’s office of director becomes vacant at the end of
that meeting.
Note: Proprietary companies do not need to hold annual
general meetings (see section 250N).
(5) An act done by a person as a director is valid even if it is
afterwards discovered that they had turned 72 at the time when they were
appointed or that their appointment had terminated under subsection (3) or
(4).
(6) If the office of a director has become vacant under subsection (3) or
(4), no provision for the automatic re-appointment of retiring directors in
default of another appointment applies in relation to that director.
(7) If a vacancy created under subsection (3) or (4) is not filled at the
meeting at which the office became vacant, the office may be filled as a casual
vacancy.
(8) Subject to subsections (9) and (10), a person who has turned 72 may by
special resolution be appointed or re-appointed as a director of that company to
hold office until the conclusion of the company’s next AGM company
if:
(a) the resolution states the person’s age; and
(b) the notice of meeting states that the person is a candidate for
election who has turned 72 and states the person’s age.
(9) If the company is a subsidiary of a public company, the appointment or
re-appointment referred to in subsection (8) does not have effect
unless:
(a) the person appointed or re-appointed is a director of the public
company; or
(b) the appointment or re-appointment of the person as a director of the
company has been approved by a special resolution of the public company and the
notice of meeting states that the person is a candidate for election as a
director of the company who has turned 72 and states the person’s
age.
(10) If the subsidiary is a proprietary company:
(a) the person may be appointed or re-appointed as a director of the
subsidiary until the end of the next AGM of the holding company; and
(b) the appointment does not need a resolution under subsection (8);
and
(c) the appointment must satisfy either paragraph (9)(a) or (b).
(11) If:
(a) the constitution of a company limited by guarantee provides for the
holding of postal ballots for the election of a director or directors;
and
(b) a postal ballot for the election of a director or directors is held
and in the ballot:
(i) the members entitled to vote have been given notice in writing by the
company stating that a candidate for election has turned 72 and stating the age
of the candidate; and
(ii) that candidate is elected by a majority of not less than 75% of the
members who, being entitled to vote, vote in the ballot;
that candidate may be appointed or re-appointed as a director to hold
office until the conclusion of the next AGM of the company.
(12) If:
(a) the constitution of a company limited by guarantee provides for the
election or appointment of a director or directors otherwise than by members at
a general meeting or by postal ballot of members; and
(b) ASIC declares in writing that this section does not apply to the
company or its directors;
then, subject to the conditions (if any) that ASIC specifies in the
declaration, this section does not so apply.
(13) A vacancy in the office of a director occurring under subsection (3)
or (4) is not to be taken into account in determining when other directors are
to retire.
(14) Nothing in this section limits, or affects the operation of, any
provision of a company’s constitution that prevents any person from being
appointed as a director or requiring any director to vacate their office at any
age less than 72 years.
(1) A company contravenes this subsection if a person does not give the
company a signed consent to act as a director of the company before being
appointed.
(2) The company must keep the consent.
(1) A resolution passed at a general meeting of a public company
appointing or confirming the appointment of 2 or more directors is void
unless:
(a) the meeting has resolved that the appointments or confirmations may be
voted on together; and
(b) no votes were cast against the resolution.
(2) This section does not affect:
(a) a resolution to appoint directors by an amendment to the
company’s constitution (if any); or
(b) a ballot or poll to elect 2 or more directors if the ballot or poll
does not require members voting for 1 candidate to vote for another
candidate.
(3) For the purposes of paragraph (2)(b), a ballot or poll does not
require a member to vote for a candidate merely because the member is required
to express a preference among individual candidates in order to cast a valid
vote.
(1) The director of a proprietary company who is its only director and
only shareholder may appoint another director by recording the appointment and
signing the record.
Appointment of new director on death, mental incapacity or
bankruptcy
(2) If a person who is the only director and the only shareholder of a
proprietary company:
(a) dies; or
(b) cannot manage the company because of the person’s mental
incapacity;
and a personal representative or trustee is appointed to administer the
person’s estate or property, the personal representative or trustee may
appoint a person as the director of the company.
(3) If:
(a) the office of the director of a proprietary company is vacated under
subsection 206B(3) or (4) because of the bankruptcy of the director;
and
(b) the person is the only director and the only shareholder of the
company; and
(c) a trustee in bankruptcy is appointed to the person’s
property;
the trustee may appoint a person as the director of the company.
(4) A person who has a power of appointment under subsection (2) or (3)
may appoint themselves as director.
(5) A person appointed as a director of a company under subsection (2),
(3) or (4) holds office as if they had been appointed in the usual
way.
A company may appoint a person as a director by resolution passed in
general meeting.
Appointment by other directors
(1) The directors of a company may appoint a person as a director. A
person can be appointed as a director in order to make up a quorum for a
directors’ meeting even if the total number of directors of the company is
not enough to make up that quorum.
Proprietary company—confirmation by meeting within 2
months
(2) If a person is appointed under this section as a director of a
proprietary company, the company must confirm the appointment by resolution
within 2 months after the appointment is made. If the appointment is not
confirmed, the person ceases to be a director of the company at the end of those
2 months.
Public company—confirmation by next AGM
(3) If a person is appointed by the other directors as a director of a
public company, the company must confirm the appointment by resolution at the
company’s next AGM. If the appointment is not confirmed, the person ceases
to be a director of the company at the end of the AGM.
The directors of a company may appoint 1 or more of themselves to the
office of managing director of the company for the period, and on the terms
(including as to remuneration), as the directors see fit.
(1) With the other directors’ approval, a director may appoint an
alternate to exercise some or all of the director’s powers for a specified
period.
(2) If the appointing director requests the company to give the alternate
notice of directors’ meetings, the company must do so.
(3) When an alternate exercises the director’s powers, the exercise
of the powers is just as effective as if the powers were exercised by the
director.
(4) The appointing director may terminate the alternate’s
appointment at any time.
(5) An appointment or its termination must be in writing. A copy must be
given to the company.
Note: ASIC must be given notice of the appointment and
termination of appointment of an alternate (see subsections 205B(2) and
(5)).
Under section 205B, a company must notify ASIC within 14 days if a person
is appointed as a director or as an alternate director.
(1) An act done by a director is effective even if their appointment, or
the continuance of their appointment, is invalid because the company or director
did not comply with the company’s constitution (if any) or any provision
of this Law.
(2) Subsection (1) does not deal with the question whether an effective
act by a director:
(a) binds the company in its dealings with other people; or
(b) makes the company liable to another person.
Note: The kinds of acts that this section validates are
those that are only legally effective if the person doing them is a director
(for example, calling a meeting of the company’s members or signing a
document to be lodged with ASIC or minutes of a meeting). Sections 128-130
contain rules about the assumptions people are entitled to make when dealing
with a company and its officers.
(1) The directors of a company are to be paid the remuneration that the
company determines by resolution.
Note: Chapter 2E makes special provision for the payment of
remuneration to the directors of public companies.
(2) The company may also pay the directors’ travelling and other
expenses that they properly incur:
(a) in attending directors’ meetings or any meetings of committees
of directors; and
(b) in attending any general meetings of the company; and
(c) in connection with the company’s business.
(1) A company must disclose the remuneration paid to each director of the
company or a subsidiary (if any) by the company or by an entity controlled by
the company if the company is directed to disclose the information by:
(a) members with at least 5% of the votes that may be cast at a general
meeting of the company; or
(b) at least 100 members who are entitled to vote at a general meeting of
the company.
The company must disclose all remuneration paid to the director, regardless
of whether it is paid to the director in relation to their capacity as director
or another capacity.
(2) The company must comply with the direction as soon as practicable
by:
(a) preparing a statement of the remuneration of each director of the
company or subsidiary for the last financial year before the direction was
given; and
(b) having the statement audited; and
(c) sending a copy of the audited statement to each person entitled to
receive notice of general meetings of the company.
A person who is the only director and the only shareholder of a
proprietary company is to be paid any remuneration for being a director that the
company determines by resolution. The company may also pay the director’s
travelling and other expenses properly incurred by the director in connection
with the company’s business.
A director of a company may resign as a director of the company by giving
a written notice of resignation to the company at its registered
office.
A person ceases to be a director of a company if the person becomes
disqualified from managing corporations under Part 2D.6 (see subsection 206A(2))
unless ASIC or the Court allows them to manage the company (see sections 206F
and 206G).
A proprietary company:
(a) may by resolution remove a director from office; and
(b) may by resolution appoint another person as a director
instead.
Resolution for removal of director
(1) A public company may by resolution remove a director from office
despite anything in:
(a) the company’s constitution (if any); or
(b) an agreement between the company and the director; or
(c) an agreement between any or all members of the company and the
director.
If the director was appointed to represent the interests of particular
shareholders or debenture holders, the resolution to remove the director does
not take effect until a replacement to represent their interests has been
appointed.
Note: See sections 249C to 249G for the rules on who may
call meetings, sections 249H to 249M on how to call meetings and sections 249N
to 249Q for rules on members’ resolutions.
Notice of intention to move resolution for removal of
director
(2) Notice of intention to move the resolution must be given to the
company at least 2 months before the meeting is to be held. However, if the
company calls a meeting after the notice of intention is given under this
subsection, the meeting may pass the resolution even though the meeting is held
less than 2 months after the notice of intention is given.
Note: Short notice of the meeting cannot be given for this
resolution (see subsection 249H(3)).
Director to be informed
(3) The company must give the director a copy of the notice as soon as
practicable after it is received.
Director’s right to put case to members
(4) The director is entitled to put their case to members by:
(a) giving the company a written statement for circulation to members (see
subsections (5) and (6)); and
(b) speaking to the motion at the meeting (whether or not the director is
a member of the company).
(5) The written statement is to be circulated by the company to members
by:
(a) sending a copy to everyone to whom notice of the meeting is sent if
there is time to do so; or
(b) if there is not time to comply with paragraph (a)—having the
statement distributed to members attending the meeting and read out at the
meeting before the resolution is voted on.
(6) The director’s statement does not have to be circulated to
members if it is more than 1,000 words long or defamatory.
Time of retirement
(7) If a person is appointed to replace a director removed under this
section, the time at which:
(a) the replacement director; or
(b) any other director;
is to retire is to be worked out as if the replacement director had become
director on the day on which the replaced director was last appointed a
director.
A resolution, request or notice of any or all of the directors of a
public company is void to the extent that it purports to:
(a) remove a director from their office; or
(b) require a director to vacate their office.
(1) A person ceases to be managing director if they cease to be a
director.
(2) The directors may revoke or vary an appointment of a managing
director.
Proprietary companies
(1) A proprietary company is not required to have a secretary but, if it
does have 1 or more secretaries, at least 1 of them must ordinarily reside in
Australia.
Public companies
(2) A public company must have at least 1 secretary. At least 1 of them
must ordinarily reside in Australia.
(1) Only an individual who is at least 18 may be appointed as a secretary
of a company.
(2) A person who is disqualified from managing corporations under Part
2D.6 may only be appointed as a secretary of a company if the appointment is
made with permission granted by ASIC under section 206F or leave granted by the
Court under section 206G.
(1) A company contravenes this subsection if a person does not give the
company a signed consent to act as secretary of the company before being
appointed.
(2) The company must keep the consent.
A secretary is to be appointed by the directors.
Note 1: The company must notify ASIC of the appointment
within 14 days (see subsection 205B(1)).
Note 2: Section 188 deals with the responsibilities of
secretaries for contraventions by the company.
(1) An act done by a secretary is effective even if their appointment, or
the continuance of their appointment, is invalid because the company or
secretary did not comply with the company’s constitution (if any) or any
provision of this Law.
(2) Subsection (1) does not deal with the question whether an effective
act by a secretary:
(a) binds the company in its dealings with other people; or
(b) makes the company liable to another person.
Note: The kinds of acts that this section validates are
those that are only legally effective if the person doing them is a secretary
(for example, signing and sending out a notice of a meeting of directors if the
company’s constitution authorises the secretary to do so or signing a
document to be lodged with ASIC). Sections 128-130 contain rules about the
assumptions people are entitled to make when dealing with a company and its
officers.
A secretary holds office on the terms and conditions (including as to
remuneration) that the directors determine.
A person ceases to be a secretary of a company if the person becomes
disqualified from managing corporations under Part 2D.6 (see subsection 206A(2))
unless ASIC or the Court allows them to manage the company (see sections 206F
and 206G).
(1) If a director, secretary or alternate director retires or resigns,
they may give ASIC written notice of the retirement or resignation. The notice
must be in the prescribed form.
(2) To be effective, a notice of resignation must be accompanied by a copy
of the letter of resignation given to the company.
(3) Nothing in this section affects the company’s obligations to
notify ASIC of the resignation or retirement.
New directors or secretaries
(1) A company must lodge with ASIC a notice of the personal details of a
director or secretary within 14 days after they are appointed. The notice must
be in the prescribed form.
Note 1: If a person becomes a director under subsection
120(1) there is no appointment and no notice is required under this
subsection.
Note 2: If a person who was appointed as an alternate
director becomes a director under the terms of their appointment as an alternate
director, there is no appointment as a director and no notice is required under
this subsection.
New alternate directors
(2) A company must lodge with ASIC a notice of:
(a) the personal details of a person who is appointed as an alternate
director; and
(b) the terms of their appointment (including terms about when the
alternate director is to act as a director);
within 14 days after their appointment as an alternate director. The notice
must be in the prescribed form.
Personal details
(3) The personal details of a director, alternate director, or secretary
are:
(a) their given and family names; and
(b) all of their former given and family names; and
(c) their date and place of birth; and
(d) their address.
Note: For address see section
205D.
Changes in details
(4) The company must lodge with ASIC notice of any change in the personal
details of a director, alternate director or secretary within 14 days after the
change. The notice must be in the prescribed form.
Notice required if person stops being a director or
secretary
(5) If a person stops being a director, alternate director or secretary of
the company, the company must lodge with ASIC notice of the fact within 14 days.
The notice must be in the prescribed form. However, the company does not need to
lodge a notice if the person was an alternate director who stopped being a
director in accordance with the terms of their appointment as an alternate
director.
(1) A director, alternate director or secretary must give the company any
information the company needs to comply with subsection 205B(1) or (2) within 7
days after their initial appointment unless they have previously given the
information to the company.
(2) A director, alternate director or secretary must give the company any
information the company needs to comply with subsection 205B(4) within 7 days
after any change in their personal details.
Address is normally residential address
(1) A person’s address for the purposes of a notice or application
under subsection 205B(1), (2), (3) or (5) or 117(2) or 601BC(2) must be their
usual residential address unless they are entitled to have an alternative
address substituted for their usual residential address under subsection
(2).
Entitlement to have alternative address
(2) The person is entitled to have an alternative address substituted for
their usual residential address if:
(a) their name, but not their residential address, is on an electoral roll
under the Commonwealth Electoral Act 1918 because of section 104 of that
Act; or
(b) their name is not on an electoral roll under that Act and ASIC
determines, in writing, that including their residential address in the notice
or application would put at risk their personal safety or the personal safety of
members of their family.
This alternative address must be in Australia and be one at which documents
can be served on the person. At any particular time, a person is entitled to
have only 1 alternative address under this section.
Note: See subsection 109X(2) on the status of the
alternative address as an address for service.
(3) A person who takes advantage of subsection (2) must:
(a) before or at the same time as the alternative address is first
included in a notice or application, lodge with ASIC notice of the
person’s usual residential address; and
(b) lodge with ASIC notice of any change in the person’s usual
residential address within 14 days after the change.
A notice under this subsection must be in the prescribed form.
(4) If a court gives a judgment for payment of a sum of money against a
person who is taking advantage of subsection (2), ASIC may give details of the
person’s usual residential address to an officer of the court for the
purposes of enforcing the judgment debt.
(1) ASIC may ask a person, in writing, to inform ASIC:
(a) whether the person is a director or secretary of a particular company;
and
(b) if the person is no longer a director or secretary of the
company—the date on which the person stopped being a director or
secretary.
(2) The person must give the information to ASIC in writing by the date
specified in the request.
A director must give the company any information affecting or relating to
the director that the company needs, or will need, to comply with Chapter 6. The
director must give the information to the company as soon as practicable after
becoming aware that the company needs, or will need, the information. The
company must give the information to each of the other directors of the company
within 7 days of receiving it.
Notifiable interests
(1) A director of a listed public company must notify the relevant
securities exchange under subsections (3) and (4) of the following interests of
the director:
(a) relevant interests in securities of the company or a related body
corporate
(b) contracts:
(i) to which the director is a party or under which the director is
entitled to a benefit; and
(ii) that confer a right to call for or deliver shares in, debentures of,
or interests in a collective investment scheme made available by, the company or
a related body corporate.
(2) A notice of a relevant interest in securities under paragraph (1)(a)
must give details of:
(a) the number of securities; and
(b) the circumstances giving rise to the relevant interest.
Occasions for initial notification
(3) The director must notify the exchange within 14 days after each of the
following occasions:
(a) appointment as a director of the company
(b) the listing of the company.
Paragraph (a) does not apply to a director who retires and is then
reappointed at the same meeting.
Updating notices
(4) The director must notify the exchange within 14 days after any change
in the director’s interests.
(5) The director need not give the information to the exchange under this
section if the director has already given the information to the
exchange.
ASIC’s power to make class orders
(6) ASIC may make an order in writing relieving a director of the
obligation to notify the relevant securities exchange of an interest in a
security or contract. The order may be made in respect of a specified class of
companies, directors, securities or contracts.
(7) The order may be expressed to be subject to conditions.
(8) Notice of the making, revocation or suspension of the order must be
published in the Gazette.
(1) A person who is disqualified from managing corporations under this
Part commits an offence if:
(a) they make, or participate in making, decisions that affect the whole,
or a substantial part, of the business of the corporation; or
(b) they exercise the capacity to affect significantly the
corporation’s financial standing; or
(c) they communicate instructions or wishes (other than advice given by
the person in the proper performance of functions attaching to the
person’s professional capacity or their business relationship with the
directors or the corporation) to the directors of the corporation:
(i) knowing that the directors are accustomed to act in accordance with
the person’s instructions or wishes; or
(ii) intending that the directors will act in accordance with those
instructions or wishes.
It is a defence to the contravention if the person had permission to manage
the corporation under either section 206F or 206G and their conduct was within
the terms of that permission.
Note: Under section 1274AA, ASIC is required to keep a
record of persons disqualified from managing corporations.
(2) A person ceases to be a director, alternate director or a secretary of
a company if:
(a) the person becomes disqualified from managing corporations under this
Part; and
(b) they are not given permission to manage the corporation under section
206F or 206G.
Note: If a person ceases to be a director, alternate
director or a secretary under subsection (2) the company must notify ASIC (see
subsection 205B(1)).
Convictions
(1) A person becomes disqualified from managing corporations if the
person:
(a) is convicted on indictment of an offence that:
(i) concerns the making, or participation in making, of decisions that
affect the whole or a substantial part of the business of the corporation;
or
(ii) concerns an act that has the capacity to affect significantly the
corporation’s financial standing; or
(b) is convicted of an offence that:
(i) is a contravention of the Corporations Law and is punishable by
imprisonment for a period greater than 12 months; or
(ii) involves dishonesty and is punishable by imprisonment for at least 3
months; or
(c) is convicted of an offence against the law of a foreign country that
is punishable by imprisonment for a period greater than 12 months.
The offences covered by paragraph (a) and subparagraph (b)(ii) include
offences against the law of a foreign country.
(2) The period of disqualification under subsection (1) starts on the day
the person is convicted and lasts for:
(a) if the person does not serve a term of imprisonment—5 years
after the day on which they are convicted; or
(b) if the person serves a term of imprisonment—5 years after the
day on which they are released from prison.
Bankruptcy, deed of arrangement or composition with
creditors
(3) A person is disqualified from managing corporations if the person is
an undischarged bankrupt under the law of Australia, its external territories or
another country.
(4) A person is disqualified from managing corporations if:
(a) the person has executed a deed of arrangement under Part X of the
Bankruptcy Act 1966 (or a similar law of an external territory or another
country) and the terms of the deed have not been fully complied with;
or
(b) the person’s creditors have accepted a composition under Part X
of the Bankruptcy Act 1966 (or a similar law of an external territory or
another country) and final payment has not been made under the
composition.
(1) On application by ASIC, the Court may disqualify a person from
managing corporations for a period that the Court considers appropriate
if:
(a) a declaration is made under section 1317E (civil penalty provision)
that the person has contravened a civil penalty provision; and
(b) the Court is satisfied that the disqualification is
justified.
Note: The civil penalty provisions are subsection 180(1) and
(2), 181(1) and (2), 182(1) and (2), 183(1) and (2), 209(2), 254L(2), 256D(3),
259F(2), 260D(2) or 344(1) or section 588G.
(2) In determining whether the disqualification is justified, the Court
may have regard to:
(a) the person’s conduct in relation to the management, business or
property of any corporation; and
(b) any other matters that the Court considers appropriate.
(1) On application by ASIC, the Court may disqualify a person from
managing corporations for up to 10 years if:
(a) within the last 7 years, the person has been an officer of 2 or more
corporations when they have failed; and
(b) the Court is satisfied that:
(i) the manner in which the corporation was managed was wholly or partly
responsible for the corporation failing; and
(ii) the disqualification is justified.
(2) For the purposes of subsection (1), a corporation fails if:
(a) a Court orders the corporation to be wound up under section 459B
because the Court is satisfied that the corporation is insolvent; or
(b) the corporation enters into voluntary liquidation and creditors are
not fully paid or are unlikely to be fully paid; or
(c) the corporation executes a deed of company arrangement and creditors
are not fully paid or are unlikely to be fully paid; or
(d) the corporation ceases to carry on business and creditors are not
fully paid or are unlikely to be fully paid; or
(e) a levy of execution against the corporation is not satisfied;
or
(f) a receiver, receiver and manager, or provisional liquidator is
appointed in relation to the corporation; or
(g) the corporation enters into a compromise or arrangement with its
creditors under Part 5.1; or
(h) the corporation is wound up and a liquidator lodges a report under
subsection 533(1) about the corporation’s inability to pay its
debts.
Note: To satisfy paragraph (h), a corporation must begin to
be wound up while the person is an officer or within 12 months after the person
ceases to be an officer. However, the report under subsection 533(1) may be
lodged by the liquidator at a time that is more than 12 months after the person
ceases to be an officer. Sections 513A to 513D contain rules about when a
company begins to be wound up.
(3) In determining whether the disqualification is justified, the Court
may have regard to:
(a) the person’s conduct in relation to the management, business or
property of any corporation; and
(b) any other matters that the Court considers appropriate.
(1) On application by ASIC, the Court may disqualify a person from
managing corporations for the period that the Court considers appropriate
if:
(a) the person:
(i) has at least twice been an officer of a body corporate that has
contravened this Law while they were an officer of the body corporate and each
time the person has failed to take reasonable steps to prevent the
contravention; or
(ii) has at least twice contravened this Law while they were an officer of
a body corporate; or
(iii) has been an officer of a body corporate and has done something that
would have contravened subsection 180(1) or section 181 if the body corporate
had been a corporation; and
(b) the Court is satisfied that the disqualification is
justified.
(2) In determining whether the disqualification is justified, the Court
may have regard to:
(a) the person’s conduct in relation to the management, business or
property of any corporation; and
(b) any other matters that the Court considers appropriate.
Power to disqualify
(1) ASIC may disqualify a person from managing corporations for up to 5
years if:
(a) within 7 years immediately before ASIC gives a notice under paragraph
(b)(i):
(i) the person has been an officer of 2 or more corporations;
and
(ii) while the person was an officer, or within 12 months after the person
ceased to be an officer of those corporations, each of the corporations was
wound up and a liquidator lodged a report under subsection 533(1) about the
corporation’s inability to pay its debts; and
(b) ASIC has given the person:
(i) a notice in the prescribed form requiring them to demonstrate why they
should not be disqualified; and
(ii) an opportunity to be heard on the question; and
(c) ASIC is satisfied that the disqualification is justified.
Grounds for disqualification
(2) In determining whether disqualification is justified, ASIC:
(a) must have regard to whether any of the corporations mentioned in
subsection (1) were related to one another; and
(b) may have regard to:
(i) the person’s conduct in relation to the management, business or
property of any corporation; and
(ii) any other matters that ASIC considers appropriate.
Notice of disqualification
(3) If ASIC disqualifies a person from managing corporations under this
section, ASIC must serve a notice on the person advising them of the
disqualification. The notice must be in the prescribed form.
Start of disqualification
(4) The disqualification takes effect from the time when a notice referred
to in subsection (3) is served on the person.
ASIC power to grant leave
(5) ASIC may give a person who it has disqualified from managing
corporations under this Part written permission to manage a particular
corporation or corporations. The permission may be expressed to be subject to
conditions and exceptions determined by ASIC.
(1) A person who is disqualified from managing corporations may apply to
the Court for leave to manage:
(a) corporations; or
(b) a particular class of corporations; or
(c) a particular corporation;
if the person was not disqualified by ASIC.
(2) The person must lodge a notice with ASIC at least 21 days before
commencing the proceedings. The notice must be in the prescribed form.
(3) The order granting leave may be expressed to be subject to exceptions
and conditions determined by the Court.
Note: If the Court grants the person leave to manage the
corporation, the person may be appointed as a director (see section 201B) or
secretary (see section 204B) of a company.
(4) The person must lodge with ASIC a copy of any order granting leave
within 14 days after the order is made.
(5) On application by ASIC, the Court may revoke the leave. The order
revoking leave does not take effect until it is served on the person.
Part 2D.6 does not apply in respect of an act or omission by a person
while they are managing a corporation that is a foreign company unless the act
or omission occurred in connection with:
(a) the foreign company carrying on business in Australia; or
(b) an act that the foreign company does, or proposes to do, in Australia;
or
(c) a decision by the foreign company whether or not to do, or refrain
from doing, an act in Australia.
The rules in this Chapter are designed to protect the interests of a
public company’s members as a whole, by requiring member approval for
giving financial benefits to related parties that could endanger those
interests.
(1) For a public company, or an entity that the public company controls,
to give a financial benefit to a related party of the public company:
(a) the public company or entity must:
(i) obtain the approval of the public company’s members in the way
set out in sections 217 to 227; and
(ii) give the benefit within 15 months after the approval; or
(b) the giving of the benefit must fall within an exception set out in
sections 210 to 216.
Note: Section 228 defines related party,
section 9 defines entity, section 55AA defines
control and section 229 affects the meaning of giving a
financial benefit.
(2) If:
(a) the giving of the benefit is required by a contract; and
(b) the making of the contract was approved in accordance with
subparagraph (1)(a)(i) as a financial benefit given to the related party;
and
(c) the contract was made:
(i) within 15 months after that approval; or
(ii) before that approval, if the contract was conditional on the approval
being obtained;
member approval for the giving of the benefit is taken to have been given
and the benefit need not be given within the 15 months.
(1) If the public company or entity contravenes section 208:
(a) the contravention does not affect the validity of any contract or
transaction connected with the giving of the benefit; and
(b) the public company or entity is not guilty of an offence.
Note: A Court may order an injunction to stop the company or
entity giving the benefit to the related party (see section
#1324).
(2) A person contravenes this subsection if they are involved in a
contravention of section 208 by a public company or entity.
Note 1: This subsection is a civil penalty
provision.
Note 2: Section 79 defines
involved.
(3) A person commits an offence if they are involved in a contravention of
section 208 by a public company or entity and the involvement is
dishonest.
Member approval is not needed to give a financial benefit on terms
that:
(a) would be reasonable in the circumstances if the public company or
entity and the related party were dealing at arm’s length; or
(b) are less favourable to the related party than the terms referred to in
paragraph (a).
Benefits that are reasonable remuneration
(1) Member approval is not needed to give a financial benefit
if:
(a) the benefit is remuneration to a related party as an officer or
employee of the following:
(i) the public company
(ii) an entity that the public company controls
(iii) an entity that controls the public company
(iv) an entity that is controlled by an entity that controls the
public company; and
(b) to give the remuneration would be reasonable given:
(i) the circumstances of the public company or entity giving the
remuneration; and
(ii) the related party’s circumstances (including the
responsibilities involved in the office or employment).
Benefits that are payments of expenses incurred
(2) Member approval is not needed to give a financial benefit
if:
(a) the benefit is payment of expenses incurred or to be incurred, or
reimbursement for expenses incurred, by a related party in performing duties as
an officer or employee of the following:
(i) the public company
(ii) an entity that the public company controls
(iii) an entity that controls the public company
(iv) an entity that is controlled by an entity that controls the
public company; and
(b) to give the benefit would be reasonable in the circumstances of
the public company or entity giving the remuneration.
(3) For the purposes of this section:
(a) a contribution made by a body corporate to a fund for the purpose of
making provision for, or obtaining, superannuation benefits for an officer of
the body, or for dependants of an officer of the body, is remuneration provided
by the body to the officer of the body; and
(b) a financial benefit given to a person because of the person ceasing to
hold an office or employment as an officer or employee of a body corporate is
remuneration paid or provided to the person in a capacity as an officer of the
body.
Indemnities, exemptions and insurance premiums
(1) Member approval is not needed to give a financial benefit
if:
(a) the benefit is for a related party who is an officer of the public
company or entity; and
(b) the benefit is:
(i) an indemnity, exemption or insurance premium in respect of a liability
incurred as an officer of the public company or entity; or
(ii) an agreement to give an indemnity or exemption, or to pay an
insurance premium, of that kind; and
(c) to give the benefit would be reasonable in the circumstances of
the public company or entity giving the benefit.
Note: Sections 199A to 199C may prohibit giving an indemnity
or exemption or paying an insurance premium for an officer.
Payments in respect of legal costs
(2) Member approval is not needed to give a financial benefit
if:
(a) the benefit is for a related party who is an officer of the public
company or entity; and
(b) the benefit is a payment (whether by way of advance, loan or
otherwise) in respect of legal costs incurred by the officer in defending an
action for a liability incurred as an officer of the public company or entity;
and
(c) either:
(i) section 199A does not apply to the costs; or
(ii) if section 199A applies to the costs—the officer must repay the
amount paid if the costs become costs for which the company must not give the
officer an indemnity under that section; and
(d) to give the benefit would be reasonable in the circumstances of
the public company or entity giving the benefit.
(3) In working out for the purposes of subsection (1) or (2) whether
giving the benefit is reasonable in the circumstances:
(a) assess whether it would be reasonable on the basis of the
circumstances existing:
(i) if the benefit is given under an agreement—at the time when the
agreement is or was made; or
(ii) if the benefit is not given under an agreement—at the time when
the benefit is or was given; and
(b) disregard any other financial benefit given or payable to the officer
by the public company or entity.
(1) Member approval is not needed to give a financial benefit that is an
amount of money for a director of the public company or their spouse or de facto
spouse if the amount does not exceed $2,000 or a greater amount as prescribed by
the regulations.
(2) In working out the amount given:
(a) add in all amounts previously given by the public company and any
entities controlled by the public company to:
(i) the director; or
(ii) their spouse; or
(iii) their de facto spouse; and
(b) disregard:
(i) amounts that have been repaid; and
(ii) amounts that fall under any other exception in this Part or a
corresponding previous law.
For the purposes of this subsection, the time at which the entity must be
controlled by the public company is the time at which the amount is
given.
(1) Member approval is not needed to give a financial benefit if the
benefit is given:
(a) by a body corporate to a closely-held subsidiary of the body;
or
(b) by a closely-held subsidiary of a body corporate to the body or an
entity it controls.
(2) For the purposes of this section, a body corporate is a closely-held
subsidiary of another body corporate if, and only if, no member of the
first-mentioned body is a person other than:
(a) the other body; or
(b) a nominee of the other body; or
(c) a body corporate that is a closely-held subsidiary of the other body
because of any other application or applications of this subsection;
or
(d) a nominee of a body referred to in paragraph (c).
(3) For the purposes of subsection (2), disregard shares that are not
voting shares.
Member approval is not needed to give a financial benefit if:
(a) the benefit is given to the related party in their capacity as a
member of the public company; and
(b) giving the benefit does not discriminate unfairly against the other
members of the public company.
Member approval is not needed to give a financial benefit under an order
of a court.
A resolution under this Division may specify anything either in
particular or by reference to class or kind.
(1) At least 14 days before the notice convening the relevant meeting is
given, the public company must lodge:
(a) a proposed notice of meeting setting out the text of the proposed
resolution; and
(b) a proposed explanatory statement satisfying section 219; and
(c) any other document that is proposed to accompany the notice convening
the meeting and that relates to the proposed resolution; and
(d) any other document that any of the following proposes to give to
members of the public company before or at the meeting:
(i) the company;
(ii) a related party of the company to whom the proposed resolution would
permit a financial benefit to be given;
(iii) an associate of the company or of such a related party;
and can reasonably be expected to be material to a member in deciding how
to vote on the proposed resolution.
(2) If, when the notice convening the meeting is given, ASIC:
(a) has approved in writing a period of less than 14 days for the purposes
of subsection (1); and
(b) has not revoked the approval by written notice to the public
company;
subsection (1) applies as if the reference to 14 days were a reference to
the approved period.
(3) ASIC may give and revoke approvals for the purposes of subsection
(2).
(1) The proposed explanatory statement lodged under section 218 must be in
writing and set out:
(a) the related parties to whom the proposed resolution would permit
financial benefits to be given; and
(b) the nature of the financial benefits; and
(c) in relation to each director of the company:
(i) if the director wanted to make a recommendation to members about the
proposed resolution—the recommendation and his or her reasons for it;
or
(ii) if not—why not; or
(iii) if the director was not available to consider the proposed
resolution—why not; and
(d) in relation to each such director:
(i) whether the director had an interest in the outcome of the proposed
resolution; and
(ii) if so—what it was; and
(e) all other information that:
(i) is reasonably required by members in order to decide whether or not it
is in the company’s interests to pass the proposed resolution;
and
(ii) is known to the company or to any of its directors.
(2) An example of the kind of information referred to in paragraph (1)(d)
is information about what, from an economic and commercial point of view, are
the true potential costs and detriments of, or resulting from, giving financial
benefits as permitted by the proposed resolution, including (without
limitation):
(a) opportunity costs; and
(b) taxation consequences (such as liability to fringe benefits tax);
and
(c) benefits forgone by whoever would give the benefits.
Note: Sections 180 and 181 require an officer of a
corporation to act honestly and to exercise care and diligence. These duties
extend to preparing an explanatory statement under this section. Section 1309
creates offences where false and misleading material relating to a
corporation’s affairs is made available or furnished to
members.
(1) Within 14 days after a public company lodges documents under section
218, ASIC may give to the company written comments on those documents (other
than comments about whether the proposed resolution is in the company’s
best interests).
(2) ASIC may consult with the Exchange for the purposes of giving comments
to a company that is included in the official list of the Exchange.
(3) Subsection (2) does not limit the persons with whom ASIC may
consult.
(4) ASIC must keep a copy of the written comments it gives to a company
under subsection (1), and subsections 1274(2) and (5) apply to the copy as if it
were a document lodged with ASIC.
(5) The fact that ASIC has given particular comments, or has declined to
give comments, under subsection (1) does not in any way affect the performance
or exercise of any of ASIC’s functions and powers.
The notice convening the meeting:
(a) must be the same, in all material respects, as the proposed notice
lodged under section 218; and
(b) must be accompanied by an explanatory statement that is the same, in
all material respects, as the proposed explanatory statement lodged under that
section; and
(c) must be accompanied by a document that is, or documents that are, the
same, in all material respects, as the document or documents (if any) lodged
under paragraph 218(1)(c); and
(d) if ASIC has given to the public company, under section 220, comments
on the documents lodged under section 218—must be accompanied by a copy of
those comments; and
(e) must not be accompanied by any other documents.
Each document (if any) that:
(a) did not accompany the notice convening the meeting; and
(b) was given to members of the public company before or at the meeting
by:
(i) the public company; or
(ii) a related party of the public company to whom the proposed resolution
would permit a financial benefit to be given; or
(iii) an associate of the public company or of such a related party;
and
(c) can reasonably be expected to have been material to a member in
deciding how to vote on the proposed resolution;
must be the same, in all material respects, as a document lodged under
paragraph 218(1)(d).
The resolution must be the same as the proposed resolution set out in the
proposed notice lodged under section 218.
(1) At a general meeting, a vote on a proposed resolution under this
Division must not be cast (in any capacity) by or on behalf of:
(a) a related party of the public company to whom the resolution would
permit a financial benefit to be given; or
(b) an associate of such a related party.
(2) Subsection (1) does not prevent the casting of a vote if:
(a) it is cast by a person as a proxy appointed by writing that specifies
how the proxy is to vote on the proposed resolution; and
(b) it is not cast on behalf of a related party or associate of a kind
referred to in subsection (1).
(3) The regulations may prescribe cases where subsection (1) does not
apply.
(4) ASIC may by writing declare that:
(a) subsection (1) does not apply to a specified proposed resolution;
or
(b) subsection (1) does not prevent the casting of a vote, on a specified
proposed resolution, by a specified entity, or on behalf of a specified
entity;
but may only do so if satisfied that the declaration will not cause unfair
prejudice to the interests of any member of the public company.
(5) A declaration in force under subsection (4) has effect
accordingly.
(6) If a vote is cast in contravention of subsection (1), the related
party or associate, as the case may be, contravenes this subsection, whether or
not the proposed resolution is passed.
(7) For the purposes of this section, a vote is cast on behalf of an
entity if, and only if, it is cast:
(a) as proxy for the entity; or
(b) otherwise on behalf of the entity; or
(c) in respect of a share in respect of which the entity has:
(i) power to vote; or
(ii) power to exercise, or control the exercise of, a right to
vote.
(8) Subject to subsection 225(1), a contravention of this section does not
affect the validity of a resolution.
(9) This section has effect despite:
(a) anything else in this Law or in any other law of this jurisdiction
(including the general law); or
(b) anything in a body corporate’s constitution.
(1) If any votes on the resolution are cast in contravention of subsection
224(1), it must be the case that the resolution would still be passed even if
those votes were disregarded.
(2) If a poll was duly demanded on the question that the resolution be
passed, subsections (3) and (4) apply in relation to voting on the
poll.
(3) In relation to each member of the public company who voted on the
resolution in person, the public company must record in writing:
(a) the member’s name; and
(b) how many votes the member cast for the resolution and how many
against.
(4) In relation to each member of the public company who voted on the
resolution by proxy, or by a representative authorised under section 250D, the
public company must record in writing:
(a) the member’s name; and
(b) in relation to each person who voted as proxy, or as such a
representative, for the member:
(i) the person’s name; and
(ii) how many votes the person cast on the resolution as proxy, or as such
a representative, for the member; and
(iii) how many of those votes the person cast for the resolution and how
many against.
(5) For 7 years after the day when a resolution under this Division is
passed, the public company must retain the records it made under this section in
relation to the resolution.
The public company must lodge a notice setting out the text of the
resolution within 14 days after the resolution is passed.
(1) The Court may declare that the conditions prescribed by this Division
have been satisfied if it finds that they have been substantially
satisfied.
(2) A declaration may be made only on the application of an interested
person.
Controlling entities
(1) An entity that controls a public company is a related party of the
public company.
Directors and their spouses
(2) The following persons are related parties of a public
company:
(a) directors of the public company
(b) directors (if any) of an entity that controls the public
company
(c) if the public company is controlled by an entity that is not a body
corporate—each of the persons making up the controlling entity
(d) spouses and de facto spouses of the persons referred to in paragraphs
(a), (b) and (c).
Relatives of directors and spouses
(3) The following relatives of persons referred to in
subsection (2) are related parties of the public company:
(a) parents
(b) children.
Entities controlled by other related parties
(4) An entity controlled by a related party referred to in subsection (1),
(2) or (3) is a related party of the public company unless the entity is also
controlled by the public company.
Related party in previous 6 months
(5) An entity is a related party of a public company at a
particular time if the entity was a related party of the public company of a
kind referred to in subsection (1), (2), (3) or (4) at any time within the
previous 6 months.
Entity has reasonable grounds to believe it will become related party in
future
(6) An entity is a related party of a public company at a
particular time if the entity believes or has reasonable grounds to believe that
it is likely to become a related party of the public company of a kind referred
to in subsection (1), (2), (3) or (4) at any time in the future.
Acting in concert with related party
(7) An entity is a related party of a public company if the entity acts in
concert with a related party of the public company on the understanding that the
related party will receive a financial benefit if the public company gives the
entity a financial benefit.
(1) In determining whether a financial benefit is given for the purposes
of this Chapter:
(a) give a broad interpretation to financial benefits being given, even if
criminal or civil penalties may be involved; and
(b) the economic and commercial substance of conduct is to prevail
over its legal form; and
(c) disregard any consideration that is or may be given for the benefit,
even if the consideration is adequate.
(2) Giving a financial benefit includes the
following:
(a) giving a financial benefit indirectly, for example, through 1 or more
interposed entities
(b) giving a financial benefit by making an informal agreement, oral
agreement or an agreement that has no binding force
(c) giving a financial benefit that does not involve paying money (for
example by conferring a financial advantage).
(3) The following are examples of giving a financial benefit
to a related party:
(a) giving or providing the related party finance or property
(b) buying an asset from or selling an asset to the related
party
(c) leasing an asset from or to the related party
(d) supplying services to or receiving services from the related
party
(e) issuing securities or granting an option to the related
party
(f) taking up or releasing an obligation of the related
party.
A director is not relieved from any of their duties under this Law
(including sections 180 and 184), or their fiduciary duties, in connection with
a transaction merely because the transaction is authorised by a provision of
this Chapter or is approved by a resolution of members under a provision of this
Chapter.
Renumber as section 231.
Repeal the Part, substitute:
The Court may make an order under section 233 if:
(a) the conduct of a company’s affairs; or
(b) an actual or proposed act or omission by or on behalf of a company;
or
(c) a resolution, or a proposed resolution, of members or a class of
members of a company;
is either:
(d) contrary to the interests of the members as a whole; or
(e) oppressive to, unfairly prejudicial to, or unfairly discriminatory
against, a member or members whether in that capacity or in any other
capacity.
For the purposes of this Part, a person to whom a share in the company has
been transmitted by will or by operation of law is taken to be a member of the
company.
Note: For affairs, see section
53.
(1) The Court can make any order under this section that it considers
appropriate in relation to the company, including an order:
(a) that the company be wound up
(b) that the company’s existing constitution be modified or
repealed
(c) regulating the conduct of the company’s affairs in the
future
(d) for the purchase of any shares by any member or person to whom a share
in the company has been transmitted by will or by operation of law
(e) for the purchase of shares with an appropriate reduction of the
company’s share capital
(f) for the company to institute, prosecute, defend or discontinue
specified proceedings
(g) authorising a member, or a person to whom a share in the company has
been transmitted by will or by operation of law, to institute, prosecute, defend
or discontinue specified proceedings in the name and on behalf of the
company
(h) appointing a receiver or a receiver and manager of any or all of the
company’s property
(i) restraining a person from engaging in specified conduct or from doing
a specified act
(j) requiring a person to do a specified act.
Order that the company be wound up
(2) If an order that a company be wound up is made under this section, the
provisions of this Law relating to the winding up of companies apply:
(a) as if the order were made under section 461; and
(b) with such changes as are necessary.
Order altering constitution
(3) If an order made under this section repeals or modifies a
company’s constitution, or requires the company to adopt a constitution,
the company does not have the power under section 136 to change or repeal the
constitution if that change or repeal would be inconsistent with the provisions
of the order, unless:
(a) the order states that the company does have the power to make such a
change or repeal; or
(b) the company first obtains the leave of the Court.
An application for an order under section 233 in relation to a
company may be made by:
(a) a member of the company, even if the application relates to an act or
omission that is against:
(i) the member in a capacity other than as a member; or
(ii) another member in their capacity as a member; or
(b) a person who has been removed from the register of members because of
a selective reduction; or
(c) a person who has ceased to be a member of the company if the
application relates to the circumstances in which they ceased to be a member;
or
(d) a person to whom a share in the company has been transmitted by will
or by operation of law; or
(e) a person whom ASIC thinks appropriate having regard to investigations
it is conducting or has conducted into:
(i) the company’s affairs; or
(ii) matters connected with the company’s affairs.
Note 1: If an application is made under this section, in
certain cases the court may order that the company be wound up in insolvency
(see section 459B).
Note 2: For selective reduction, see
subsection 256B(2).
If an order is made under section 233, the applicant must lodge a copy of
the order with ASIC within 14 days after it is made.
(1) A person may bring proceedings on behalf of a company, or intervene in
any proceedings to which the company is a party for the purpose of taking
responsibility on behalf of the company for those proceedings, or for a
particular step in those proceedings (for example, compromising or settling
them), if:
(a) the person is:
(i) a member, former member, or person entitled to be registered as a
member, of the company or of a related body corporate; or
(ii) an officer or former officer of the company; and
(b) the person is acting with leave granted under section 237.
(2) Proceedings brought on behalf of a company must be brought in the
company’s name.
(3) The right of a person at general law to bring, or intervene in,
proceedings on behalf of a company is abolished.
Note 1: For the right to inspect company books, see
subsections 247A(3) to (6).
Note 2: For the requirements to disclose proceedings and
leave applications in the annual directors’ report, see subsections
300(14) and (15).
Note 3: This section does not prevent a person bringing, or
intervening in, proceedings on their own behalf in respect of a personal
right.
(1) A person referred to in paragraph 236(1)(a) may apply to the Court for
leave to bring, or to intervene in, proceedings.
(2) The Court must grant the application if it is satisfied
that:
(a) it is probable that the company will not itself bring the proceedings,
or properly take responsibility for them, or for the step in them; and
(b) the applicant is acting in good faith; and
(c) it is in the best interests of the company that the applicant be
granted leave; and
(d) if the applicant is applying for leave to bring
proceedings—there is a serious question to be tried; and
(e) either:
(i) at least 14 days before making the application, the applicant gave
written notice to the company of the intention to apply for leave and of the
reasons for applying; or
(ii) it is appropriate to grant leave even though subparagraph (i) is not
satisfied.
(3) A rebuttable presumption that granting leave is not in the best
interests of the company arises if it is established that:
(a) the proceedings are:
(i) by the company against a third party; or
(ii) by a third party against the company; and
(b) the company has decided:
(i) not to bring the proceedings; or
(ii) not to defend the proceedings; or
(iii) to discontinue, settle or compromise the proceedings; and
(c) all of the directors who participated in that decision:
(i) acted in good faith for a proper purpose; and
(ii) did not have a material personal interest in the decision;
and
(iii) informed themselves about the subject matter of the decision to the
extent they reasonably believed to be appropriate; and
(iv) rationally believed that the decision was in the best interests of
the company.
The director’s belief that the decision was in the best interests of
the company is a rational one unless the belief is one that no reasonable person
in their position would hold.
(4) For the purposes of subsection (3):
(a) a person is a third party if:
(i) the company is a public company and the person is not a related party
of the company; or
(ii) the company is not a public company and the person would not be a
related party of the company if the company were a public company; and
(b) proceedings by or against the company include any appeal from a
decision made in proceedings by or against the company.
Note: Related party is defined in section
228.
(1) Any of the following persons may apply to the Court for an order that
they be substituted for a person to whom leave has been granted under section
237:
(a) a member, former member, or a person entitled to be registered as a
member, of the company or of a related body corporate; or
(b) an officer, or former officer, of the company.
(2) The Court may make the order if it is satisfied that:
(a) the applicant is acting in good faith; and
(b) it is appropriate to make the order in all the
circumstances.
(3) An order substituting one person for another has the effect
that:
(a) the grant of leave is taken to have been made in favour of the
substituted person; and
(b) if the other person has already brought the proceedings or
intervened—the substituted person is taken to have brought those
proceedings or to have made that intervention.
(1) If the members of a company ratify or approve conduct, the
ratification or approval:
(a) does not prevent a person from bringing or intervening in proceedings
with leave under section 237 or from applying for leave under that section;
and
(b) does not have the effect that proceedings brought or intervened in
with leave under section 237 must be determined in favour of the defendant, or
that an application for leave under that section must be refused.
(2) If members of a company ratify or approve conduct, the Court may take
the ratification or approval into account in deciding what order or judgment
(including as to damages) to make in proceedings brought or intervened in with
leave under section 237 or in relation to an application for leave under that
section. In doing this, it must have regard to:
(a) how well-informed about the conduct the members were when deciding
whether to ratify or approve the conduct; and
(b) whether the members who ratified or approved the conduct were acting
for proper purposes.
Proceedings brought or intervened in with leave must not be discontinued,
compromised or settled without the leave of the Court.
(1) The Court may make any orders, and give any directions, that it
considers appropriate in relation to proceedings brought or intervened in with
leave, or an application for leave, including:
(a) interim orders; and
(b) directions about the conduct of the proceedings, including requiring
mediation; and
(c) an order directing the company, or an officer of the company, to do,
or not to do, any act; and
(d) an order appointing an independent person to investigate, and report
to the Court on:
(i) the financial affairs of the company; or
(ii) the facts or circumstances which gave rise to the cause of action the
subject of the proceedings; or
(iii) the costs incurred in the proceedings by the parties to the
proceedings and the person granted leave.
(2) A person appointed by the Court under paragraph (1)(d) is entitled, on
giving reasonable notice to the company, to inspect any books of the company for
any purpose connected with their appointment.
(3) If the Court appoints a person under paragraph (1)(d):
(a) the Court must also make an order stating who is liable for the
remuneration and expenses of the person appointed; and
(b) the Court may vary the order at any time; and
(c) the persons who may be made liable under the order, or the order as
varied, are:
(i) all or any of the parties to the proceedings or application;
and
(ii) the company; and
(d) if the order, or the order as varied, makes 2 or more persons liable,
the order may also determine the nature and extent of the liability of each of
those persons.
(4) Subsection (3) does not affect the powers of the Court as to
costs.
The Court may at any time make any orders it considers appropriate about
the costs of the following persons in relation to proceedings brought or
intervened in with leave under section 237 or an application for leave under
that section:
(a) the person who applied for or was granted leave
(b) the company
(c) any other party to the proceedings or application.
An order under this section may require indemnification for
costs.
Insert:
(1) Before a body:
(a) makes an offer of debentures in this jurisdiction that needs
disclosure to investors under Chapter 6D, or does not need disclosure to
investors under Chapter 6D because of subsection 9(13) (disclosure document
exclusion for debenture roll overs); or
(b) makes an offer of debentures in this jurisdiction or elsewhere as
consideration for the acquisition of securities under an off-market takeover
bid; or
(c) issues debentures in this jurisdiction or elsewhere 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);
regardless of where any resulting issue, sale or transfer occurs, the body
must enter into a trust deed that complies with section 260FB and appoint a
trustee that complies with section 260FC.
Note: For rules about when an offer of debentures will need
disclosure to investors under Chapter 6D, see sections 706, 707 and
708.
(2) The body may revoke the trust deed after it has repaid all amounts
payable under the debentures in accordance with the debentures’ terms and
the trust deed.
(3) The body must comply with this Chapter.
Note: Sections 168 and 601CZB require a register of
debenture holders to be set up and kept.
The trust deed must provide that the following are held in trust by the
trustee for the benefit of the debenture holders:
(a) the right to enforce the borrower’s duty to repay
(b) any charge or security for repayment
(c) the right to enforce any other duties that the borrower and any
guarantor have under:
(i) the terms of the debentures; or
(ii) the provisions of the trust deed or this Chapter.
Note: For information about the duties that the borrower and
any guarantor body have under this Chapter, see sections 260GB to
260HE.
Who can be trustee
(1) The trustee must be:
(a) the Public Trustee of any State or Territory; or
(b) a body corporate authorised by a law of any State or Territory to take
in its own name a grant of probate of the will, or letters of administration of
the estate, of a deceased person; or
(c) a body corporate registered under the Life Insurance Act 1995;
or
(d) an Australian ADI; or
(e) a body corporate, all of whose shares are held beneficially by a body
corporate or bodies corporate of the kind referred to in paragraph (b), (c) or
(d) if that body or those bodies:
(i) are liable for all of the liabilities incurred, or to be incurred, by
the trustee as trustee; or
(ii) have subscribed for and beneficially hold shares in the trustee and
there is an uncalled liability of at least $500,000 in respect of those shares
that can only be called up if the trustee becomes an externally-administered
body corporate (see section 254N); or
(f) a body corporate approved by ASIC (see section 260MB).
Note: Section 260GD provides that if the borrower becomes
aware that the trustee cannot be a trustee, the trustee must be
replaced.
Circumstances in which a person cannot be trustee
(2) A person may only be appointed or act as trustee (except to the extent
provided for by section 260FD) if the appointment or acting will not result in a
conflict of interest or duty. This subsection is not intended to affect any rule
of law or equity.
An existing trustee continues to act as the trustee until a new trustee
is appointed and has taken office as trustee, despite any rule of law or equity
to the contrary.
Note: This section applies even if the existing trustee
resigns.
Related party of existing trustee may be appointed as a new
trustee
(1) In addition to any other powers of appointment under the terms of the
debentures or provisions of the trust deed, the borrower may appoint a body
corporate which is related to the existing trustee as trustee in place of the
existing trustee if:
(a) the body corporate can be a trustee under section 260FC; and
(b) the existing trustee consents in writing to the
appointment.
The appointment has effect despite any terms of the debentures or
provisions of the trust deed.
Appointment by Court
(2) The Court may:
(a) appoint a person who may be a trustee under section 260FC as trustee
on the application of the borrower, a debenture holder or ASIC if:
(i) a trustee has not been validly appointed; or
(ii) the trustee has ceased to exist; or
(b) terminate the existing trustee’s appointment and appoint a
person who may be a trustee under section 260FC as trustee in the existing
trustee’s place on the application of the borrower, the existing trustee,
a debenture holder or ASIC if:
(i) the existing trustee cannot be trustee under section 260FC;
or
(ii) the existing trustee fails, or refuses, to act.
A borrower that is required to enter into a trust deed under section
260FA has the duties imposed by this Part.
The borrower must:
(a) carry on and conduct its business in a proper and efficient manner;
and
(b) provide a copy of the trust deed to:
(i) a debenture holder; or
(ii) the trustee;
if they request a copy; and
(c) make all of its financial and other records available for inspection
by:
(i) the trustee; or
(ii) an officer or employee of the trustee authorised by the trustee to
carry out the inspection; or
(iii) a registered company auditor appointed by the trustee to carry out
the inspection;
and give them any information, explanations or other assistance that they
require about matters relating to those records.
Note: The borrower also has a duty to call a meeting of
debenture holders in certain circumstances (see section 260KA).
The borrower must lodge with ASIC a notice of the name of a trustee
within 14 days after they are appointed. The notice must be in the prescribed
form.
The borrower must take all reasonable steps to replace the trustee under
section 260FE as soon as practicable after the borrower becomes aware that the
trustee:
(a) has ceased to exist; or
(b) has not been validly appointed; or
(c) cannot be a trustee under section 260FC; or
(d) has failed or refused to act as trustee.
If the borrower creates a charge, it must:
(a) give the trustee written details of the charge within 21 days after it
is created; and
(b) if the total amount to be advanced on the security of the charge is
indeterminate and the advances are not merged in a current account with bankers,
trade creditors or anyone else—give the trustee written details of the
amount of each advance within 7 days after it is made.
Note: If the advances are merged in a current account the
borrower must give the trustee the details in the quarterly report (see
subsection 260GF(4)).
Quarterly reports
(1) Within 1 month after the end of each quarter, the borrower
must:
(a) give the trustee a quarterly report that sets out the information
required by subsections (4), (5) and (6); and
(b) lodge a copy of the report with ASIC (see section 351).
First quarter
(2) The first quarter is the period of 3 months ending on a day fixed by
the borrower, by written notice to the trustee. The day must be less than 6
months after the first issue of a debenture under the trust deed.
Subsequent quarters
(3) Each of the subsequent quarters are periods of 3 months. The trustee
may allow a particular quarter to be a period of less than 3 months if the
trustee is satisfied that special circumstances justify doing so.
Content of quarterly report
(4) The report for a quarter must include details of:
(a) any failure by the borrower and each guarantor to comply with the
terms of the debentures or the provisions of the trust deed or this Chapter
during the quarter; and
(b) any event that has happened during the quarter that has caused, or
could cause, 1 or more of the following:
(i) any amount deposited or lent under the debentures to become
immediately payable
(ii) the debentures to become immediately enforceable
(iii) any other right or remedy under the terms of the debenture or
provisions of the trust deed to become immediately enforceable; and
(c) any circumstances that have occurred during the quarter that
materially prejudice:
(i) the borrower, any of its subsidiaries, or any of the guarantors;
or
(ii) any security or charge included in or created by the debentures or
the trust deed; and
(d) any substantial change in the nature of the business of the borrower,
any of its subsidiaries, or any of the guarantors that has occurred during the
quarter; and
(e) any of the following events that happened in the quarter:
(i) the appointment of a guarantor
(ii) the cessation of liability of a guarantor body for the payment of the
whole or part of the money for which it was liable under the guarantee
(iii) a change of name of a guarantor (if this happens, the report must
also disclose the guarantor’s new name); and
(f) the net amount outstanding on any advances at the end of the quarter
if the borrower has created a charge where:
(i) the total amount to be advanced on the security of the charge is
indeterminate; and
(ii) the advances are merged in a current account with bankers, trade
creditors or anyone else; and
(g) any other matters that may materially prejudice any security or the
interests of the debenture holders.
Note: Paragraph (f)—the borrower has a duty to inform
the trustee about charges as they are created (see section
260GE).
(5) If the borrower has deposited money with, or lent money to, a related
body corporate during the quarter, the report must also include details
of:
(a) the total of the money deposited with, or lent to, the related body
corporate during the quarter (see subsection (7)); and
(b) the total amount of money owing to the borrower at the end of the
quarter in respect of the deposits or loans to the related body
corporate.
Disregard any amount that the borrower deposits with an ADI in the normal
course of the borrower’s business.
(6) If the borrower has assumed a liability of a related body corporate
during the quarter, the report must also include details of the extent of the
liability assumed during the quarter and the extent of the liability as at the
end of the quarter.
(7) For the purposes of subsections (5) and (6), the report:
(a) must distinguish between deposits, loans and assumptions of liability
that are secured and those that are unsecured; and
(b) may exclude any deposit, loan or assumption of liability on behalf of
the related body corporate if it has:
(i) guaranteed the repayment of the debentures of the borrower;
and
(ii) secured the guarantee by a charge over all of its property in favour
of the trustee.
Formalities
(8) The report must:
(a) be made in accordance with a resolution of the directors;
and
(b) specify the date on which the report is made.
Sections 260GE and 260GF do not apply in respect of the borrower
while:
(a) it is under external administration; or
(b) a receiver, or a receiver and manager, of property of the borrower has
been appointed and has not ceased to act under that appointment.
(1) The borrower may describe or refer to the debentures in:
(a) any disclosure in relation to the offer of the debentures;
or
(b) any other document constituting or relating to the offer of the
debentures; or
(c) the debentures themselves;
only in accordance with the following table:
|
How debentures may be described |
||
|---|---|---|
|
Item |
Description |
When description may be used |
|
1 |
mortgage debenture |
only if the circumstances set out in subsection (2) are satisfied |
|
2 |
debenture |
only if the circumstances set out in subsection (2) or (3) are
satisfied |
|
3 |
unsecured note or unsecured deposit note |
in any other case |
When debentures can be called mortgage debentures or
debentures
(2) The borrower may describe or refer to the debentures as:
(a) mortgage debentures; or
(b) debentures;
if:
(c) the repayment of all money that has been, or may be, deposited or lent
under the debentures is secured by a first mortgage given to the trustee over
land vested in the borrower or in any of the guarantors; and
(d) the mortgage has been registered, or is a registrable mortgage that
has been lodged for registration, in accordance with the law relating to the
registration of mortgages of land in the place where the land is situated;
and
(e) the total amount of that money and of all other liabilities (if any)
secured by the mortgage of that land ranking equally with the liability
to repay that money does not exceed 60% of the value of the borrower’s or
guarantor’s interest in that land as shown in the valuation included in
the disclosure document for the debentures.
When debentures can be called debentures
(3) The borrower may describe or refer to the debentures as debentures
if:
(a) the repayment of all money that has been, or may be, deposited or lent
under the debentures has been secured by a charge in favour of the trustee over
the whole or any part of the tangible property of the borrower or of any of the
guarantors; and
(b) the tangible property that constitutes the security for the charge is
sufficient and is reasonably likely to be sufficient to meet the liability for
the repayment of all such money and all other liabilities that:
(i) have been or may be incurred; and
(ii) rank in priority to, or equally with, that
liability.
The borrower commits an offence if it intentionally or recklessly
contravenes section 260GB, 260GC, 260GD, 260GE, 260GF or 260KA.
If a borrower is required to enter into a trust deed under section 260FA
in relation to debentures, a guarantor in respect of the debentures has the
duties imposed by this Part.
The guarantor must:
(a) carry on and conduct its business in a proper and efficient manner;
and
(b) make all of its financial and other records available for inspection
by:
(i) the trustee; or
(ii) an officer or employee of the trustee authorised by the trustee to
carry out the inspection; or
(iii) a registered company auditor appointed by the trustee to carry out
the inspection;
and give them any information, explanations or other assistance that they
require about matters relating to those records.
If the guarantor creates a charge, it must:
(a) give the trustee written details of the charge within 21 days after it
is created; and
(b) if the total amount to be advanced on the security of the charge is
indeterminate, give the trustee written details of:
(i) the amount of each advance made within 7 days after it is made;
or
(ii) where the advances are merged in a current account with bankers,
trade creditors or anyone else—the net amount outstanding on the advances
at the end of every 3 months.
Section 260HC does not apply in respect of the guarantor while:
(a) it is under external administration; or
(b) a receiver, or a receiver and manager, of property of the guarantor
has been appointed and has not ceased to act under that appointment.
The guarantor commits an offence if it intentionally or recklessly
contravenes paragraph 260HB(b) or section 260HC.
The trustee of a trust deed entered into under section 260FA
must:
(a) exercise reasonable diligence to ascertain whether the property of the
borrower and of each guarantor that is or should be available (whether by way of
security or otherwise) will be sufficient to repay the amount deposited or lent
when it becomes due; and
(b) exercise reasonable diligence to ascertain whether the borrower or any
guarantor has committed any breach of:
(i) the terms of the debentures; or
(ii) the provisions of the trust deed or this Chapter; and
(c) do everything in its power to ensure that the borrower or a guarantor
remedies any breach known to the trustee of:
(i) any term of the debentures; or
(ii) any provision of the trust deed or this Chapter;
unless the trustee is satisfied that the breach will not materially
prejudice the debenture holders’ interests or any security for the
debentures; and
(d) ensure that the borrower and each guarantor complies with Part 2K to
the extent that it applies to the debentures; and
(e) notify ASIC as soon as practicable if:
(i) the borrower has not complied with section 260GE, 260GF or subsection
318(1) or (4); or
(ii) a guarantor has not complied with section 260HC; and
(f) notify ASIC and the borrower as soon as practicable if the trustee
discovers that it cannot be a trustee under section 260FC; and
(g) give the debenture holders a statement explaining the effect of any
proposal that the borrower submits to the debenture holders before any meeting
that:
(i) the Court calls in relation to a scheme under subsection 411(1) or
(1A); or
(ii) the trustee calls under subsection 260KB(1); and
(h) comply with any directions given to it at a debenture holders’
meeting referred to in section 260KA, 260KB or 260KC unless:
(i) the trustee is of the opinion that the direction is inconsistent with
the terms of the debentures or the provisions of the trust deed or this Law or
is otherwise objectionable; and
(ii) has either obtained, or is in the process of obtaining, an order from
the Court under section 260NA setting aside or varying the direction;
and
(i) apply to the Court for an order under section 260NB if the borrower
requests it to do so.
Note 1: Paragraph (g)—Section 411 relates to
compromises and arrangements.
Note 2: Section 260JC deals with indemnification in respect
of trustee’s liability to the debenture holders.
(1) A term of a debenture, provision of a trust deed or a term of a
contract with holders of debentures secured by a trust deed, is void in so far
as the term or provision would have the effect of:
(a) exempting a trustee from liability for breach of section 260JA for
failure to show the degree of care and diligence required of it as trustee;
or
(b) indemnifying the trustee against that liability;
unless the term or provision:
(c) releases the trustee from liability for something done or omitted to
be done before the release is given; or
(d) enables a meeting of debenture holders to approve the release of the
trustee from liability for something done or omitted to be done before the
release is given.
(2) For the purposes of paragraph (1)(d):
(a) a release is approved if the debenture holders who vote for the
resolution hold 75% of the nominal value of the debentures held by all the
debenture holders who attend the meeting and vote on the resolution;
and
(b) a debenture holder attends the meeting and votes on the resolution
if:
(i) they attend the meeting in person and vote on the resolution;
or
(ii) if proxies are permitted—they are represented at the meeting by
a proxy and the proxy votes on the resolution.
The trustee is not liable for anything done or omitted to be done in
accordance with a direction given to it by the debenture holders at any meeting
called under section 260KA, 260KB or 260KC.
Duty to call meeting
(1) The borrower must call a meeting of debenture holders if:
(a) debenture holders who together hold 10% or more of the nominal value
of the issued debentures to which the trust relates direct the borrower to do
so; and
(b) the direction is given to the borrower in writing at its registered
office; and
(c) the purpose of the meeting is to:
(i) consider the financial statements that were laid before the last AGM
of the borrower; or
(ii) give the trustee directions in relation to the exercise of any of its
powers.
Note: The trustee usually must comply with any directions
given to it by the debenture holders at the meeting (see paragraph
260JA(h)).
Duty to give notification of meeting
(2) If the borrower is required to call a meeting, it must give notice of
the time and place of the meeting to:
(a) the trustee; and
(b) the borrower’s auditor; and
(c) each of the debenture holders whose names are entered on the register
of debenture holders.
Notice to joint holders of a debenture must be given to the joint holder
named first in the register of debenture holders.
(3) The borrower may give the notice to a debenture holder:
(a) personally; or
(b) by sending it by post to the address for the debenture holder in the
register of debenture holders; or
(c) by sending it to the fax number or electronic address (if any)
nominated by the debenture holder; or
(d) by any other means that the trust deed or the terms of the debentures
permit.
Note: A defect in the notice may not invalidate a meeting
(see section 1322).
When notice by post or fax is given
(4) A notice of meeting sent to a debenture holder is taken to be
given:
(a) 3 days after it is posted, if it is posted; or
(b) on the business day after it is sent, if it is sent by fax or other
electronic means;
unless the trust deed or the terms of the debentures provide
otherwise.
Trustee may call meeting in event of breach
(1) If the borrower or a guarantor fails to remedy any breach of the terms
of the debentures or provisions of the trust deed or this Chapter when required
by the trustee, the trustee may:
(a) call a meeting of debenture holders; and
(b) inform the debenture holders of the failure at the meeting;
and
(c) submit proposals for protection of the debenture holders’
interests to the meeting; and
(d) ask for directions from the debenture holders in relation to the
matter.
Trustee may appoint person to chair meeting
(2) The trustee may appoint a person to chair a meeting of debenture
holders called under subsection (1). If the trustee does not exercise this
power, the debenture holders present at the meeting may appoint a person to
chair the meeting.
(1) Without limiting section 260NA or 260NB, the Court may make an order
under either of those sections for a meeting of all or any of the debenture
holders to be held to give directions to the trustee. The order may direct the
trustee to:
(a) place before the debenture holders any information concerning their
interests; and
(b) place before the debenture holders any proposals to protect their
interests that the Court directs or the trustee considers appropriate;
and
(c) obtain the debenture holders’ directions concerning the
protection of their interests.
(2) The meeting is to be held and conducted in the manner the Court
directs. The trustee may appoint a person to chair the meeting. If the trustee
does not exercise this power, the debenture holders present at the meeting may
appoint a person to chair the meeting.
(1) A person who suffers loss or damage because a person contravenes a
provision of this Chapter may recover the amount of the loss or damage
from:
(a) the person who contravened the provision; or
(b) a person involved in the contravention.
This is so even if the person did not commit, and was not involved in, the
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 Part does not affect any liability that a person has under any
other law.
(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 debentures, specified debentures or a specified class of
debentures
(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 Law or the regulations as they apply to references
in:
(i) this Chapter; or
(ii) regulations made for the purposes of this Chapter; and
(c) Division 12 of Part 11.2.
(1) ASIC may approve a body corporate in writing to be a trustee for the
purposes of paragraph 260FC(1)(f). The approval may allow the body corporate to
act as trustee:
(a) in any circumstances; or
(b) in relation to a particular borrower or particular class of borrower;
or
(c) in relation to a particular trust deed;
and may be given subject to conditions.
(2) ASIC must publish notice of the approval in the
Gazette.
If the trustee applies to the Court for any direction in relation to the
performance of the trustee’s functions or to determine any question in
relation to the interests of the debenture holders, the Court may give any
direction and make any declaration or determination in relation to the matter
that the Court considers appropriate. The Court may also make ancillary or
consequential orders.
Note: Under this section, the Court may order a meeting of
debenture holders to be held, see section 260KC.
(1) If the trustee or ASIC applies to the Court, the Court may make any or
all of the following orders:
(a) an order staying an action or other civil proceedings before a court
by or against the borrower or a guarantor body
(b) an order restraining the borrower from paying any money to the
debenture holders or any holders of any other class of debentures
(c) an order that any security for the debentures be enforceable
immediately or at the time the Court directs (even if the debentures are
irredeemable or redeemable only on the happening of a contingency)
(d) an order appointing a receiver of any property constituting security
for the debentures
(e) an order restricting advertising by the borrower for deposits or loans
(f) an order restricting borrowing by the borrower
(g) any other order that the Court considers appropriate to protect the
interests of existing or prospective debenture holders.
(2) In deciding whether to make an order under subsection(1) the Court
must have regard to:
(a) the ability of the borrower and each guarantor to repay the amount
deposited or lent as and when it becomes due; and
(b) any contravention of section 260MA by the borrower; and
(c) the interests of the borrower’s members and creditors;
and
(d) the interests of the members of each of the guarantors.
Note: The Court may order a meeting of debenture holders to
be held (see section 260KC).
There are other rules relating to debentures in paragraph 124(1)(b) and
section 563AAA.
Repeal the Chapter, substitute:
The purposes of this Chapter are to ensure that:
(a) the acquisition of control over:
(i) the voting shares in a listed company, or an unlisted company with
more than 50 members; or
(ii) the voting shares in a listed body; or
(iii) the voting interests in a listed managed investment
scheme;
takes place in an efficient, competitive and informed market;
and
(b) the holders of the shares or interests, and the directors of the
company or body or the responsible entity for the scheme:
(i) know the identity of any person who proposes to acquire a substantial
interest in the company, body or scheme; and
(ii) have a reasonable time to consider the proposal; and
(iii) are given enough information to enable them to assess the merits of
the proposal; and
(c) as far as practicable, the holders of the relevant class of voting
shares or interests all have a reasonable and equal opportunity to participate
in any benefits accruing to the holders through any proposal under which a
person would acquire a substantial interest in the company, body or scheme;
and
(d) an appropriate procedure is followed as a preliminary to compulsory
acquisition of voting shares or interests or any other kind of securities under
Part 6A.1.
Note: To achieve the objectives referred to in paragraphs
(a), (b) and (c), the prohibition in section 606 and the exceptions to it refer
to interests in “voting shares”. To achieve the objective in
paragraph (d), the provisions that deal with the takeover procedure refer more
broadly to interests in “securities”.
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 this jurisdiction in the same way as it applies to the acquisition of
relevant interests in the securities of companies.
Note: Section 9 defines company,
jurisdiction and listed.
(1) This Chapter applies to the acquisition of relevant interests in the
interests in a listed managed investment scheme registered in this jurisdiction
as if:
(a) the scheme were a listed 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;
and
(d) a meeting of the members of the scheme were a general meeting of the
company; and
(e) the obligations and powers that are imposed or conferred on the
company were imposed or conferred on the responsible entity; and
(f) the directors of the responsible entity were the directors of the
company; and
(g) the appointment of a responsible entity for the scheme were the
election of a director of the company; and
(h) the scheme’s constitution were the company’s
constitution.
Note 1: Paragraph (g): see subsection
610(2).
Note 2: Section 9 defines voting interest in a
managed investment scheme.
(2) The regulations may modify the operation of this Chapter as it applies
in relation to the acquisition of interests in listed managed investment
schemes.
(1) Takeover bids are made for securities within a particular class.
Similarly, compulsory acquisition and buy-out rights operate on securities
within a particular class.
(2) For the purposes of this Chapter and Chapters 6A and 6C, securities
are not to be taken to be different classes merely because:
(a) some of the securities are fully-paid and others are partly-paid;
or
(b) different amounts are paid up or remain unpaid on the
securities.
Acquisition of relevant interests in voting shares through transaction
entered into by or on behalf of person acquiring relevant interest
(1) A person must not acquire a relevant interest in issued voting shares
in a company if:
(a) the company is:
(i) a listed company; or
(ii) an unlisted company with more than 50 members; and
(b) the person acquiring the interest does so through a transaction in
relation to securities entered into by or on behalf of the person; and
(c) because of the transaction, that person’s or someone
else’s voting power in the company increases:
(i) from 20% or below to more than 20%; or
(ii) from a starting point that is above 20% and below 90%.
However, the person may acquire the relevant interest under one of the
exceptions set out in section 611 without contravening this
subsection.
Note 1: Section 9 defines company as meaning a
company incorporated, or taken to have been incorporated, in this
jurisdiction.
Note 2: Section 607 deals with the effect of a contravention
of this section on transactions. Sections 608 and 609 deal with the meaning of
relevant interest. Section 610 deals with the calculation of a person’s
voting power in a company.
Note 3: If the acquisition of relevant interests in an
unlisted company with 50 or fewer members leads to the acquisition of a relevant
interest in another company that is an unlisted company with more than 50
members, or a listed company, the acquisition is caught by this section because
of its effect on that other company.
Acquisition of legal or equitable interest giving rise to relevant
interest for someone else
(2) A person must not acquire a legal or equitable interest in securities
of a body corporate if, because of the acquisition:
(a) another person acquires a relevant interest in issued voting shares in
a company that is:
(i) a listed company; or
(ii) an unlisted company with more than 50 members; and
(b) someone’s voting power in the company increases:
(i) from 20% or below to more than 20%; or
(ii) from a starting point that is above 20% and below 90%.
However, if the acquisition of the relevant interest is covered by one of
the exceptions set out in section 611, the person may acquire the legal or
equitable interest without contravening this subsection.
50 member threshold
(3) In determining whether the company has more than 50 members for the
purposes of subsection (1) or (2), count joint holders of a particular parcel of
shares as 1 person.
Offers and invitations
(4) A person must not:
(a) make an offer, or cause an offer to be made on their behalf, if the
person would contravene subsection (1) or (2) if the offer were accepted;
or
(b) issue an invitation, or cause an invitation to be issued on their
behalf, if the person would contravene subsection (1) or (2) if:
(i) an offer were made in response to the invitation; and
(ii) the offer were accepted.
Defences
(5) It is a defence to the prosecution of a person for contravening
subsection (1), (2) or (4) if the person proves that they contravened the
subsection:
(a) because of inadvertence or mistake; or
(b) because the person was 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.
Extended meaning of acquiring relevant interests—conversions and
increases in voting rights
(6) A person is taken for the purposes of subsection (1) or (2) to acquire
a relevant interest in voting shares in a company if:
(a) securities in which the person already had a relevant interest become
voting shares in the company; or
(b) there is an increase in the number of votes that may be cast on a poll
attached to voting shares that the person already had a relevant interest
in.
The acquisition occurs when the securities become voting shares or the
number of votes increases.
Note: Some examples of cases to which this subsection
applies are:
• A person exercises a right to convert a non-voting
preference share into an ordinary share that carries votes.
• A person pays up partly-paid shares with limited
votes and this leads to an increase in the number of votes attached to the
shares.
A transaction is not invalid merely because it involves a contravention
of section 606.
Basic rule—relevant interest is holding, or controlling voting or
disposal of, securities
(1) A person has a relevant interest in securities if they:
(a) are the holder of the securities; or
(b) have power to exercise, or control the exercise of, a right to vote
attached to the securities; or
(c) have power to dispose of, or control the exercise of a power to
dispose of, the securities.
It does not matter how remote the relevant interest is or how it arises. If
2 or more people can jointly exercise one of these powers, each of them is taken
to have that power.
Extension to control exercisable through a trust, agreement or
practice
(2) In this section, power or control includes:
(a) power or control that is indirect; and
(b) power or control that is, or can be, exercised as a result of, by
means of or by the revocation or breach of:
(i) a trust; or
(ii) an agreement; or
(iii) a practice; or
(iv) any combination of them;
whether or not they are enforceable; and
(c) power or control that is, or can be made, subject to restraint or
restriction.
It does not matter whether the power or control is express or implied,
formal or informal, exercisable alone or jointly with someone else. It does not
matter that the power or control cannot be related to a particular
security.
Extension to relevant interests held through bodies
corporate
(3) A person has the relevant interests in any securities that any of the
following has:
(a) a body corporate, or managed investment scheme, in which the
person’s voting power is above 20%
(b) a body corporate, or managed investment scheme, that the person
controls.
Paragraph (a) does not apply to a relevant interest that the body corporate
or scheme itself has in the securities merely because of the operation of that
paragraph in relation to another body corporate or managed investment
scheme.
(4) For the purposes of paragraph (3)(b), a person controls a body
corporate if the person has the capacity to determine the outcome of decisions
about the body corporate’s financial and operating policies.
(5) In determining whether a person has this capacity:
(a) the practical influence the person can exert (rather than the rights
they can enforce) is the issue to be addressed; and
(b) any practice or pattern of behaviour affecting the body
corporate’s financial or operating policies is to be taken into account
(even if it involves a breach of an agreement or a breach of trust).
(6) The person does not control the body corporate merely because the
person and an entity that is not an associate jointly have the capacity to
determine the outcome of decisions about the body corporate’s financial
and operating policies.
(7) A person is not to be taken to control a body corporate merely because
of a capacity they have if they are under a legal obligation to exercise that
capacity for the benefit of:
(a) if the person is an individual—someone else; or
(b) if the person is a body corporate—someone other than its
members.
Extension to control in anticipation of performance of agreements
etc.
(8) If at a particular time all the following conditions are
satisfied:
(a) a person has a relevant interest in issued securities
(b) the person (whether before or after acquiring the relevant
interest):
(i) has entered or enters into an agreement with another person with
respect to the securities; or
(ii) has given or gives another person an enforceable right, or has been
or is given an enforceable right by another person, in relation to the
securities (whether the right is enforceable presently or in the future and
whether or not on the fulfilment of a condition); or
(iii) has granted or grants an option to, or has been or is granted an
option by, another person with respect to the securities
(c) the other person would have a relevant interest in the securities if
the agreement were performed, the right enforced or the option
exercised;
the other person is taken to already have a relevant interest in the
securities.
Note: Subsections 609(6) and (7) deal with specific
situations in which the agreement will not give rise to a relevant
interest.
Body corporate may have relevant interest in its own
securities
(9) This section may result in a body corporate having a relevant interest
in its own securities.
Money lending and financial accommodation
(1) A person does not have a relevant interest in securities merely
because of a mortgage, charge or other security taken for the purpose of a
transaction entered into by the person if:
(a) the mortgage, charge or security is taken or acquired in the ordinary
course of the person’s business of providing financial services and on
ordinary commercial terms; and
(b) the person whose property is subject to the mortgage, charge or
security is not an associate of the person.
Note: Sections 11 to 17 define
associate.
Nominees and other trustees
(2) A person who would otherwise have a relevant interest in securities as
a bare trustee does not have a relevant interest in the securities if a
beneficiary under the trust has a relevant interest in the securities because of
a presently enforceable and unconditional right of the kind referred to in
subsection 608(8).
Note: This subsection will often apply to a person who holds
securities as a nominee.
Holding of securities by securities dealer
(3) A securities dealer does not have a relevant interest in securities
merely because they hold securities on behalf of someone else in the ordinary
course of their securities business.
Shares covered by buy-backs
(4) A person does not have a relevant interest in a company’s shares
if the relevant interest would arise merely because the company has entered into
an agreement to buy back the shares.
Proxies
(5) A person does not have a relevant interest in securities merely
because the person has been appointed to vote as a proxy or representative at a
meeting of members, or of a class of members, of the company, body or managed
investment scheme if:
(a) the appointment is for one meeting only; and
(b) neither the person nor any associate gives valuable consideration for
the appointment.
Exchange traded options and futures contracts
(6) A person does not have a relevant interest in securities merely
because of:
(a) an exchange traded option over the securities; or
(b) a right to acquire the securities given by a futures
contract.
This subsection stops applying to the relevant interest when the obligation
to make or take delivery of the securities arises.
Note: Without this subsection, subsection 608(8) would
create a relevant interest from the option or contract.
Conditional agreements
(7) A person does not have a relevant interest in securities merely
because of an agreement if the agreement:
(a) is conditional on:
(i) a resolution under item 7 in the table in section 611 being passed;
or
(ii) ASIC exempting the acquisition under the agreement from the
provisions of this Chapter under section 655A; and
(b) does not confer any control over, or power to substantially influence,
the exercise of a voting right attached to the securities; and
(c) does not restrict disposal of the securities for more than 3 months
from the date when the agreement is entered into.
The person acquires a relevant interest in the securities when the
condition referred to in paragraph (a) is satisfied.
Pre-emptive rights
(8) A member of a company, body or managed investment scheme does not have
a relevant interest in securities of the company, body or scheme merely because
the company’s, body’s or scheme’s constitution gives members
pre-emptive rights on the transfer of the securities if all members have
pre-emptive rights on the same terms.
Director of body corporate holding securities
(9) A person does not have a relevant interest in securities merely
because:
(a) the person is a director of a body corporate; and
(b) the body corporate has a relevant interest in those
securities.
Prescribed exclusions
(10) A person does not have a relevant interest in securities in the
circumstances specified in the regulations. The regulations may provide that
interests in securities are not relevant interests subject to specified
conditions.
Person’s voting power in a body corporate
(1) A person’s voting power in a body corporate
is:
where:
person’s and associates’ votes is the total
number of votes attached to all the voting shares in the body corporate (if any)
that the person or an associate has a relevant interest in.
total votes in body corporate is the total number of votes
attached to all voting shares in the body corporate.
Note: Even if a person’s relevant interest in voting
shares is based on control over disposal of the shares (rather than control over
voting rights attached to the shares), their voting power in the body corporate
is calculated on the basis of the number of votes attached to those
shares.
Counting votes
(2) For the purposes of this section, the number of votes attached to a
voting share in a body corporate is the maximum number of votes that can be cast
in respect of the share on a poll:
(a) if the election of directors is determined by the casting of votes
attached to voting shares—on the election of a director of the body
corporate; or
(b) if the election of directors is not determined by the casting of votes
attached to voting shares—on the adoption of a constitution for the body
corporate or the amendment of the body corporate’s constitution.
Note: The Corporations and Securities Panel may decide that
the setting or varying of voting rights in a way that affects control of a body
corporate is unacceptable circumstances under section 657A.
(3) If:
(a) a transaction in relation to, or an acquisition of an interest in,
securities occurs; and
(b) before the transaction or acquisition, a person did not have a
relevant interest in particular voting shares but an associate of the person did
have a relevant interest in those shares; and
(c) because of the transaction or acquisition, the person acquires a
relevant interest in those shares;
then, for the purposes of applying section 606 to the transaction or
acquisition, the person’s voting power is taken to have increased because
of the transaction or acquisition from what it would have been before the
transaction or acquisition if the votes attached to those shares were
disregarded to what it was after the transaction or acquisition (taking the
votes attached to those shares into account).
(4) Disregard the operation of section 613 and paragraph 614(1)(b) in
working out a person’s voting power in a body corporate.
The following table sets out:
(a) acquisitions of relevant interests in a company’s voting
shares that are exempt from the prohibition in subsection 606(1);
and
(b) acquisitions of relevant interests in a company’s voting
shares resulting from acquisitions of legal or equitable interests in
securities of a body corporate that are exempt from the prohibition in
subsection 606(2).
Note: Some of the items in the table cover only activities
in relation to the company itself (items 7, 8, 12 and 13) while the other items
cover acquisitions in that company that may occur through activities in relation
to other companies.
|
Acquisitions that are exempt |
[operative] |
|
|---|---|---|
|
|
Takeover bids |
|
|
|
Acceptance of takeover offer |
|
|
1 |
An acquisition that results from the acceptance of an offer under a
takeover bid. See also section 612. |
|
|
|
On-market purchase during bid period |
|
|
2 |
An acquisition in relation to bid class securities that results from an
on-market transaction if: |
|
|
|
(d) the bid is: See also sections 612 and 613. |
|
|
|
On-market purchase of convertible securities during takeover bid
period |
|
|
3 |
An acquisition of bid class securities that results directly from the
exercise of rights attached to convertible securities if: See sections 612 and 613. |
|
|
|
Acceptance of scrip offered as takeover consideration |
|
|
4 |
An acquisition that results from the acceptance of: See also section 612. |
|
|
|
Acquisition immediately followed by announcement of mandatory
bid |
|
|
5 |
An acquisition that occurs in, or results from, the following set of
circumstances: |
|
|
|
The proposal under paragraph (e) must set out the terms on which the
acquisition was made. Note 1: Section 631 requires a person who publicly proposes
to make a takeover bid to commence the bid within 2 months after the
proposal. Note 2: Paragraph (e)—If securities are acquired under
an agreement, the acquisition occurs when the agreement is entered into (not
when the transfer takes place) (see subsection 608(8)). See also section 614. |
|
|
|
Nature of acquirer |
|
|
6 |
An acquisition that results from the exercise by a person of a power, or
appointment as a receiver, or receiver and manager, under a mortgage,
charge or other security if: |
|
|
|
Approval by resolution of target |
|
|
7 |
An acquisition approved previously by a resolution passed at a general
meeting of the company in which the acquisition is made, if: |
|
|
|
(iii) the voting power that person would have as a result of the
acquisition; and |
|
|
|
Target newly formed |
|
|
8 |
An acquisition that results from an issue of securities of the company in
which the acquisition is made if the company has not started to carry on any
business and has not borrowed any money. |
|
|
|
Manner of acquisition |
|
|
|
3% creep in 6 months |
|
|
9 |
An acquisition by a person if: |
|
|
|
Rights issues |
|
|
10 |
An acquisition that results from an issue of securities that
satisfies all of the following conditions: |
|
|
|
(d) agreements to issue are not entered into until a specified time for
acceptances of offers has closed This extends to an acquisition by a person as underwriter to the issue or
sub-underwriter. See section 615. |
|
|
|
Dividend reinvestment etc. |
|
|
11 |
An acquisition that results from an issue of: if the plan or facility is available to all members. Disregard any unavailability to foreign holders in determining whether the
plan or facility is available to all members. |
|
|
|
Initial public offering (IPO) fundraising |
|
|
12 |
An acquisition that results from an issue under a disclosure document of
securities in the company in which the acquisition is made if: |
|
|
|
Underwriting of fundraising |
|
|
13 |
An acquisition that results from an issue under a disclosure document of
securities in the company in which the acquisition is made if: |
|
|
|
Acquisition through listed company |
|
|
14 |
An acquisition that results from another acquisition of relevant interests
in voting shares in a body corporate included in the official list of: |
|
|
|
Wills etc. |
|
|
15 |
An acquisition through a will or through operation of law. |
|
|
|
Forfeiture of shares |
|
|
16 |
An acquisition that results from an auction of forfeited shares conducted
on-market. |
|
|
|
Compromise, arrangement, liquidation or buy-back |
|
|
|
Part 5.1 compromise or arrangement |
|
|
17 |
An acquisition that results from a compromise or arrangement approved by
the Court under Part 5.1. |
|
|
|
Section 507 arrangement |
|
|
18 |
An acquisition that results from an arrangement entered into by a
liquidator under section 507. |
|
|
|
Buy-back |
|
|
19 |
An acquisition that results from a buy-back authorised by section
257A. |
|
|
|
Regulations |
|
|
20 |
An acquisition made in a manner or in circumstances prescribed by the
regulations. The circumstances may include acquisitions of relevant interests in
voting shares in a specified body or class of bodies. |
|
The exceptions in items 1 to 4 of the table in section 611 do not apply
to a takeover bid if the bid is carried out in contravention of:
(a) section 618 (full or proportionate bid); or
(b) section 619 (offers to be the same); or
(c) subsection 621(4) (minimum price); or
(d) subsection 624(1) (minimum offer period); or
(e) sections 625 to 630 (conditional offers); or
(f) items 2, 3 and 6 in the table in subsection 633(1) (procedural steps
for off-market bid); or
(g) items 3, 4 and 6 in the table in section 635 (procedural steps for
market bid).
If the exception in item 2 or 3 of the table in section 611 applies to an
acquisition on-market during a takeover bid, the bidder is not entitled to
exercise the voting rights attached to the shares if:
(a) the bid is an off-market bid; and
(b) the bidder fails to send offers under the bid within 28 days after
giving the bidder’s statement to the target.
(1) If the exception in item 5 of the table in section 611 applies to an
acquisition of a relevant interest in securities:
(a) the person who publicly proposes to make a takeover bid for the
securities must give notice of the proposed bid to:
(i) if the securities in the proposed bid class are quoted—the
relevant securities exchange; or
(ii) otherwise—ASIC; and
(b) the votes attached to the securities may not be exercised by any
person from the time of the acquisition until:
(i) the offer period starts; or
(ii) the person and their associates have no relevant interests in the
securities; and
(c) if the target is a company or body—from the time of the
acquisition until the end of the bid period for the proposed bid, the target
may:
(i) issue or agree to issue securities (including options or convertible
securities); or
(ii) declare a dividend;
only if authorised to do so by a resolution of the company or body passed
in general meeting; and
(d) if the target is a managed investment scheme—from the time of
the acquisition until the end of the bid period for the proposed bid, the
responsible entity for the target may:
(i) issue or agree to issue interests in the scheme (including options or
convertible securities); or
(ii) make a distribution to members out of scheme property that is not
required by an arrangement entered into before the acquisition
occurred;
only if authorised to do so by a resolution of the members of the
scheme.
(2) Despite paragraphs (1)(c) and (d), the target may issue securities
if:
(a) the issue of the securities:
(i) if the securities are not quoted—was publicly announced;
or
(ii) if the securities are quoted—was notified to the relevant
securities exchange;
before the acquisition occurred; or
(b) item 10, 11 or 17 in the table in section 611 applies to the
acquisitions that result from the issue of the securities; or
(c) the securities are issued on the exercise of:
(i) an option granted; or
(ii) rights attached to convertible securities issued;
before the acquisition occurred.
The exception in item 10 of the table in section 611 applies even though
the conditions set out in the item are not satisfied in respect of foreign
holders of the company’s securities if, under the terms of the
offers:
(a) the company must appoint a nominee for foreign holders of the
company’s securities who is approved by:
(i) if the securities are quoted—the relevant securities exchange;
or
(ii) otherwise—ASIC; and
(b) the company must transfer to the nominee:
(i) the securities that would otherwise be issued to the foreign holders
who accept the offer; or
(ii) the right to acquire those securities; and
(c) the nominee must sell the securities, or those rights, and distribute
to each of those foreign holders their proportion of the proceeds of the sale
net of expenses.
(1) There are 2 kinds of takeover bid:
(a) an off-market bid (for quoted or unquoted securities); or
(b) a market bid (only available for quoted securities).
Note: Although the prohibition in section 606 is against
acquiring relevant interests in voting shares, a takeover bid may be made for
any securities (for example, as a preliminary to compulsorily acquiring
securities in that class under Part 6A.1).
(2) The following table shows where to find the provisions dealing with
the main features of the offers that may be made under off-market bids and
market bids and the procedures to be followed:
|
Takeover bids |
[signpost table] |
|||
|---|---|---|---|---|
|
|
Feature |
Off-market bid |
Market bid |
|
|
1 |
people to whom offers made |
617(1)-(2) |
617(3) |
|
|
2 |
securities covered |
618(1)-(2) |
618(3) |
|
|
3 |
consideration offered for the securities |
621(1)-(2), (4)-(6) and 651A |
621(3), (4)-(6) |
|
|
4 |
escalation agreements and collateral benefits not allowed |
622 and 623 |
622 and 623 |
|
|
5 |
offer period |
624(1)-(2) and 650C |
624(1)-(2) and 649C |
|
|
6 |
conditional offers |
625(2)-(3) and 626-630 |
625(1) |
|
|
7 |
procedure to be followed in making bid |
632 and 633 |
634 and 635 |
|
|
8 |
acceptances |
650E and 653A-653B |
- |
|
Off-market bid
(1) An off-market bid must relate to securities:
(a) in a class of securities (the bid class); and
(b) that exist or will exist as at the date set by the bidder under
subsection 633(2).
(2) If other securities exist or will exist at that date that:
(a) will convert, or may be converted, to securities in the bid class;
or
(b) confer rights to be issued securities in the bid class;
the bid may extend to securities that come to be in the bid class during
the offer period due to a conversion or exercise of the rights.
Note: The bidder’s statement must say if the bid is
extended in this way (see paragraph 636(1)(k)).
Market bid
(3) A market bid must relate to securities:
(a) in a class of quoted securities (the bid class);
and
(b) that exist or will exist at any time during the offer
period.
Off-market bid
(1) An offer for securities under an off-market bid must be an offer to
buy:
(a) all the securities in the bid class; or
(b) a specified proportion of the securities in the bid class.
The proportion specified under paragraph (b) must be the same for all
holders of securities in the bid class.
Off-market bid—non-marketable parcels
(2) If accepting an offer under an off-market bid for quoted securities
would leave a person with a parcel of the securities that is less than a
marketable parcel (within the meaning of the rules of the relevant securities
exchange), the offer extends to that parcel.
Market bid
(3) An offer for securities under a market bid must be an offer to buy all
the securities in the bid class.
Off-market bid
(1) All the offers made under an off-market bid must be the
same.
Note: The offers may include alternative forms of
consideration (see section 621).
(2) In applying subsection (1), disregard the following:
(a) any differences in the offers attributable to the fact that the number
of securities that may be acquired under each offer is limited by the number of
securities held by the holder
(b) any differences in the offers attributable to the fact that the offers
relate to securities having different accrued dividend or distribution
entitlements
(c) any differences in the offers attributable to the fact that the offers
relate to securities on which different amounts are paid up or remain
unpaid
(d) any differences in the offers attributable to the fact that the bidder
may issue or transfer only whole numbers of securities as consideration for the
acquisition
(e) any additional cash amount offered to holders instead of the fraction
of a security that they would otherwise be offered.
Foreign holders
(3) If the consideration for the bid includes an offer of securities, the
securities do not need to be offered to foreign holders of the target’s
securities if under the terms of the bid:
(a) the bidder must appoint a nominee for foreign holders of the
target’s securities who is approved by:
(i) if the securities are quoted—the relevant securities exchange;
or
(ii) otherwise—ASIC; and
(b) the bidder must transfer to the nominee:
(i) the securities that would otherwise be transferred to the foreign
holders who accept the bid for that consideration; or
(ii) the right to acquire those securities; and
(c) the nominee must sell the securities, or those rights, and distribute
to each of those foreign holders their proportion of the proceeds of the sale
net of expenses.
(1) Each offer under an off-market bid must:
(a) be in writing; and
(b) have the same date; and
(c) provide that, unless withdrawn, it will remain open until the end of
the offer period (see section 624); and
(d) state how, and when, the bidder is to satisfy their
obligations.
(2) Each offer must provide that the bidder is to pay or provide the
consideration for the offer:
(a) if the bidder is given the necessary transfer documents with the
acceptance—by the end of whichever of the following periods ends
earlier:
(i) 1 month after the offer is accepted or, if the offer is subject to a
defeating condition, within 1 month after the takeover contract becomes
unconditional
(ii) 21 days after the end of the offer period; or
(b) if the bidder is given the necessary transfer documents after the
acceptance and before the end of the bid period—within 1 month after the
bidder is given the necessary transfer documents; or
(c) if the bidder is given the necessary transfer documents after the
acceptance and after the end of the bid period—within 21 days after the
bidder is given the necessary transfer documents.
Note: Subsection 630(1) requires an offer that is subject to
a defeating condition to specify a date for declaring whether the condition has
been fulfilled or not.
(3) The offer may provide that the bidder may avoid the takeover contract
if the bidder is not given the necessary transfer documents within 1 month after
the end of the offer period.
Off-market bid—general
(1) A bidder making an off-market bid for securities may offer any form of
consideration for the securities, including:
(a) a cash sum; or
(b) securities (including shares, debentures, interests in a managed
investment scheme or options); or
(c) a combination of a cash sum and securities.
Note: Sections 650B and 651A deal with variations of the
consideration offered under the bid.
Off-market bid—mandatory bid
(2) An off-market bid that is a mandatory bid:
(a) must include an offer of a cash sum for the securities; and
(b) may include other forms of consideration for the securities,
including:
(i) securities (including shares, debentures, interests in a managed
investment scheme or options); or
(ii) a combination of a cash sum and securities.
Market bid—cash only
(3) As the offers under a market bid for securities are made through the
stock market of a securities exchange, the bidder must offer to acquire the
securities for a cash sum only for each security.
Note: Section 649B deals with variations of the
consideration offered under the bid.
All bids—minimum cash price if bidder purchased securities in the
4 months before the bid
(4) If:
(a) a person makes a takeover bid; and
(b) the consideration, or one of the forms of consideration, offered under
the bid for the securities in the bid class consists solely of a cash sum for
each security;
the amount of that cash sum must equal or exceed the maximum consideration
that the bidder or an associate provided, or agreed to provide, for a security
in the bid class under any purchase or agreement during the 4 months before the
date of the bid.
(5) For the purposes of subsection (4), the consideration provided for a
security is:
(a) if the consideration provided is a cash sum only—the amount of
that cash sum; or
(b) if the consideration provided does not include a cash sum—the
value of that consideration; or
(c) if the consideration provided is a cash sum and other
consideration—the sum of the amount of the cash sum and the value of the
other consideration.
The value of consideration that is not a cash sum is to be ascertained as
at the time the relevant purchase or agreement is made.
(6) If:
(a) a person agrees to buy a security in a company; and
(b) the agreement provides that the price payable for the security is a
price specified in the agreement but may be varied in accordance with the terms
of the agreement;
any variation in price under the agreement is to be disregarded in working
out, for the purposes of subsection (4), the price agreed to be paid for the
security under the agreement.
Benefits linked to bids and proposed bids not allowed
(1) A person who makes or proposes to make a takeover bid for securities,
or their associate, contravenes this section if:
(a) a person acquires a relevant interest in securities in the bid class
within the 6 months before the bid is made or proposed; and
(b) at any time whatever, the bidder, proposed bidder or associate gives
or agrees to give a benefit to, or receives or agrees to receive a benefit
from:
(i) a person who had a relevant interest in any of the paragraph (a)
securities immediately before the acquisition; or
(ii) an associate of a person who had a relevant interest in any of those
securities at that time; and
(c) the benefit is attributable to the acquisition or matters that include
the acquisition; and
(d) the amount or value of the benefit is, or is to be, determined by
reference to or to matters that include either of the following:
(i) the amount or value of the consideration for the securities under the
bid or proposed bid
(ii) the amount or value of the consideration for which the bidder or
proposed bidder acquires, offers or proposes to offer to acquire, securities in
the bid class during the offer period (whether or not under the bid) or under
Chapter 6A.
Agreement to escalate to full-bid price for mandatory bid
allowed
(2) The bidder, proposed bidder or associate does not contravene
subsection (1) by giving a person a benefit under an agreement that merely
adjusts the price paid under an acquisition that leads to a mandatory bid up to
the amount payable under the bid or proposed bid.
Contravening agreements void
(3) An agreement is void to the extent that it purports to provide
for:
(a) a person to give a benefit to a person; or
(b) a person to receive a benefit from a person;
in contravention of subsection (1).
(1) A bidder, or an associate, must not, during the offer period for a
takeover bid, give, offer to give or agree to give a benefit to a person
if:
(a) the benefit is likely to induce the person or an associate
to:
(i) accept an offer under the bid; or
(ii) dispose of securities in the bid class; and
(b) the benefit is not offered to all holders of securities in the bid
class under the bid.
(2) A person who proposes to make a takeover bid for securities within the
next 4 months, or an associate, must not give, offer to give or agree to give a
benefit to another person if:
(a) the benefit is likely to induce the other person, or an associate,
to:
(i) accept an offer under the bid; or
(ii) dispose of securities in the bid class; and
(b) the benefit is not proposed to be offered, or is not in fact offered,
to all holders of securities in the bid class under the bid.
(3) A person, or an associate, must not give, offer to give or agree to
give a benefit to another person if:
(a) the benefit is likely to induce the other person, or an associate, to
dispose of securities in a way that results in an acquisition that leads to a
mandatory bid; and
(b) the benefit is not offered to all holders of securities in the bid
class under the mandatory bid that is made as a result of the
acquisition.
(4) For the purpose of this section, a person does not receive a benefit
that is not offered under a takeover bid merely because the person sells bid
class securities on-market and the takeover bid is an off-market bid or a
conditional bid.
(5) This section does not prohibit:
(a) the variation of a takeover offer as provided by sections 649A to
650D; or
(b) an acquisition of securities through an on-market transaction;
or
(c) simultaneous takeover bids for different classes of securities in the
target.
Offer period set in offer
(1) The offers under a takeover bid must remain open for the period stated
in the offer. The period must:
(a) start on the date the first offer under the bid is made; and
(b) last for at least 1 month, and not more than 12 months.
However, the offer may be withdrawn during that period under section
652B.
Note: Sections 649C (market bids) and 650C (off-market bids)
deal with variation of the offer period.
Automatic extension of offer period if bidder reaches 50% or
consideration increased in last week
(2) If, within the last 7 days of the offer period:
(a) for an off-market bid—the offers under the bid are varied to
improve the consideration offered; or
(b) in any case—the bidder’s voting power in the target
increases to more than 50%;
the offer period is extended so that it ends 14 days after the event
referred to in paragraph (a) or (b). The bidder must give the target and
everyone who has not accepted an offer under the bid written notice that the
extension has occurred within 3 days after that event.
Note: The consideration for a market bid cannot be increased
in the last 5 trading days of the offer period (see section
649B).
Market bids
(1) Offers under a market bid must be unconditional.
Off-market bids may generally be conditional
(2) Offers under an off-market bid may be subject to conditions that are
not prohibited by sections 626 to 629.
Note: A bid must be unconditional to qualify as a mandatory
bid to which item 5 in the table in section 611 applies.
(3) If:
(a) the consideration offered is or includes securities; and
(b) the offer or the bidder’s statement states or implies that the
securities are to be quoted on a stock market of a securities exchange (whether
in Australia or elsewhere);
the following rules apply:
(c) the offer is subject to a condition that:
(i) an application for admission to quotation will be made within 7 days
after the start of the bid period; and
(ii) permission for admission to quotation will be granted no later than 7
days after the end of the bid period
(d) the offer may not be freed from this condition.
Note: Section 1325A provides that a Court may make a
remedial order if the condition is not satisfied.
Maximum acceptance conditions not allowed
(1) Offers under an off-market bid must not be subject to a maximum
acceptance condition. A maximum acceptance condition is one that provides that
the offers will terminate, or the maximum consideration offered under the bid
will be reduced, if one or more of the following occur:
(a) the number of securities for which the bidder receives acceptances
reaches or exceeds a particular number; or
(b) the bidder’s voting power in the company reaches or exceeds a
particular percentage; or
(c) the percentage of securities the bidder has relevant interests in
reaches or exceeds a particular percentage of securities in that
class.
(2) For the purposes of subsection (1), it does not matter:
(a) how the condition is expressed; or
(b) how a particular number or percentage was, or is to be, determined;
or
(c) whether or not a particular number or percentage is specified in the
condition and, if it is so specified, how it is expressed.
(3) For the purposes of subsection (1), an offer under an off-market bid
terminates if:
(a) the offer lapses, is withdrawn or otherwise ceases to have effect;
or
(b) a binding takeover contract will not result from an acceptance of the
offer; or
(c) an obligation of the bidder will not arise under the takeover
contract; or
(d) the takeover contract is rescinded; or
(e) the bidder is entitled to rescind the takeover contract; or
(f) the bidder is relieved of an obligation arising under the takeover
contract.
Offers under an off-market bid must not be subject to a condition that
allows the bidder to acquire, or may result in the bidder acquiring, securities
from some but not all of the people who accept the offers. It does not matter
how the condition is expressed.
An offer to a person under an off-market bid must not be made subject to
a condition that requires the person to approve or consent to a payment or other
benefit to an officer of the target or a related body corporate:
(a) as compensation for loss of; or
(b) as consideration in connection with retirement from;
any office or employment in connection with the management of the target or
of a related body corporate. A purported requirement of this kind is
void.
(1) Offers under an off-market bid must not be subject to a defeating
condition if the fulfilment of the condition depends on:
(a) the bidder’s, or an associate’s, opinion, belief or other
state of mind; or
(b) the happening of an event that is within the sole control of, or is a
direct result of action by, any of the following:
(i) the bidder (acting alone or together with an associate or
associates)
(ii) an associate (acting alone or together with the bidder or another
associate or associates of the bidder).
A purported condition of this kind is void.
Note: Section 9 defines defeating condition.
Sections 630, 650F and 650G deal with defeating conditions.
(2) For the purposes of paragraph (1)(b):
(a) the target; and
(b) a subsidiary of the target;
are taken not to be associates of the bidder if they would otherwise be an
associate merely because they are a related body corporate.
Note: Paragraph 11(b) makes related bodies corporate
associates of each other.
Off-market bid may include defeating conditions
(1) Offers under an off-market bid may be made subject to a defeating
condition only if the offers specify a date (not more than 14 days and not less
than 7 days before the end of the offer period) for giving a notice on the
status of the condition.
(2) If the offer period is extended by a period:
(a) the date for giving the notice is taken to be postponed for the same
period; and
(b) as soon as practicable after the extension, the bidder must give a
notice that states:
(i) the new date for giving the notice of the status of the condition;
and
(ii) whether the offers have been freed from the condition and whether, so
far as the bidder knows, the condition has been fulfilled on the date the notice
under this subsection is given.
Bidder to give notice of status of defeating condition near end of offer
period
(3) On the date determined under subsection (1) or (2), the bidder must
give a notice that states:
(a) whether the offers are free of the condition; and
(b) whether, so far as the bidder knows, the condition was fulfilled on
the date the notice is given; and
(c) the bidder’s voting power in the target.
The bidder must comply with this subsection whether or not the bidder has
given a notice under subsection (4) or 650F(1).
Note: The offers may be freed of the condition by a
declaration by the bidder under subsection 650F(1).
Bidder to give notice if defeating condition fulfilled
(4) If the condition is fulfilled (so that the offers become free of the
condition) during the bid period but before the date for publishing the notice
on the status of the condition, the bidder must publish as soon as practicable a
notice that states that the condition has been fulfilled.
(5) A notice under this section is given by:
(a) giving the notice to the target; and
(b) for quoted bid class securities—giving the notice to the
relevant securities exchange; and
(c) for unquoted bid class securities—lodging the notice with
ASIC.
Bid must proceed within 2 months after proposal
(1) If a person publicly proposes to make a takeover bid for securities in
a company, either alone or with other persons, the person contravenes this
subsection unless they make offers for the securities under a takeover bid
within 2 months after the proposal. The terms and conditions of the bid must be
the same as or not substantially less favourable than those in the public
proposal.
Note: The Court has power under section 1325B to order a
person to proceed with a bid.
Proposals if takeover bid not intended
(2) A person must not publicly propose, either alone or with other
persons, to make a takeover bid if:
(a) the person knows the proposed bid will not be made, or is reckless as
to whether the proposed bid is made; or
(b) the person is reckless as to whether they will be able to perform
their obligations relating to the takeover bid if a substantial proportion of
the offers under the bid are accepted.
(3) Section 1314 (continuing offences) and subsection 1324(2)
(injunctions) do not apply in relation to a failure to make a takeover bid in
accordance with a public proposal under subsection (1).
Note: For liability and defences for contraventions of this
section, see sections 670E and 670F.
The following diagram gives an overview of the steps involved in an
off-market bid.
|
Overview of steps in an off-market bid |
||||
|
|
Bidder |
|
|
|
|
Step 1 |
bidder’s statement (together with offer
document) |
|
* ASIC |
|
|
|
|
|
|
|
|
Step 2 |
notice that Step 1 done |
——→ |
* ASIC |
|
|
|
|
|
|
|
|
Step 3 |
bidder’s statement and
offers |
——→ |
* holders of bid class
securities |
|
|
|
|
|
|
|
|
Step 4 |
notice that Step 3 done |
|
* target |
|
|
|
|
|
|
|
|
|
Target |
|
|
|
|
Step 5 |
target’s statement |
|
* bidder |
|
|
The holders then consider the terms of the offer, and the statements
provided by the bidder and the target, and decide whether to accept the offer
under section 653A before the end of the bid period. A holder may also decide to
sell on-market during the bid period. |
||||
(1) The following table provides for the steps that a bidder must take to
make an effective off-market bid and the steps that a target must take when an
off-market bid is made.
|
Steps in off-market bid |
[operative table] |
|
|---|---|---|
|
|
Steps |
Timing and relevant provisions |
|
1 |
The bidder must prepare: |
See section 636 for content of statement. |
|
2 |
The bidder must lodge a copy of the bidder’s statement and offer
document with ASIC. |
|
|
3 |
The bidder must send a copy of the bidder’s statement and offer
document to the target. |
To be done on the day the bidder’s statement is lodged or within 21
days afterwards |
|
4 |
The bidder must lodge with ASIC a notice stating that the bidder’s
statement and offer document have been sent to the target. |
To be done on the day the bidder’s statement is sent to the
target |
|
5 |
The bidder must send a copy of the bidder’s statement and offer
document to each securities exchange that has a stock market on which the
target’s securities are quoted. |
To be done on the day the bidder’s statement is sent to the
target See also subsection (5). |
|
6 |
The bidder must send the bidder’s statement and offers to each person
(other than the bidder) who holds: as at the date set by the bidder under subsection (2). The offers must be made on the terms set out in the bidder’s
statement and the offer document lodged with ASIC under item 2. |
To be done: The directors of the target may agree that the offers and accompanying
documents be sent earlier. See also subsections (5) and (6.) Item 2 of the table in section 611 covers offers made by the bidder
on-market during the period between the lodgement of the bidder’s
statement and the making of the offers under the bid. Sections 648B and 648C provide for the manner in which documents may be
sent to holders. |
|
7 |
The bidder must send a notice to the target that the bidder’s
statement and offers have been sent as required by item 6. The notice must state the date of the offers. |
To be done on the day all offers have been sent as required by item
6 See subsection 620(1) on date of offer. |
|
8 |
The bidder must send a notice that offers have been sent as required by
item 6 to each securities exchange that has a stock market on which the
target’s securities are quoted. |
To be done on the day all offers have been sent as required by item
6 |
|
9 |
The bidder must lodge with ASIC a notice that offers have been sent as
required by item 6. |
To be done on the day all offers have been sent as required by item
6 |
|
10 |
The target must prepare a target’s statement. |
See section 638 for content of statement. |
|
11 |
The target must send the target’s statement (and any accompanying
report) to the bidder. |
To be done no later than 15 days after the target receives a notice that
all offers have been sent as required by item 6 |
|
12 |
The target must send a copy of the target’s statement (and any
accompanying report) to each person who holds: as at the date set by the bidder under subsection (2). |
To be done: Sections 648B and 648C provide for the manner in which documents may be
sent to holders. |
|
13 |
The target must lodge a copy of the target’s statement (and any
accompanying report) with ASIC. |
To be done on the day the target’s statement is sent to the
bidder See also subsection (7). |
|
14 |
The target must send a copy of the target’s statement (and any
accompanying report) to each securities exchange that has a stock market on
which the target’s securities are quoted. |
To be done on the day the target’s statement is sent to the
bidder See also subsection (7). |
Date for determining holders of securities
(2) The people to whom information is to be sent under items 6 and 12 of
the table in subsection (1) are the holders of the securities referred to in
those items as at the date set by the bidder in:
(a) the bidder’s statement; or
(b) a separate written notice given to the target on or before the
date set by the bidder.
Note: The bidder may set the date when the bidder asks the
target for a list of members under section 641.
(3) The date set by the bidder must be:
(a) on or after the date on which the bidder gives the bidder’s
statement, or the separate written notice, to the target; and
(b) on or before the date on which the first offers under the bid are made
to holders of the securities.
(4) As soon as practicable after setting the day, the bidder must give
notice of it by:
(a) if the securities in the bid class are quoted—giving the notice
to the relevant securities exchange; or
(b) otherwise—lodging the notice with ASIC.
Information to be sent with bidder’s statement
(5) A bidder’s statement required to be sent under item 5 or 6 in
the table in subsection (1) must be sent together with any other information
sent by the bidder to the target with the statement.
Information to be sent with notices that offers have been
sent
(6) If the bidder sends the people to whom the bidder’s statement is
sent under item 6 of the table in subsection (1) additional information together
with the bidder’s statement and the offer, the bidder must also include
that information in any notice under item 7, 8 or 9 of the table.
Information to be sent with target’s statement
(7) If the target sends the people to whom the target’s statement is
sent under item 12 of the table in subsection (1) additional information
together with the target’s statement, the target must also include that
information in any notice under item 13 or 14 of the table.
The following diagram gives an overview of the steps involved in a market
bid.
|
Overview of steps in a market bid |
||||
|
|
Bidder |
|
|
|
|
Step 1 |
announcement of bid to the
exchange |
|
|
|
|
|
|
|
|
|
|
Step 2 |
bidder’s statement |
——→ |
*
exchange |
|
|
|
|
|
|
|
|
Step 3 |
bidder’s statement and any other
documents sent with it to the exchange |
——→ |
* holders of bid class
securities |
|
|
|
|
|
|
|
|
Step 4 |
copy of documents sent to
holders |
——→ |
*
exchange |
|
|
|
|
|
|
|
|
|
Target |
|
|
|
|
Step 5 |
target’s statement |
|
*
exchange |
|
|
|
|
|
|
|
|
|
Bidder |
|
|
|
|
Step 6 |
make offers on the exchange |
|
|
|
|
The holders then consider the terms of the offer, and the statements
provided by the bidder and the target, and decide whether to accept the offer
on-market before the end of the bid period. |
||||
The following table provides for the steps that a bidder must take to
make an effective market bid and the steps that a target must take when a market
bid is made.
|
Steps in market bid |
[operative] |
|
|---|---|---|
|
|
Steps |
Timing and relevant provisions |
|
1 |
The bidder must prepare a bidder’s statement. |
See section 636 for content of statement |
|
2 |
The bidder must have the bid announced to the relevant securities
exchange. |
|
|
3 |
The bidder must send a copy of the bidder’s statement to the relevant
securities exchange. |
To be done on the day the announcement is made |
|
4 |
The bidder must send to the target: |
To be done on the day the announcement is made |
|
5 |
The bidder must lodge with ASIC: |
To be done on the day the announcement is made |
|
6 |
The bidder must send to each holder of bid class securities (other than the
bidder): |
Within 14 days after the announcement is made Sections 648B and 648C provide for the manner in which documents may be
sent to holders. |
|
7 |
The bidder must lodge with ASIC a copy of every other document sent to
holders of bid class securities with the bidder’s statement. |
To be done no later than the day copies of the bidder’s statement
have been sent to all holders of bid class securities |
|
8 |
The bidder must give the relevant securities exchange a copy of every other
document sent to holders of bid class securities with the bidder’s
statement. |
To be done no later than the day copies of the bidder’s statement
have been sent to all holders of bid class securities |
|
9 |
The target must prepare a target’s statement. |
See section 638 for content of statement |
|
10 |
The target must send a copy of the target’s statement to the relevant
securities exchange. |
Within 14 days after the announcement is made |
|
11 |
The target must send to the bidder: |
To be done on the day the target sends a copy of the target’s
statement to the securities exchange |
|
12 |
The target must lodge with ASIC: |
To be done on the day the target sends a copy of the target’s
statement to the securities exchange |
|
13 |
The target must send each holder of bid class securities: |
Within 14 days after the announcement is made Sections 648B and 648C provide for the manner in which documents may be
sent to holders. |
|
14 |
The bidder must make offers for the securities under the bid through the
relevant securities exchange. |
To be done on the next day after the end of the 14 day period referred to
in item 13. If the bidder does not make the offers at that time, the bidder contravenes
this section. Item 2 of the table in section 611 covers offers made by the bidder on
market during the 14 day period between the announcement and the making of the
offers under the bid |
(1) A bidder’s statement must include the following:
(a) the identity of the bidder
(b) the date of the statement
(c) if the target is a company or body—details of the bidder’s
intentions regarding:
(i) the continuation of the business of the target; and
(ii) any major changes to be made to the business of the target, including
any redeployment of the fixed assets of the target; and
(iii) the future employment of the present employees of the
target
(d) if the target is a managed investment scheme—details of the
bidder’s intentions regarding:
(i) the continued operation of the scheme; and
(ii) any major changes to be made to the operation of the scheme,
including any redeployment of scheme property; and
(iii) any plans to remove the current responsible entity and appoint a new
responsible entity
(e) for an off-market bid—a statement that the bidder’s
statement has been lodged with ASIC but that ASIC takes no responsibility for
the content of the statement
(f) in relation to the cash consideration (if any) offered under the
bid—details of:
(i) the cash amounts (if any) held by the bidder for payment of the
consideration; and
(ii) the identity of any other person who is to provide, directly or
indirectly, cash consideration from that person’s own funds; and
(iii) any arrangements under which cash will be provided by a person
referred to in subparagraph (ii)
(g) in relation to the cash consideration (if any) that might be payable
under a compulsory buy-out under Part 6A.2 following the bid—details of
the kind referred to in paragraph (f) in relation to the cash
consideration
(h) if any securities are offered as consideration under the bid and the
bidder is:
(i) the body that has issued or will issue the securities; or
(ii) a person who controls that body;
all material that would be required for a prospectus for an offer of
those securities by the bidder under section 710 to 713
(i) if the bid is a mandatory bid—the terms of the acquisition that
led to the bid being made including the number of securities affected and the
consideration provided
(j) if the bidder or an associate provided, or agreed to provide,
consideration for a security in the bid class under a purchase or agreement
during the 4 months before the date of the bid—the following information
about the consideration:
(i) to the extent to which the consideration is a cash sum—the
amount per security of the cash sum
(ii) to the extent to which the consideration is quoted
securities—the market price per security of those securities
(iii) to the extent to which the consideration is neither a cash sum nor a
quoted security—the value per security of that consideration
(k) if the bid is to extend to securities that come to be in the bid class
during the offer period due to the conversion of or exercise of rights attached
to other securities (see subsection 617(2))—a statement to that
effect
(l) for an off-market bid—the following details in relation to each
class of securities in the target:
(i) the total number of securities in the class
(ii) the number of securities in the class that the bidder had a relevant
interest in immediately before the first offer is sent (expressed as a number of
securities or as a percentage of the total number of securities in the
class)
(m) for an off-market bid—the bidder’s voting power in the
company
(n) any other information that:
(i) is material to the making of the decision by a holder of bid class
securities whether to accept an offer under the bid; and
(ii) is known to the bidder; and
(iii) does not relate to the value of securities offered as consideration
under the bid.
The information that the bidder must disclose under subparagraph (l)(i) and
paragraph (m) must be only as up-to-date as it is reasonable to expect in the
circumstances. The bidder does not have to disclose information under paragraph
(n) if it would be unreasonable to require the bidder to do so because the
information had previously been disclosed to the holders of bid class
securities.
Note: Paragraph (b)—see subsection 637(2) for the date
of the statement.
Expert’s report on non-cash consideration provided for bid class
securities in last 4 months
(2) If the bidder’s statement includes details of the value per
share of consideration under subparagraph (1)(j)(iii), the statement must
include, or be accompanied by, a report by an expert that states whether, in the
expert’s opinion, the value stated is fair and reasonable and gives the
reasons for forming that opinion.
Note: Subsections 648A(2) and (3) provide for the
independence of the expert and disclosure of any association between the bidder
and the expert or the target and the expert.
Consent of person to whom statement attributed
(3) The bidder’s statement may only include, or be accompanied by, a
statement by a person, or a statement said in the bidder’s statement to be
based on a statement by a person, if:
(a) the person has consented to the statement being included in the
bidder’s statement, or accompanying it, in the form and context in which
it is included; and
(b) the bidder’s statement states that the person has given this
consent; and
(c) the person has not withdrawn this consent before the bidder’s
statement is lodged with ASIC.
(4) The bidder must keep the consent.
Approval
(1) The copy of the 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.
(2) The bidder’s statement must be dated. The date is the date on
which it is lodged with ASIC.
General requirement
(1) A target’s statement must include all the information that
holders of bid class securities and their professional advisers would reasonably
require to make an informed assessment whether to accept the offer under the
bid. The statement 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 statement;
and
(b) only if the information is known to any of the directors of the
target.
(2) In deciding what information should be included under subsection (1),
have regard to:
(a) the nature of the bid class securities; and
(b) if the bid class securities are interests in a managed investment
scheme—the nature of the scheme; and
(c) the matters that the holders of bid class securities may reasonably be
expected to know; and
(d) the fact that certain matters may reasonably be expected to be known
to their professional advisers; and
(e) the time available to the target to prepare the statement.
Director’s recommendations
(3) A target’s statement must contain a statement by each director
of the target:
(a) recommending that offers under the bid be accepted or not accepted,
and giving reasons for the recommendation; or
(b) giving reasons why a recommendation is not made.
(4) The statement under subsection (3) must be made by:
(a) if the target is under administration—the liquidator or
administrator; or
(b) if the target has executed a deed of company arrangement that has not
yet terminated—the deed’s administrator.
Consent of person to whom statement attributed
(5) The target’s statement may only include, or be accompanied by, a
statement by a person, or a statement said in the target’s statement to be
based on a statement by a person, if:
(a) the person has consented to the statement being included in the
target’s statement, or accompanying it, in the form and context in which
it is included; and
(b) the target’s statement states that the person has given this
consent; and
(c) the person has not withdrawn this consent before the target’s
statement is lodged with ASIC.
(6) The target must keep the consent.
Approval
(1) The copy of the 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
(2) The target’s statement must be dated. The date is the date on
which it is lodged with ASIC.
(1) If:
(a) the bidder’s voting power in the target is 30% or more;
or
(b) for a bidder who is, or includes, an individual—the bidder is a
director of the target; or
(c) for a bidder who is, or includes, a body corporate—a director of
the bidder is a director of the target; or
(d) the bid is a mandatory bid;
a target’s statement given in accordance with section 638 must
include, or be accompanied by, a report by an expert that states whether, in the
expert’s opinion, the takeover offers are fair and reasonable and gives
the reasons for forming that opinion.
Note: Subsections 648A(2) and (3) provide for the
independence of the expert and disclosure of any association between the target
and the expert or the bidder and the expert.
(2) In determining whether the bidder’s voting power in the target
is 30% or more, calculate the bidder’s voting power at the time the
bidder’s statement is sent to the target.
Requirement to inform bidder and information that must be
given
(1) If the bidder has given a bidder’s statement to the target and
requested the target to give the bidder information in accordance with this
section, the target must inform the bidder of:
(a) the name and address of each person who, at a time specified by the
bidder under subsection (2), held securities:
(i) in the bid class; or
(ii) convertible into securities in the bid class; and
(b) the type, and number of each type, of those securities held by the
person at the specified time.
However, the target does not need to give information to the bidder about a
person or their holding of securities unless the target knows the person’s
name.
Time at which target’s information must be correct
(2) The bidder’s request must specify a day as at which the
information must be correct. The day must be one that occurs after the day on
which the bidder makes the request unless the target agrees to it being the day
on which the bidder makes the request.
Form in which target must provide information
(3) The target must give the information to the bidder:
(a) in the form that the bidder requests; or
(b) if the target is unable to comply with the request—in
writing.
(4) If the target must give the information to the bidder in
electronic form, the information must be readable but the information need not
be formatted for the bidder’s preferred operating system.
Fee for provision of information
(5) The target may require the bidder to pay an amount, not exceeding the
prescribed amount, for the provision of the information to the bidder.
Time by which target must provide information
(6) The target must give the information to the bidder no later than the
latest of the following times:
(a) the end of the second day after the day on which the bidder requested
the information; or
(b) the end of the next day after the day as at which the information must
be correct; or
(c) the time when the target receives the amount mentioned in subsection
(5).
(1) If the target is a company or body, the directors of the target have a
right to recover from the target any expenses they reasonably incur in the
interest of members of the target and in relation to the takeover bid. The
directors have this right regardless of anything contained in the target’s
constitution (if any).
(2) If the target is a managed investment scheme, the responsible entity
for the scheme has a right to recover from scheme property any expenses it
reasonably incurs in the interest of members of the scheme and in relation to
the takeover bid. The responsible entity has this right regardless of anything
contained in the scheme’s constitution.
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)(j)(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 in an external territory
or 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 the options offered; or
(f) by offering a cash sum in addition to the 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 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 consideration, or 1 of the forms of consideration, payable under
the bid consists of a cash sum only; and
(b) the bidder purchases securities in the bid class outside the bid
during the bid period and the consideration for that purchase:
(i) consists solely of a cash sum; and
(ii) is higher than the cash sum payable for the securities under the
bid.
Note 1 Section 9 defines takeover
contract.
Note 2: Section 623 prevents the bidder from making
purchases outside the bid for better non-cash consideration without formally
varying the bid offers.
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 of cash purchase on non-cash offers already
accepted
(4) If the consideration paid or provided, or to be paid or provided,
under a takeover contract arising from the acceptance of an offer does not
consist of a cash sum only:
(a) the person who accepted the offer 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
(b) the bidder must give the person who accepted the offer 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.
This subsection does not apply to a mandatory bid.
(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;
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, no-one else
may accept an offer under the bid in respect of the remainder of that
person’s 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.
(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 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 Law or the regulations as they apply to references
in:
(i) this Chapter; or
(ii) regulations made for the purposes of this Chapter; and
(c) Division 12 of Part 11.2.
(1) Subject to subsection (3), ASIC must take such steps as are reasonable
in the circumstances to give to each person whose interests are affected by a
decision under a section 655A 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 Law.
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:
(a) the circumstances 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; and
(b) it is in the public interest to make the declaration.
(3) In exercising its powers under this section, the Panel:
(a) must have regard to the purposes of this Chapter set out in section
602; 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 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 the 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.
A person who contravenes an order made under section 657D or 657E commits
an offence.
(1) If a person contravenes an order made by the Panel under section 657D
or 657E, the Court may make any order 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
ASIC.
(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) an order under section 657G to secure compliance with an order made
under subsection 657D(2) or section 79.
(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.
The Panel may, of its own motion, refer a question of law arising in a
proceeding before the Panel to the Court for decision.
Delay in commencing court proceedings until after end of bid
period
(1) Only:
(a) ASIC; or
(b) another public authority of the Commonwealth or a State;
may commence court proceedings in relation to a takeover bid, or proposed
takeover bid, before the end of the bid period.
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 Law
but includes proceedings under other Commonwealth and State laws (including the
general law).
(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 Law;
the Court’s powers under this Law 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 Law
because they engaged in or were involved in the conduct; and
(ii) impose a sentence 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 the Law; 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 this jurisdiction in
the same way as it applies to the acquisition of securities of
companies.
Note: Section 9 defines company,
jurisdiction and listed.
(1) This Chapter extends to the acquisition of interests in a listed
managed investment scheme registered in this jurisdiction 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 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.
(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 informs the holders of
the securities that the bidder is entitled to acquire their securities under
that subsection; 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 in an external territory or
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 shares that are entered on an SCH
subregister; or
(b) in writing if it relates to shares 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 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 in an external territory or
outside Australia—by pre-paid airmail post or by courier.
(b) if the notice is to be sent to the holder is 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 in an external territory or
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.
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.
(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 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 bidder 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 bidder must dispatch the notices under paragraph (2)(b)
on the day the bidder 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 in an external territory or
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 cash sum for which they are willing to acquire the
convertible securities; and
(iii) 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)(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 665C, anyone who holds the securities after that day may require the
bidder 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.
(3) The notice may be sent:
(a) if the notice is to be sent to the holder in an external territory or
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.
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) state whether, in the expert’s opinion, the terms proposed in
the notice give a fair value for the securities concerned; and
(b) 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) 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.
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).
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 Australia; or
(c) another place in Australia 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 Law or the regulations as they apply to references
in:
(i) this Chapter; or
(ii) regulations made for the purposes of this Chapter; and
(c) Division 12 of Part 11.2.
(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 the
statement, 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. |
|
|
All documents |
|
|
10 |
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 Part 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 995A.
(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 this jurisdiction in the same way as it applies to the acquisition of
relevant interests in the securities of companies.
Note: Section 9 defines company,
jurisdiction 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 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) to be 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 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 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 Law or the regulations as they apply to references
in:
(i) this Chapter; or
(ii) regulations made for the purposes of this Chapter; and
(c) Division 12 of Part 11.2.
Securities covered
(1) This Chapter covers the following securities:
(a) shares in a body
(b) debentures of a body
(c) interests in a registered managed investment scheme
(d) legal or equitable rights or interests in:
(i) shares; or
(ii) debentures; or
(iii) interests in a registered managed investment scheme
(e) options to acquire (whether by way of issue or transfer) a security
covered by paragraph (a), (b), (c) or (d).
It does not cover a futures contract or an option approved by a securities
exchange as an exchange traded option.
Note: Section 9 defines body, sections 9 and
92 define securities and sections 9 and 72 define futures
contract.
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.
Note: This Chapter in effect applies to all offers received
anywhere in Australia because the Corporations Law operates as a national
law.
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 to be 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(14) and (15)).
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 received outside 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) the offer is made through a licensed dealer and 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;
or
(d) 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: Section 9 defines qualified
accountant.
(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.
Professional investors
(10) 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
(f) a terminating building society within the meaning of the Financial
Corporations Act 1974; or
(g) a friendly society within the meaning of the Life Insurance Act
1995; 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
(11) 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
(12) 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.
(13) 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
(14) 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.
(15) 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
(16) 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
(17) 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
(18) 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
(19) An offer of a body’s securities does not need disclosure to
investors under this Part if the body is an exempt body of this
jurisdiction.
Note: Section 66A defines exempt
body.
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 paragraph 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 Law 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 1001A
(c) section 724
(d) section 728.
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 offer 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] |
||
|---|---|---|---|
|
|
|
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).
Quotation condition must be fulfilled before issue or
transfer
(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), the person making the offer must not issue
or transfer any of the securities until the securities are admitted to quotation
on that stock market.
Note 1: Under section 722, the application money must be
held in trust until the issue or transfer of the securities. Subsection 711(5)
restricts the statements about quotation that may be included in a
prospectus.
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).
(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 sections 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 sections 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) a reasonable opportunity to withdraw their applications 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) a reasonable opportunity to return the securities 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) a reasonable opportunity 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) a reasonable opportunity to return the securities 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
sections 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 sections 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 the
statement, 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 995A.
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)
(sophisticated investors) or 708(10) (professional investors)
A person who offers securities under a prospectus must keep a consent
required in respect of the prospectus 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) (sophisticated investors); or
(b) the offer does not need a disclosure document because of subsection
708(10) (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) An option 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 Law or the regulations as they apply to references
in:
(i) this Chapter; or
(ii) regulations made for the purposes of this Chapter; and
(c) Division 12 of Part 11.2.
Repeal the Part, substitute:
(1) If a Court is satisfied that a person has contravened 1 of the
following provisions, it must make a declaration of contravention:
(a) subsections 180(1) and 181(1) and (2), 182(1) and (2), 183(1) and (2)
(officers’ duties)
(b) subsection 209(2) (related parties rules)
(c) subsections 254L(2), 256D(3), 259F(2) and 260D(2) (share capital
transactions)
(d) subsection 344(1) (requirements for financial reports)
(e) subsection 588G(2) (insolvent trading)
(f) subsection 601FC(1)
(g) subsection 601FD(1)
(h) subsection 601FE(1)
(i) section 601FG
(j) subsection 6010JD(1).
These provisions are the civil penalty provisions.
Note: Once a declaration has been made ASIC can then seek a
pecuniary penalty order (section 1317G) or a disqualification order (section
206C).
(2) A declaration of contravention must specify the following:
(a) the Court that made the declaration
(b) the civil penalty provision that was contravened
(c) the person who contravened the provision
(d) the conduct that constituted the contravention
(e) the corporation or registered scheme to which the conduct
related.
A declaration of contravention is conclusive evidence of the matters
referred to in subsection 1317E(2).
(1) A Court may order a person to pay the Commonwealth a pecuniary penalty
of up to $200,000 if:
(a) a declaration of contravention by the person has been made under
section 1317E; and
(b) the contravention:
(i) materially prejudices the interests of the corporation or scheme, or
its members; or
(ii) materially prejudices the corporation’s ability to pay its
creditors; or
(iii) is serious.
(2) The penalty is a civil debt payable to ASIC on the
Commonwealth’s behalf. ASIC or the Commonwealth may enforce the order as
if it were an order made in civil proceedings against the person to recover a
debt due by the person. The debt arising from the order is taken to be a
judgment debt.
Compensation for damage suffered
(1) A Court may order a person to compensate a corporation or registered
scheme for damage suffered by the corporation or scheme if:
(a) the person has contravened a civil penalty provision in relation to
the corporation or scheme; and
(b) the damage resulted from the contravention.
The order must specify the amount of the compensation.
Damage includes profits
(2) In determining the damage suffered by the corporation or scheme for
the purposes of making a compensation order, include profits made by any person
resulting from the contravention or the offence.
Damage includes diminution of value of scheme property
(3) In determining the damage suffered by the scheme for the purposes of
making a compensation order, include any diminution in the value of the property
of the scheme.
(4) If the responsible entity for a registered scheme is ordered to
compensate the scheme, the responsible entity must transfer the amount of the
compensation to scheme property. If anyone else is ordered to compensate the
scheme, the responsible entity may recover the compensation on behalf of the
scheme.
Recovery of damage
(5) A compensation order may be enforced as if it were a judgment of the
Court.
Application by ASIC
(1) ASIC may apply for a declaration of contravention, a pecuniary penalty
order or a compensation order.
Application by corporation
(2) The corporation, or the responsible entity for the registered scheme,
may apply for a compensation order.
(3) The corporation, or the responsible entity for the registered scheme,
may intervene in an application for a declaration of contravention or a
pecuniary penalty order in relation to the corporation or scheme. The
corporation or responsible entity is entitled to be heard on all matters other
than whether the declaration or order should be made.
No one else may apply
(4) No person may apply for a declaration of contravention, a pecuniary
penalty order or a compensation order unless permitted by this
section.
(5) Subsection (4) does not exclude the operation of the Director of
Public Prosecutions Act 1983 or that Act as applying as a law of this
jurisdiction.
Proceedings for a declaration of contravention, a pecuniary penalty
order, or a compensation order, may be started no later than 6 years after the
contravention.
The Court must apply the rules of evidence and procedure for civil
matters when hearing proceedings for:
(a) a declaration of contravention; or
(b) a pecuniary penalty order.
A court must not make a declaration of contravention or a pecuniary
penalty order against a person for a contravention if the person has been
convicted of an offence constituted by conduct that is substantially the same as
the conduct constituting the contravention.
(1) Proceedings for a declaration of contravention or pecuniary penalty
order against a person are stayed if:
(a) criminal proceedings are started or have already been started against
the person for an offence; and
(b) the offence is constituted by conduct that is substantially the same
as the conduct alleged to constitute the contravention.
(2) The proceedings for the declaration or order may be resumed if the
person is not convicted of the offence. Otherwise, the proceedings for the
declaration or order are dismissed.
Criminal proceedings may be started against a person for conduct that is
substantially the same as conduct constituting a contravention of a civil
penalty provision regardless of whether:
(a) a declaration of contravention has been made against the person;
or
(b) a pecuniary penalty order has been made against the person;
or
(c) a compensation order has been made against the person; or
(d) the person has been disqualified from managing a corporation under
Part 2D.6.
Evidence of information given or evidence of production of documents by
an individual is not admissible in criminal proceedings against the individual
if:
(a) the individual previously gave the evidence or produced the documents
in proceedings for a pecuniary penalty order against the individual for a
contravention of a civil penalty provision (whether or not the order was made);
and
(b) the conduct alleged to constitute the offence is substantially the
same as the conduct that was claimed to constitute the contravention.
However, this does not apply to a criminal proceeding in respect of the
falsity of the evidence given by the individual in the proceedings for the
pecuniary penalty order.
(1) ASIC may require a person to give all reasonable assistance in
connection with:
(a) an application for a declaration of contravention or a pecuniary
penalty order; or
(b) criminal proceedings for an offence against this Law.
(2) ASIC can require the person to assist in connection with an
application for a declaration or order if, and only if:
(a) it appears to ASIC that someone other than the person required to
assist may have contravened a civil penalty provision; and
(b) ASIC suspects or believes that the person required to assist can give
information relevant to the application.
(3) ASIC can require the person to assist in connection with criminal
proceedings if, and only if:
(a) it appears to ASIC that the person required to assist is unlikely to
be a defendant in the proceedings; and
(b) the person required to assist is, in relation to a person who is or
should be a defendant in the proceedings:
(i) an employee or agent (including a banker or auditor) of the other
person; or
(ii) if the other person is a corporation—an officer of the other
person; or
(iii) if the other person is an individual—a partner of the other
person.
(4) ASIC can require the person to assist regardless of whether:
(a) an application for the declaration or penalty order has actually been
made; or
(b) criminal proceedings for the offence have actually begun.
(5) The person cannot be required to assist if they are or have been a
lawyer for:
(a) in an application for a declaration or penalty order—the person
suspected of the contravention; or
(b) in criminal proceedings—a defendant or likely defendant in the
proceedings.
(6) The requirement to assist must be given in writing.
(7) The Court may order the person to comply with the requirement in a
specified way. Only ASIC may apply to the Court for an order under this
subsection.
Note: The person must comply with the requirement and may
commit an offence if they do not, even if there is no order under this
subsection (see section #104 and subsection #1311(1)).
(8) This section does not limit and is not limited by section 49 of the
ASC Law.
(1) In this section:
eligible proceedings:
(a) means proceedings for a contravention of a civil penalty provision
(including proceedings under section 588M, 588W or 1317H of the Corporations Law
of this jurisdiction); and
(b) does not include proceedings for an offence (except so far as the
proceedings relate to the question whether the court should make an order under
section 588K or 1317H of that Law).
(2) If:
(a) eligible proceedings are brought against a person; and
(a) in the proceedings it appears to the court that the person has, or may
have, contravened a civil penalty provision but that:
(i) the person has acted honestly; and
(ii) having regard to all the circumstances of the case (including, where
applicable, those connected with the person’s appointment as an officer of
a corporation or of a Part 5.7 body), the person ought fairly to be excused for
the contravention;
the court may relieve the person either wholly or partly from a liability
to which the person would otherwise be subject, or that might otherwise be
imposed on the person, because of the contravention.
(3) In determining under subsection (2) whether a person ought fairly to
be excused for a contravention of section 588G, the matters to which regard is
to be had include, but are not limited to:
(a) any action the person took with a view to appointing an administrator
of the company or Part 5.7 body; and
(b) when that action was taken; and
(c) the results of that action.
(4) If a person thinks that eligible proceedings will or may be begun
against them, they may apply to the Court for relief.
(5) On an application under subsection (4), the Court may grant relief
under subsection (2) as if the eligible proceedings had been begun in the
Court.
(6) For the purposes of subsection (2) as applying for the purposes of a
case tried by a judge with a jury:
(a) a reference in that subsection to the court is a reference to the
judge; and
(b) the relief that may be granted includes withdrawing the case in whole
or in part from the jury and directing judgment to be entered for the defendant
on such terms as to costs as the judge thinks appropriate.
(7) Nothing in this section limits, or is limited by, section
1318.
Insert:
(1) The Court may make any order or orders (including a remedial order)
that it considers appropriate if a person:
(a) contravenes a provision of Chapter 6, 6A, 6B or 6C; or
(b) contravenes a condition on a consent given by ASIC under section 652B;
or
(c) states in a notice under section 672B about securities that they do
not know particular information about:
(i) the securities; or
(ii) someone who has a relevant interest in, or has given instructions in
relation to, the securities.
Note 1: Section 9 defines remedial
order.
Note 2: Sections 659B and 659C deal with court proceedings
during and after a takeover bid.
(2) The Court may make any order or orders (including a remedial order)
that it considers appropriate if:
(a) the consideration offered under a takeover bid is or includes
securities; and
(b) the offers under the bid or the bidder’s statement 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 admission to quotation is not made within 7 days
after the start of the bid period; or
(ii) permission for admission to quotation is not granted within 7 days
after the end of the bid period.
Note: Section 9 defines remedial
order.
(3) An order under this section may be made on application by the
following:
(a) ASIC
(b) the company, or the responsible entity of the registered scheme, whose
securities are involved in the contravention
(c) a member or former member of that company or scheme
(d) a person from whom the relevant interest in the securities were
acquired
(e) a person whose interests are affected by the contravention.
(1) If a bidder making a takeover bid for a class of securities
contravenes section 631 by failing to make offers under the bid within time and
ASIC applies for an order under this section, the Court may:
(a) order the bidder to send, to each holder of securities in that class,
an offer to which the bidder’s statement relates within a specified time;
and
(b) make any ancillary orders it thinks appropriate including orders that
the bidder:
(i) send notices setting out specified information with the offer;
and
(ii) send copies of the notice within a specified period to the target
and, if the target is listed, to the relevant securities exchange; and
(iii) lodge a copy of the notice with ASIC within a specified
period.
(2) Offers sent in accordance with an order under this section are taken
to be made under a takeover bid.
(1) The Court may make orders under subsection (2) if:
(a) a body corporate gives, or enters into an agreement to give, a
director or secretary of the body corporate or a related body corporate a
benefit (including a payment or an agreement to employ them, or engage their
services, for a fixed period); and
(b) the agreement is entered into or the benefit is given:
(i) within 12 months after the start of the bid period for a takeover bid
for the securities of the body corporate or a related body corporate;
or
(ii) at a time when the directors of the body corporate have reason to
believe that a takeover bid is to be made in respect of securities of the body
corporate or a related body corporate; and
(c) the Court is satisfied that the agreement or benefit was unfair or
unconscionable having regard to the interests of the body corporate.
(2) The Court may:
(a) declare the agreement, or any part of it, to be void or to have always
been void; or
(b) direct a person to whom a benefit is given, or another specified
person, to:
(i) make a payment or transfer property to the body corporate;
or
(ii) do any other act for the benefit of the body corporate; or
(c) make any other order it considers appropriate.
(3) This section does not apply to an agreement or benefit that has been
approved by an ordinary resolution of the body corporate (whether before or
after the agreement was entered into or the benefit given) with no vote being
cast by the person who is to receive the benefit or their associates.
(4) An order under this section may be made on application by:
(a) the body corporate; or
(b) ASIC; or
(c) members who together hold shares carrying at least 10% of the votes
attached to voting shares in the body corporate or a related body
corporate;
within 12 months, or any longer period that the Court thinks appropriate in
the circumstances, after the agreement is entered into or the benefit
given.
(1) The Court may declare that any act, document or matter:
(a) is not invalid merely because a person has contravened a provision of
Chapter 6, 6A, 6B or 6C; and
(b) has had effect at all times as if there had been no
contravention;
if the Court is satisfied that the contravention ought to be excused in all
the circumstances.
(2) An application for an order under subsection (1) may be made by any
interested person.
(3) If the Court is satisfied that in all the circumstances a
contravention of a provision of Chapter 6, 6A, 6B or 6C ought to be excused, the
Court must not make an order under section 1325A, 1325B or 1325C other
than:
(a) an order restraining the exercise of voting or other rights attached
to securities; or
(b) an order that an exercise of voting or other rights attached to
securities be disregarded.
(4) In determining whether or not a contravention of a provision by a
person ought to be excused, have regard to the contravention being caused by any
of the following:
(a) the person’s inadvertence or mistake
(b) the person not having been aware of a relevant fact or occurrence
(c) circumstances beyond the control of the person.
(5) This section applies notwithstanding anything contained in any other
provision of this Chapter.
In order to secure compliance with an order under section 1325A, 1325B or
1325C, the Court may direct a person to:
(a) do a specified act; or
(b) refrain from doing a specified act.
8 After Division 11
of Part 11.2
Insert:
In this Division:
commencement means the commencement of Schedule 1 to the
Corporate Law Economic Reform Act 1998.
new Law means this Law as in force after
commencement.
old Law means this Law as in force immediately before
commencement.
(1) A reference in any law of the Commonwealth or of a State or Territory,
or in any document, to a provision of the old Law is to be read after
commencement as a reference to the corresponding provision of the new Law except
so far as the contrary intention appears in the law or document.
(2) Without limiting subsection (1), the following table sets out
provisions of the old Law that correspond to particular provisions of the new
Law:
|
Corresponding provisions |
||
|---|---|---|
|
|
Old Law provision |
New Law provision |
|
1 |
Part 3A.2 |
Chapter 2E |
|
2 |
Part 6.3 (document lodged for the purposes of) |
Chapter 6 |
|
3 |
Part 6.6 |
Chapter 6B |
|
4 |
Part 6.7 |
Chapter 6C.1 |
|
5 |
Part 6.8 |
Chapter 6C.2 |
|
6 |
Part 7.12 |
Chapter 6D |
|
7 |
Division 5 of Part 1.2 of the Corporations Law |
Corporations Law |
|
8 |
section 33 |
subsection 608(3) |
|
9 |
section 91A |
subsection 206A(1) |
|
10 |
section 241 |
section 199A |
|
11 |
section 241A |
section 199B |
|
12 |
section 242 |
section 205B |
|
13 |
section 260 |
sections 232 to 235 |
|
14 |
section 709 |
section 671B |
|
15 |
section 710 |
section 671B |
|
16 |
section 711 |
section 671B |
|
17 |
paragraph 1317EA(3)(b) |
section 1317G |
A reference in any law of the Commonwealth or of a State or Territory, or
in any document, to a term set out in the old term column of the table (within
the meaning of this Law) is to be read after commencement as including a
reference to the corresponding term set out in the new term column of the table
(within the meaning of this Law) except so far as the contrary intention appears
in the law or document.
|
Conversion of references |
||
|---|---|---|
|
Item |
Old term |
New term |
|
1 |
takeover scheme |
off-market takeover bid |
|
2 |
takeover announcement |
market takeover bid |
|
3 |
Part A statement |
bidder’s statement |
|
4 |
Part B statement |
target’s statement |
|
5 |
Part C statement |
bidder’s statement |
|
6 |
Part D statement |
target’s statement |
|
7 |
prospectus |
disclosure document |
Column 2 of the table sets out things that have been done, or situations
that have arisen, on or before the commencement of certain provisions of the new
Law. Column 3 sets out how the things and situations will be dealt with after
commencement—either under the old Law or the new Law.
|
Transitional arrangements |
||
|---|---|---|
|
|
If... |
then, after commencement... |
|
1 |
before the commencement of section 191 of the new Law, a director of a
proprietary company who had an interest in a contract or proposed contract with
the company declared the nature of the interest in accordance with subsection
231(1) of the old Law |
the director is taken to have disclosed the interest as a material personal
interest in accordance with section 191 of the new Law and to have made the
disclosure on the day on which section 191 of the new Law commences. |
|
2 |
before the commencement of section 192 of the new Law, a director of a
proprietary company gave a general notice to the directors of the company in
accordance with subsection 231(5) of the old Law |
the director is taken to have given standing notice in accordance with
section 192 of the new Law and to have given that notice on the day on which
section 192 of the new Law commences. |
|
3 |
before the commencement of section 195 of the new Law, the board passed a
resolution under subsection 232A(3) of the old Law |
the resolution is taken to be a resolution passed in accordance with
subsection 195(2) of the new Law. |
|
4 |
before the commencement of section 196 of the new Law, ASIC made a
declaration under section 232B of the old Law which is still in force
immediately before commencement |
ASIC is taken to have made a valid declaration with identical conditions
under section 196 of the new Law. |
|
5 |
before the commencement of section 199A or 199B of the new Law, an officer
or auditor incurred a liability |
sections 199A and 199B of the new Law applies if an indemnity was given, or
a premium paid, in respect of the liability after commencement. In all other
cases, sections 241 and 241A of the old Law continue to apply. |
|
6 |
before the commencement of section 202B of the new Law, the company was
served a notice in accordance with section 239 of the old Law |
the company must deal with the notice as provided for in section 239 of the
old Law and that section continues to apply in relation to the matter. |
|
7 |
before the commencement of section 203D of the new Law, notice of a
resolution was given to a company in accordance with subsection 227(3) of the
old Law |
the company must act in accordance with section 227 of the old Law (which
continues to apply in relation to the matter). |
|
8 |
on a date less than 1 month before the commencement of section 205B of the
new Law, a director or secretary was appointed and no notice was lodged by the
company in accordance with section 242 of the old Law |
the company must lodge the notice within 1 month after the appointment in
accordance with sections 242 and 242AA of the old Law (which continue to apply
in relation to the matter). |
|
9 |
on a date less than 1 month before the commencement of section 205B of the
new Law, a change occurred in the personal details of a director or secretary
and no notice was lodged in accordance with section 242 of the old Law |
the company must lodge the notice in accordance with sections 242 and 242AA
of the old Law (which continue to apply in relation to the matter). |
|
10 |
on a date less than 1 month before the commencement of section 205B of the
new Law, a director or secretary stopped being a director or secretary and no
notice was lodged in accordance with section 242 of the old Law |
the company must lodge the notice in accordance with sections 242 and 242AA
of the old Law (which continue to apply in relation to the matter). |
|
11 |
on a date less than 14 days before the commencement of section 205C of the
new Law, a director or secretary was required to give the company written notice
under section 236 of the old Law and no such notice was given |
the director or secretary is required to give the company the information
in accordance with section 236 of the old Law (which continues to apply in
relation to the matter). |
|
12 |
on a date less than 14 days before the commencement of section 205G of the
new Law, a director was required to give notice under section 235 of the old Law
and the notice was not given |
the director is required to give the notice in accordance with section 235
of the old Law (which continues to apply in relation to the matter). |
|
13 |
before the commencement of section 206B of the new Law, a person is
convicted of serious fraud or an offence mentioned in subsection 229(3) of the
old Law |
subsections 229(3), (3A) and (4) of the old Law continue to apply in
relation to the person. The new Law applies in relation to all other
people. |
|
14 |
on the commencement of section 206B of the new Law, a person is an
insolvent under administration |
• if the person has been an insolvent under administration for 3
years—the person is no longer disqualified from managing
corporations. |
|
15 |
before the commencement of section 206C of the new Law, an application for
a civil penalty order was made and not dealt with |
section 1317EA of the old Law continues to apply in relation to such
applications. |
|
16 |
before the commencement of section 206D of the new Law, an application was
made under subsection 599(2) and was not finally determined |
section 599 of the old Law continues to apply in relation to the
application and any proceedings or orders flowing from that
application. |
|
17 |
before the commencement of section 206E of the old Law, an application was
made under section 230 of the old Law and was not finally determined |
section 230 of the old Law continues to apply in relation to the
application section 206E of the new Law applies as if the application had been made
under Part 2D.6 of the new Law |
|
18 |
before the commencement of section 206F, a person is served with a notice
to show cause why ASIC should not serve on the person a notice under subsection
600(3) of the old Law |
section 600 of the old Law continues to apply in relation to the
matter. |
|
19 |
before the commencement of section 206A, the person was disqualified from
managing corporations under the Corporations Law or a previous corresponding
law |
Part 2D.6 applies as if the person were disqualified under that
Part. |
|
20 |
before the commencement of section 206A, a person had permission under a
previous corresponding law to section 206F or 206G to manage a
corporation |
Part 2D.6 applies as if the person had permission to manage the corporation
under section 206F or 206G. |
|
21 |
before the commencement of section 203D, a company gives notice of
intention under a corresponding previous provision to subsection
203D(2) |
Section 203D applies as if the notice had been given under subsection
203D(2). |
Chapter 2E of the old Law continues to apply to the giving of a
financial benefit (within the meaning of the old law) if:
(a) the benefit was given before commencement; or
(b) some or all materials required to be lodged with ASIC in relation to
the benefit by section 243U of the old Law were lodged with ASIC before
commencement; or
(c) the benefit is given under a contract made before
commencement.
If an application was made under section 246AA of the old Law and not
finally determined before the commencement of section 232 of the new Law, then
section 246AA of the old Law continues to apply in respect of the
application.
Under Part 2F.1A (sections 236 to 242) of the new Law, a person may apply
for leave to intervene, and intervene, in proceedings started before
commencement.
(1) Part 9.4B of the old Law continues to apply in relation to:
(a) a contravention of a civil penalty provision listed in section 1317DA
of the old Law; or
(b) an offence committed against one of those civil penalty
provisions;
despite its repeal.
(2) Part 9.4B of the new Law applies in relation to a contravention of a
civil penalty provision listed in section 1317E of the new law.
(1) An order in force under paragraph 1317EA(3)(a) of the old Law
immediately before commencement continues to have effect after commencement as
if it were made under section 206C of the new Law.
(2) An order in force under paragraph 1317EA(3)(b) of the old Law
immediately before commencement continues to have effect after commencement as
if it were made under section 1317G of the new Law.
(3) An order in force under section 1317HA or 1317HB of the old Law
immediately before commencement continues to have effect after commencement as
if it were made under section 1317H of the new Law.
General rule (new law applies to offers made after
commencement)
(1) Except as provided for in subsection (2), this Chapter applies to
offers of securities made after the commencement of this Chapter.
Prospectus, or section 1043C or 1043D notice, lodged before commencement
covered by old law
(2) If a prospectus, or a notice under section 1043C or 1043D, is lodged
with ASIC before commencement, the old Law continues to apply to:
(a) the prospectus or notice; and
(b) offers made under the prospectus or notice; and
(c) the issue or transfer of securities as a result of the
offer.
Section 712 of the new Law (incorporation by reference of documents
lodged with ASIC) applies to documents lodged with ASIC before
commencement.
Subsection 601ED(2) of the new Law applies as if issues of interests
that:
(a) were made before commencement; and
(b) were excluded issues under the old Law (disregarding paragraph
66(2)(da) of that Law);
were issued that did not need disclosure to investors under section 706 of
the new Law.
A document made or given under the old Law and specified in the following
table continues to have effect after commencement as if it were made or given
under the corresponding provision of the new Law:
|
Documents saved |
||
|---|---|---|
|
|
|
Corresponding provision of the new Law |
|
1 |
determination under section 1022AA(8) |
subsection 713(8) |
|
2 |
order under section 1033 |
section 739 |
|
3 |
declaration under paragraph 61(1)(a) |
section 65 |
(1) Subsection 1023(2) of the old Law continues to apply after
commencement to the acceptance of money under a prospectus lodged with ASIC
before commencement.
(2) Section 1029 of the old Law continues to apply after commencement to a
consent to the issue of a prospectus lodged with ASIC before
commencement.
(3) Sections 1037 and 1041 of the old Law continue to apply after
commencement to an allotment of shares made before commencement in contravention
of Division 3 of Part 7.12 of the old Law.
(4) Section 1047 of the old Law continues to apply after commencement
to:
(a) a request made before commencement under subsection 1047(5) or (6);
or
(b) a notice given under subsection 1047(8).
Section 111AF of the new Law applies after commencement as if:
(a) a prospectus lodged before commencement under Part 7.12 of the old Law
or a corresponding previous law; or
(b) a document relating to securities that was taken to be a prospectus
because of section 1030 of the old Law or a corresponding previous
provision;
were a disclosure document lodged with ASIC under Chapter 6D of the new
Law.
(1) Paragraph 124(1)(b) of the new Law applies to all debentures or trust
deeds regardless of whether they were issued or made before or after
commencement.
(2) Section 563AAA applies in relation to the issue of debentures
regardless of whether that event occurs before or after commencement.
(3) A provision in force immediately before the date of commencement of
section 1062 of the old Law is not void under section 260JB of the new Law if a
trustee who was entitled to the benefit of the provision before that date
remains a trustee of the trust deed concerned.
(4) Subsection 260JB(1) does not deprive a trustee of an exemption or
right to be indemnified for anything done or omitted to be done by the trustee
while a term or provision was in force even if that provision later becomes void
under subsection 260JB(1).
A document made or given under the old Law and specified in the following
table continues to have effect after commencement as if it were made or given
under the corresponding provision of the new Law:
|
Documents saved |
||
|---|---|---|
|
|
Document |
Corresponding provision of the new law |
|
1 |
approval under paragraph 1052(1)(h) |
section 260MB |
|
2 |
application under subsection 1056(2) or 1057(1) |
section 260NA |
|
3 |
order under subsection 1056(6) or 1057(2) |
section 260NB |
If:
(a) a Part A statement for a takeover scheme is lodged with ASIC;
or
(b) a takeover announcement is made;
before commencement, Chapter 6 of the old Law continues to apply to the
scheme or announcement.
Part 6.9 of the old Law continues to apply to:
(a) an application made to the Panel before commencement; or
(b) an application to the Panel in respect of a takeover scheme or
takeover announcement to which Chapter 6 of the old Law applies under section
1483.
Chapter 6 of the new Law applies to relevant interests and other
interests acquired before commencement.
The prohibitions in subsections 606(1) and (2) of the new Law do not
apply to an acquisition pursuant to an invitation or offer if section 615 of the
old Law would not have applied to the acquisition because of section 622A of the
old Law (acquisitions under section 1043B notices) if the old Law had remained
in force after commencement.
A document made or given under the old Law and specified in the following
table continues to have effect after commencement as if it were made or given
under the corresponding provision of the new Law:
|
Documents saved |
||
|---|---|---|
|
|
|
Corresponding provision of the new Law |
|
1 |
declaration of unacceptable circumstances under section 733 |
section 657A |
|
2 |
order under section 734 |
section 657D |
|
3 |
interim order under section 733A or 733B |
section 657E |
|
4 |
order under section 736 |
section 657G |
|
5 |
order under section 737, paragraph 738(1)(e) or section 739, 741 or
742 |
section 1325A |
|
6 |
order under paragraph 738(1)(f) |
section 1325B |
|
7 |
order under section 740 |
section 1325C |
|
8 |
declaration under section 743 |
section 1325D |
An obligation under Part 6.7 or 6.8 of the old Law continues after
commencement as if that Part had not been repealed if the period for complying
with the obligation has commenced but not ended before commencement.
Section 672C of the new Law applies to information obtained under Part
6.8 of the old Law as if it had been obtained in response to a direction under
section 672A of the new Law.
Section 111AG of the new Law applies after commencement as if a takeover
scheme as defined in section 603 of the old Law or a corresponding previous law
were an off-market takeover bid.
Part 6A.5 of the new Law (sections 668A and 668B) applies to
consideration paid before commencement.
If, immediately before commencement, a company holds property in trust
for a person under subsection 701(11) of the old Law, the company must continue
to hold the property in trust for the person in accordance with subsection
666B(2) of the new Law.
For the avoidance of doubt, an accounting standard that was in force
under section 334 immediately before commencement continues in force after that
commencement as if it had been made by the AASB under that section immediately
after that commencement.
Repeal the Part, substitute:
The main objects of this Part are:
(a) to facilitate the development of accounting standards that require the
provision of financial information that:
(i) allows users to make and evaluate decisions about allocating scarce
resources; and
(ii) assists directors to discharge their obligations in relation to
financial reporting; and
(iii) is relevant to assessing performance, financial position, financing
and investment; and
(iv) is relevant and reliable; and
(v) facilitates comparability; and
(vi) is readily understandable; and
(b) to facilitate the Australian economy by:
(i) reducing the cost of capital; and
(ii) enabling Australian entities to compete effectively overseas;
and
(iii) having accounting standards that are clearly stated and easy to
understand; and
(c) to maintain investor confidence in the Australian economy (including
its capital markets).
Establishment
(1) A Financial Reporting Council is established.
Functions
(2) The FRC functions are:
(a) to provide broad oversight of the process for setting accounting
standards in Australia and to give the Minister reports and advice on that
process; and
(b) to appoint the members of the AASB (other than the Chairman);
and
(c) to approve and monitor the AASB’s:
(i) priorities; and
(ii) business plan; and
(iii) budget; and
(iv) staffing arrangements (including level, structure and composition of
staffing); and
(d) to determine the AASB’s broad strategic direction; and
(e) to give the AASB directions, advice or feedback on matters of general
policy and the AASB’s procedures; and
(f) to monitor the development of international accounting standards
and:
(i) to further the harmonisation of Australian accounting standards with
international standards; and
(ii) to promote a greater role for international standards in the
Australian accounting standard setting process if doing so would be in the best
interests of both the private and public sectors of the Australian economy;
and
(g) to monitor:
(i) the operation of accounting standards to assess their continued
relevance and their effectiveness in achieving their objectives in respect of
both the private and public sectors of the Australian economy; and
(ii) the effectiveness of the AASB’s consultative arrangements;
and
(h) to seek contributions towards the costs of the Australian accounting
standard setting process; and
(i) to monitor and periodically review the level of funding, and the
funding arrangements, for the AASB; and
(j) to establish appropriate consultative mechanisms; and
(k) to advance and promote the main objects of this Part; and
(l) any other functions that the Minister confers on the FRC by written
notice to the FRC Chairman.
Powers
(3) As well as any other powers conferred by this Act, the FRC has power
to do all things necessary or convenient to be done for or in connection with
the performance of its functions.
(4) Without limiting subsection (3), the FRC may establish committees and
advisory groups.
(1) An Australian Accounting Standards Board is established.
Note: Subsection 236B(3) specifies the qualifications needed
for appointment to the Board.
(2) The AASB:
(a) is a body corporate with perpetual succession; and
(b) must have a common seal; and
(c) may acquire, hold and dispose of real and personal property;
and
(d) may sue and be sued in its corporate name.
Note: The Commonwealth Authorities and Companies Act
1997 applies to the AASB. This Act makes provision for reporting obligations
(annual report, interim reports and estimates), accounting records, audit,
banking, investment of funds and duties of officers.
(3) All courts, judges and persons acting judicially must:
(a) take judicial notice of the imprint of the common seal of the AASB
appearing on a document; and
(b) presume that the document was duly sealed.
Functions
(1) The functions of the AASB are:
(a) to develop a conceptual framework, not having the force of an
accounting standard, for the purpose of evaluating proposed accounting standards
and international standards; and
(b) to make accounting standards under section 334 of the Corporations Law
for the purposes of the national scheme laws; and
(c) to formulate accounting standards for other purposes; and
(d) to participate in the formulation of international accounting
standards; and
(e) to advance and promote the main objects of this Part.
Note 1: The standards made under paragraph (b) are given
legal effect by the Corporations Law. The standards formulated under paragraph
(c) do not have legal effect under the Corporations Law itself but may be
applied or adopted by some other authority.
Note 2: See section 224 and sections 228 to 233 for the
framework within which the AASB is to formulate and make accounting
standards.
Powers
(2) The AASB has power to:
(a) engage staff and consultants; and
(b) establish committees, advisory panels and consultative groups;
and
(c) receive money contributed towards its operating costs; and
(d) do anything else that is necessary for, or reasonably incidental to,
the performance of its functions.
Manner of making and formulating standards
(3) Without limiting paragraph (1)(b) or (c), the AASB may make or
formulate an accounting standard by issuing the text of an international
accounting standard. The text of the international accounting standard may be
modified to the extent necessary to take account of the Australian legal or
institutional environment.
Manner of participating in the development of international
standards
(4) Without limiting paragraph (1)(d), the AASB may distribute the text of
a draft international accounting standard (whether or not modified to take
account of the Australian legal or institutional environment) for the purposes
of consultation.
Constitutional basis
(5) This Part confers functions and powers to the extent to which they are
not in excess of the legislative power of the Commonwealth.
(6) Without limiting subsection (5), this Part confers functions and
powers to the extent to which doing so promotes, encourages and facilitates the
integration and efficiency of, and investment in, Australia’s national
economy.
Objects of this Part
(1) In interpreting an accounting standard made or formulated by the AASB,
a construction that would promote the objects of this Part is to be preferred to
a construction that would not promote those objects.
Note: Section 224 states the main objects of this
Part.
Purposes or objects of particular standard
(2) In interpreting an accounting standard made or formulated by the AASB,
a construction that would promote a purpose or object of the standard (to the
extent to which it is not inconsistent with the objects of this Part) is to be
preferred to a construction that would not promote that purpose or object. This
is so even if the purpose or object is not expressly stated in the
standard.
(1) Accounting standards made or formulated by the AASB may:
(a) be of general or limited application (including a limitation to
specified bodies or undertakings); and
(b) differ according to differences in time, place or
circumstance.
(2) In making and formulating accounting standards, the AASB:
(a) must have regard to the suitability of a proposed standard for
different types of entities; and
(b) may apply different accounting requirements to different types of
entities; and
(c) must ensure that there are appropriate accounting standards for each
type of entity that must comply with accounting standards.
The accounting standards for the preparation of financial reports for a
period may require the inclusion in those reports of comparative amounts for
earlier periods.
(1) The AASB must carry out a cost/benefit analysis of the impact of a
proposed accounting standard before making or formulating the standard. This
does not apply where the standard is being made or formulated by issuing the
text of an international standard (whether or not modified to take account of
the Australian legal or institutional environment).
Note: Subsection 227(3) allows the AASB to make or formulate
a standard by issuing the text of an international standard. Under subsection
(2) of this section, the AASB will have done a cost/benefit analysis of the
international standard used in that way.
(2) The AASB must carry out a cost/benefit analysis of the impact of a
proposed international accounting standard before:
(a) providing comments on a draft of the standard; or
(b) proposing the standard for adoption as an international
standard.
(3) The AASB has to comply with subsections (1) and (2) only to the extent
to which it is reasonably practicable to do so in the circumstances.
In performing its functions, the AASB must:
(a) follow the broad strategic direction determined by the FRC under
paragraph 225(2)(d); and
(b) follow the general policy directions given by the FRC under paragraph
225(2)(e); and
(c) take into account the advice and feedback on matters of general policy
given by the FRC under paragraph 225(2)(e).
The Minister may give the AASB a direction about the role of
international accounting standards in the Australian accounting standard setting
system. Before giving a direction under this section, the Minister must receive
and consider a report from the FRC about the desirability of giving the
direction. The AASB must comply with the direction.
A failure to comply with this Division in relation to the making of an
accounting standard does not affect the validity of the standard.
(1) The members of the Council are appointed by the Minister in writing.
The Minister may appoint a person by specifying an organisation or body that is
to choose the person who is appointed.
(2) The members hold office on the terms and conditions that are
determined by the Minister.
(3) The Minister must appoint one of the members to be Chairman of the
Council. The appointment must be in writing. The Council may appoint one of its
members to be Deputy Chairman of the Council.
(1) As soon as practicable after 30 June in each year, and in any event
before 31 October, the FRC must give the Minister a report on:
(a) the operations of:
(i) the FRC and its committees and advisory groups; and
(ii) the AASB and its committees, advisory panels and consultative groups;
and
(b) the achievement of the objects set out in section 224;
during the year that ended on 30 June in that year.
(2) The Minister may grant an extension of time in special
circumstances.
(3) The Minister must table the report in each House of the Parliament as
soon as practicable.
(4) If the FRC is established during the last 3 months of a year ending on
30 June:
(a) the FRC is not required to prepare an annual report for that year;
and
(b) the period from the time of establishment to the end of that year must
be dealt with in the next annual report.
(5) If the FRC is established during the first 9 months of a year ending
on 30 June, the annual report for that year must cover the period from the time
of establishment to the end of that year.
The FRC may determine its own procedural rules (including rules as to
notice of meetings, quorum and voting).
(1) Meetings of the AASB are to be chaired by:
(a) the Chairman; or
(b) the Deputy Chairman if the Chairman is absent; or
(c) a member chosen by the members present if both the Chairman and the
Deputy Chairman are absent.
(2) If a meeting of the AASB, or a part of one of its meetings, concerns
the contents of accounting standards or international accounting standards, the
meeting or that part of it must be held in public.
(3) The AASB must:
(a) comply with any directions about its procedure that the FRC gives
under paragraph 225(2)(e); and
(b) take into account the advice and feedback about its procedure that the
FRC gives under paragraph 225(2)(e).
(4) Otherwise, the AASB may determine its own procedural rules (including
rules as to notice of meetings, quorum and voting).
Appointment of Chairman
(1) The Minister appoints the Chairman of the AASB.
Appointment of other members
(2) The FRC appoints the other members of the AASB. The AASB may appoint
one of its members to be Deputy Chairman of the AASB.
Qualification for appointment
(3) A person must not be appointed as a member of the AASB unless their
knowledge of, or experience in, business, accounting, law or government
qualifies them for the appointment.
Appointment document
(4) An appointment under subsection (1) or (2) is to be made in
writing.
Period of appointment
(5) The appointment document must specify the period of the appointment
(not exceeding 5 years). A member holds office for the period specified in the
appointment document and is eligible for reappointment.
Terms and conditions of appointment
(6) The Chairman holds office on the terms and conditions that are
determined by the Minister. The other members hold office on the terms and
conditions determined by the FRC.
Resignation
(1) A member of the AASB may resign their appointment by giving a written
resignation to:
(a) if the member is the Chairman of the AASB—the Minister;
or
(b) in any other case—the Chairman of the FRC.
Termination of Chairman’s appointment
(2) The Chairman is not to be removed from office except as provided by
subsection (3) or (4).
(3) The Minister may terminate the appointment of the Chairman of the AASB
for:
(a) misbehaviour or physical or mental incapacity; or
(b) breach of the terms and conditions of their appointment.
(4) The Minister must terminate the appointment of the Chairman of the
AASB if the Chairman:
(a) becomes bankrupt; or
(b) applies to take the benefit of any law for the relief of bankrupt or
insolvent debtors; or
(c) compounds with their creditors; or
(d) makes an assignment of their remuneration or property for the benefit
of their creditors; or
(e) contravenes section 237.
Termination of ordinary member’s appointment
(5) A member of the AASB (other than the Chairman) is not to be removed
from office except as provided by subsection (6) or (7).
(6) The FRC may terminate the appointment of a member of the AASB (other
than the Chairman) for:
(a) misbehaviour or physical or mental incapacity; or
(b) breach of the terms and conditions of the member’s
appointment.
(7) The FRC must terminate the appointment of a member of the AASB (other
than the Chairman) if the member:
(a) becomes bankrupt; or
(b) applies to take the benefit of any law for the relief of bankrupt or
insolvent debtors; or
(c) compounds with their creditors; or
(d) makes an assignment of their remuneration or property for the benefit
of their creditors; or
(e) contravenes section 237.
(1) The Minister may appoint a person to act as Chairman of the
AASB:
(a) during a vacancy in the office of Chairman (whether or not an
appointment has previously been made to the office); or
(b) during any period, or during all periods, when the Chairman is absent
from duty or from Australia, or is for any reason unable to perform the duties
of the office.
(2) The AASB may appoint one of its members to act as Deputy Chairman of
the AASB:
(a) during a vacancy in the office of Deputy Chairman (whether or not an
appointment has previously been made to the office); or
(b) during any period, or during all periods, when the Deputy Chairman is
absent from duty or from Australia, or is for any reason unable to perform the
duties of the office.
(3) The FRC may appoint a person to act as a member of the AASB (other
than the Chairman):
(a) during a vacancy in the office of member (whether or not an
appointment has previously been made to the office); or
(b) during any period, or during all periods, when the member is absent
from duty or from Australia, or is for any reason unable to perform the duties
of the office.
(4) Anything done by or in relation to a person purporting to act under an
appointment is not invalid merely because:
(a) the occasion for the appointment had not arisen; or
(b) there was a defect in connection with the appointment; or
(c) the appointment had ceased to have effect; or
(d) the occasion to act had not arisen or had ceased.
(1) The FRC and the AASB must take all reasonable measures to protect from
unauthorised use or disclosure information given to it in confidence.
(2) For the purposes of subsection (1), the disclosure of information is
taken to be authorised if the disclosure:
(a) is required or permitted by a law of the Commonwealth or a prescribed
law of this or any other jurisdiction; or
(b) is made in order to enable an authority or person in a country outside
Australia and the external Territories to perform or exercise a function or
power that corresponds, or is analogous, to any of the FRC’s or the
AASB’s functions or powers; or
(c) is made to a body that sets international accounting standards;
or
(d) is made to ASIC for the purposes of its performance of its functions
under national scheme laws.
The money of the AASB must be applied only:
(a) in payment or discharge of the costs, expenses and other obligations
incurred by the AASB in the performance of its functions or the exercise of its
powers under this Act; and
(b) in meeting the administrative expenses of the FRC and the committees
and advisory groups it establishes; and
(c) in payment of any remuneration and allowances payable to any person
appointed under this Part.
Part
1—Amendments relating to new
Chapter 6D (Fundraising)
Omit “1039”, substitute “703”.
Insert:
admit to quotation: securities are admitted to
quotation on a stock market of a securities exchange if the exchange has
given unconditional permission for quotation of the securities on the stock
market.
3
Section 9 (definition of application
period)
Repeal the definition.
Insert:
continuously quoted securities are securities that:
(a) are in a class of securities that were quoted ED securities at all
times in the 12 months before the date of the prospectus; and
(b) are securities of an entity that was not covered by any of the
following at any time in that 12 months:
(i) an exemption under section 111AS or 111AT, or a modification under
section 111AV
(ii) an exemption under paragraph 741(1)(a), or a declaration under
paragraph 741(1)(b), relating to a provision that is a disclosing entity
provision for the purposes of Division 4 of Part 1.2A
and, for these purposes, securities are not in different classes merely
because of a temporary difference in the dividend, or distribution rights,
attaching to the securities or because different amounts have been paid up on
the securities.
Insert:
continuous disclosure notice means:
(a) a document used to notify a securities exchange of information
relating to a body under provisions of the securities exchange’s listing
rules referred to in subsection 1001A(1); or
(b) a document under section 1001B lodged in relation to the
body.
6
Section 9 (paragraph (a) of the definition of
dealers
licence)
Omit “, 807 or 1017A”, substitute “or
807”.
Insert:
disclosure document for an offer of securities
means:
(a) a prospectus for the offer; or
(b) a profile statement for the offer; or
(c) an offer information statement for the offer.
8
Section 9 (definition of eligible
communications service)
Repeal the definition.
9
Section 9 (definition of excluded
invitation)
Repeal the definition.
10
Section 9 (definition of excluded
issue)
Repeal the definition.
11
Section 9 (definition of excluded
offer)
Repeal the definition.
12
Section 9 (definition of excluded
prospectus)
Repeal the definition.
13
Section 9 (definition of exempt
securities)
Repeal the definition.
Insert:
financial report means an annual financial report or a
half-year financial report prepared under Chapter 2M.
Note: Section 295 deals with the contents of annual
financial reports and section 302 deals with the contents of half-year financial
reports.
15
Section 9 (definition of minimum
subscription)
Repeal the definition.
Insert:
offer information statement means an offer information
statement that is lodged with ASIC.
Insert:
profile statement means a profile statement that is lodged
with ASIC.
18
Section 9 (definition of
promoter)
Repeal the definition.
19
Section 9 (definition of
prospectus)
Repeal the definition, substitute:
prospectus means a prospectus that is lodged with
ASIC.
Insert:
qualified accountant means a member of a professional body
that is approved by ASIC in writing for the purposes of this
definition.
21
Section 9 (definition of replacement
prospectus)
Repeal the definition.
22
Section 9 (paragraph (c) of the definition of
securities
exchange
Omit “Part 7.12”, substitute “Chapter
6D”.
23
Section 9 (definition of stock
exchange)
Omit “, section 869 or 1115 or Part 7.12”, substitute “or
section 869 or 1115”.
Insert:
State Fair Trading Act means the following Acts for each
jurisdiction:
|
State Fair Trading Acts |
||
|---|---|---|
|
|
Jurisdiction |
Act |
|
1 |
New South Wales |
Fair Trading Act 1987 (NSW) |
|
2 |
Victoria |
Fair Trading Act 1985 |
|
3 |
Queensland |
Fair Trading Act 1987 |
|
4 |
South Australia |
Fair Trading Act 1987 |
|
5 |
Western Australia |
Fair Trading Act 1987 |
|
6 |
Tasmania |
Fair Trading Act 1990 |
|
7 |
Northern Territory |
Fair Trading Act 1990 |
|
8 |
Australian Capital Territory |
Fair Trading Act 1992 |
25
Section 9 (definition of supplementary
prospectus)
Repeal the definition.
26
Section 9 (definition of
underlying)
Repeal the definition.
Insert:
underlying securities means:
(a) in relation to an option over securities—those securities;
and
(b) in relation to scrip that is constituted by documents that are, or are
documents of title to, securities—those securities.
Omit “lodgment of a prospectus under Part 7.12”, substitute
“disclosure to investors under Chapter 6D”.
Repeal the subsection, substitute:
(3) A financial institution (as defined by section 111AZA) is not a
corporation for the purposes of this Law.
Repeal the section.
Repeal the section.
Omit “Subject to section 1006, a person”, substitute “A
person”.
33
Subsections 92(3), (4), (5) and (6)
Repeal the subsections.
Repeal the section.
Omit “1020A,”.
Repeal the paragraph, substitute:
(a) a disclosure document in relation to securities in that class has been
lodged with ASIC under Chapter 6D; or
37
Paragraphs 111AF(1)(b) and (c)
Omit “prospectus” (wherever occurring), substitute
“disclosure document”.
Omit “1022AA”, substitute “713”.
Omit “1022”, substitute “710”
Omit “1084”, substitute “741”.
41
Subsection 111AZF(2) (table item 4)
Omit “Parts 7.11 and 7.12”, substitute “Chapter 6D and
Part 7.11”.
42
Subsection 111AZF(2) (table item 4)
Omit “The application of those Parts to financial institutions is
subject to the exceptions in sections 1015A and 1083A.”
43
Section 8 of the Small business guide in Part 1.5
Omit “the company to lodge a prospectus with ASIC”, substitute
“disclosure to investors under Chapter 6D”.
44
Section 11 of the Small business guide in Part 1.5 (note at
end)
Omit “1018”, substitute “707”.
Omit “the lodgment with ASIC of a prospectus under Part 7.12”,
substitute “disclosure to investors under Chapter 6D”.
Repeal the note, substitute:
Note: An offer of shares associated with a proposed change
of type may need disclosure to investors under Part 6D.2 (see sections 706, 707
and 708).
Omit “subsection 1024E(7)”, substitute “subsections
258E(2) and (3)”.
Omit “share capital; or”, substitute “share
capital.”.
Repeal the paragraph.
Add:
(2) A company may cancel shares returned to it under section 651C, 724(2),
737 or 738 and any reduction in the company’s share capital that is
involved is authorised by this subsection.
(3) Any reduction in a company’s share capital because of an order
under section 1325A is authorised by this subsection.
Omit “were excluded issues (disregarding paragraph 66(2)(da))”,
substitute “did not need disclosure to investors under section
706”.
Omit “excluded issues”, substitute “Chapter 6D not
applying”.
Repeal the subsection.
Repeal the Division.
Repeal the Part.
Repeal the subparagraph, substitute:
(ii) a notice published in relation to securities;
Insert:
(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.
Omit “Part 7.12”, substitute “Chapter
6D”.
Insert:
The provisions of the State Fair Trading Act do not apply to dealings in
securities.
Repeal the section.
Omit “prospectus” (twice occurring), substitute
“disclosure document”.
Omit “or Part 7.12”.
Note: The heading to section 1005 is altered by omitting
“or Part 7.12”.
Omit “or Part 7.12” (twice occurring).
64
Subdivision B of Division 4 of Part 7.11
Repeal the Subdivision.
Repeal the Division.
66
Subparagraph 1274(2)(a)(ia)
Omit “7.12 or”.
Repeal the items relating to sections 996, 1018, 1019 and 1020, subsections
1023A(1), 1023B(2), 1024(2), 1024C(3), 1024D(2), 1024E(8) and 1024G(4) to (7),
sections 1025, 1026, 1027 and 1028, subsections 1031(6), 1031(8) and 1031(9) and
sections 1032, 1036, 1040, 1043, 1043B 1078, 1079 and 1081 and insert each of
the following items in their appropriate place according to the order that the
provision referred to in the item appears in the Corporations Law:
|
Subsection 721(1) |
|
200 penalty units or imprisonment for 5 years, or both. |
|
Subsection 721(4) |
|
200 penalty units or imprisonment for 5 years, or both. |
|
Subsection 722(1) |
|
25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 724(1) |
|
25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 725(1) |
|
25 penalty units or imprisonment for 6 months, or both. |
|
Section 726 |
|
200 penalty units or imprisonment for 5 years, or both. |
|
Subsection 727(1) |
|
200 penalty units or imprisonment for 5 years, or both. |
|
Subsection 727(2) |
|
200 penalty units or imprisonment for 5 years, or both. |
|
Subsection 727(3) |
|
200 penalty units or imprisonment for 5 years, or both. |
|
Subsection 727(4) |
|
200 penalty units or imprisonment for 5 years, or both. |
|
Subsection 728(3) |
|
200 penalty units or imprisonment for 5 years, or both. |
|
Section 730 |
|
50 penalty units or imprisonment for 1 year, or both. |
|
Subsection 734(1) |
|
25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 734(2) |
|
25 penalty units or imprisonment for 6 months, or both. |
|
Section 735 |
|
10 penalty units or imprisonment for 3 months, or both. |
|
Subsection 736(1) |
|
25 penalty units or imprisonment for 6 months, or both |
Part
2—Amendments relating to new
Chapter 2L (Debentures)
68
Section 9 (definition of borrowing
corporation)
Repeal the definition.
Insert:
borrower, in relation to a debenture, means the
body that is or will be liable to repay money under the debenture.
70
Section 9 (definition of
debenture)
Repeal the definition, substitute:
debenture of a body means a chose in action that includes an
undertaking by the body to repay as a debt money deposited with or lent to the
body. The chose in action may (but need not) include a charge over property of
the body to secure repayment of the money. However, a debenture does not
include:
(a) an undertaking to repay money deposited with or lent to the body by a
person if:
(i) the person deposits or lends the money in the ordinary course of a
business carried on by the person; and
(ii) the body receives the money in the ordinary course of carrying on a
business that neither comprises nor forms part of a business of borrowing money
and providing finance
(b) an undertaking by an Australian ADI to repay money deposited with it,
or lent to it, in the ordinary course of its banking business
(c) an undertaking to pay money under:
(i) a cheque; or
(ii) an order for the payment of money; or
(iii) a bill of exchange
(d) an undertaking to pay money under a promissory note that has a face
value of at least $50,000
(e) an undertaking by a body corporate to pay money to a related body
corporate
(f) an undertaking to repay money that is prescribed by the
regulations.
71
Section 9 (definition of eligible money
market dealer)
Omit “paragraph 65(1)(a)”, substitute “section
65”.
72
Section 9 (definition of excluded
corporation)
Repeal the definition.
73
Section 9 (definition of exempt
securities)
Repeal the definition.
74
Section 9 (definition of guarantor
body)
Repeal the definition.
Insert:
guarantor, in relation to a debenture, means a body that has
guaranteed, or has agreed to guarantee, the repayment of any money deposited or
lent to the borrower under the debenture.
Repeal the section, substitute:
ASIC may declare a body corporate to be an authorised dealer in the short
term money market by notice published in the Gazette.
Omit “1047”, substitute “601CZB”.
Repeal the section, substitute:
Debentures of a borrower are ED securities if section 260FA
requires the borrower to appoint a trustee.
79
At the end of paragraph 124(1)(b)
Add “(despite any rule of law or equity to the contrary, this power
includes a power to issue debentures that are irredeemable, redeemable only if a
contingency, however remote, occurs, or redeemable only at the end of a period,
however long)”.
Repeal the subsection, substitute:
(2) For the purposes of this Part, choses in action (including an
undertaking) that fall into one of the exceptions in paragraphs (a), (b), (e)
and (f) of the definition of debenture in section 9 must also be
entered into the register of debenture holders.
Repeal the subsection, substitute:
Certain documents are debentures
(2) For the purposes of this Part, choses in action (including an
undertaking) that fall into one of the exceptions in paragraphs (a), (b), (e)
and (f) of the definition of debenture in section 9 must also be
entered into the register of debenture holders.
Omit “borrowing corporation”, substitute “borrower in
relation to debentures”.
Note: The heading to subsection 260C(3) is altered by
omitting “borrowing corporation” and substituting
“debenture issuers”.
Omit “borrowing corporation”, substitute
“borrower”.
Repeal the paragraph, substitute:
(c) the borrower is a borrower in relation to the debentures because it is
or will be liable to repay the money; and
Omit “borrowing corporations”, substitute “borrowers in
relation to debentures”.
Omit “A borrowing corporation’s auditor”, substitute
“The auditor of a borrower in relation to debentures”.
Note: The heading to section 313 is altered by omitting
“borrowing corporations and guarantor bodies”
and substituting “debenture issuers and
guarantors”.
Omit “borrowing corporation”, substitute
“borrower”.
Omit “borrowing corporation” (last occurring), substitute
“borrower”.
Omit “a borrowing corporation or guarantor body”, substitute
“a borrower, or guarantor, in relation to debentures”.
Omit “the borrowing corporation or guarantor body”, substitute
“the borrower or guarantor”.
Omit “borrowing corporation”, substitute “borrower in
relation to debentures”.
Omit “borrowing corporation”, substitute “borrower in
relation to debentures”.
93
At the end of section 601CD
Add:
(2) For the purposes of this Division, a foreign company carries on
business in this jurisdiction if it:
(a) offers debentures in this jurisdiction; or
(b) is a guarantor body for debentures offered in this
jurisdiction;
and Part 2L.1 applies to the debentures.
94
After Division 3 of Part 5B.2
Insert:
For the purposes of this Division choses in action (including an
undertaking) that fall into one of the exceptions in paragraphs (a), (b), (e)
and (f) of the definition of debenture in section 9 must also be
entered into the register of debenture holders.
(1) A body that is not a company must set up and maintain a register of
debenture holders if it issues debentures covered by Chapter 2L.
Note 1: Companies have to keep a register of debenture
holders under sections 168 and 171.
Note 2: The register may be kept on computer (see section
1306).
(2) The register must contain the following information about each
debenture holder:
(a) their name and address
(b) the amount of the debentures held.
(3) A body’s failure to comply with this section in relation to a
debenture does not affect the debenture itself.
(1) The register must be kept at:
(a) the body’s registered office; or
(b) the body’s principal place of business in Australia;
or
(c) a place in Australia (whether of the body or of someone else) where
the work involved in maintaining the register is done; or
(d) another place approved by ASIC.
(2) The body must lodge with ASIC a notice of the address at which the
register is kept within 7 days after the register is:
(a) established at an office that is neither the body’s registered
office nor at its principal place of business; or
(b) moved from one office to another.
Notice is not required for moving the register between the registered
office and an office at the principal place of business.
Sections 173 to 177 apply to a register kept under this Division as if it
were kept under Chapter 2C.
Note: Sections 173 to 177 deal with rights to inspect the
register and get copies, the obligations of agents who maintain the register,
correction of the register, the evidential value of the register and the use of
information on the register.
Insert:
Priorities
(1) Debentures of a company under a trust deed that are issued in place of
debentures under that deed that have been redeemed have the priority that the
redeemed debentures would have had if they had never been redeemed.
Deposit of debentures to secure advance
(2) Debentures of a company are not to be taken to be redeemed merely
because:
(a) the debentures secure advances on current account or otherwise;
and
(b) the company’s account ceases to be in debit while those
debentures remain available.
Omit “or 1047”.
Repeal the items relating to sections 1052 and 1054. Insert each of the
following items in their appropriate place according to the order that the
provision referred to occurs in the Corporations Law:
|
Subsection 260FA(1) |
|
25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 260FA(3) |
|
25 penalty units or imprisonment for 6 months, or both. |
|
Section 260FB |
|
25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 260FC(1) |
|
25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 260FC(2) |
|
25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 260GH(1) |
|
200 penalty units or imprisonment for 5 years, or both. |
|
Section 260GI |
|
25 penalty units or imprisonment for 6 months, or both. |
|
Section 260HE |
|
25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 260HD1CB(1) |
|
10 penalty units or imprisonment for 3 months, or both. |
|
Section 601CZC |
|
10 penalty units or imprisonment for 3 months, or both. |
Part
3—Amendments relating to new
Chapter 2D (Officers)
98
Section 9 (definition of
administration)
Omit “or relevant body”.
99
Section 9 (paragraph (a) of the definition of
administrator)
Omit “or relevant body”.
100
Section 9 (definition of
benefit)
Repeal the definition, substitute:
benefit:
(a) means any benefit, whether by way of payment of cash or otherwise;
and
(b) when used in Division 2 of Part 2D.2 (sections 200B to
1813)—means:
(i) a payment or other valuable consideration; or
(ii) an interest in property of any kind; and
(iii) any other benefit.
Insert:
board or managerial office (when used in Division 2 of Part
2D.2 (sections 200B to 1813) in relation to a body corporate) means:
(a) an office of director of the body corporate; and
(b) any other office in connection with the management of the body
corporate’s affairs that is held by:
(i) a person who also holds an office of director of the body corporate or
a related body corporate; or
(ii) a person who has held an office of director of the body corporate or
a related body corporate at any time within the 12 months immediately before the
loss of, or retirement from, that office.
102
Section 9 (definition of
director)
Repeal the definition, substitute:
director of a company or other body means:
(a) a person who:
(i) is appointed to the position of a director; or
(ii) is appointed to the position of an alternate director and is acting
in that capacity;
regardless of the name that is given to their position; and
(b) unless the contrary intention appears, a person who is not validly
appointed as a director if:
(i) they act in the position of a director; or
(ii) the directors of the company or body are accustomed to act in
accordance with the person’s instructions or wishes.
Subparagraph (b)(ii) does not apply merely because the directors act on
advice given by the person in the proper performance of functions attaching to
the person’s professional capacity, or the person’s business
relationship with the directors or the company or body.
Note: Paragraph (b)—Contrary intention—Examples
of provisions for which a person referred to in paragraph (b) would not be
included in the term “director” are:
• section 249C (power to call meetings of a
company’s members)
• subsection 251A(3) (signing minutes of
meetings)
• section 205B (notice to ASIC of change of
address).
Insert:
general law means the principles and rules of the common law
and equity.
104
Section 9 (definition of
manage)
Repeal the definition.
105
Section 9 (definition of
officer)
Repeal the definition, substitute:
officer of a corporation means:
(a) a director or secretary of the corporation; or
(b) a person:
(i) who makes, or participates in making, decisions that affect the whole,
or a substantial part, of the business of the corporation; or
(ii) who has the capacity to affect significantly the corporation’s
financial standing; or
(iii) in accordance with whose instructions or wishes the directors of the
corporation are accustomed to act (excluding advice given by the person in the
proper performance of functions attaching to the person’s professional
capacity or their business relationship with the directors or the corporation);
or
(c) a receiver, or receiver and manager, of the property of the
corporation; or
(d) an administrator of the corporation; or
(e) an administrator of a deed of company arrangement executed by the
corporation; or
(f) a liquidator of the corporation; or
(g) a trustee or other person administering a compromise or arrangement
made between the corporation and someone else.
Note: Section 201B contains rules about who is a director of
a corporation.
Insert:
payment (when used in Division 2 of Part 2D.2 (sections 200B
to 1813)) includes a payment by way of damages for breach of contract.
107
Section 9 (definition of
person)
Repeal the definition, substitute:
person:
(a) has a meaning affected by section 85A; and
(b) when used in Division 2 of Part 2D.2 (sections 200B to
1813)—includes a superannuation fund.
108
Section 9 (paragraph (a) of the definition of
public company)
Omit “paragraph 228(1)(b) and subsection 879(1)”, substitute
“subsection 849(1)”.
109
Section 9 (paragraph (b) of the definition of
public company)
Omit “232A”, substitute “195”.
110
Section 9 (definition of relevant
body)
Repeal the definition.
111
Section 9 (definition of section 229
prohibition)
Repeal the definition.
112
Section 9 (definition of section 230
order)
Repeal the definition.
113
Section 9 (definition of section 599
order)
Repeal the definition.
114
Section 9 (definition of section 600
notice)
Repeal the definition.
Omit “235”, substitute “205G”.
Omit “235”, “substitute “205G”.
Repeal the section.
Repeal the subsection.
Repeal the section.
Omit “232A, 232B”
Omit “242(1), or (3)”, substitute 205B(1), (2) or
(4)”.
122
Subsection 117(2) (note 2)
Omit “242AA”, substitute “205D”.
Omit “section 224B”, substitute “sections 198E, 201F and
202C”.
124
Section 141 (table item 1)
Omit “224C”, substitute “201G”.
125
Section 141 (table item 2)
Omit “224D”, substitute “201H”.
126
Section 141 (table item 3)
Omit “225A”, substitute “201K”.
127
Section 141 (table item 4)
Omit “226A”, substitute “198A”.
128
Section 141 (table item 5)
Omit “226B”, substitute “198B”.
129
Section 141 (table item 6)
Omit “226C”, substitute “198C, 201J,
203F”.
130
Section 141 (table item 7)
Repeal the item.
131
Section 141 (table item 8)
Omit “226E”, substitute “203C”.
132
Section 141 (table item 9)
Omit “227A”, substitute “203A”.
133
Section 141 (table item 11)
Omit “236A”, substitute “202A”.
134
Section 141 (table item 11)
Repeal the item, substitute:
|
10 |
Material interests—directors of proprietary companies |
194 |
135
Section 141 (table item 31)
Omit “240(4A)”, substitute “204F”.
136
Subsection 248B(2) (note 1)
Omit “231,”.
Omit “section 225A”, substitute “subsection
201K(2)”.
Omit “sections 232A and 232B”, substitute “section
195”.
Omit “227”, substitute “203D”.
Omit “section; or”, substitute
“section.”.
Repeal the paragraph.
Omit “section 232”, substitute “sections 180, 181, 182,
183 and 184”.
Omit “241(2) or (3)”, substitute “199A(2) or
(3)”.
Omit “and that is covered by subsection 241A(3)”, substitute
“for legal costs”.
Omit “For the purposes of this subsection, officer has
the same meaning as in section 241.”.
Omit “241 and 241A”, substitute “199A and
199B”.
Omit “235”, substitute “205G”.
Omit “232”, substitute “180, 181, 182, 183 or
184”.
149
Section 348 (table item 5)
Omit “section 242AA”, substitute “subsection
205D(2)”.
After “secretary”, insert “(if the company has
one)”.
Add at the end:
If the company has 2 or more directors, the director so appointed must not
also attend in the capacity of a secretary.
152
Division 7 of Part 5.7B (heading)
Repeal the heading, substitute:
Omit “229, 230, 599, 600 or 1317EF”, substitute
“206A”.
Omit “(as defined by section 91A)”.
Repeal the section.
Repeal the section.
157
Subsection 601BC(2) (note 1)
Omit “242AA”, substitute “205D”.
Omit “subsection 232(7)”, substitute “Part
9.4B”.
Omit “subsection 232(7)”, substitute “Part
9.4B”.
160
Subparagraph 1274(2)(a)(iaa)
Omit “242(6)” substitute “205D(3)”.
Insert:
(1) ASIC must keep a register of persons who have been disqualified from
managing corporations under this Part or prohibited from managing a corporation
under any previous Law.
(2) The register must contain a copy of:
(a) each order made by the Court disqualifying a person from managing a
corporation, or prohibiting a person from managing a corporation, under or a
corresponding previous law of this jurisdiction before the commencement of this
Part; and
(b) every notice that was served under:
(i) section 206F; or
(ii) a previous law of this jurisdiction before the commencement of this
Part that corresponds to section 206F; and
(c) every order lodged under section 206G.
(3) Subsections 1274(2) and (5) apply to a copy of an order or notice as
if that copy were a document lodged with ASIC.
Insert:
ASIC may certify that a person was a director or secretary of a company
at a particular time or during a particular period. In the absence of evidence
to the contrary, a certificate is proof of the matters stated in it.
Note: See section 1274B for the evidentiary status of
documents prepared by ASIC from the national database.
Omit all the words after “a person who”, substitute “is
disqualified from managing corporations under Part 2D.6”.
Omit all the words after “a person who”, substitute “is
disqualified from managing corporations under Part 2D.6”.
Repeal the subsection, substitute:
(4) If a person who is registered as an auditor, as a liquidator or as a
liquidator of a specified corporate body is disqualified from managing
corporations under Part 2D.6, then, within a period of 3 days after they become
disqualified, they must lodge written particulars in the prescribed form of the
circumstances because of which they become disqualified.
Repeal the paragraph, substitute:
(a) that the person is disqualified from managing corporations under Part
2D.6; or
Omit “or relevant body”.
Omit “or relevant body”.
Omit “or relevant body”.
Omit “, of a relevant body,”.
171
Section 1424 (table item 7)
Omit “subsection 227(3A)”, substitute “subsection
203D(2)”.
Omit the items relating to sections 222A, 229, 230, 231, 235 and 236,
subsections 242(1), (3) and (4) and 1317(1) and (4) and sections 242A, 599 and
600. Insert each of the following items in their appropriate place according to
the order that the provision referred to occurs in the Corporations
Law:
|
Section 184 Penalty: 200 penalty units or imprisonment for 5 years, or both. |
|
Subsections 188(1) and (2) Penalty: 5 penalty units. |
|
Subsection 191(1) Penalty: 10 penalty units or imprisonment for 3 months, or both. |
|
Subsection 195(1) Penalty: 5 penalty units. |
|
Section 199B Penalty: 5 penalty units. |
|
Subsection 200B(3) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Section 200B Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Section 200C Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Section 200D Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 201D(1) Penalty: 10 penalty units or imprisonment for 3 months, or both. |
|
Subsection 201D(2) Penalty: 5 penalty units. |
|
Subsection 202B(1) Penalty: 5 penalty units. |
|
Subsections 203D(3) and (5) Penalty: 5 penalty units. |
|
Section 204A Penalty: 5 penalty units. |
|
Subsections 204C(1) and (2) Penalty: 5 penalty units. |
|
Subsections 205B(1), (2), (4) and (5) Penalty: 10 penalty units or imprisonment for 3 months, or both. |
|
Subsections 205C(1) and (2) Penalty: 10 penalty units or imprisonment for 3 months, or both. |
|
Subsection 205E(2) Penalty: 10 penalty units or imprisonment for 3 months, or both. |
|
Section 205F Penalty: 10 penalty units or imprisonment for 3 months, or both. |
|
Subsections 205G(1), (3) and (4) Penalty: 10 penalty units or imprisonment for 3 months, or both. |
|
Subsection 206A(1) Penalty: 50 penalty units or imprisonment for 1 year, or both. |
|
Subsection 81(3) Penalty: 200 penalty units or imprisonment for 5 years, or both. |
|
Section 224 Penalty: 200 penalty units or imprisonment for 5 years, or both. |
|
Section 225 Penalty: 5 penalty units. |
Part
4—Amendments relating to new
Chapter 2E (Related Parties)
Omit “243L(2)”, substitute “213(2)”.
174
Section 9 (definition of child entity)
Repeal the definition.
175
Section 9 (definition of
control)
Repeal the definition, substitute:
control has the meaning given by section 50AA.
Insert:
entity: for the purposes of Chapter 2E an
entity is any of the following:
(a) a body corporate
(b) a partnership
(c) an unincorporated body
(d) an individual
(e) for a trust that has only 1 trustee—the trustee
(f) for a trust that has more than 1 trustee—the trustees
together.
177
Section 9 (definition of financial
benefit)
Repeal the definition, substitute:
financial benefit (when used in Chapter 2E) has a meaning
that is affected by section 229.
178
Section 9 (definition of parent entity)
Repeal the definition.
179
Section 9 (definition of related
party)
Repeal the definition, substitute:
related party (when used in Chapter 2E) has the meaning given
by section 228.
Insert:
remuneration of an officer or employee of a corporation. A
benefit given to an officer or employee of a corporation is
remuneration if and only if the benefit, were it received by a
director of the corporation, would be remuneration of the director for the
purposes of an accounting standard that deals with disclosure in
companies’ financial reports of information about related parties. For the
purposes of this definition, the following are not officers of a
corporation:
(a) a receiver, or receiver and manager, of the property of the
corporation; or
(b) an administrator of the corporation; or
(c) an administrator of a deed of company arrangement executed by the
corporation; or
(d) a liquidator of the corporation; or
(e) a trustee or other person administering a compromise or arrangement
made between the corporation and someone else.
181
Section 9 (definition of sibling
entity)
Repeal the definition.
Insert in Division 6 of Part 1.2:
(1) For the purposes of this Law, an entity controls a second entity if
the first entity has the capacity to determine the outcome of decisions about
the second entity’s financial and operating policies.
(2) In determining whether the first entity has this capacity:
(a) the practical influence the first entity can exert (rather than the
rights it can enforce) is the issue to be considered; and
(b) any practice or pattern of behaviour affecting the second
entity’s financial or operating policies is to be taken into account (even
if it involves a breach of an agreement or a breach of trust).
(3) The first entity does not control the second entity merely because the
first entity and a third entity jointly have the capacity to determine the
outcome of decisions about the second entity’s financial and operating
policies.
(4) If the first entity:
(a) has the capacity to influence decisions about the second
entity’s financial and operating policies; and
(b) is under a legal obligation to exercise that capacity for the benefit
of someone other than the first entity’s members;
the first entity is taken not to control the second entity.
Omit “243H, 243ZE”, substitute “208,
209”.
184
Section 256E (table item 5)
Omit “members of a public company, or diminish or endanger its
resources”, substitute “a public company’s members as a
whole”.
Omit “243E”, substitute “50AA”.
Repeal the subsection.
Omit “Part 3.2A”, substitute “Chapter 2E”
Repeal the sections, substitute:
Chapter 2E applies as if section 207 were replaced by the following
section:
The rules in this Chapter, as they apply to a registered scheme, are
designed to protect the interests of the scheme’s members as a whole, by
requiring member approval for giving financial benefits to the responsible
entity or its related parties that come out of scheme property or that could
endanger those interests.
Chapter 2E applies as if section 208 were replaced by the following
section:
(1) If all the following conditions are satisfied in relation to a
financial benefit:
(a) the benefit is given by:
(i) the responsible entity of a registered scheme; or
(ii) an entity that the responsible entity controls; or
(iii) an agent of, or person engaged by, the responsible entity;
and
(b) the benefit either:
(i) is given out of the scheme property; or
(ii) could endanger the scheme property; and
(c) the benefit is given to:
(i) the person or a related party; or
(ii) another person referred to in paragraph (a) or a related party of
that person;
then, for the person referred to in paragraph (a) to give the benefit,
either:
(d) the person referred to in paragraph (a) must:
(i) obtain the approval of the scheme’s members in the way set out
in sections 217 to 227; and
(ii) give the benefit within 15 months after the approval; or
(e) the giving of the benefit must fall within an exception set out in
sections 210 to 216.
Note: Section 228 defines related party,
section 191 defines entity, section 191 defines
control and section 229 affects the meaning of giving a
financial benefit.
(2) If:
(a) the giving of the benefit is required by a contract; and
(b) the making of the contract was approved in accordance with
subparagraph (1)(d)(i) as a financial benefit given to the entity or related
party; and
(c) the contract was made:
(i) within 15 months after that approval; or
(ii) before that approval, if the contract was conditional on the approval
being obtained;
member approval for the giving of the benefit is taken to have been given
and the benefit need not be given within the 15 months.
(3) Subsection (1) does not prevent the responsible entity from paying
itself fees, and exercising rights to an indemnity, as provided for in the
scheme’s constitution under subsection 601GA(2).
Chapter 2E applies as if sections 213, 214 and 224 were
omitted.
Note: Instead of section 224, the rule in section 253E will
apply.
Chapter 2E applies as if subsection 225(1) were amended by omitting
“subsection 224(1)” and substituting “section
253E”.
Repeal the items relating to sections 243ZF and 243ZH. Insert the following
item in its appropriate place according to the order that the provision referred
to occurs in the Corporations Law:
Insert:
|
Subsection 209(3) Penalty: 2000 penalty units, or imprisonment for 5 years, or
both. |
Part
5—Amendments relating to new
Part 2F.1 (Oppressive conduct of affairs)
Omit “ or 246AA”, substitute “232, 233 or
234”.
191
At the end of paragraph 136(1)(b)
Add “or a court order is made under section 233 that requires the
company to adopt the constitution”.
192
At the end of subsection 136(2)
Add:
Note: The company may need leave of the Court to modify or
repeal its constitution if it was adopted as the result of a Court order (see
subsection 233(3)).
Repeal the section, substitute:
If a new constitution is adopted or an existing constitution is modified
or repealed, that adoption, modification or repeal takes effect:
(a) if it is the result of a special resolution:
(i) on the date on which the resolution is passed if it specified no later
date; or
(ii) on a date specified in, or determined in accordance with the
resolution if the relevant date is later than the date on which the resolution
is passed; or
(b) if it is the result of a Court order made under section 233:
(i) on the date on which the order is made if it specifies no later date;
or
(ii) on a date specified by the order.
Omit “246AA”, substitute “234”.
Note: The heading to section 459B of the Corporations Law is
altered by omitting “246AA” and substituting
“234”.
Omit “246AA”, substitute “234”.
Omit “246AA”, substitute “233”.
Omit “246AA”, substitute “233”.
Omit “246AA”, substitute “233”.
Repeal the item relating to section 246AA and insert the following item in
its appropriate place according to the order that the provision referred to
occurs in the Corporations Law:
|
Section 235 |
|
Penalty: 50 penalty units or imprisonment for 1 year, or both. |
Part
6—Amendments relating to new
Part 2F.1A (Proceedings on behalf of a company by members and
others)
200
At the end of section 247A
Add:
(3) A person who:
(a) is granted leave under section 237; or
(b) applies for leave under that section; or
(c) is eligible to apply for leave under that section;
may apply to the Court for an order under this section.
(4) On application, the Court may make an order authorising:
(a) the applicant to inspect books of the company; or
(b) another person to inspect books of the company on the
applicant’s behalf.
(5) The Court may make the order only if it is satisfied that:
(a) the applicant is acting in good faith; and
(b) the inspection is to be made for a purpose connected with:
(i) applying for leave under section 237; or
(ii) bringing or intervening in proceedings with leave under that
section.
(6) A person authorised to inspect books may make copies of the books
unless the Court orders otherwise.
Add:
Proceedings on behalf of a company
(14) The report for a company must also include the following details of
any application for leave under section 237 made in respect of the
company:
(a) the applicant’s name; and
(b) a statement whether leave was granted.
(15) The report for a company must also include the following details of
any proceedings that a person has brought or intervened in on behalf of the
company with leave under section 237:
(a) the person’s name; and
(b) the names of the parties to the proceedings; and
(c) sufficient information to enable members to understand the nature and
status of the proceedings (including the cause of action and any orders made by
the court).
Part
7—Amendments relating to new
Part 9.4B (Civil penalty provisions)
202
Section 9 (definition of civil penalty order)
Repeal the definition, substitute:
civil penalty order means any of the
following:
(a) a declaration of contravention under section 1317F
(b) a pecuniary penalty order under section 1317G
(c) a compensation order under section 1317H
(d) an order under section 206C disqualifying a person from managing
corporations.
203
Section 9 (definition of civil penalty
provision)
Repeal the definition, substitute:
civil penalty provision has the meaning given in subsection
1317E(1).
Omit “relating to the person”, substitute “disqualifying
the person from managing corporations”.
Repeal the subsection.
Repeal the section.
207
Paragraph 1.3 (note) of the Small business guide in Part
1.5
Omit “232, 233”, substitute “197”.
208
Paragraph 1.3 (note) of the Small business guide in Part
1.5
Omit “1317HA, 1317HD”, substitute
“1317H”.
209
Paragraph 5.1 (note) of the Small business guide in Part
1.5
Omit “1317EA(3)”, substitute “1317G,
206C”.
210
Paragraph 5.3 (note) of the Small business guide in Part
1.5
Repeal the note, substitute:
[Sections 180, 181, 182, 183, 184, 475, 530A, 588G, 596,
601AE, 601AH, 1317H]
211
Paragraph 9 (note) of the Small business guide in Part 1.5
Repeal the note, substitute:
[588G, 1317H]
Omit “section 1317DA”, substitute “section
1317E”.
Omit “Note”, substitute “Note 1”.
214
At the end of section 254L
Add:
Note 2: Section 79 defines
involved.
215
At the end of section 254L (after the notes)
Add:
(3) A person commits an offence if they are involved in a company’s
contravention of section 254J or 254K and the involvement is
dishonest.
Omit “section 1317DA”, substitute “section
1317E”.
Omit “Note”, substitute “Note 1”.
218
At the end of section 256D
Add:
Note 2: Section 79 defines
involved.
219
At the end of section 256D (after the notes)
Add:
(4) A person commits an offence if they are involved in a company’s
contravention of section 256B and the involvement is dishonest.
220
Section 256E (table item 1)
Omit “1317HA”, substitute “1317H”.
221
Section 257J (table item 1)
Omit “section 1317HA”, substitute “section
1317H”.
Omit “section 1317DA”, substitute “section
1317E”.
Omit “Note”, substitute “Note 1”.
224
At the end of section 259F
Add:
Note 2: Section 79 defines
involved.
225
At the end of section 259F (after the notes)
Add:
(3) A person commits an offence if they are involved in a company’s
contravention of section 259A or subsection 259B(1) and the involvement is
dishonest.
Omit “section 1317DA”, substitute “section
1317E”.
Omit “Note”, substitute “Note 1”.
228
At the end of section 260D
Add:
Note 2: Section 79 defines
involved.
229
At the end of section 260D (after the notes)
Add:
(3) A person commits an offence if they are involved in a company’s
contravention of section 260A and the involvement is dishonest.
Omit “section 232”, substitute “section 180, 181, 182,
183 or 184”.
Add “a person commits an offence if they contravene subsection (1)
and the contravention is dishonest”.
Omit “section 1317DA”, substitute “section
1317E”.
Omit “section 232”, substitute “180 or
181”.
Omit “section 588G”, substitute “subsection
588G(2)”.
235
At the end of subsection 588G(2)
Add:
Note: This subsection is a civil penalty provision (see
subsection 1317E(1)).
Repeal the subsection, substitute:
(3) A person commits an offence if:
(a) the person is a director of the company when it incurs a debt;
and
(b) the company is insolvent at that time, or becomes insolvent by
incurring that debt, or by incurring at that time debts including that debt;
and
(c) the person suspected at the time when the company incurred the debt
that the company was insolvent or would become insolvent as a result of
incurring that debt or other debts (as in paragraph (1)(b)); and
(d) the person’s failure to prevent the company incurring the debt
was dishonest.
Omit “section 588G”, substitute “subsection
588G(2)”.
Omit “section 588G”, substitute “subsection
588G(2)”.
Omit “an order under subsection 1317EA(3)”, substitute “a
pecuniary penalty order under section 1317G or an order under section 206C
disqualifying a person from managing corporations”.
Omit “section 588G, unless the application was made under Division 4
of Part 9.4B”, substitute “subsection 588G(2)”.
Omit “constituted by a contravention of section 588G”,
substitute “under subsection 588G(3)”.
Repeal the subsection.
Omit “section 588G”, substitute “subsection 588G(2) or
(3)”.
Omit “section 588G”, substitute “subsection
588G(3)”.
Omit “section 588G”, substitute “subsection
588G(2)”.
Repeal the item relating to subsections 1317EF(1) and (4). Insert each of
the following items in their appropriate place according to the order that the
provision referred to in the item appears in the Corporations Law:
|
Subsection 254L(3) Penalty: 2000 penalty units, or imprisonment for 5 years, or
both. |
|
Subsection 256D(4) Penalty: 2000 penalty units, or imprisonment for 5 years, or
both. |
|
Subsection 259F(3) Penalty: 2000 penalty units, or imprisonment for 5 years, or
both. |
|
Subsection 260D(3) Penalty: 2000 penalty units, or imprisonment for 5 years, or
both. |
|
Subsection 344(1) Penalty: 2000 penalty units, or imprisonment for 5 years, or
both. |
|
Subsection 588G(3) Penalty: 2000 penalty units, or imprisonment for 5 years, or
both. |
Part
8—Amendments relating to new
Part 12 of the ASIC Act (Accounting standards)
Repeal the subsection.
Repeal the section.
Part
9—Amendments relating to new
Chapters 6 to 6C (Takeovers)
249
Section 9 (paragraphs (b) and (c) of the definition of
acquire)
Repeal the paragraphs, substitute:
(b) in relation to shares—has, in Chapter 7, the meaning given by
section 51(1).
Insert:
appropriate dealer for a market bid means a member of the
relevant securities exchange.
251
Section 9 (definition of
associate)
Repeal the definition, substitute:
associate: The following are the associates of a bidder
making a takeover offer, a substantial holder or a 90% holder:
(a) if the bidder or holder is a body corporate:
(i) a body corporate it controls; or
(ii) a body corporate that controls it; or
(iii) a body corporate that is controlled by an entity that controls
it
(b) a person with whom the bidder or holder has, or proposes to enter
into, a relevant agreement for the purpose of controlling or influencing the
composition of the body’s board or the conduct of the body’s
affairs
(c) a person with whom the bidder or holder is acting, or proposes to act,
in concert in relation to the body’s affairs.
Otherwise a person’s associates are determined under sections 10 to
17.
Insert:
bid class of securities for a takeover bid is the class of
securities to which the securities being bid for belong.
Insert:
bidder for a takeover bid means the person who makes or
proposes to make, or each of the people who make or propose to make, the offers
under the bid (whether personally or by an agent or nominee).
Note: The dealer who announces a market bid is not the
bidder; the bidder is the person or people on whose behalf the announcement is
made.
Insert:
bidder’s statement means a bidder’s statement
under sections 636 and 637 as supplemented.
Insert:
bid period:
(a) for an off-market bid—starts when the bidder’s statement
is given to the target and ends:
(i) 1 month later if no offers are made under the bid; or
(ii) at the end of the offer period; and
(b) for a market bid—starts when the bid is announced to the
relevant securities exchange and ends at the end of the offer period.
256
Section 9 (definition of body
corporate)
Repeal the definition, substitute:
body corporate:
(a) includes a body corporate that is being wound up or has been
dissolved; and
(b) in this Chapter (except section 66A) and section 206E includes an
unincorporated registrable body.
257
Section 9 (definition of Chapter 6
body)
Repeal the definition.
258 Section 9 (definition of Chapter 6
company)
Repeal the definition.
Insert:
class of securities has the meaning given by section
605.
260
Section 9 (paragraph (c) of the definition of
company)
Omit “body; and”, substitute “body.”
261
Section 9 (paragraph (d) of the definition of
company)
Repeal the paragraph.
Insert:
convertible securities: Securities are convertible into
another class of securities if the holder may have the other class of securities
issued to them by the exercise of rights attached to those securities. An option
may be a convertible security even if it is non-renounceable.
Insert:
current market bid price for securities covered by a market
bid is the price specified in the announcement of the bid as increased or
decreased during the offer period.
Insert:
date of a takeover bid is:
(a) for an off-market bid—the date on which offers are first made
under the bid; or
(b) for a market bid—the date on which the bid is announced to the
relevant securities exchange.
Insert:
defeating condition for a takeover bid means a condition
that:
(a) will, in circumstances referred to in the condition, result in the
rescission of, or entitle the bidder to rescind, a takeover contract;
or
(b) prevents a binding takeover contract from resulting from an acceptance
of the offer unless or until the condition is fulfilled.
266
Section 9 (definition of dispose
of)
Repeal the definition, substitute:
dispose of a futures contract has the meaning given by
sections 24, 26, 27 and 28. For the purposes of Chapter 6, a person who has a
relevant interest in securities disposes of the securities if, and
only if, they cease to have a relevant interest in the securities.
267
Section 9 (definition of enter
into)
Repeal the definition, substitute:
enter into: A person who:
(a) enters into, or becomes a party to, a relevant agreement in relation
to voting shares or other securities; or
(b) exercises an option to have voting shares or other securities issued
or granted;
is taken to enter into a transaction in relation to the shares or
securities. Enter into, in relation to a futures contract, has a
meaning affected by section 72(2).
268
Section 9 (paragraph (a) of the definition of
Exchange
subsidiary)
Repeal the paragraph.
Insert:
exchange traded option means an option declared by a
securities exchange to be an exchange traded option.
Insert:
foreign holder of securities means a holder of the securities
whose address, as shown in the register in which details of their holding is
recorded, is a place outside Australia and the external Territories.
Insert:
highest outside purchase price for a takeover bid is the
highest amount paid or payable by the bidder for a security in the bid class
under a purchase made outside the bid and during the bid period.
Insert:
listed: A company, managed investment scheme or other body is
listed if it is included in the official list of a securities
exchange.
273
Section 9 (definition of listing
rules)
Repeal the definition, substitute:
listing rules, when used in Chapter 7, has the meaning given
by section 761.
274
Section 9 (definition of
make)
Repeal the definition.
Insert:
mandatory bid means a takeover bid made as result of an
acquisition to which item 5 of the table in section 611 applies.
Insert:
market bid means a takeover bid made under Chapter 6 as a
market bid (see section 616).
Insert:
necessary transfer documents for the transfer of securities
to a person means the documents that are sufficient to enable the person to
become the holder of the securities.
278
Section 9 (definition of
offer)
Repeal the definition.
Insert:
offer period for a takeover bid is the period for which
offers under the bid remain open.
Insert:
off-market bid means a takeover made under Chapter 6 as an
off-market bid (see section 616)
Insert:
on-market: a transaction of any kind is an
on-market transaction if it is effected on a stock market of a
securities exchange and is:
(a) an on-market transaction as defined in the rules governing the
operation of the exchange; or
(b) if those rules do not define on-market transactions—effected in
the ordinary course of trading on the stock market.
Insert:
proportional takeover approval provisions, in relation to a
company, means provisions of the kind referred to in subsection 648D(1) that are
contained in, or that it is proposed to insert in, the constitution of the
company.
Insert:
proportional takeover bid means an off-market bid for a
specified proportion of the securities in the bid class (see paragraph
618(1)(b)).
Insert:
public authority of the Commonwealth or a State
means:
(a) a Minister or State Minister; or
(b) the holder of an office established by a Commonwealth or State law;
or
(c) a body corporate incorporated for a public purpose by a Commonwealth
or State law to the extent to which it is exercising a power conferred by a
Commonwealth or State law.
285
Section 9 (definition of relevant
interest)
Repeal the definition, substitute:
relevant interest, in relation to securities, has a meaning
given by sections 608 and 609.
Insert:
relevant securities exchange for a listed company, or listed
registered managed investment scheme, means:
(a) the securities exchange on whose stock market the company or scheme is
listed; or
(b) if the company or scheme is listed on 2 or more exchanges—each
of those exchanges.
Insert:
remedial order means an order that:
(a) restrains a person from exercising any voting or other rights attached
to securities
(b) directs a body corporate not to make or to defer payment of an amount
due from the body corporate in respect of securities
(c) restrains a person from acquiring securities or an interest in
securities
(d) directs a person to dispose of, or not to dispose of, securities or
interests in securities
(e) directs the disposal referred to in paragraph (d):
(i) to be made within a specified time; or
(ii) to be made subject to specified conditions; or
(iii) not to be made to a specified person or persons or to a specified
class or classes of persons
(f) directs a specified person to pay to the body corporate an amount
equal to any profit or benefit that the person obtains because of the disposal
referred to in paragraph (d)
(g) vests securities, or an interest in securities, in ASIC
(h) directs a body corporate not to register the transfer or transmission
of securities
(i) cancels securities issued as consideration for offers under a takeover
bid
(j) declares that an exercise of the voting or other rights attached to
securities be disregarded
(k) cancels or declares voidable:
(i) an agreement or offer relating to a takeover bid, or a proposed
takeover bid; or
(ii) any other agreement or offer in connection with the acquisition of
securities or relevant interests in securities
(l) directs a person to give specified information to the holders of
securities of a body corporate
(m) directs a body corporate to not issue securities to a person
(n) if an order of a kind referred to in paragraphs (a) to (m) is in force
in respect of securities—directs the registered holder of the securities
to give written notice of the order to any person whom the holder knows to be
entitled to exercise a right to vote attached to those securities
(o) directs a body corporate to repeal or modify its existing constitution
or adopt a particular constitution
(p) if a person has failed to comply with a requirement of Chapter 6, 6A,
6B or 6C—directs that person to comply with that
requirement.
Insert:
renounceable option means an assignable option to have an
allotment of shares in a body corporate made to the holder of the
option.
289
Section 9 (definition of stock
market)
Omit “and, in Chapter 6, has a meaning affected by the definition of
‘stock market’ in section 603;”.
Insert:
substantial holding: A person has a substantial holding in a
body corporate, or listed registered managed investment scheme, if:
(a) the total votes attached to voting shares in the body, or voting
interests in the scheme, in which they or their associates:
(i) have relevant interests; and
(ii) would have a relevant interest but for subsection 609(6) (exchange
traded options) or 609(7) (conditional agreements);
is 5% or more of the total number of votes attached to voting shares in
the body, or interests in the scheme; or
(b) the person has made a takeover bid for voting shares in the body, or
voting interests in the scheme, and the takeover period has started and not yet
ended.
Note: For relevant interest, see section
608.
291
Section 9 (definition of takeover
bid)
Repeal the definition, substitute:
takeover bid means an off-market bid or market bid made under
Chapter 6.
Insert:
takeover contract means a contract that results from the
acceptance of an offer made under a takeover bid.
293
Section 9 (definition of takeover
scheme)
Repeal the definition.
Insert:
target for a takeover bid means the company, listed body or
managed investment scheme whose securities are to be acquired under the
bid.
Insert:
target’s statement means a target’s statement
under sections 638 to 640 as supplemented.
Insert:
trading day of a securities exchange or stock exchange means
a day on which a stock market of the exchange or stock exchange is open for
trading in securities.
297
Section 9 (definition of unclaimed
property)
Omit “(except in section 701)”.
Insert:
voting interest, in relation to a managed investment scheme,
means an issued interest in the scheme that confers a right to vote, not being a
right to vote that is exercisable only in one or more of the following
circumstances:
(a) on a proposal that affects rights attached to the interests
(b) on a proposal to wind up the scheme
(c) on a proposal for the disposal of the whole of the scheme property,
business and undertaking
(d) during the winding up of the scheme
Insert:
voting power in a company has the meaning given by section
610.
Insert:
voting share in a body corporate means an issued share in the
body that carries any voting rights beyond the following:
(a) a right to vote while a dividend (or part of a dividend) in respect of
the share is unpaid
(b) a right to vote on a proposal to reduce the body’s share
capital
(c) a right to vote on a resolution to approve the terms of a buy-back
agreement
(d) a right to vote on a proposal that affects the rights attached to the
share
(e) a right to vote on a proposal to wind the body up
(f) a right to vote on a proposal for the disposal of the whole of the
body’s property, business and undertaking
(g) a right to vote during the body’s winding up.
301
Paragraphs 12(1)(b) and (c)
Repeal the paragraphs, substitute:
(b) the primary person’s voting power in a body corporate;
or
(c) a takeover bid for securities in a body corporate;
Repeal the paragraph, substitute:
(c) one had sent, or proposes to send, to the other an offer under a
takeover bid for shares held by the other;
Repeal the Division.
Omit “Chapters 6 and 7”, substitute “Chapter
7”.
Repeal the subsection.
Repeal the section.
Repeal the paragraph, substitute:
(a) securities in that class have been issued by the body as consideration
for offers under an off-market bid; and
Note: The heading to section 111AG is altered by omitting
“a takeover scheme” and substituting “an off-market takeover
bid”.
Omit “pursuant to the takeover scheme”, substitute “under
the off-market bid”.
309
Subsection 111AZF(2) (table item 3.1)
Omit “purposes, except for paragraph (d). Under that paragraph,
financial institutions may be companies for the purposes of Chapter 6.”,
substitute “purposes.”.
Repeal the paragraph, substitute:
(c) imposes or increases restrictions on the right to transfer the shares
already held by the member, unless the modification is made:
(i) in connection with the company’s change from a public company to
a proprietary company under Part 2B.7; or
(ii) to insert proportional takeover approval provisions into the
company’s constitution.
Repeal the note, substitute:
Note 1: See also section 271 (register of
charges).
Repeal the paragraph, substitute:
(b) is not a listed company;
Omit “720 or 722”, substitute “672B or
672C”.
314
Section 256E (item 3 of the table)
Repeal the item.
315 Section 257J
(item 3 of the table)
Repeal the item.
316
Section 257J (item 4 of the table)
Omit “section 42A”, substitute “subsection
609(4)”.
317
Section 257J (item 4 of the table)
Omit “section 623A”, substitute “section 611 (item 19 of
the table)”.
Omit “is a substantial shareholder for the purposes of Part
6.7”, substitute “has a substantial holding”.
Omit “is a substantial shareholder for the purposes of Part
6.7”, substitute “has a substantial holding”.
Omit “is a substantial shareholder for the purposes of Part
6.7”, substitute “has a substantial holding”.
Omit “is a substantial shareholder for the purposes of Part
6.7”, substitute “has a substantial holding”.
Omit “an extraordinary resolution”, substitute “a
resolution”.
Omit “an extraordinary resolution” (twice occurring),
substitute “a resolution”.
Omit “takeover offers, or a takeover announcement, under Chapter
6)”, substitute “offers under a takeover bid”.
Omit “is a substantial shareholder for the purposes of Part
6.7”, substitute “has a substantial holding”.
Omit “is a substantial shareholder for the purposes of Part
6.7”, substitute “has a substantial holding”.
Omit “414 or 701”, substitute “414, 661A or
664A”.
Repeal the subsection, substitute:
(1) If the responsible entity of a registered scheme wants to retire, it
must call a members’ meeting to explain its reason for wanting to retire
and to enable the members to vote on a resolution to choose a company to be the
new responsible entity. The resolution must be an extraordinary resolution if
the scheme is not listed.
Repeal the subsection, substitute:
(1) If members of a registered scheme want to remove the responsible
entity, they may take action under Division 1 of Part 2G.4 for the calling of a
members’ meeting to consider and vote on a resolution that the current
responsible entity should be removed and a resolution choosing a company to be
the new responsible entity. The resolutions must be extraordinary resolutions if
the scheme is not listed.
Omit “extraordinary resolution”, substitute
“resolution”.
After “the new responsible entity.”, insert “The
resolution must be an extraordinary resolution if the scheme is not
listed.”
Omit “an extraordinary resolution to remove”, substitute
“a resolution removing”.
Omit “an extraordinary resolution” (second occurring),
substitute “a resolution”.
Repeal the section, substitute:
For the purposes of this Division, an unacceptable ownership situation
exists if any one person’s voting power in the Exchange exceeds
5%.
Omit “a share or”.
Omit “is a substantial shareholder for the purposes of Part
6.7”, substitute “has a substantial holding”.
Omit “relevant interest” (twice occurring), substitute
“relevant interests”.
Omit “a relevant interest”, substitute “relevant
interests”.
Omit “relevant interest in those securities”, substitute
“relevant interests in those securities”.
Omit “a relevant interest”, substitute “relevant
interests”.
Omit “relevant interest in those securities”, substitute
“relevant interests in those securities”.
Omit “relevant interest”, substitute “relevant
interests”.
Omit “a relevant interest”, substitute “relevant
interests”.
Omit “the relevant interest”, substitute “the relevant
interests”.
Omit “relevant interest in” (twice occurring), substitute
“relevant interests in”.
Omit “relevant interest”, substitute “relevant
interests”.
Omit “relevant interest relates”, substitute “relevant
interests relate”.
Omit “the relevant interest was acquired”, substitute
“the relevant interests were acquired”.
349
Subsection 954A(1) (subparagraph (b)(ii) of the definition of
security
benefit)
Omit “takeover”, substitute “takeover
bid”.
350
Subparagraph 995(2)(b)(iii)
Repeal the subparagraph, substitute:
(iii) the making of, or the making of an evaluation of, or of a
recommendation in relation to, offers under a takeover bid;
351
Subsection 1096A(8) (definition of
company)
Repeal the definition.
Omit “642A”, substitute “653A”.
Omit “is a substantial shareholder for the purposes of Part
6.7”, substitute “has a substantial holding”.
Omit “is a substantial shareholder for the purposes of Part
6.7”, substitute “has a substantial holding”.
Omit “is, for the purposes of Part 6.7, a substantial
shareholder”, substitute “has a substantial
holding”.
356
Subparagraph 1252(1)(c)(ii)
Omit “is, for the purposes of Part 6.7, a substantial
shareholder”, substitute “has a substantial
holding”.
Insert:
(ga) a decision of ASIC under section 655A; or
(gb) a decision of ASIC under section 673 in relation to securities of the
target of a takeover bid during the bid period; or
(gc) a decision by ASIC whether to make an application under section 657C,
657G, 659B, 1325A, 1325B or 1325C; or
Repeal the items relating to Chapter 6 (other than a provision referred to
in a later heading in this Schedule), sections 672, 704 and 705 and subsections
746(2) and 746(4). Insert each of the following items in their appropriate place
according to the order that the provision referred to occurs in the Corporations
Law:
|
Subsection 606(1) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 606(2) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 606(4) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 614(1) Penalty: 100 penalty units or imprisonment for 2 years, or both. |
|
Subsection 622(1) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsections 623(1), (2) and (3) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 624(2) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsections 630(2), (3) and (4) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 631(1) Penalty: 100 penalty units or imprisonment for 2 years, or both. |
|
Subsection 631(2) Penalty: 200 penalty units or imprisonment for 5 years, or both. |
|
Subsection 633(1) (items 4, 5, 7, 8, 9, 11, 12, 13, 14) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Section 635 (items 5, 7, 8, 10, 11, 12, 13, 14) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 636(3) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 636(4) Penalty: 10 penalty units. |
|
Subsection 637(1) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 638(1) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 638(3) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 638(5) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 638(6) Penalty: 10 penalty units. |
|
Subsection 639(1) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 640(1) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 641(1) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 643 Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Section 644 Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsections 647(1), (2) and (3) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsections 648A(1), (2) and (3) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsections 648E(1) and (2) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Section 648G 50 penalty units or imprisonment for 1 year, or both. |
|
Subsection 649C(2) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 650B(3) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsections 650E(5) and (6) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 650F(3) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 651A(4) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Section 651C Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 652C(3) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 654A(1) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 654C(1) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 654C(3) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Section 657F Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Section 661D Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 662A(1) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Section 663A Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsections 664D(1), (2) and (3) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsections 664E(2), (3) and (4) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 665A(2) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 666A(1) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsections 666B(2) and (3) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 667A(3) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsections 668A(1), (3) and (4) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 668B(1) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 670A(3) Penalty: 50 penalty units or imprisonment for 1 year, or both. |
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Subsections 670C(1), (2) and (3) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 671B(1) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
|
Subsection 672B(1) Penalty: 25 penalty units or imprisonment for 6 months, or both. |
Australian
Securities and Investments Commission Act 1989
Part
1—Amendments relating to new
Chapter 6D (Fundraising)
Insert:
This Subdivision does not apply to dealings in securities.
Part
2—Amendments relating to new
Chapter 2F.1 (Oppression)
2
Subsection 5(1) (definition of
affairs)
Omit “246AA”, substitute “232”.
Part
3—Amendments relating to new
accounting standards provisions in ASIC Act
Insert:
AASB means the Australian Accounting Standards Board
established by section 226.
4
Section 5 (definition of
Director)
Repeal the definition.
Insert:
FRC means the Financial Reporting Council established by
section 225.
Insert:
international accounting standards means accounting standards
made by:
(a) the Board of the International Accounting Standards Committee;
or
(b) another body specified by the regulations.
7
Section 5 (paragraph (c) of the definition of
meeting)
Omit “Board; and”, substitute “Board.”.
8
Section 5 (paragraph (d) of the definition of
meeting)
Repeal the paragraph.
9
Section 5 (paragraph (a) of the definition of
member)
Omit “Standards Board”, substitute “FRC, the
AASB”.
10
Section 5 (paragraph (e) of the definition of
member)
Repeal the paragraph, substitute:
(e) in relation to the FRC—a member of the FRC; and
(ea) in relation to the AASB—a member of the AASB; and
11
Section 5 (definition of Standards Board)
Repeal the definition.
Omit “Standards Board”, substitute
“AASB”.
Part
4—Amendments relating to new
Chapter 6 (Takeovers)
Insert:
Panel proceedings means proceedings before the Panel on an
application made to the Panel under the Corporations Law.
14
Subsection 5(1) (paragraph (b) of the definition of
witness)
Repeal the paragraph, substitute:
(b) in relation to Panel proceedings, means a person appearing in the
proceedings to give evidence.
Omit “Part 6.9”, substitute “Subdivision B of Division 2
of Part 6.12”.
Omit “subsection 733(1) or 734(2)”, substitute “section
657C”.
Omit “Part 6.7 or 6.8”, substitute “Chapter
6C”.
Omit “subsection 734(5)”, substitute “section
657F”.
Omit “subsection 733(1) or 734(2), or section 736, as the case may
be,”, substitute “section 657C or 657G”.
Omit “733, 734 or 736”, substitute “657C or
657G”.
Omit “an inquiry”, substitute
“proceedings”.
Repeal the paragraph, substitute:
(b) if one of those persons ceases to be a member, or ceases to be
available for the purposes of proceedings in relation to a matter, during the
proceedings or after the completion of the proceedings but before the matter to
which the proceedings relate is determined—at any time after the person so
ceases to be a member or to be available;
23 Heading to
Division 3 of Part 10
Repeal the heading, substitute:
Repeal the subsection.
Omit “hold inquiries”, substitute “conduct
proceedings”.
Note: The heading to section 188 is altered by omitting
“hold inquiries” and substituting “conduct
proceedings”.
Omit “an inquiry”, substitute
“proceedings”.
Repeal the section.
Omit “an inquiry”, substitute “Panel
proceedings”.
Omit “inquiry”, substitute “proceedings”.
Add:
(3) In this section:
Panel proceedings includes a part of Panel
proceedings.
Repeal the section.
Omit “an inquiry”, substitute “Panel
proceedings”.
Omit “At an inquiry”, substitute “In Panel
proceedings”.
34
Paragraphs 192(2)(a) and (b)
Omit “at the inquiry” (wherever occurring), substitute
“in the proceedings”.
Omit “an inquiry”, substitute “Panel
proceedings”.
36
Paragraphs 192(4)(a) and (b)
Omit “at the inquiry” (wherever occurring), substitute
“in the proceedings”.
Repeal the subsection, substitute:
(6) If:
(a) a person appears at an inquiry pursuant to a summons issued under this
section; and
(b) the summons was issued at a person’s request;
the person appearing is entitled to be paid the prescribed allowances and
expenses (if any) by the person at whose request the summons was
issued.
Repeal the section.
Repeal the section, substitute:
In Panel proceedings, 2 members form a quorum.
Repeal the section.
Repeal the section, substitute:
(1) Subject to subsections (2) to (4), the Panel may determine the
procedural rules to be followed in Panel proceedings.
(2) Panel proceedings are to be conducted in accordance with (in order of
priority):
(a) the requirements of this Division; and
(b) the requirements of the regulations.
(3) Without limiting paragraph (2)(b), the regulations may deal
with:
(a) making submissions or giving evidence in Panel proceedings;
and
(b) the right (if any) to appear, or be represented, in Panel proceedings;
and
(c) the matters that the Panel is to take into account when making a
decision in the course of Panel proceedings.
(4) The rules of procedural fairness, to the extent that they are not
inconsistent with the provisions of this Act or the Regulations made under it
apply to Panel proceedings.
Repeal the section.
Omit “an inquiry”, substitute “Panel
proceedings”.
Omit “at an inquiry” (wherever occurring), substitute “in
Panel proceedings”.
Omit “an inquiry”, substitute “Panel
proceedings”.
Omit “at an inquiry”, substitute “in Panel
proceedings”.
Omit “an inquiry”, substitute “Panel
proceedings”.
Omit “a particular inquiry”, substitute “particular Panel
proceedings”.
Omit “at, or in relation to, that inquiry”, substitute
“in, or in relation to, those proceedings”.
Omit “During an inquiry”, substitute “In Panel
proceedings”.
Omit “the inquiry” (wherever occurring), substitute “the
proceedings”.
Commonwealth Authorities
and Companies Act 1998
Insert:
court means any court exercising jurisdiction under this
Act.
Insert:
Court means:
(a) the Federal Court of Australia; or
(b) the Supreme Court of a State or Territory.
Insert:
enabling legislation, in relation to a Commonwealth
authority, means the Act, regulations or Ordinance under which the authority is
incorporated.
Insert:
involved: a person is involved in a contravention if, and
only if, the person has:
(a) aided, abetted, counselled or procured the contravention; or
(b) has induced, whether by threats or promises or otherwise, the
contravention; or
(c) has been in any way, by act or omission, directly or indirectly,
knowingly concerned in or party to the contravention; or
(d) has conspired with others to effect the contravention.
Omit “Schedule 2”, substitute “Division 4 of Part
3”.
Omit “and criminal”.
Add:
(4) A maximum penalty that is specified:
(a) at the foot of a clause of a Schedule to this Act (other than a clause
that is divided into subclauses); or
(b) at the foot of a subclause of a Schedule to this Act;
indicates that a person who contravenes the clause or subclause is guilty
of an offence against the clause or subclause that is punishable, on conviction,
by a penalty up to that maximum.
Note 1: Chapter 2 of the Criminal Code sets out the
general principles of criminal responsibility.
Note 2: If the specified penalty is imprisonment only,
section 4B of the Crimes Act 1914 allows the court to impose a fine
instead of imprisonment or in addition to imprisonment.
Repeal the Division, substitute:
(1) This Part sets out some of the most significant duties of officers and
employees of Commonwealth authorities. Other duties are imposed by other
provisions of this Act and other laws (including the general law).
(2) Section 5 defines both director and
officer. Officer includes, as well as
directors, other people who are concerned in, or take part in, the management of
the authority.
Care and diligence—officers
(1) An officer of a Commonwealth authority must exercise his or her powers
and discharge his or her duties with the degree of care and diligence that a
reasonable person would exercise if he or she:
(a) were an officer of a Commonwealth authority in the Commonwealth
authority’s circumstances; and
(b) occupied the office held by, and had the same responsibilities within
the Commonwealth authority as, the officer.
Note: This subsection is a civil penalty provision (see
Schedule 2).
Business judgment rule
(2) An officer of a Commonwealth authority who makes a business judgment
is taken to meet the requirements of subsection (1), and their equivalent duties
at common law and in equity, in respect of the judgment if he or she:
(a) makes the judgment in good faith for a proper purpose; and
(b) does not have a material personal interest in the subject matter of
the judgment; and
(c) informs himself or herself about the subject matter of the judgment to
the extent he or she reasonably believes to be appropriate; and
(d) rationally believes that the judgment is in the best interests of the
Commonwealth authority.
The officer’s belief that the judgment is in the best interests of
the Commonwealth authority is a rational one unless the belief is one that no
reasonable person in his or her position would hold.
Note: This subsection only operates in relation to duties
under this section and their equivalents at common law or in equity (including
the duty of care that arises under the common law principles governing liability
for negligence)—it does not operate in relation to duties under any other
provision of this Act or under any other laws.
(3) In this section:
business judgment means any decision to take or not take
action in respect of a matter relevant to the operations of the Commonwealth
authority.
Good faith—officers
(1) An officer of a Commonwealth authority must exercise his or her powers
and discharge his or her duties:
(a) in good faith in what he or she believes to be the best interests of
the Commonwealth authority; and
(b) for a proper purpose.
Note 1: This subsection is a civil penalty provision (see
Schedule 2).
Note 2: Section 187 of the Corporations Law deals with the
position of directors of wholly-owned subsidiaries of Commonwealth
authorities.
(2) A person who is involved in a contravention of subsection (1)
contravenes this subsection.
Note 1: Section 5 defines
involved.
Note 2: This subsection is a civil penalty provision (see
Schedule 2).
Use of position—officers and employees
(1) An officer or employee of a Commonwealth authority must not improperly
use his or her position to:
(a) gain an advantage for him or her or someone else; or
(b) cause detriment to the Commonwealth authority or to another
person.
Note 1: Section 26 makes provision for officers who are also
public servants.
Note 2: This subsection is a civil penalty provision (see
Schedule 2).
(2) A person who is involved in a contravention of subsection (1)
contravenes this subsection.
Note 1: Section 5 defines
involved.
Note 2: This subsection is a civil penalty provision (see
Schedule 2).
Use of information—officers and employees
(1) A person who obtains information because they are, or have been, an
officer or employee of a Commonwealth authority must not improperly use the
information to:
(a) gain an advantage for himself or herself or someone else; or
(b) cause detriment to the Commonwealth authority or to another
person.
Note 1: Section 26 makes provision for officers who are also
public servants.
Note 2: This duty continues after the person stops being an
officer or employee of the Commonwealth authority.
Note 3: This subsection is a civil penalty provision (see
Schedule 2).
(2) A person who is involved in a contravention of subsection (1)
contravenes this subsection.
Note 1: Section 5 defines
involved.
Note 2: This subsection is a civil penalty provision (see
Schedule 2).
Good faith—officers
(1) An officer of a Commonwealth authority commits an offence if he or she
intentionally or recklessly fails to exercise his or her powers and discharge
his or her duties:
(a) in good faith in what he or she believes to be in the best interests
of the Commonwealth authority; or
(b) for a proper purpose;
and he or she does so dishonestly.
Note : Section 187 of the Corporations Law deals with the
position of directors of wholly-owned subsidiaries of Commonwealth
authorities.
Penalty: Imprisonment for 5 years.
Use of position—directors, other officers and
employees
(2) An officer or employee of a Commonwealth authority commits an offence
if he or she uses his or her position dishonestly:
(a) with the intention of directly or indirectly gaining an advantage for
himself or herself, or someone else, or causing detriment to the Commonwealth
authority or to another person; or
(b) recklessly as to whether the use may result in him or her or someone
else directly or indirectly gaining an advantage, or in causing detriment to the
Commonwealth authority or to another person.
Penalty: Imprisonment for 5 years.
Use of information—officers and employees
(3) A person who obtains information because he or she is, or has been, an
officer or employee of a Commonwealth authority commits an offence if he or she
uses the information dishonestly:
(a) with the intention of directly or indirectly gaining an advantage for
himself or herself, or someone else, or causing detriment to the Commonwealth
authority or to another person; or
(b) recklessly as to whether the use may result in himself or herself or
someone else directly or indirectly gaining an advantage, or in causing
detriment to the Commonwealth authority or to another person.
Maximum penalty: Imprisonment for 5 years.
(1) An officer does not contravene section 23, 24 or 25, or commit an
offence against section 26, by doing an act that another provision of this Act
requires the officer to do.
(2) If an officer of a Commonwealth authority is also a public servant,
the officer does not contravene section 23, 24 or 25, or commit an offence
against section 26, by doing an act in the course of the performance of his or
her duties as a public servant. For this purpose, public servant
means an officer or employee within the meaning of the Public Service Act
1922.
Sections 22 to 26:
(a) have effect in addition to, and not in derogation of, any rule of law
relating to the duty or liability of a person because of his or her office or
employment in relation to a Commonwealth authority; and
(b) do not prevent the commencement of proceedings for a breach of duty or
in respect of a liability referred to in paragraph (a).
This section does not apply to subsections 22(2) and (3) to the extent to
which they operate on the duties at common law and in equity that are equivalent
to the requirements of subsection 22(1).
(1) The Court may disqualify a person from managing bodies corporate for a
period that the Court considers appropriate if:
(a) a declaration is made under clause 1 of Schedule 2 (civil penalty
provision) that the person has contravened a civil penalty provision;
and
(b) the Court is satisfied that the disqualification is
justified.
(2) An application for a disqualification order under subsection (2) may
be made by:
(a) the Finance Minister; or
(b) some other person authorised in writing by the Finance Minister, under
this paragraph, to make the application.
An authorisation for the purposes of paragraph (b) may relate to
applications in relation to specified contraventions, or to all contraventions,
of civil penalty provisions.
(3) In determining whether the disqualification is justified, the Court
may have regard to:
(a) the person’s conduct in relation to the management, business or
property of any Commonwealth authority or other body corporate; and
(b) any other matters that the Court considers appropriate.
(4) If a disqualification order under subsection (1) is in force against a
person, the person must not be a director of a Commonwealth authority except
with the leave of the Court.
Maximum penalty: Imprisonment for 1 year.
(5) When granting leave under subsection (4), the Court may impose
conditions or restrictions that the Court considers appropriate.
(6) A person must not contravene a condition or restriction imposed under
subsection (5).
Maximum penalty: Imprisonment for 1 year.
(7) A person may only apply for leave under subsection (4) if he or she
has given the Finance Minister at least 21 days notice of the
application.
(8) On the application of the Finance Minister, the Court may revoke leave
granted under subsection (4).
If:
(a) a director relies on information, or professional or expert advice,
given or prepared by:
(i) an employee of the Commonwealth authority whom the director believes
on reasonable grounds to be reliable and competent in relation to the matters
concerned; or
(ii) a professional adviser or expert in relation to matters that the
director believes on reasonable grounds to be within the person’s
professional or expert competence; or
(iii) another director or officer in relation to matters within the
director’s or officer’s authority; or
(iv) a committee of directors on which the director did not serve in
relation to matters within the committee’s authority; and
(b) the reliance was made:
(i) in good faith; and
(ii) after making proper inquiry if the circumstances indicated the need
for inquiry; and
(c) the reasonableness of the director’s reliance on the information
or advice arises in proceedings brought to determine whether a director has
performed a duty under this Division or an equivalent general law
duty;
the director’s reliance on the information or advice is taken to be
reasonable unless the contrary is proved.
(1) If the directors of a Commonwealth authority delegate a power under
its enabling legislation, a director is responsible for the exercise of the
power by the delegate as if the power had been exercised by the directors
themselves.
(2) A director is not responsible under subsection (1) if:
(a) the director believed on reasonable grounds at all times that the
delegate would exercise the power in conformity with the duties imposed on
directors of the Commonwealth authority by this Act and the authority’s
enabling legislation; and
(b) the director believed:
(i) on reasonable grounds; and
(ii) in good faith; and
(iii) after making proper inquiry if the circumstances indicated the need
for inquiry;
that the delegate was reliable and competent in relation to the power
delegated.
Director’s duty to notify other directors of material personal
interest when conflict arises
(1) A director of a Commonwealth authority who has a material personal
interest in a matter that relates to the affairs of the authority must give the
other directors notice of the interest unless subsection (2) says
otherwise.
(2) The director does not need to give notice of an interest under
subsection (1) if:
(a) the interest:
(i) arises in relation to the director’s remuneration as a director
of the authority; or
(ii) relates to a contract that insures, or would insure, the director
against liabilities the director incurs as an officer of the authority (but only
if the contract does not make the authority or a subsidiary of the authority the
insurer); or
(iii) relates to any payment by the authority or a subsidiary of the
authority in respect of an indemnity permitted under section 27K or any contract
relating to such an indemnity; or
(iv) is in a contract, or proposed contract, with, or for the benefit of,
or on behalf of, a subsidiary of the authority and arises merely because the
director is a director of the subsidiary; or
(b) all the following conditions are satisfied:
(i) the director has already given notice of the nature and extent of the
interest and its relation to the affairs of the authority under subsection
(1)
(ii) if a person who was not a director of the authority at the time when
the notice under subsection (1) was given is appointed as a director of the
authority—the notice is given to that person
(iii) the nature or extent of the interest has not materially increased
above that disclosed in the notice; or
(c) the director has given a standing notice of the nature and extent of
the interest under section 27G and the notice is still effective in relation to
the interest.
(3) The notice required by subsection (1) must:
(a) give details of:
(i) the nature and extent of the interest; and
(ii) the relation of the interest to the affairs of the authority;
and
(b) be given at a directors’ meeting as soon as practicable after
the director becomes aware of his or her interest in the matter.
The details must be recorded in the minutes of the meeting.
Effect of contravention by director
(4) A contravention of this section by a director does not affect the
validity of any act, transaction, agreement, instrument, resolution or other
thing.
Power to give notice
(1) A director of a Commonwealth authority who has an interest in a matter
may give the other directors standing notice of the nature and extent of the
interest in the matter in accordance with subsection (2). The notice may be
given at any time and whether or not the matter relates to the affairs of the
authority at the time the notice is given.
Note: The standing notice may be given to the other
directors before the interest becomes a material personal
interest.
(2) The notice under subsection (1) must:
(a) give details of the nature and extent of the interest; and
(b) be given:
(i) at a directors’ meeting (either orally or in writing); or
(ii) to the other directors individually in writing.
The standing notice is given under subparagraph (b)(ii) when it has been
given to every director.
Standing notice must be tabled at meeting if given to directors
individually
(3) If the standing notice is given to the other directors individually in
writing it must be tabled at the next directors’ meeting after it is
given.
Nature and extent of interest must be recorded in minutes
(4) The director must ensure that the nature and extent of the interest
disclosed in the standing notice is recorded in the minutes of the meeting at
which the standing notice is given or tabled.
Dates of effect and expiry of standing notice
(5) The standing notice:
(a) takes effect as soon as it is given; and
(b) ceases to have effect if a person who was not a director of the
authority at the time when the notice was given is appointed as a director of
the authority.
A standing notice that ceases to have effect under paragraph (b) commences
to have effect again if it is given to the person referred to in that
paragraph.
Effect of material increase in nature or extent of
interest
(6) The standing notice ceases to have effect in relation to a particular
interest if the nature or extent of the interest materially increases above that
disclosed in the notice.
Effect of contravention by director
(7) A contravention of this section by a director does not affect the
validity of any act, transaction, agreement, instrument, resolution or other
thing.
Sections 27F and 27G have effect in addition to, and not in derogation
of:
(a) any general law rule about conflicts of interest; and
(b) any provision in the Commonwealth authority’s enabling
legislation that restricts a director from:
(i) having a material personal interest in a matter; or
(ii) holding an office or possessing property;
involving duties or interests that conflict with their duties or
interests as a director.
Restrictions on voting and being present
(1) A director of a Commonwealth authority who has a material personal
interest in a matter that is being considered at a directors’ meeting must
not:
(a) be present while the matter is being considered at the meeting;
or
(b) vote on the matter;
unless:
(c) subsection (2) or (3) allows the director to be present; or
(d) the interest does not need to be disclosed under section
27F.
Participation with approval of other directors
(2) The director may be present and vote if directors who do not have a
material personal interest in the matter have passed a resolution
that:
(a) identifies the director, the nature and extent of the director’s
interest in the matter and its relation to the affairs of the authority;
and
(b) states that those directors are satisfied that the interest should not
disqualify the director from voting or being present.
Participation with Ministerial approval
(3) The director may be present and vote if they are so entitled under a
declaration or order made by the responsible Minister under section
27K.
Effect of contravention by director
(4) A contravention by a director of:
(a) this section; or
(b) a condition attached to a declaration or order made by the responsible
Minister under section 27K;
does not affect the validity of any resolution.
Minister’s power to make specific declarations
(1) The responsible Minister may declare in writing that a director of a
Commonwealth authority who has a material personal interest in a matter that is
being, or is to be, considered at a directors’ meeting may, despite the
director’s interest, be present while the matter is being considered at
the meeting, vote on the matter, or both be present and vote. However, the
Minister may only make the declaration if:
(a) the number of directors entitled to be present and vote on the matter
would be less than the quorum for a directors’ meeting if the director
were not allowed to vote on the matter at the meeting; and
(b) the matter needs to be dealt with urgently, or if there is some other
compelling reason for the matter being dealt with at the directors’
meeting.
(2) The declaration may:
(a) apply to all or only some of the directors; or
(b) specify conditions that the company or director must comply
with.
Responsible Minister’s power to make class orders
(3) The responsible Minister may make an order in writing that enables
directors who have a material personal interest in a matter to be present while
the matter is being considered at a directors’ meeting, vote on that
matter, or both be present and vote. The order may be made in respect of a
specified class of Commonwealth authorities, directors, resolutions or
interests.
(4) The order may be expressed to be subject to conditions.
(5) Notice of the making, revocation or suspension of the order must be
published in the Gazette.
Right while director
(1) A director of a Commonwealth authority may inspect the books of the
authority at all reasonable times for the purposes of a legal
proceeding:
(a) to which the director is a party; or
(b) that the director proposes in good faith to bring; or
(c) that the director has reason to believe will be brought against him or
her.
Right during 7 years after ceasing to be director
(2) A person who has ceased to be a director of a Commonwealth authority
may inspect the books of the authority at all reasonable times for the purposes
of a legal proceeding:
(a) to which the person is a party; or
(b) that the person proposes in good faith to bring; or
(c) that the person has reason to believe will be brought against him or
her.
This right continues for 7 years after the person ceased to be a director
of the authority.
Right to take copies
(3) A person authorised to inspect books under this section for the
purposes of a legal proceeding may make copies of the books for the purposes of
those proceedings.
Commonwealth authority not to refuse access
(4) A Commonwealth authority must allow a person to exercise his or her
rights to inspect or take copies of the books under this section.
Power to indemnify officers
(1) Except as provided in this section, a Commonwealth authority may
indemnify a person who is or has been an officer of the authority from any
liability incurred by the person as an officer of the authority.
Exemptions not allowed
(2) A Commonwealth authority, or a subsidiary of a Commonwealth authority,
must not exempt a person (whether directly or through an interposed entity) from
a liability to the authority incurred as an officer of the authority.
When indemnity for liability (other than for legal costs) not
allowed
(3) A Commonwealth authority, or a subsidiary of a Commonwealth authority,
must not indemnify a person (whether by agreement or by making a payment and
whether directly or through an interposed entity) against any of the following
liabilities incurred as an officer of the authority:
(a) a liability owed to the authority or a subsidiary of the authority;
or
(b) a liability for a civil penalty order under clause 3 of Schedule 2 or
a compensation order under clause 4 of Schedule 2; or
(c) a liability that is owed to someone other than the authority or a
subsidiary of the authority and did not arise out of conduct in good
faith.
This subsection does not apply to a liability for legal costs.
When indemnity for legal costs not allowed
(4) A Commonwealth authority, or a subsidiary of a Commonwealth authority,
must not indemnify a person (whether by agreement or by making a payment and
whether directly or through an interposed entity) against legal costs incurred
in defending an action for a liability incurred as an officer of the authority
if the costs are incurred:
(a) in defending or resisting a proceedings in which the person is found
to have a liability for which they could not be indemnified under subsection
(3); or
(b) in defending or resisting criminal proceedings in which the person is
found guilty; or
(c) in defending or resisting proceedings brought by the Finance Minister
for a court order if the grounds for making the order are found by the court to
have been established; or
(d) in connection with proceedings for relief to the person under this Act
in which the Court denies the relief.
Paragraph (c) does not apply to costs incurred in responding to actions
taken by the Finance Minister as part of an investigation before commencing
proceedings for the court order.
Note: Paragraph (c)—This includes proceedings by the
Finance Minister for an order under section 27C (disqualification order) or
clause 3 or 4 of Schedule 2 (civil penalties).
(5) For the purposes of subsection (4), the outcome of proceedings is the
outcome of the proceedings and any appeal in relation to the
proceedings.
(1) Except as provided in subsection (2), a Commonwealth authority may
insure a person who is or has been an officer against liabilities incurred by
the person as an officer.
(2) A Commonwealth authority, or a subsidiary of a Commonwealth authority,
must not pay, or agree to pay, a premium for a contract insuring a person who
is, or has been, an officer of the authority against a liability (other than one
for legal costs) arising out of:
(a) conduct involving a wilful breach of duty in relation to the company;
or
(b) a contravention of section 24 or 25.
This section applies to a premium whether it is paid directly or through an
interposed entity.
(1) Sections 27M and 27N do not authorise anything that would otherwise be
unlawful.
(2) Anything that purports to indemnify or insure a person against a
liability or exempt them from a liability is void to the extent that it
contravenes section 27M or 27N.
Repeal the Schedule, substitute:
Note: See section 6.
(1) If a Court is satisfied that a person has contravened 1 of the
following provisions, it must make a declaration of contravention:
(a) subsections 22(1) and 23(1) and (2), 24(1) and (2), 25(1) and (2)
(officers’ duties)
(b) subsection 11(1) (annual reporting rules)
These provisions are the civil penalty provisions.
Note: Once a declaration has been made, the Finance Minister
can then seek a pecuniary penalty order (clause 3) or a disqualification order
(section 27C).
(2) A declaration of contravention must specify the following:
(a) the Court that made the declaration;
(b) the civil penalty provision that was contravened;
(c) the person who contravened the provision;
(d) the conduct that constituted the contravention;
(e) the Commonwealth authority to which the conduct related.
A declaration of contravention is conclusive evidence of the matters
referred to in subclause 1(2).
(1) A Court may order a person to pay the Commonwealth a pecuniary penalty
of up to $200,000 if:
(a) a declaration of contravention by the person has been made under
clause 1; and
(b) the contravention:
(i) materially prejudices the interests of the Commonwealth authority;
or
(ii) materially prejudices the Commonwealth authority’s ability to
pay its creditors; or
(iii) is serious.
(2) The penalty is a civil debt payable to the Commonwealth. The
Commonwealth may enforce the order as if it were an order made in civil
proceedings against the person to recover a debt due by the person. The debt
arising from the order is taken to be a judgment debt.
Compensation for damage suffered
(1) A Court may order a person to compensate a Commonwealth authority for
damage suffered by the authority if:
(a) the person has contravened a civil penalty provision in relation to
the authority; and
(b) the damage resulted from the contravention.
The order must specify the amount of the compensation.
Damage includes profits
(2) In determining the damage suffered by the Commonwealth authority for
the purposes of making a compensation order, include profits made by any person
resulting from the contravention or the offence.
Recovery of damage
(3) A compensation order may be enforced as if it were a judgment of the
Court.
Clause 4:
(a) has effect in addition to, and not in derogation of, any rule of law
about the duty or liability of a person because of the person’s office or
employment in relation to a Commonwealth authority; and
(b) does not prevent proceedings from being instituted in respect of such
a duty or in respect of such a liability.
Application by Finance Minister
(1) The Finance Minister, or some other person authorised in writing by
the Finance Minister under this subclause to make the application, may apply for
a declaration of contravention, a pecuniary penalty order or a compensation
order.
Application by Commonwealth authority
(2) The Commonwealth authority may apply for a compensation
order.
(3) The Commonwealth authority may intervene in an application for a
declaration of contravention or a pecuniary penalty order in relation to the
Commonwealth authority. The Commonwealth authority is entitled to be heard on
all matters other than whether the declaration or order should be
made.
No one else may apply
(4) No person may apply for a declaration of contravention, a pecuniary
penalty order or a compensation order unless permitted by this clause.
(5) Subclause (4) does not exclude the operation of the Director of
Public Prosecutions Act 1983 or that Act as applying as a law of this
jurisdiction.
Proceedings for a declaration of contravention, a pecuniary penalty
order, or a compensation order, may be started no later than 6 years after the
contravention.
The Court must apply the rules of evidence and procedure for civil
matters when hearing proceedings for:
(a) a declaration of contravention; or
(b) a pecuniary penalty order.
A court must not make a declaration of contravention or a pecuniary
penalty order against a person for a contravention if the person has been
convicted of an offence constituted by conduct that is substantially the same as
the conduct constituting the contravention.
(1) Proceedings for a declaration of contravention or pecuniary penalty
order against a person are stayed if:
(a) criminal proceedings are started or have already been started against
the person for an offence; and
(b) the offence is constituted by conduct that is substantially the same
as the conduct alleged to constitute the contravention.
(2) The proceedings for the declaration or order may be resumed if the
person is not convicted of the offence. Otherwise, the proceedings for the
declaration or order are dismissed.
Criminal proceedings may be started against a person for conduct that is
substantially the same as conduct constituting a contravention of a civil
penalty provision regardless of whether:
(a) a declaration of contravention has been made against the person;
or
(b) a pecuniary penalty order has been made against the person;
or
(c) a compensation order has been made against the person; or
(d) the person has been disqualified from managing a Commonwealth
authority under section 27C.
Evidence of information given or evidence of production of documents by
an individual is not admissible in criminal proceedings against the individual
if:
(a) the individual previously gave the evidence or produced the documents
in proceedings for a pecuniary penalty order against the individual for a
contravention of a civil penalty provision (whether or not the order was made);
and
(b) the conduct alleged to constitute the offence is substantially the
same as the conduct that was claimed to constitute the contravention.
However, this does not apply to a criminal proceeding in respect of the
falsity of the evidence given by the individual in the proceedings for the
pecuniary penalty order.
(1) The Finance Minister may require a person to give all reasonable
assistance in connection with:
(a) an application for a declaration of contravention or a pecuniary
penalty order; or
(b) criminal proceedings for an offence against this Act.
The person must comply with the request.
Maximum penalty: 5 penalty units.
(2) The Finance Minister can require the person to assist in connection
with an application for a declaration or order if, and only if:
(a) it appears to the Finance Minister that someone other than the person
required to assist may have contravened a civil penalty provision; and
(b) the Finance Minister suspects or believes that the person required to
assist can give information relevant to the application.
(3) The Finance Minister can require the person to assist in connection
with criminal proceedings if, and only if:
(a) it appears to the Finance Minister that the person required to assist
is unlikely to be a defendant in the proceedings; and
(b) the person required to assist is, in relation to a person who is or
should be a defendant in the proceedings:
(i) an employee or agent (including a banker or auditor) of the other
person; or
(ii) if the other person is a Commonwealth authority—an officer of
the other person; or
(iii) if the other person is an individual—a partner of the other
person.
(4) The Finance Minister can require the person to assist regardless of
whether:
(a) an application for the declaration or penalty order has actually been
made; or
(b) criminal proceedings for the offence have actually begun.
(5) The person cannot be required to assist if they are or have been a
lawyer for:
(a) in an application for a declaration or penalty order—the person
suspected of the contravention; or
(b) in criminal proceedings—a defendant or likely defendant in the
proceedings.
(6) The requirement to assist must be given in writing.
(7) The Court may order the person to comply with the requirement in a
specified way. Only the Finance Minister may apply to the Court for an order
under this subsection.
(1) In this section:
eligible proceedings:
(a) means proceedings for a contravention of a civil penalty provision
(including proceedings under clause 4); and
(b) does not include proceedings for an offence (except so far as the
proceedings relate to the question whether the court should make an order under
clause 4).
(2) If:
(a) eligible proceedings are brought against a person; and
(b) in the proceedings it appears to the court that the person has, or may
have, contravened a civil penalty provision but that:
(i) the person has acted honestly; and
(ii) having regard to all the circumstances of the case, the person ought
fairly to be excused for the contravention;
the court may relieve the person either wholly or partly from a liability
to which the person would otherwise be subject, or that might otherwise be
imposed on the person, because of the contravention.
(3) If a person thinks that eligible proceedings will or may be begun
against them, they may apply to the Court for relief.
(4) On an application under subclause (3), the Court may grant relief
under subclause (2) as if the eligible proceedings had been begun in the
Court.
(5) For the purposes of subclause (2) as applying for the purposes of a
case tried by a judge with a jury:
(a) a reference in that subclause to the court is a reference to the
judge; and
(b) the relief that may be granted includes withdrawing the case in whole
or in part from the jury and directing judgment to be entered for the defendant
on such terms as to costs as the judge thinks appropriate.
(1) If:
(a) civil proceedings are brought against an officer of a Commonwealth
authority for negligence, default, breach of trust or breach of duty in a
capacity as such an officer; and
(b) in the proceedings it appears to the court before which the
proceedings are taken that:
(i) the officer is or may be liable in respect of the negligence, default
or breach; and
(ii) the officer has acted honestly; and
(iii) having regard to all the circumstances of the case (including those
connected with the officer’s appointment), the officer ought fairly to be
excused for the negligence, default or breach;
the court may relieve the officer either wholly or partly from liability on
the terms that the court thinks appropriate.
(2) An officer of a Commonwealth authority who has reason to apprehend
that a claim will or might be made against him or her for negligence, default,
breach of trust or breach of duty in a capacity as such an officer may apply to
the Court for relief. On the application, the Court has the same power to
relieve the officer as it would have had under subclause (1) if it had been a
court before which proceedings against the officer for negligence, default,
breach of trust or breach of duty had been brought.
(3) If:
(a) a case to which subclause (1) applies is being tried by a judge with a
jury; and
(b) the judge after hearing the evidence is satisfied that the defendant
ought pursuant to that subclause to be relieved either wholly or partly from the
liability sought to be enforced against the officer;
the judge may withdraw the case in whole or in part from the jury and
forthwith direct judgment to be entered for the defendant on the terms as to
costs or otherwise that the judge thinks proper.
In this Schedule:
commencement means the commencement of the Corporate Law
Economic Reform Act 1998.
new Law means this Act as in force after
commencement.
old Law means this Act as in force immediately before
commencement.
(1) A reference in any law of the Commonwealth or of a State or Territory,
or in any document, to a provision of the old Law is to be read after
commencement as a reference to the corresponding provision of the new Law except
so far as the contrary intention appears in the law or document.
(2) Without limiting subclause (1), sections 27F to 27K of the new Law
correspond to section 21 of the old Law.
Column 2 of the table sets out things that have been done, or situations
that have arisen, on or before commencement. Column 3 sets out how the things
and situations will be dealt with after commencement—either under the old
Law or the new Law.
|
Transitional arrangements |
||
|---|---|---|
|
|
If... |
then, after commencement... |
|
1 |
before commencement, a director of a Commonwealth authority who had an
interest in a matter declared the nature of the interest in accordance with
subsection 21(1) of the old Law |
the director is taken to have disclosed the interest as a material personal
interest in accordance with section 27F of the new Law and to have made the
disclosure on commencement. |
|
2 |
before commencement, the Board of a Commonwealth authority made a
determination under subsection 21(3) of the old Law |
the determination is taken to be a resolution passed in accordance with
subsection 27J(2) of the new Law. |
|
3 |
before commencement, the responsible Minister for a Commonwealth authority
made a determination under subsection 21(3) of the old Law |
the determination has effect as if it were a determination under section
27K of the new Law. |
|
4 |
before commencement, an officer of a Commonwealth authority incurred a
liability |
sections 27M and 27N of the new Law apply if an indemnity was given, or a
premium paid, in respect of the liability after commencement; in all other
cases, sections 26 and 27 of the old Law continue to apply. |
|
5 |
before commencement, an application for a civil penalty order was made and
not dealt with under Schedule 2 of the old Law |
Schedule 2 of the old Law continues to apply in relation to the
application |
|
6 |
before commencement, a person was granted leave under subclause 8(2) of
Schedule 2 of the old Law |
the leave has effect as if it were granted under subsection 27C(4) of the
new Law |
(1) Schedule 2 of the old Law continues to apply in relation to:
(a) a contravention of a civil penalty provision listed in clause 2 of
Schedule 2 of the old Law; or
(b) an offence committed against one of those civil penalty
provisions;
despite its repeal.
(2) Schedule 2 of the new Law applies in relation to a contravention of a
civil penalty provision listed in subclause 1(1) of Schedule 2 of the new
law.
(1) An order in force under paragraph 4(a) of Schedule 2 of the old Law
immediately before commencement continues to have effect after commencement as
if it were made under section 27C of the new Law.
(2) An order in force under paragraph 4(b) of Schedule 2 of the old Law
immediately before commencement continues to have effect after commencement as
if it were made under clause 3 of Schedule 2 of the new Law.
Insert:
(1A) Chapters 6, 6A, 6B, 6C and 6D of the Corporations Law of the Capital
Territory bind the Crown in right of the Commonwealth.
Add:
(2) Chapters 6, 6A, 6B, 6C and 6D of the Corporations Law of each
jurisdiction other than the Capital Territory bind the Crown in right of the
Commonwealth.
1
Section 9 (at the end of the definition of
contributory)
Add:
(c) in relation to a no liability company—subject to section 385, a
member of the company.
2
Section 9 (both definitions of financial
statements)
Repeal the definitions, substitute:
financial statements means annual financial statements under
section 295 or half-year financial statements under section 303.
Repeal the subsection.
Insert:
(1A) The regulations may prescribe a different number of members for the
purposes of the application of paragraph (1)(b) to:
(a) a particular company; or
(b) a particular class of company.
Without limiting this, the regulations may specify the number as a
percentage of the total number of members of the company.
Insert:
(1A) The regulations may prescribe a different number of members for the
purposes of the application of paragraph (1)(b) to:
(a) a particular company; or
(b) a particular class of company.
Without limiting this, the regulations may specify the number as a
percentage of the total number of members of the company.
Insert:
(2A) The regulations may prescribe a different number of members for the
purposes of the application of paragraph (2)(b) to:
(a) a particular company; or
(b) a particular class of company.
Without limiting this, the regulations may specify the number as a
percentage of the total number of members of the company.
Insert:
(1A) The regulations may prescribe a different number of members for the
purposes of the application of paragraph (1)(b) to:
(a) a particular scheme; or
(b) a particular class of scheme.
Without limiting this, the regulations may specify the number as a
percentage of the total number of members of the scheme.
Insert:
(1A) The regulations may prescribe a different number of members for the
purposes of the application of paragraph (1)(b) to:
(a) a particular scheme; or
(b) a particular class of scheme.
Without limiting this, the regulations may specify the number as a
percentage of the total number of members of the scheme.
Insert:
(2A) The regulations may prescribe a different number of members for the
purposes of the application of paragraph (2)(b) to:
(a) a particular scheme; or
(b) a particular class of scheme.
Without limiting this, the regulations may specify the number as a
percentage of the total number of members of the scheme.
Omit “special notice”, substitute “notice under
subsection (1A)”.
Omit “special notice”, substitute “notice under
subsection (1A)”.
Omit “and 2M.3”, substitute “, 2M.3 and
2M.4”.
Omit “and 2M.3”, substitute “, 2M.3 and
2M.4”.
Omit “and 2M.3”, substitute “, 2M.3 and
2M.4”.
Repeal the subsection, substitute:
(6) A futures broker must not deal with property deposited by the broker
in safe custody under subsection (3) except:
(a) in accordance with the terms and conditions on which it was deposited
with, or received by, the broker; or
(b) for the purpose of meeting obligations incurred by the broker in
connection with margining, guaranteeing, securing, transferring, adjusting or
settling dealings in futures contracts effected by the broker on behalf of
clients only.
Australian Securities and
Investments Commission Act 1989
Omit “Subdivision D or E (sections 12DA to 12ED)”, substitute
“Subdivision D (sections 12DA to 12DN)”.
Note: The heading to section 12GB is altered by omitting
“or E”.
Omit “Subdivision D or E (sections 12DA to 12ED)”, substitute
“Subdivision D (sections 12DA to 12DN)”.
Omit “Subdivision D or E (sections 12DA to 12ED)”, substitute
“Subdivision D (sections 12DA to 12DN)”.
Omit “Subdivision D or E (sections 12DA to 12ED)”, substitute
“Subdivision D (sections 12DA to 12DN)”.
Omit “Subdivision D or E (sections 12DA to 12ED)”, substitute
“Subdivision D (sections 12DA to 12DN)”.
Omit “Subdivision D or E (sections 12DA to 12ED)”, substitute
“Subdivision D (sections 12DA to 12DN)”.
Omit “Subdivision D or E (sections 12DA to 12ED)”, substitute
“Subdivision D (sections 12DA to 12DN)”.
Omit “Subdivision D or E (sections 12DA to 12ED)”, substitute
“Subdivision D (sections 12DA to 12DN)”.
Omit “or E” (second occurring).
Omit “Subdivision D or E (sections 12DA to 12ED)”, substitute
“Subdivision D (sections 12DA to 12DN)”.
Omit “Subdivision D or E (sections 12DA to 12ED)”, substitute
“Subdivision D (sections 12DA to 12DN)”.
Financial Sector Reform
(Consequential Amendments) Act 1998
Repeal the heading, substitute:
Note: The heading to section 12DL of the Australian
Securities and Investments Commission Act 1989 is altered by omitting
“credit and”.