Commonwealth Consolidated Acts Commonwealth Consolidated ActsSmall scale offerings (20 issues or sales in 12 months)
(1) Personal offers of a body's securities by a person do not need disclosure to investors under this Part if:
(a) none of the offers results in a breach of the 20 investors ceiling (see subsections (3) and (4)); and
(b) none of the offers results in a breach of the $2 million ceiling (see subsections (3) and (4)).
This subsection does not apply to an offer for sale to which subsection 707(3) (sale amounting to indirect issue) or (5) (sale amounting to indirect sale by controller) applies.
Note 1: Subsection 727(4) makes it an offence to issue or transfer securities without disclosure to investors once 20 issues or transfers have occurred or $2 million has been raised.
Note 2: Under section 740 ASIC may make a determination aggregating the transactions of bodies that ASIC considers to be closely related.
(2) For the purposes of subsection (1), a personal offer is one that:
(a) may only be accepted by the person to whom it is made; and
(b) is made to a person who is likely to be interested in the offer, having regard to:
(i) previous contact between the person making the offer and that person; or
(ii) some professional or other connection between the person making the offer and that person; or
(iii) statements or actions by that person that indicate that they are interested in offers of that kind.
(3) An offer by a body to issue securities:
(a) results in a breach of the 20 investors ceiling if it results in the number of people to whom securities of the body have been issued exceeding 20 in any 12 month period; and
(b) results in a breach of the $2 million ceiling if it results in the amount raised by the body by issuing securities exceeding $2 million in any 12 month period.
(4) An offer by a person to transfer a body's securities:
(a) results in a breach of the 20 investors ceiling if it results in the number of people to whom the person sells securities of the body exceeding 20 in any 12 month period; and
(b) results in a breach of the $2 million ceiling if it results in the amount raised by the person from selling the body's securities exceeding $2 million in any 12 month period.
(5) In counting issues and sales of the body's securities, and the amount raised from issues and sales, for the purposes of subsection (1), disregard issues and sales that result from offers that:
(a) do not need a disclosure document because of any other subsection of this section; or
(b) are not received in Australia; or
(c) are made under a disclosure document.
Note 1: Also see provisions on restrictions on advertising (section 734) and securities hawking provisions (Part 6D.3).
Note 2: Issues and sales that result from offers that are eligible to be made under Division 1A of Part 7.12 (Employee share schemes) are also disregarded for the purposes of subsection (1): see subsection 1100ZC(4).
(7) In working out the amount of money raised by the body by issuing securities, include the following:
(a) the amount payable for the securities at the time when they are issued;
(b) if the securities are shares issued partly - paid--any amount payable at a future time if a call is made;
(c) if the security is an option--any amount payable on the exercise of the option;
(d) if the securities carry a right to convert the securities into other securities--any amount payable on the exercise of that right.
Sophisticated investors
(8) An offer of a body's securities does not need disclosure to investors under this Part if:
(a) the minimum amount payable for the securities on acceptance of the offer by the person to whom the offer is made is at least $500,000; or
(b) the amount payable for the securities on acceptance by the person to whom the offer is made and the amounts previously paid by the person for the body's securities of the same class that are held by the person add up to at least $500,000; or
(c) it appears from a certificate given by a qualified accountant no more than 6 months before the offer is made that the person to whom the offer is made:
(i) has net assets of at least the amount specified in regulations made for the purposes of this subparagraph; or
(ii) has a gross income for each of the last 2 financial years of at least the amount specified in regulations made for the purposes of this subparagraph a year; or
(d) the offer is made to a company or trust controlled by a person who meets the requirements of subparagraph (c)(i) or (ii).
Note 1: Section 9 defines qualified accountant .
Note 2: A financial services licensee has obligations under Division 3 of Part 7.7 when providing financial advice. ASIC has a power under section 915C to suspend or cancel a licensee's licence.
(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.
(9A) In addition to specifying amounts for the purposes of subparagraphs (8)(c)(i) and (ii), the regulations may do either or both of the following:
(a) deal with how net assets referred to in subparagraph (8)(c)(i) are to be determined and valued, either generally or in specified circumstances;
(b) deal with how gross income referred to in subparagraph (8)(c)(ii) is to be calculated, either generally or in specified circumstances.
(9B) In determining the net assets of a person under subparagraph (8)(c)(i), the net assets of a company or trust controlled by the person may be included.
Note: Control is defined in section 50AA.
(9C) In determining the gross income of a person under subparagraph (8)(c)(ii), the gross income of a company or trust controlled by the person may be included.
Note: Control is defined in section 50AA.
(10) An offer of a body's securities does not need disclosure to investors under this Part if:
(a) the offer is made through a financial services licensee; and
(b) the licensee is satisfied on reasonable grounds that the person to whom the offer is made has previous experience in investing in securities that allows them to assess:
(i) the merits of the offer; and
(ii) the value of the securities; and
(iii) the risks involved in accepting the offer; and
(iv) their own information needs; and
(v) the adequacy of the information given by the person making the offer; and
(c) the licensee gives the person before, or at the time when, the offer is made a written statement of the licensee's reasons for being satisfied as to those matters; and
(d) the person to whom the offer is made signs a written acknowledgment before, or at the time when, the offer is made that the licensee has not given the person a disclosure document under this Part in relation to the offer.
(11) An offer of securities does not need disclosure to investors under this Part if it is made to:
(a) a person covered by the definition of professional investor in section 9 (except a person mentioned in paragraph (e) of the definition); or
(b) a person who has or controls gross assets of at least $10 million (including any assets held by an associate or under a trust that the person manages).
Offers of securities to people associated with the body
(12) An offer of a body's securities does not need disclosure to investors under this Part if it is made to:
(a) a senior manager of the body or a related body or their spouse, parent, child, brother or sister; or
(b) a body corporate controlled by a person referred to in paragraph (a).
Certain offers to present holder of securities
(13) An offer of securities for issue does not need disclosure to investors under this Part if it is an offer of fully - paid shares in a body to one or more existing holders of shares in the body under a dividend reinvestment plan or bonus share plan.
(14) An offer of a disclosing entity's debentures for issue does not need disclosure to investors under this Part if the offer is made to 1 or more existing debenture holders.
(14A) Subsection (14) does not apply to:
(a) an offer of simple corporate bonds; or
(b) an offer of debentures (other than simple corporate bonds), if the offer is made to holders of simple corporate bonds.
Issues or sales for no consideration
(15) An offer of securities (other than options) does not need disclosure to investors under this Part if no consideration is to be provided for the issue or transfer of the securities.
(16) An offer of options does not need disclosure to investors under this Part if:
(a) no consideration is to be provided for the issue or transfer of the options; and
(b) no consideration is to be provided for the underlying securities on the exercise of the option.
Compromise or arrangement under Part 5 . 1
(17) An offer of securities does not need disclosure to investors under this Part if it is made under a compromise or arrangement under Part 5.1 approved at a meeting held as a result of an order under subsection 411(1) or (1A).
(17A) An offer of securities does not need disclosure to investors under this Part if:
(a) it is made to any or all of the company's creditors under a deed of company arrangement; and
(b) it does not require the provision of consideration other than the release of the company from a debt or debts; and
(c) before the offer was specified in the deed, the administrator gave as many creditors as reasonably practicable a statement:
(i) that set out all relevant information about the offer that was within the knowledge of the administrator of the deed; and
(ii) that stated that the statement is not a prospectus and may contain less information than a prospectus.
Takeovers
(18) An offer of securities does not need disclosure to investors under this Part if it is:
(a) made as consideration for an offer to acquire securities under a takeover bid under Chapter 6; and
(b) accompanied by a bidder's statement.
Note: Although this offer does not need a disclosure document, similar disclosures must be made about the securities in the bidder's statement under section 636.
Debentures of certain bodies
(19) An offer of a body's debentures for issue or sale does not need disclosure to investors under this Part if the body is:
(a) an Australian ADI; or
(b) registered under section 21 of the Life Insurance Act 1995 .
Offers by exempt bodies
(20) An offer of a body's securities in a State or Territory in this jurisdiction does not need disclosure to investors under this Part if the body is an exempt body corporate of that State or Territory.
Note: Section 66A defines exempt body corporate of a State or Territory .
(21) An offer of a body's securities for issue does not need disclosure to investors under this Part if the body is an exempt public authority of a State or Territory.
Note: Debentures, stock or bonds issued by a government are not securities for the purposes of this Chapter (see subsection 92(3)).