Corporations Legislation Amendment (Simpler Regulatory System) Act 2007 (101 of 2007)

Schedule 1   Amendments

Part 1   Amendments commencing on Royal Assent

Corporations Act 2001

78   After section 708

Insert:

708AA Rights issues that do not need disclosure

(1) This section applies to an offer of a body's securities (the relevant securities ) for issue if:

(a) but for subsection (2), disclosure to investors under this Part would be required by section 706; and

(b) a determination under subsection (3) is not in force in relation to the body at the time when the relevant securities are offered.

Conditions required for rights issue

(2) The offer does not need disclosure to investors under this Part if:

(a) the relevant securities are being offered under a rights issue; and

(b) the class of the relevant securities are quoted securities at the time at which the offer is made; and

(c) trading in that class of securities on a prescribed financial market on which they are quoted was not suspended for more than a total of 5 days during the shorter of the following periods:

(i) the period during which the class of securities is quoted;

(ii) the period of 12 months before the day on which the offer is made; and

(d) no exemption under section 111AS or 111AT covered the body, or any person as director or auditor of the body, at any time during the relevant period referred to in paragraph (c); and

(e) no order under section 340 or 341 covered the body, or any person as director or auditor of the body, at any time during the relevant period referred to in paragraph (c); and

(f) the body gives the relevant market operator for the body a notice that complies with subsection (7) within the 24 hour period before the offer is made.

Determination by ASIC

(3) ASIC may make a determination under this subsection if ASIC is satisfied that in the previous 12 months the body contravened any of the following provisions:

(a) subsection 283AA(1), 283AB(1) or 283AC(1);

(b) the provisions of Chapter 2M as they apply to the body;

(c) section 674 or 675;

(d) section 724 or 728;

(e) subsection (10) of this section;

(f) section 1308 as that section applies to a notice under subsection (2) of this section.

(4) The determination must be made in writing and a copy must be published in the Gazette as soon as practicable after the determination is made.

(5) The determination made under subsection (3) is not a legislative instrument.

(6) A failure to publish a copy of the determination does not affect the validity of the determination.

Requirements for notice

(7) A notice complies with this subsection if the notice:

(a) states that the body will offer the relevant securities for issue without disclosure to investors under this Part; and

(b) states that the notice is being given under paragraph (2)(f); and

(c) states that, as at the date of the notice, the body has complied with:

(i) the provisions of Chapter 2M as they apply to the body; and

(ii) section 674; and

(d) sets out any information that is excluded information as at the date of the notice (see subsections (8) and (9)); and

(e) states:

(i) the potential effect the issue of the relevant securities will have on the control of the body; and

(ii) the consequences of that effect.

Note 1: A person is taken not to contravene section 727 if a notice purports to comply with this subsection but does not actually comply with this subsection: see subsection 727(5).

Note 2: A notice must not be false or misleading in a material particular, or omit anything that would render it misleading in a material respect: see sections 1308 and 1309. The body has an obligation to correct a defective notice: see subsection (10) of this section.

(8) For the purposes of subsection (7), excluded information is information:

(a) that has been excluded from a continuous disclosure notice in accordance with the listing rules of the relevant market operator to whom that notice is required to be given; and

(b) 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; or

(ii) the rights and liabilities attaching to the relevant securities.

(9) The notice given under subsection (2) must contain any excluded information only to the extent to which it is reasonable for investors and their professional advisers to expect to find the information in a disclosure document.

Obligation to correct defective notice

(10) The body contravenes this subsection if:

(a) the notice given under subsection (2) is defective; and

(b) the body becomes aware of the defect in the notice within 12 months after the relevant securities are issued; and

(c) the body does not, within a reasonable time after becoming aware of the defect, give the relevant market operator a notice that sets out the information necessary to correct the defect.

(11) For the purposes of subsection (10), the notice under subsection (2) is defective if the notice:

(a) does not comply with paragraph (2)(f); or

(b) is false or misleading in a material particular; or

(c) has omitted from it a matter or thing, the omission of which renders the notice misleading in a material respect.