Corporations Act 2001

CHAPTER 6D - FUNDRAISING  

PART 6D.2 - DISCLOSURE TO INVESTORS ABOUT SECURITIES (OTHER THAN FOR CSF OFFERS)  

Division 1 - Overview  

SECTION 703B  

703B   PART GENERALLY DOES NOT APPLY IN RELATION TO CSF OFFERS  

Part 6D.3A (Crowd-sourced funding) contains a separate regime for the making of CSF offers. The provisions in this Part do not apply in relation to CSF offers, except as expressly provided in this Part or in Part 6D.3A .

Note 1: The fact that a company makes a CSF offer of securities does not prevent the company from also making an offer of securities of the same class in reliance on a provision of section 708 (see section 738E ).

Note 2: Division 1A of Part 7.12 (Employee share schemes) contains a separate regime for the making of offers in connection with employee share schemes. The provisions of this Part do not apply in relation to offers that are eligible to be made under that Division: see subsection 1100ZC(2) and section 1100ZD .

SECTION 704  

704   WHEN DISCLOSURE TO INVESTORS IS NEEDED  

Sections 706 , 707 , 708 , 708AA and 708A say when an offer of securities, other than a CSF offer, 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 .

SECTION 705  

705   TYPES OF DISCLOSURE DOCUMENT  

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.	content [ 712 ]
	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.
2A	2-part simple corporate bonds prospectus
	Must be used for any offer of simple corporate bonds.	content [713C, 713D, 713E] procedure [717] liability [728 and 729] defences [731 and 733]
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 $10 million or less.	content [ 715 ] procedure [ 717 ] liability [ 728 and 729 ] defences [ 732, 733 ]

Note: Subsection 709(1A) provides that if the offer period for an offer of simple corporate bonds begins during the 2-year period beginning at the commencement of that subsection, a prospectus (other than a 2-part simple corporate bonds prospectus) may be prepared.

Division 2 - Offers that need disclosure to investors  

SECTION 706  

706   ISSUE OFFERS THAT NEED DISCLOSURE  

An offer of securities for issue, other than a CSF offer, needs disclosure to investors under this Part unless section 708 or 708AA says otherwise.

SECTION 707   SALE OFFERS THAT NEED DISCLOSURE  

Only some sales need disclosure

707(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

707(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 relevant financial market;

and section 708 does not say otherwise.

Note: See section 50AA for when a person controls a body.

Sale amounting to indirect issue

707(3)    

An offer of a body's securities for sale within 12 months after their issue needs disclosure to investors under this Part if:

(a) the body issued the securities without disclosure to investors under this Part; and

(b) either:

(i) the body issued the securities with the purpose of the person to whom they were issued selling or transferring the securities, or granting, issuing or transferring interests in, or options over, them; or

(ii) the person to whom the securities were issued acquired them with the purpose of selling or transferring the securities, or granting, issuing or transferring interests in, or options over, them;

and section 708 or 708A 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 ).

The purpose test in subsection (3)

707(4)    

For the purposes of subsection (3):

(a) securities are taken to be:

(i) issued with the purpose referred to in subparagraph (3)(b)(i); or

(ii) acquired with the purpose referred to in subparagraph (3)(b)(ii);

if there are reasonable grounds for concluding that the securities were issued or acquired with that purpose (whether or not there may have been other purposes for the issue or acquisition); and

(b) without limiting paragraph (a), securities are taken to be:

(i) issued with the purpose referred to in subparagraph (3)(b)(i); or

(ii) acquired with the purpose referred to in subparagraph (3)(b)(ii);

if any of the securities are subsequently sold, or offered for sale, within 12 months after issue, unless it is proved that the circumstances of the issue and the subsequent sale or offer are not such as to give rise to reasonable grounds for concluding that the securities were issued or acquired with that purpose.

Sale amounting to indirect off-market sale by controller

707(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 relevant financial market on which they were quoted; and

(b) the controller sold the securities without disclosure to investors under this Part; and

(c) either:

(i) the controller sold the securities with the purpose of the person to whom they were sold selling or transferring the securities, or granting, issuing or transferring interests in, or options over, them; or

(ii) the person to whom the securities were sold acquired them with the purpose of selling or transferring the securities, or granting, issuing or transferring interests in, or options 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 ).

The purpose test in subsection (5)

707(6)    

For the purposes of subsection (5):

(a) securities are taken to be:

(i) sold with the purpose referred to in subparagraph (5)(c)(i); or

(ii) acquired with the purpose referred to in subparagraph (5)(c)(ii);

if there are reasonable grounds for concluding that the securities were sold or acquired with that purpose (whether or not there may have been other purposes for the sale or acquisition); and

(b) without limiting paragraph (a), securities are taken to be:

(i) sold with the purpose referred to in subparagraph (5)(c)(i); or

(ii) acquired with the purpose referred to in subparagraph (5)(c)(ii);

if any of the securities are subsequently sold, or offered for sale, within 12 months after their sale by the controller, unless it is proved that the circumstances of the initial sale and the subsequent sale or offer are not such as to give rise to reasonable grounds for concluding that the securities were sold or acquired (in the initial sale) with that purpose.

SECTION 708   OFFERS THAT DO NOT NEED DISCLOSURE  

Small scale offerings (20 issues or sales in 12 months)

708(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.

708(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.

708(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.

708(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.

708(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) .

708(6)    
(Repealed by No 122 of 2001, s 3, Sch 1, Pt 2 [ 414].)

708(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

708(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.

708(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.

708(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.

708(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 .

708(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 .

708(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.

Professional investors

708(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

708(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

708(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.

708(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.

708(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

708(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.

708(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

708(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) .

Deed of company arrangement

708(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.

(d) (Repealed)

Takeovers

708(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

708(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

708(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.

708(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) ).

SECTION 708AA   RIGHTS ISSUES THAT DO NOT NEED DISCLOSURE  

708AA(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

708AA(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 declared 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

708AA(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 , 674A , 675 or 675A ;

(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.

708AA(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.

708AA(5)    
The determination made under subsection (3) is not a legislative instrument.

708AA(6)    
A failure to publish a copy of the determination does not affect the validity of the determination.

Requirements for notice

708AA(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) sections 674 and 674A ; 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.

708AA(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.

708AA(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

708AA(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.

708AA(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.

SECTION 708A   SALE OFFERS THAT DO NOT NEED DISCLOSURE  

Sale offers to which this section applies

708A(1)    
This section applies to an offer (the sale offer ) of a body ' s securities (the relevant securities ) for sale by a person if:

(a)    but for subsection (5) , (11) or (12) , disclosure to investors under this Part would be required by subsection 707(3) for the sale offer; and

(b)    the securities were not issued by the body with the purpose referred to in subparagraph 707(3)(b)(i) ; and

(c)    a determination under subsection (2) was not in force in relation to the body at the time when the relevant securities were issued.

708A(1A)   

This section also applies to an offer (the sale offer ) of a body ' s securities (the relevant securities ) for sale by a person if:

(a)    but for subsection (5) , disclosure to investors under this Part would be required by subsection 707(5) for the sale offer; and

(b)    the securities were not sold by the controller with the purpose referred to in subparagraph 707(5)(c)(i) ; and

(c)    a determination under subsection (2) was not in force in relation to the body at the time when the relevant securities were issued.

Determination by ASIC

708A(2)    
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 , 674A , 675 or 675A ;

(d)    section 724 or 728 ;

(e)    subsection (9) of this section; or

(f)    section 1308 as that section applies to a notice under subsection (5) of this section.

708A(3)    
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.

708A(4)    
A failure to publish a copy of the determination does not affect the validity of the determination.

Sale offer of quoted securities - case 1

708A(5)    
The sale offer does not need disclosure to investors under this Part if:

(a)    

the relevant securities are in a class of securities that were quoted securities at all times in the 3 months before the day on which the relevant securities were issued; and

(b)    

trading in that class of securities on a declared financial market on which they were quoted was not suspended for more than a total of 5 days during the shorter of the period during which the class of securities were quoted, and the period of 12 months before the day on which the relevant securities were issued; and

(c)    

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 (b) ; and

(d)    

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 (b) ; and

(e)    

either:

(i) if this section applies because of subsection (1) - the body gives the relevant market operator for the body a notice that complies with subsection (6) before the sale offer is made; or

(ii) if this section applies because of subsection (1A) - both the body, and the controller, give the relevant market operator for the body a notice that complies with subsection (6) before the sale offer is made.

708A(6)    
A notice complies with this subsection if the notice:

(a)    is given within 5 business days after the day on which the relevant securities were issued by the body; and

(b)    states that the body issued the relevant securities without disclosure to investors under this Part; and

(c)    states that the notice is being given under paragraph (5)(e) ; and

(d)    

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) sections 674 and 674A ; and

(e)    sets out any information that is excluded information as at the date of the notice (see subsections (7) and (8) ).

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 (9) of this section.

708A(7)    
For the purposes of subsection (6) , 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.

708A(8)    
The notice given under subsection (5) 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

708A(9)    
The body contravenes this subsection if:

(a)    the notice given under subsection (5) 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.

708A(10)    
For the purposes of subsection (9) , the notice under subsection (5) is defective if the notice:

(a)    does not comply with paragraph (6)(e) ; 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.

Sale offer of quoted securities - case 2

708A(11)    
The sale offer does not need disclosure to investors under this Part if:

(a)    the relevant securities are in a class of securities that are quoted securities of the body; and

(b)    either:

(i) a prospectus is lodged with ASIC on or after the day on which the relevant securities were issued but before the day on which the sale offer is made; or

(ii) a prospectus is lodged with ASIC before the day on which the relevant securities are issued and offers of securities that have been made under the prospectus are still open for acceptance on the day on which the relevant securities were issued; and

(c)    the prospectus is for an offer of securities issued by the body that are in the same class of securities as the relevant securities.

Sale offer of quoted securities - case 3

708A(12)    
This subsection is satisfied if:

(a)    the body offered to issue securities under a prospectus; and

(b)    the body issued the relevant securities to:

(i) a person (the underwriter ) named in that prospectus as an underwriter of the issue; or

(ii) a person nominated by the underwriter; and

(c)    the relevant securities were issued to the underwriter, or the person nominated by the underwriter, at or about the time that persons who applied for securities under the prospectus were issued with those securities; and

(d)    the relevant securities are in a class of securities that were quoted securities of the body.

Division 3 - Types of disclosure documents  

SECTION 709   PROSPECTUSES, SHORT-FORM PROSPECTUSES, PROFILE STATEMENTS AND OFFER INFORMATION STATEMENTS  

Prospectus or short-form prospectus

709(1)    

If an offer of securities (other than an offer of simple corporate bonds) 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.

709(1A)    

If:

(a)    an offer of simple corporate bonds needs disclosure to investors under this Part; and

(b)    the offer period begins during the 2-year period beginning at the commencement of this subsection;

either of the following must be prepared for the offer:

(c)    a prospectus (other than a 2-part simple corporate bonds prospectus) unless subsection (4) allows an offer information statement to be used instead;

(d)    a 2-part simple corporate bonds prospectus.

Note: See sections 713B to 713E for the contents of a 2-part simple corporate bonds prospectus.

709(1B)    

If a prospectus is prepared under paragraph (1A)(c) , then, under section 712 , the prospectus may simply refer to material already lodged with ASIC instead of including it.

709(1C)    

If:

(a)    an offer of simple corporate bonds needs disclosure to investors under this Part; and

(b)    the offer period begins after the 2-year period beginning at the commencement of this subsection;

a 2-part simple corporate bonds prospectus must be prepared for the offer.

Note: See sections 713B to 713E for the contents of a 2-part simple corporate bonds prospectus.

Profile statement

709(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.

709(2A)    

Subsection (2) does not apply to an offer of simple corporate bonds.

709(3)    
ASIC may approve the use of profile statements for offers of securities of a particular kind. The approval may specify information to be included in the profile statement (including information about a matter referred to in paragraphs 714(1)(a) to (d) ).

Offer information statement

709(4)    

A body offering to issue securities may use an offer information statement for the offer instead of a prospectus (other than a 2-part simple corporate bonds 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 $10 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 than 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.

709(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.

However, do not include an amount payable for securities, or payable on the exercise of options, if the securities or options are issued under an employee share scheme.

Division 4 - Disclosure requirements  

SECTION 710   PROSPECTUS CONTENT - GENERAL DISCLOSURE TEST  

710(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 or debentures	•	the rights and liabilities attaching to the securities offered
		•	the assets and liabilities, financial position and performance, profits and losses and prospects of the body that is to issue (or issued) the shares or debentures
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:
			-	the interest or option
			-	the underlying securities
		•	for an option - the capacity of the person making the offer to issue or deliver the underlying securities
		•	if the person making the offer is:
			-	the body that issued or is to issue the underlying securities; or
			-	a person who controls that body;
			the assets and liabilities, financial position and performance, profits and losses and prospects of that body
		•	if subsection 707(3) or (5) applies to the offer - the assets and liabilities, financial position and performance, profits and losses and prospects of the body whose securities are offered

Note: Section 713 makes special provision for prospectuses for continuously quoted securities.

710(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) (Repealed)

(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.

710(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 financial services licensee involved in the issue or sale;

(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.

710(4)    

This section does not apply to a 2-part simple corporate bonds prospectus.

SECTION 711   PROSPECTUS CONTENT - SPECIFIC DISCLOSURES  

Terms and conditions of offer

711(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

711(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.

711(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.

(c) (Repealed)

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.

711(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) (Repealed)

(d)    a promoter of the body;

(e)    

an underwriter (but not a sub-underwriter) to the issue or sale or a financial services licensee named in the prospectus as a financial services licensee involved in the issue or sale.

Quotation of securities

711(5)    

If the prospectus for an offer of securities states or implies that the securities will be able to be traded on a financial market (whether in Australia or elsewhere), the prospectus must state that:

(a)    the securities have been admitted to quotation on that financial market; or

(b)    an application for admission of the securities to quotation on that financial market has been made to the operator of that market; or

(c)    an application for admission of the securities to quotation on that financial market will be made to the operator of that market 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

711(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

711(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

711(8)    
The prospectus must set out the information required by the regulations.

Section does not apply to 2-part simple corporate bonds prospectus

711(9)    

This section does not apply to a 2-part simple corporate bonds prospectus.

SECTION 712   PROSPECTUS CONTENT - SHORT FORM PROSPECTUSES  

Prospectus may simply refer to material lodged with ASIC

712(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) .

712(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).

712(3)    
The document (or part) referred to under subsection (1) is taken to be included in the prospectus.

712(4)    
A person who wishes to take advantage of subsection (1) may lodge a document with ASIC even if this Act does not require the document to be lodged.

712(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.

Section does not apply to 2-part simple corporate bonds prospectus

712(6)    

This section does not apply to a 2-part simple corporate bonds prospectus.

SECTION 713   SPECIAL PROSPECTUS CONTENT RULES FOR CONTINUOUSLY QUOTED SECURITIES  

Alternative general disclosure test

713(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.

713(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) (Repealed)

(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.

713(3)    
The prospectus must state that:

(a)    

as a disclosing entity, the body 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.

713(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;

(ia) if the body has lodged with ASIC a sustainability report - the most recently lodged sustainability report;

(ii) any half-year financial report lodged with ASIC by the body 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 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

713(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 declared financial market whose operator was given the notice; 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

713(6)    

ASIC may determine in writing that a body 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:

(a)    the provisions of Chapter 2M ;

(aa)    

subsection 674(2) , 674A(2) , 675(2) or 675A(2) ;

(ab)    

subsection 708AA(10) or 708A(9) ;

(b)    section 724 ;

(c)    section 728 ;

(d)    

section 1308 as it applies to a notice under subsection 708AA(2) or 708A(5) ;

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.

Section does not apply to 2-part simple corporate bonds prospectus

713(7)    

This section does not apply to a 2-part simple corporate bonds prospectus.

SECTION 713A   OFFER OF SIMPLE CORPORATE BONDS  

Simple corporate bonds

713A(1)    
If the conditions set out in this section are satisfied in relation to an offer of securities for issue by a body:

(a)    the offer is an offer of simple corporate bonds ; and

(b)    the securities are simple corporate bonds .

Securities must be debentures

713A(2)    
The securities must be debentures.

Securities must be quoted on a declared financial market

713A(3)    
The securities must be offered on the basis that:

(a)    the securities have been admitted to quotation on a declared financial market; or

(b)    an application for admission of the securities to quotation on a declared financial market has been made to the operator of that market; or

(c)    an application for admission of the securities to quotation on a declared financial market will be made to the operator of that market within 7 days after the date of the prospectus.

713A(4)    
If, at a particular time, there is no prospectus, then, for the purposes of paragraph (3)(c) , assume that:

(a)    there is a prospectus; and

(b)    the date of the prospectus is the first day of the offer period.

Securities must be in Australian currency

713A(5)    
The securities must be denominated in Australian currency.

Securities for fixed term

713A(6)    
The securities must be for a fixed term of not more than 15 years.

Principal payable at end of fixed term

713A(7)    
The principal in respect of the securities must be repaid by the issuing body to the holder at the end of the fixed term.

Interest rate must be fixed or floating

713A(8)    
The rate at which interest is payable on the securities must be:

(a)    a fixed rate; or

(b)    a floating rate that is comprised of a reference rate and a fixed margin.

Fixed rate etc. must not be decreased

713A(9)    
If a fixed rate of interest is payable on the securities, the rate must not be decreased during the term of the securities.

713A(10)    
If a floating rate of interest is payable on the securities, the fixed margin of the rate must not be decreased during the term of the securities.

Interest to be paid periodically etc.

713A(11)    
Interest payments on the securities:

(a)    must be paid periodically; and

(b)    must be paid no later than the end of the fixed term; and

(c)    cannot be deferred or capitalised by the issuing body.

Security must not exceed $1,000

713A(12)    
The price payable for each security must not exceed $1,000.

Securities may only be redeemed before fixed term in specified circumstances

713A(13)    
The securities must not be redeemable (other than at the end of the fixed term) except in one or more of the following circumstances:

(a)    at the option of the holders of the securities;

(b)    as a result of the acceptance of offers made to the holders by the issuing body to buy back the securities;

(c)    a change in a law, or in the application or interpretation of a law, with the effect that interest payable on the securities is not, or may not be, deductible by the issuing body for the purposes of calculating its taxation liability;

(d)    a change in a law, or in the application or interpretation of a law, with the effect that:

(i) the issuing body, or any guarantor for the body, would be required to deduct or withhold an amount in respect of taxes from a payment to the holders; and

(ii) under the terms of the securities, that deduction or withholding would result in the body, or any guarantor, being required to pay an additional amount to the holders in relation to the amount deducted or withheld;

(e)    there is a change of control of the issuing body (as defined in the terms of the securities) and the redemption does not take effect unless all securities issued under the offer are redeemed;

(f)    fewer than 10% of the securities issued under the offer remain on issue and the redemption does not take effect unless all securities issued under the offer are redeemed.

Debt to security holders is not subordinated to debts to unsecured creditors

713A(14)    
The issuing body ' s debts to holders of the securities must not be subordinated to any of the issuing body ' s debts to unsecured creditors.

Securities not convertible

713A(15)    
The securities must not be convertible into another class of securities.

Securities are offered at single price

713A(16)    
The price payable for the securities must be the same for all persons who accept the offer.

Continuously quoted securities

713A(17)    
The issuing body must be a body that:

(a)    has continuously quoted securities; or

(b)    is a wholly-owned subsidiary of a body corporate that:

(i) has continuously quoted securities; and

(ii) has guaranteed, or agreed to guarantee, the repayment of any money deposited or lent to the borrower under the securities; and

(iii) has guaranteed, or agreed to guarantee, the payment of any interest payable on the securities;

where trading in the securities on a declared financial market on which the securities are quoted was not suspended for more than a total of 5 days during the shorter of the following periods:

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

(d)    the period of 12 months before the day on which the offer is made.

713A(18)    
If, at a particular time, there is no prospectus, then, in determining, for the purposes of subsection (17) , whether a body has continuously quoted securities at that time, assume that:

(a)    there is a prospectus; and

(b)    the date of the prospectus is the first day of the offer period.

Auditor ' s reports have not been modified

713A(19)    
If the condition in subsection (17) is satisfied because of the application of paragraph (17)(a) to the issuing body, the auditor ' s report on:

(a)    the issuing body ' s financial report for the most recent financial year; or

(b)    if a half-year financial report was prepared by the issuing body after the issuing body ' s financial report for the most recent financial year - the half-year financial report;

must not include:

(c)    a statement to the effect that the auditor is of the opinion that the financial report, or the half-year financial report, as the case may be, is not in accordance with this Act; or

(d)    a description of a defect or an irregularity in the financial report or the half-year financial report, as the case may be; or

(e)    a description of a deficiency, failure or shortcoming in respect of the matters referred to in paragraph 307(b) , (c) or (d) ; or

(f)    an emphasis of matter paragraph related to going concern.

713A(20)    
If:

(a)    the issuing body is a wholly-owned subsidiary of a body corporate; and

(b)    the condition in subsection (17) is satisfied because of the application of paragraph (17)(b) to the body corporate;

the auditor ' s report on:

(c)    the body corporate ' s financial report for the most recent financial year; or

(d)    if a half-year financial report was prepared by the body corporate after the body corporate ' s financial report for the most recent financial year - the half-year financial report;

must not include:

(e)    a statement to the effect that the auditor is of the opinion that the financial report, or the half-year financial report, as the case may be, is not in accordance with this Act; or

(f)    a description of a defect or an irregularity in the financial report or the half-year financial report, as the case may be; or

(g)    a description of a deficiency, failure or shortcoming in respect of the matters referred to in paragraph 307(b) , (c) or (d) ; or

(h)    an emphasis of matter paragraph related to going concern.

ASIC power to exclude body from this section

713A(21)    
The issuing body must not be a body in relation to which a determination is in force under subsection (23) .

713A(22)    
If the issuing body is a wholly-owned subsidiary of a body corporate, the body corporate must not be a body in relation to which a determination is in force under subsection (23) .

713A(23)    
ASIC may determine that a body is a body to which this subsection applies if ASIC is satisfied that, in the previous 12 months, any of the following provisions were contravened in relation to the body:

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

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

(c)    

section 674 , 674A , 675 or 675A ;

(d)    section 724 or 728 .

ASIC must publish a copy of the determination in the Gazette.

Regulations

713A(24)    
The securities must comply with such other conditions (if any) as are specified in the regulations.

713A(25)    
The offer must comply with such other conditions (if any) as are specified in the regulations.

713A(26)    
The issuing body must comply with such other conditions (if any) as are specified in the regulations.

713A(27)    
If the issuing body is a wholly-owned subsidiary of a body corporate, the body corporate must comply with such other conditions (if any) as are specified in the regulations.

SECTION 713B   SIMPLE CORPORATE BONDS - 2-PART SIMPLE CORPORATE BONDS PROSPECTUS  

713B(1)    
A 2-part simple corporate bonds prospectus for an offer of simple corporate bonds for issue by a body is the combination of the following documents prepared by the issuing body:

(a)    the base prospectus that covers the period during which the offer is made;

(b)    the offer-specific prospectus for the offer.

Prospectus

713B(2)    
A 2-part simple corporate bonds prospectus is taken to be a prospectus for the purposes of this Act.

Base prospectus is not taken to be a prospectus in its own right

713B(3)    
For the purposes of this Act, a base prospectus is taken not to be a prospectus in its own right.

Offer-specific prospectus is not taken to be a prospectus in its own right

713B(4)    
For the purposes of this Act, an offer-specific prospectus is taken not to be a prospectus in its own right.

Lodgement of prospectus

713B(5)    
For the purposes of this Act, a 2-part simple corporate bonds prospectus for an offer of simple corporate bonds is taken to have been lodged with ASIC on the day the offer-specific prospectus for the offer is lodged with ASIC.

Expiry date of prospectus

713B(6)    
For the purposes of this Act, the expiry date of a 2-part simple corporate bonds prospectus for an offer of simple corporate bonds is taken to be the expiry date for the offer-specific prospectus for the offer.

Prospectus must be published on body ' s website

713B(7)    
A base prospectus must be available on the issuing body ' s website throughout the covered period for the base prospectus (within the meaning of section 713C ).

713B(8)    
An offer-specific prospectus must be available on the issuing body ' s website throughout the application period for the offer-specific prospectus.

SECTION 713C   SIMPLE CORPORATE BONDS - BASE PROSPECTUS  

Base prospectus

713C(1)    
If a body prepares and lodges with ASIC a document that satisfies the conditions set out in subsections (2) and (3) , the document is a base prospectus for simple corporate bonds offered by the body during the 3-year period (the covered period ) beginning on the date on which the document is lodged with ASIC.

Document must be expressed to be the base prospectus

713C(2)    
The document must state that it is the base prospectus for all offers of simple corporate bonds made by the body during the covered period.

Document to be read with offer-specific prospectus

713C(3)    
The document must state that:

(a)    there will be an offer-specific prospectus for each offer of simple corporate bonds during the covered period; and

(b)    the disclosure document for each such offer will consist of:

(i) a base prospectus; and

(ii) the offer-specific prospectus for the offer.

Note: See also section 713B (2-part simple corporate bonds prospectus).

Replacement document

713C(4)    
If the document is a replacement document, the covered period is the period:

(a)    beginning on the date on which the replacement document is lodged with ASIC; and

(b)    ending at the end of the covered period for the original base prospectus.

Content of base prospectus

713C(5)    
A base prospectus must contain the information specified in the regulations.

713C(6)    
A base prospectus must set out the statements specified in the regulations.

SECTION 713D   SIMPLE CORPORATE BONDS - OFFER-SPECIFIC PROSPECTUS  

Offer-specific prospectus

713D(1)    
If:

(a)    a body proposes to make a particular offer of simple corporate bonds; and

(b)    the body prepares and lodges with ASIC a document that satisfies:

(i) the conditions set out in subsections (2) , (3) and (4) ; and

(ii) if the condition set out in subsection (5) is applicable - that condition;

the document is an offer-specific prospectus for the offer.

Document must be expressed to be the offer-specific prospectus

713D(2)    
The document must state that it is the offer-specific prospectus for the offer.

Expiry date

713D(3)    
The document must state that no simple corporate bonds will be issued under the offer after the expiry date specified in the document. The expiry date must not be later than 13 months after the date the document is lodged with ASIC. The expiry date of a replacement document must be the same as that of the original document it replaces.

Note: Section 719A deals with replacement documents.

Document to be read with base prospectus

713D(4)    
The document must state that:

(a)    there is a base prospectus that is applicable to the offer; and

(b)    the disclosure document for each such offer will consist of:

(i) the offer-specific prospectus for the offer; and

(ii) the base prospectus.

Note: See also section 713B (2-part simple corporate bonds prospectus).

Minimum subscription - first offer

713D(5)    
If the offer is the first offer of simple corporate bonds made by the issuing body during:

(a)    if the base prospectus that is applicable to the offer is not a replacement document - the covered period (within the meaning of subsection 713C(1) ) for the base prospectus; or

(b)    if the base prospectus that is applicable to the offer is a replacement document for the original base prospectus - the covered period (within the meaning of subsection 713C(1) ) for the original base prospectus;

the document must state that the simple corporate bonds will not be issued under the offer unless a minimum amount of $50 million is raised under the offer. For the purpose of working out whether this condition has been satisfied, a person who has agreed to take simple corporate bonds as an underwriter is taken to have applied for those simple corporate bonds.

Content of offer-specific prospectus

713D(6)    
An offer-specific prospectus must contain the information specified in the regulations.

713D(7)    
An offer-specific prospectus must set out the statements specified in the regulations.

Offer-specific prospectus may amend applicable base prospectus

713D(8)    
An offer-specific prospectus may include material that modifies or supplements the applicable base prospectus.

SECTION 713E   SIMPLE CORPORATE BONDS - PROSPECTUS MAY REFER TO OTHER MATERIAL LODGED WITH ASIC  

713E(1)    
Instead of setting out information that is contained in a document (the lodged document ) that has been lodged with ASIC, a base prospectus or an offer-specific prospectus may simply refer to the lodged document. The reference must:

(a)    identify the lodged document or the part of the lodged document that contains the information; and

(b)    inform people of their right to obtain a copy of the lodged document (or part) under subsection (5) .

713E(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 lodged document (or part); and

(ii) a statement to the effect that the information in the lodged document (or part) is primarily of interest to those people; or

(b)    in any other case - sufficient information about the contents of the lodged document to allow a person to whom the offer is made to decide whether to obtain a copy of the lodged document (or part).

713E(3)    
The lodged document (or part) referred to under subsection (1) is taken to be included in the base prospectus, or the offer-specific prospectus, as the case may be.

713E(4)    
A person who wishes to take advantage of subsection (1) may lodge a document with ASIC even if this Act does not require the document to be lodged.

713E(5)    
If the base prospectus, or the offer-specific prospectus, as the case may be, is taken to include a lodged document, or part of a lodged document, under subsection (1) , the person making the offer must give a copy of the lodged document (or part) free of charge to anyone who asks for it during:

(a)    in the case of a base prospectus - the covered period for the base prospectus (within the meaning of section 713C ); or

(b)    in the case of an offer-specific prospectus - the application period for the offer-specific prospectus.

SECTION 714   CONTENTS OF PROFILE STATEMENT  

714(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) .

714(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.

SECTION 715   CONTENTS OF OFFER INFORMATION STATEMENT  

715(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

(ia)    if the body has prepared a sustainability report - include a copy of the most recent sustainability report; and

(j)    include any other information that the regulations require to be included in the statement.

715(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.

715(2A)    

The sustainability report included under paragraph (1)(ia) must:

(a)    comply with the sustainability standards; and

(b)    be audited.

715(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.

SECTION 715A   PRESENTATION ETC. OF DISCLOSURE DOCUMENTS  

715A(1)    
The information in a disclosure document must be worded and presented in a clear, concise and effective manner.

Note: If this subsection is contravened, ASIC may make a stop order under section 739 .

715A(2)    
A contravention of subsection (1) is not an offence.

SECTION 716   DISCLOSURE DOCUMENT DATE AND CONSENTS  

Date of disclosure document

716(1)    
A disclosure document must be dated. The date is the date on which it is lodged with ASIC.

Date for 2-part simple corporate bonds prospectus

716(1A)    

Subsection (1) does not apply to a 2-part simple corporate bonds prospectus.

716(1B)    

For the purposes of this Act, the date of a 2-part simple corporate bonds prospectus for an offer of simple corporate bonds is taken to be the date on which the offer-specific prospectus for the offer is lodged with ASIC.

Consent of person to whom statement attributed

716(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.

Division 5 - Procedure for offering securities  

SECTION 717  

717   OVERVIEW OF PROCEDURE FOR OFFERING SECURITIES  

The following table summarises what a person who wants to offer securities must do to make an offer of securities that needs disclosure to investors under this Part and gives signposts to relevant sections:

Offering securities (disclosure documents and procedure)
	Action required	Sections	Comments and related sections
1	Prepare disclosure document, making sure that it:	710 711 712 713 713C 713D 713E 714 715 716	Section 728 prohibits offering securities under a disclosure document that is materially deficient.
	•		sets out all the information required	Section 729 deals with the liability for breaches of this prohibition.
	•		does not contain any misleading or deceptive statements	Sections 731 , 732 and 733 set out defences.
	•		is dated
	and that the directors consent to the disclosure document.
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:
			•	offer securities without a disclosure document
	•	the disclosure document; or		•	offer securities if the disclosure document is materially deficient.
	•	a profile statement if ASIC has approved the use of a profile statement for offers of that kind.		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 719A 724	Section 728 prohibits making offers after becoming aware of a material deficiency in the disclosure document or a significant new matter.
	•	lodge a supplementary or replacement document under section 719 or 719A ; or		Section 730 requires people liable on the disclosure document to inform the person making the offer about material deficiencies and new matters.
	•	return money to applicants under section 724 .
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.
	•	the investor used an application form distributed with the disclosure document; and		Section 729 identifies the people who may be liable if:
	•	the disclosure document is current and not materially deficient; and		•	securities are issued in response to an improper application form; or
	•	any minimum subscription condition has been satisfied.		•	the disclosure document is not current or is materially deficient.
				Sections 731 , 732 and 733 provide defences for the contraventions.
				Section 737 provides remedies for an investor.

SECTION 718   LODGING OF DISCLOSURE DOCUMENT  

718(1)    
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.

718(2)    

This section does not apply to a 2-part simple corporate bonds prospectus.

Note: See section 713B (2-part simple corporate bonds prospectus).

SECTION 719   LODGING SUPPLEMENTARY OR REPLACEMENT DOCUMENT - GENERAL  

Need for a supplementary or replacement document

719(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.

719(1A)    

If the person making the offer becomes aware that information in the disclosure document is not worded and presented in a clear, concise and effective manner, the person may lodge a supplementary or replacement document with ASIC.

Form of supplementary document

719(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

719(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

719(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

719(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.

Section does not apply to 2-part simple corporate bonds prospectus

719(6)    

This section does not apply to a 2-part simple corporate bonds prospectus.

SECTION 719A   LODGING SUPPLEMENTARY OR REPLACEMENT DOCUMENT - 2-PART SIMPLE CORPORATE BONDS PROSPECTUS  

Need for a supplementary or replacement document

719A(1)    
If the person making an offer of simple corporate bonds under a 2-part simple corporate bonds prospectus becomes aware of:

(a)    a misleading or deceptive statement in the 2-part simple corporate bonds prospectus; or

(b)    an omission from the 2-part simple corporate bonds prospectus of information required by section 713C , 713D or 713E ; or

(c)    a new circumstance that:

(i) has arisen since the 2-part simple corporate bonds prospectus was lodged with ASIC; and

(ii) would have been required by section 713C , 713D or 713E to be included in the 2-part simple corporate bonds prospectus if it had arisen before the 2-part simple corporate bonds prospectus was lodged;

that is materially adverse from the point of view of an investor, the person may:

(d)    if the statement, omission or circumstance relates to the base prospectus component of the 2-part simple corporate bonds prospectus:

(i) include material in an offer-specific prospectus that supplements or modifies the base prospectus; or

(ii) lodge a replacement document with ASIC; or

(e)    if the statement, omission or circumstance relates to the offer-specific prospectus component of the 2-part simple corporate bonds prospectus - 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 713E , a 2-part simple corporate bonds 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: A base prospectus may be supplemented or modified by the offer-specific prospectus for a particular offer, see subsection 713D(7) .

Note 4: The power to issue a supplementary or replacement document is not limited to the situations dealt with in this section.

Note 5: This section applies to a document that has already been previously supplemented or replaced.

Note 6: See section 720 for the consents that need to be obtained before lodgement.

719A(2)    
If the person making the offer becomes aware that information in the base prospectus component of the 2-part simple corporate bonds prospectus is not worded and presented in a clear, concise and effective manner, the person may lodge a replacement document with ASIC.

Note: A base prospectus may be supplemented or modified by the offer-specific prospectus for a particular offer, see subsection 713D(7) .

719A(3)    
If the person making the offer becomes aware that information in the offer-specific prospectus component of the 2-part simple corporate bonds prospectus is not worded and presented in a clear, concise and effective manner, the person may lodge a supplementary or replacement document with ASIC.

Form of supplementary document for offer-specific prospectus

719A(4)    
At the beginning of a supplementary document for an offer-specific prospectus, there must be:

(a)    a statement that it is a supplementary document; and

(b)    an identification of the offer-specific prospectus 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:

(i) the offer-specific prospectus it supplements; and

(ii) any previous supplementary documents; and

(iii) the base prospectus that covers the period during which the offer is made.

The supplementary document must be dated. The date is the date on which the document is lodged with ASIC.

Form of replacement document for a base prospectus

719A(5)    
At the beginning of a replacement document for a base prospectus, there must be:

(a)    a statement that it is a replacement document; and

(b)    an identification of the base prospectus it replaces.

The replacement document must be dated. The date is the date on which the document is lodged with ASIC.

Form of replacement document for an offer-specific prospectus

719A(6)    
At the beginning of a replacement document for an offer-specific prospectus, there must be:

(a)    a statement that it is a replacement document; and

(b)    an identification of the offer-specific prospectus it replaces.

The replacement document must be dated. The date is the date on which the document is lodged with ASIC.

Consequences of lodging a supplementary document for an offer-specific prospectus

719A(7)    
If a supplementary document is lodged with ASIC in relation to an offer-specific prospectus, the offer-specific prospectus is taken to be the offer-specific prospectus together with the supplementary document for the purposes of the application of this Chapter to events that occur after the lodgement.

Note: This subsection means, for example, that offers made after lodgement of the supplementary document must be accompanied by copies of both the original offer-specific prospectus and the supplementary document.

Consequences of lodging a replacement document for a base prospectus

719A(8)    
If a replacement document is lodged with ASIC in relation to a base prospectus, the base prospectus is taken to be the replacement document for the purposes of the application of this Chapter to events that occur after the lodgement.

Note: This subsection means, for example, that offers made after lodgement of the replacement document must be accompanied by copies of the replacement document and not the original base prospectus.

Consequences of lodging a replacement document for an offer-specific prospectus

719A(9)    
If a replacement document is lodged with ASIC in relation to an offer-specific prospectus, the offer-specific prospectus is taken to be the replacement document for the purposes of the application of this Chapter to events that occur after the lodgement.

Note: This subsection means, for example, that offers made after lodgement of the replacement document must be accompanied by copies of the replacement document and not the original offer-specific prospectus.

SECTION 720  

720   CONSENTS NEEDED FOR LODGMENT  

The lodgment of a disclosure document, or a supplementary or replacement document, for the offer of a body ' s securities requires the consent of:

Consents required for lodgment	[ operative ]
	Type of offer	People whose consent is required
	Issue offers
1	offer of securities for issue (other than an offer of simple corporate bonds under a 2-part simple corporate bonds prospectus)	every director of the body
		every person named in the document as a proposed director of the body
	Simple corporate bonds issue offers
1A	offer of simple corporate bonds under a 2-part simple corporate bonds prospectus	every director of the body
		every person named in the document as a proposed director of the body
	sale offers (sale by controller)
2	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
	sale offers (sale amounting to indirect issue)
3	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
	sale offers (sale amounting to indirect sale by controller)
4	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

SECTION 721   OFFER MUST BE MADE IN, OR ACCOMPANIED BY, THE DISCLOSURE DOCUMENT  

Offers using prospectus alone

721(1)    

Offers of securities for which a prospectus is being used must be made in, or accompanied by, the prospectus.

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.

721(1A)    

Subsection (1) does not apply to the extent that subsection (2) allows a profile statement to be used instead of a prospectus.

Note: A defendant bears an evidential burden in relation to the matter in subsection (1A), see subsection 13.3(3) of the Criminal Code .