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 7.12 - MISCELLANEOUS  

Division 1A - Employee share schemes  

Subdivision E - Prohibitions and defences  

SECTION 1100ZI   MISSTATEMENT IN, OR OMISSION FROM, FINANCIAL INFORMATION FOR OPTIONS AND INCENTIVE RIGHTS  

1100ZI(1)    
A person must not offer ESS interests that are options or incentive rights to ESS participants if subparagraph 1100Q(1)(a)(ii) and subsection 1100Y(4) apply to the offer and there is:

(a)    a misleading or deceptive statement in any information provided to the ESS participants in purported satisfaction of the term of the offer mentioned in paragraph 1100Y(4)(a) (about the provision of valuations and financial information); or

(b)    an omission from information provided as mentioned in paragraph (a) that would result in the information provided being misleading or deceptive; or

(c)    a new circumstance that:

(i) has arisen during the period that the option is exercisable or the incentive right is vested; and

(ii) if the new circumstance had occurred before the option became exercisable or the incentive right vested, would have been required to be included in the information mentioned in paragraph (a) .

1100ZI(2)    
For the purposes of subsection (1) , a person is taken to offer options and incentive rights to ESS participants at all times during which the options are exercisable or the incentive rights are vested.

Forecasts and other forward-looking statements

1100ZI(3)    
A person is taken to make a misleading statement about a future matter (including the doing of, or refusing to do, an act) if they do not have reasonable grounds for making the statement. This subsection does not limit the meaning of a reference to a misleading statement or a statement that is misleading in a material particular.

Offence if statement or new circumstance is materially adverse

1100ZI(4)    
A person commits an offence if:

(a)    the person contravenes subsection (1) ; and

(b)    the misleading or deceptive statement or omission, or the new circumstance, is materially adverse from the point of view of an ESS participant.

Defence - due diligence

1100ZI(5)    
A person does not commit an offence against subsection (4) because of a misleading or deceptive statement in, or an omission from, information mentioned in paragraph (1)(a) if the person proves that the person:

(a)    made all inquiries (if any) that were reasonable in the circumstances; and

(b)    after doing so, believed on reasonable grounds that the statement was not misleading or deceptive.

Defence - lack of knowledge

1100ZI(6)    
A person does not commit an offence against subsection (4) because of a misleading or deceptive statement in information mentioned in paragraph (1)(a) if the person proves that the person did not know that the statement was misleading or deceptive.

1100ZI(7)    
A person does not commit an offence against subsection (4) because of an omission from information mentioned in paragraph (1)(a) in relation to a particular matter if the person proves that the person did not know that there was an omission from the information in relation to that matter.

1100ZI(8)    
A person does not commit an offence against subsection (4) because of a new circumstance that had arisen as mentioned in paragraph (1)(c) if the person did not know that the new circumstance had arisen.

Defence - reasonable reliance on information given by someone else

1100ZI(9)    
A person does not commit an offence against subsection (4) because of a misleading or deceptive statement in information mentioned in paragraph (1)(a) if the person proves that the person placed reasonable reliance on information given to them by:

(a)    if the person is a body corporate or a responsible entity of a registered scheme - someone other than a director, employee or agent of the body corporate or responsible entity; or

(b)    if the person is an individual - someone other than an employee or agent of the individual.

1100ZI(10)    
For the purposes of subsection (9) , a person is not the agent of a body corporate or responsible entity merely because the person performs a particular professional or advisory function for the body corporate or responsible entity.

Defence - provision of updated information

1100ZI(11)    
A person does not commit an offence against subsection (4) because of a new circumstance that has arisen as mentioned in paragraph (1)(c) if the person proves that, as soon as reasonably practicable after the circumstance arose:

(a)    the information mentioned in paragraph (1)(a) was updated to include all relevant information about the new circumstance; and

(b)    the updated information was given to the ESS participants.