Corporations Act 2001

CHAPTER 6 - TAKEOVERS  

Note: This Chapter only applies to acquisitions of interests in a CCIV if the CCIV is a listed company: see Division 1 of Part 8B.7 .

PART 6.1 - PROHIBITED ACQUISITIONS OF RELEVANT INTERESTS IN VOTING SHARES  

SECTION 609   SITUATIONS NOT GIVING RISE TO RELEVANT INTERESTS  

Money lending and financial accommodation

609(1)    

A person does not have a relevant interest in securities merely because of a security interest taken or acquired by the person if:

(a)    

the security interest is taken or acquired:

(i) in the ordinary course of the person ' s business of the provision of financial accommodation by any means and on ordinary commercial terms; or

(ii) for the benefit of one or more other persons in relation to financial accommodation provided by them in the ordinary course of their business of the provision of financial accommodation by any means and on ordinary commercial terms; and

(b)    

the person whose property is subject to the security interest is not an associate of any other person mentioned in this subsection.

In this subsection, a reference to a security interest includes a reference to a negative pledge.

Note: Sections 11 to 17 define associate .

Nominees and other trustees

609(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 financial services licensee

609(3)    

A financial services licensee does not have a relevant interest in securities merely because they hold securities on behalf of someone else in the ordinary course of their financial services business.

Disposal of securities by financial services licensees

609(3A)    

A financial services licensee does not have a relevant interest in securities merely because, in the ordinary course of the licensee ' s financial services business, a person specifically instructs the licensee to:

(a)    dispose of the securities on behalf of the person; or

(b)    enter into a position on behalf of the person under which the licensee has an obligation to make delivery of the securities by dealing in:

(i) a warrant within the meaning of the regulations; or

(ii) a financial product that, but for the product not being transferable, would be a warrant within the meaning of the regulations.

Shares covered by buy-backs

609(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

609(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.

Market traded options and derivatives

609(6)    
A person does not have a relevant interest in securities merely because of:

(a)    

an [ sic ] market traded option over the securities; or

(b)    

a right to acquire the securities given by a derivative.

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

609(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

609(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

609(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.

Clearing and settlement facilities

609(9A)    

The operator of a clearing and settlement facility does not have a relevant interest in securities merely because of its provision of facilities for the settlement of transactions.

Securities escrowed under listing rules

609(9B)    

A listed company does not have a relevant interest in securities merely because:

(a)    

those securities are restricted securities within the meaning of the listing rules of a declared financial market; and

(b)    the company applies restrictions, in accordance with those rules, on the disposal of the securities by their holder.

609(9C)    

The operator of a declared financial market does not have a relevant interest in securities merely because:

(a)    those securities are restricted securities within the meaning of the listing rules of that market; and

(b)    the operator has the power under those rules to control the exercise of a power to dispose of the securities.

Prescribed exclusions

609(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.