Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

PART 7.9 - FINANCIAL PRODUCT DISCLOSURE AND OTHER PROVISIONS RELATING TO ISSUE, SALE AND PURCHASE OF FINANCIAL PRODUCTS  

Division 2 - Product Disclosure Statements  

Subdivision B - Requirement for a Product Disclosure Statement to be given  

SECTION 1012DAA   RIGHTS ISSUES FOR WHICH PRODUCT DISCLOSURE STATEMENT IS NOT REQUIRED  

1012DAA(1)    
In a recommendation situation or issue situation, the regulated person does not have to give the client a Product Disclosure Statement if:

(a)    but for subsection (2) , the regulated person would be required by section 1012B to give a Product Disclosure Statement for the transfer or issue of a financial product (the relevant product ); and

(b)    a determination under subsection (3) was not in force in relation to the issuer of the relevant product at the time when the relevant product was issued.

Conditions required for rights issue

1012DAA(2)    
The regulated person does not have to give the client a Product Disclosure Statement if:

(a)    the relevant product is being offered under a rights issue; and

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

(c)    

trading in that class of the relevant product 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 the relevant product 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 issuer of the relevant product, or any person as director or auditor of the issuer, at any time during the relevant period referred to in paragraph (c) ; and

(e)    

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

(f)    the issuer of the relevant product gives the relevant market operator for the issuer a written notice that complies with subsection (7) within the 24 hour period before the relevant conduct occurs.

Determination by ASIC

1012DAA(3)    
ASIC may make a determination under this subsection if ASIC is satisfied that in the previous 12 months the issuer of the relevant product contravened any of the following provisions:

(a)    the provisions of Chapter 2M as they apply to the registered scheme in which the relevant product is an interest;

(aa)    the provisions of Chapter 2M as they apply to the notified foreign passport fund in which the relevant product is an interest;

(b)    

section 674 , 674A , 675 or 675A as it applies to the registered scheme in which the relevant product is an interest;

(ba)    

section 674 , 674A , 675 or 675A as it applies to the notified foreign passport fund in which the relevant product is an interest;

(c)    section 1016E , 1021D , 1021E or 1021J ;

(d)    subsection (10) of this section;

(e)    section 1308 as it applies to a notice under subsection (2) of this section.

1012DAA(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.

1012DAA(5)    
The determination made under subsection (3) is not a legislative instrument.

1012DAA(6)    
A failure to publish a copy of the determination does not affect the validity of the determination.

Requirements for notice

1012DAA(7)    
A notice complies with this subsection if the notice:

(a)    states that the relevant product was issued without a Product Disclosure Statement for the relevant product being prepared; and

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

(c)    states that, as a disclosing entity, the issuer of the relevant product is subject to regular reporting and disclosure obligations; and

(d)    

if the relevant product is a managed investment product - states that, as at the date of the notice, the issuer of the relevant product has complied with:

(i) the provisions of Chapter 2M as they apply to the registered scheme in which the relevant product is an interest; and

(ii) sections 674 and 674A as they applies to that registered scheme; and

(da)    

if the relevant product is a foreign passport fund product - states that, as at the date of the notice, the issuer of the relevant product has complied with:

(i) the provisions of Chapter 2M as they apply to the fund in which the relevant product is an interest; and

(ii) sections 674 and 674A as they apply to that fund; and

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

(f)    states:

(i) the potential effect the issue of the relevant product 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 1021C if a notice purports to comply with this subsection but does not actually comply with this subsection: see subsection 1021C(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 issuer has an obligation to correct a defective notice: see subsection (10) of this section.

1012DAA(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 a person would reasonably require for the purpose of making a decision, as a retail client, whether to acquire the relevant product.

1012DAA(9)    
The notice given under subsection (2) must contain any excluded information only to the extent to which it is reasonable for a person considering, as a retail client, whether to acquire the relevant product to expect to find the information in a Product Disclosure Statement.

Obligation to correct defective notice

1012DAA(10)    
The issuer of the relevant product contravenes this subsection if:

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

(b)    the issuer becomes aware of the defect in the notice within 12 months after the relevant product is issued; and

(c)    the issuer 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.

1012DAA(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.