Corporations (NZ Closer Economic Relations) and Other Legislation Amendment Act 2007 (85 of 2007)

Schedule 1   Mutual recognition of securities offers

Corporations Act 2001

18   After Chapter 7

Insert:

Chapter 8 - Mutual recognition of securities offers

Part 8.1 - Preliminary

1200A Definitions

(1) In this Chapter:

foreign recognition scheme means the provisions of a law of a recognised jurisdiction that are prescribed by the regulations as comprising a foreign recognition scheme for the purposes of this Chapter.

law of a recognised jurisdiction includes law of part of a recognised jurisdiction.

offer securities includes:

(a) invite applications for the issue of securities; and

(b) invite offers to purchase securities.

offeror , of securities, means:

(a) in relation to an offer of a kind prescribed by the regulations - a person of a kind prescribed by the regulations; and

(b) otherwise - the person who has the capacity, or who agrees, to issue or transfer the securities if the offer is accepted.

recognised jurisdiction means a foreign country prescribed by the regulations as a recognised jurisdiction.

recognised offer has the meaning given by section 1200B.

securities means:

(a) a share in a body; or

(b) a debenture of a body; or

(c) an interest in a managed investment scheme; or

(d) a legal or equitable right or interest in a security or interest covered by paragraph (a), (b) or (c); or

(e) an option to acquire, by way of issue, an interest or right covered by paragraph (a), (b), (c) or (d).

(2) For the purposes of this Chapter, paragraph (b) of the definition of debenture in section 9 is taken to include a reference to an undertaking by an institution, authorised by or under the law of a recognised jurisdiction as a deposit-taking institution (however described), to repay money deposited with it, or lent to it, in the ordinary course of its banking business.

(3) For the purposes of this Chapter:

(a) paragraph (c) of the definition of managed investment scheme in section 9 is taken to include a reference to a partnership that, if this Act applied to it, would not need to be incorporated or formed under an Australian law because of regulations made for the purposes of subsection 115(2); and

(b) paragraph (i) of the definition of managed investment scheme in section 9 is taken to include a reference to a scheme operated by an institution, authorised by or under the law of a recognised jurisdiction as a deposit-taking institution (however described), in the ordinary course of its banking business.

Part 8.2 - Foreign offers that are recognised in this jurisdiction

Division 1 - Recognised offers

1200B When an offer is a recognised offer

(1) An offer of securities becomes a recognised offer , in relation to a recognised jurisdiction, on the day the offer is first made in this jurisdiction, if the conditions in section 1200C are met in relation to the offer on that day.

(2) The offer continues to be a recognised offer after that day, even if a condition in section 1200C ceases to be met after that day.

(3) If, at the time an offer is first made in this jurisdiction, the offer would be a recognised offer but for a failure to meet the condition in subsection 1200C(5) or (6) that ASIC is satisfied is minor or technical, ASIC may declare in writing that the offer is a recognised offer within the meaning of subsection (1).

(4) If ASIC makes a declaration under subsection (3) in relation to an offer, the condition is taken to have been met at the time the offer was first made in this jurisdiction.

(5) A declaration under subsection (3) is not a legislative instrument.

1200C Conditions that must be met to be a recognised offer

(1) For the purposes of subsection 1200B(1), the conditions that must be met are those set out in this section.

(2) The person offering the securities must be:

(a) a person incorporated by or under the law of the recognised jurisdiction; or

(b) a natural person resident in the recognised jurisdiction; or

(c) a legal person established by or under the law of the recognised jurisdiction; or

(d) a person of a kind prescribed by regulations made in relation to the recognised jurisdiction for the purposes of this paragraph.

(3) The person offering the securities must not be banned under section 1200P.

(4) The offer must be an offer of a kind prescribed by the regulations in relation to the recognised jurisdiction.

(5) At least 14 days before the day on which the offer is first made in this jurisdiction, the person making the offer must have lodged with ASIC:

(a) a notice in the prescribed form (if any) of the person's intention to make a recognised offer; and

(b) the documents and information required to be lodged under section 1200D.

(6) If:

(a) before the offer is first made in this jurisdiction; and

(b) after a document or information was lodged with ASIC under section 1200D;

either:

(c) an event of a kind mentioned in the table in subsection 1200G(9) happened; or

(d) the address for service in this jurisdiction of the person proposing to offer the securities changed;

the person making the offer must have lodged with ASIC:

(e) if paragraph (c) applies - the document or information that would have been required to have been lodged under subsection 1200G(9) for the event if that subsection had applied; and

(f) if paragraph (d) applies - the changed address for service.

1200D Required documents and information

(1) For the purposes of paragraph 1200C(5)(b), the documents and information required to be lodged under this section are:

(a) any offer document required by the law of the recognised jurisdiction; and

(b) the warning statement that is to be included with an offer document in this jurisdiction (which, if regulations are in force for the purposes of section 1200E, must comply with those regulations); and

(c) unless paragraph (d) applies - the constitution of the body whose securities are to be the subject of the offer; and

(d) if the securities that are to be the subject of the offer are interests in a managed investment scheme, rights or interests in such interests, or options to acquire such interests by way of issue - the constituent document of the scheme; and

(e) details, in the prescribed form (if any), of any exemption from the securities law of the recognised jurisdiction that applies, but not exclusively, to the offer or to the offeror in relation to the offer; and

(f) if the offeror is relying on subsection (2) - notice of the document or information that is not being lodged because of the offeror's reliance on that subsection; and

(g) an address for service in this jurisdiction, in the prescribed form (if any); and

(h) a copy of any exemption from the securities law of the recognised jurisdiction that applies exclusively to the offer or to the offeror; and

(i) any other documents or information prescribed by the regulations.

(2) For the purposes of this Chapter, a person is taken to have lodged a document or information under this section if:

(a) the document or information has been lodged under Division 2 or 3 of Part 5B.2; or

(b) the document or information is not required to be lodged because of section 601CDA or 601CTA.

(3) For the purposes of this Chapter, a person is taken to have lodged a document or information under this section if the person lodged the document or information in compliance with subsection 1200C(6).

1200E Warning statement

The regulations may, in relation to offer documents used in this jurisdiction for recognised offers, prescribe either or both of the following:

(a) statements to be included with those documents that relate to the status of an offer as a recognised offer and the laws that regulate the offer;

(b) details to be given in statements to be included with those documents that relate to the status of an offer as a recognised offer and the laws that regulate the offer.

Division 2 - Effect of a recognised offer

1200F Effect of a recognised offer

(1) The provisions listed in the table do not apply, in relation to a recognised offer, to the things specified in the table for those provisions.

Note: Recognised offers must comply with Division 3 instead.

(2) Despite subsection (1), the regulations may:

(a) apply a provision listed in the table in subsection (1) to a person or class of persons; or

(b) apply a provision listed in the table in subsection (1) to a security or class of securities; or

(c) provide that a provision listed in the table in subsection (1) applies with the modifications specified in the regulations.

Division 3 - Ongoing conditions for recognised offers

1200G Offering conditions

When the offering conditions apply

(1) The offering conditions in this section apply in relation to a recognised offer until the recognised offer closes in this jurisdiction.

Note: Failure to comply with an offering condition is an offence (see sections 1200Q and 1311).

Offering conditions

(2) The offer must be made in the recognised jurisdiction as well as in this jurisdiction.

(3) The offeror must meet the conditions in subsections 1200C(2) and (3).

(4) The offer must meet the condition in subsection 1200C(4).

(5) The offer must comply with the law of the recognised jurisdiction.

(6) There must be no person concerned in the management of the offeror:

(a) who is disqualified from managing corporations for the purposes of Part 2D.6; or

(b) who is disqualified from being concerned in the management of the offeror under the law of the recognised jurisdiction; or

(c) who is subject to a banning order under section 920A; or

(d) who is subject to a court order under paragraph 921A(2)(a).

(7) An offer document provided to a person in this jurisdiction must have included with it:

(a) the warning statement lodged under subsection 1200D(1) for that offer document; or

(b) if a changed warning statement is lodged with ASIC under subsection 1200G(9) - the changed warning statement.

(8) The offeror must, on request by a person in this jurisdiction, provide a copy of the constitution or constituent document lodged under paragraph 1200D(1)(c) or (d).

(9) If an event mentioned in an item of this table occurs in relation to the offer or offeror, the offeror must lodge with ASIC the document, statement or notice specified in the table for that event, by the time specified for that event.

(10) For the purposes of this Chapter, a person is taken to have lodged a document under subsection (9) if:

(a) the document has been lodged under Division 2 or 3 of Part 5B.2; or

(b) the document is not required to be lodged because of section 601CDA or 601CTA.

(11) If:

(a) an event mentioned in the table in subsection (9) occurs while the offering conditions in this section apply; and

(b) the time by which an offeror is required to lodge a document, statement or notice with ASIC because of that event is after the offering conditions cease to apply;

then, for the purposes of this section and paragraph 1200Q(1)(b), the offering conditions are taken to continue to apply until that time in relation to the offer to the extent necessary to require the offeror to lodge the document, statement or information by that time.

(12) The offer must meet any other conditions prescribed by the regulations.

Home regulator

(13) For the purposes of subsection (9), the home regulator for a recognised jurisdiction is an authority in the recognised jurisdiction whose functions under the law of the recognised jurisdiction include functions equivalent to any of those of ASIC under this Act and that is prescribed by the regulations as the home regulator for that jurisdiction.

(14) If there is more than one authority in a recognised jurisdiction whose functions include functions under the law of the recognised jurisdiction equivalent to any of those of ASIC under this Act and that is prescribed under subsection (13), the regulations may prescribe the matters in relation to which that authority is to be regarded as the home regulator.

1200H Address for service condition

When the address for service condition applies

(1) The address for service condition in this section applies in relation to a recognised offer:

(a) until the end of the last day on which a person who resides in this jurisdiction could acquire securities under the offer; and

(b) if a person who resides in this jurisdiction acquires securities under the offer - at all times when the offeror's records indicate that someone who resides in this jurisdiction holds securities in the class of securities that was the subject of the recognised offer.

Note: Failure to comply with the address for service condition is an offence (see sections 1200Q and 1311).

Address for service condition

(2) The offeror must lodge with ASIC written notice, in the prescribed form (if any), of any change in its address for service in this jurisdiction, no later than the end of the seventh day after the day on which the address changed.

(3) If:

(a) the offeror's address for service in this jurisdiction changes while the address for service condition in this section applies; and

(b) the time by which the offeror is required to lodge notice with ASIC because of the change is after the address for service condition ceases to apply;

then, for the purposes of this section and subparagraph 1200Q(2)(b)(i), the address for service condition is taken to continue to apply until that time to the extent necessary to require the offeror to lodge notice by that time.

1200J Dispute resolution condition

When the dispute resolution condition applies

(1) The dispute resolution condition in this section applies, to a person who is or who has been the offeror of a recognised offer, at all times when the person's records indicate that someone who resides in this jurisdiction holds securities in the class of securities that was the subject of the recognised offer.

Note: Failure to comply with the dispute resolution condition is an offence (see sections 1200Q and 1311).

Dispute resolution condition

(2) The person must have a dispute resolution process that complies with subsection 1017G(2), if the recognised offer was an offer of:

(a) interests in a managed investment scheme; or

(b) rights or interests in such interests, or options to acquire such interests by way of issue.

Exemption from the dispute resolution condition

(3) ASIC may, on application by a person in the prescribed form (if any), grant the person an exemption from the dispute resolution condition in this section, subject to any conditions specified in the exemption.

(4) If ASIC grants a person an exemption under subsection (3), then, for the purposes of this Chapter, the person is taken to comply with the dispute resolution condition in this section for so long as the exemption is in force.

(5) ASIC may, in relation to an exemption under subsection (3):

(a) vary, or impose, a condition in relation to the exemption; or

(b) revoke the exemption.

(6) A variation, imposition or revocation under subsection (5) takes effect:

(a) if the person has an address for service in this jurisdiction - when it is served on the person at that address; or

(b) if the person does not have an address for service in this jurisdiction - on publication in the Gazette.

Division 4 - Modification of provisions of this Act

1200K Additional operation of section 675 (continuous disclosure)

In relation to a disclosing entity that has been the offeror of a recognised offer, section 675 also has the operation it would have if paragraph 675(2)(c) were replaced by the following paragraph:

(c) the information is not required, by the law of the recognised jurisdiction to which the offer relates, to be included in a supplementary or replacement offer document; and

1200L Pre-offer advertising

Offers that need a disclosure document

(1) Subsection 734(4) also has the operation it would have if:

(a) the reference in that subsection to a disclosure document that has been lodged with ASIC were a reference to an offer document lodged with ASIC for the purposes of this Chapter; and

(b) the reference in that subsection to section 739 were a reference to section 1200N.

(2) Subsection 734(5) also has the operation it would have if:

(a) references in that subsection to a disclosure document were references to an offer document that complies with the law of a recognised jurisdiction; and

(b) references in that subsection to completing an application form were references to completing an application process under the law of that recognised jurisdiction.

(3) Subsection 734(6) also has the operation it would have if:

(a) references in that subsection to a disclosure document were references to an offer document lodged with ASIC for the purposes of this Chapter; and

(b) references in that subsection to completing an application form were references to completing an application process under the law of the recognised jurisdiction to which the offer relates.

Offers that need a Product Disclosure Statement

(4) Subsection 1018A(2) also has the operation it would have if:

(a) a reference in that subsection to a Product Disclosure Statement were a reference to an offer document that complies with the law of a recognised jurisdiction; and

(b) a reference in that subsection to sale offers to which section 1012C will apply were a reference to sale offers to which section 1012C would apply if the financial product, when made available, were not made available under a recognised offer.

(5) Subsection 1018A(3) also has, in relation to subsection 1018A(2), the operation it would have if:

(a) the reference in that subsection to a Product Disclosure Statement were a reference to an offer document that complies with the law of a recognised jurisdiction; and

(b) the reference to section 1020E were a reference to section 1200N.

1200M Modification by the regulations

The regulations may modify a provision of this Act in relation to its application in respect of a recognised offer or a proposed offer of securities that may become a recognised offer.

Division 5 - ASIC's powers in relation to recognised offers

1200N Stop orders

(1) If, in relation to a thing mentioned in an item of this table, ASIC is satisfied of the matters specified in the table item for that thing, ASIC may make either or both of the orders specified in the table item about that thing.

(2) The order may include a statement that specified conduct engaged in contrary to the order will be regarded as not meeting a specified ongoing condition in Division 3.

(3) Before making an order under subsection (1), ASIC must:

(a) hold a hearing; and

(b) give a reasonable opportunity to any interested people to make oral or written submissions to ASIC on whether an order should be made.

(4) If ASIC considers that any delay in making an order under subsection (1) pending the holding of a hearing would be prejudicial to the public interest, ASIC may make an interim order. The interim order may be made without holding a hearing and lasts for 21 days after the day on which it is made unless revoked before then.

(5) At any time during the hearing, ASIC may make an interim order. The interim order lasts until:

(a) ASIC makes an order under subsection (1) after the conclusion of the hearing; or

(b) the interim order is revoked;

whichever happens first.

(6) An order under subsection (1), (4) or (5) must be in writing and must be served on the person who is ordered not to offer, issue, sell or transfer securities or not to engage in specified conduct.

(7) The person on whom the order is served must take reasonable steps to ensure that other people who engage in conduct to which the order applies are aware of the order.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

(8) The person on whom the order is served, or a person who is aware of the order, must not engage in conduct contrary to the order.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

(9) A statement under subsection (2) has effect accordingly in relation to a person on whom the order is served, or who is aware of it, who engages in conduct contrary to the order. This applies in addition to any other consequence that is provided for in this Act.

1200P Ban on making subsequent recognised offers

(1) ASIC may declare in writing that a person is, for the time specified in the declaration (which must be no longer than 5 years from the day the declaration takes effect), banned from making a recognised offer if:

(a) the person, or an associate of the person, has been convicted (whether or not in this jurisdiction) of an offence constituted by conduct engaged in in relation to a recognised offer; or

(b) a court in this jurisdiction has made a civil penalty order against the person, or an associate of the person, for a contravention in relation to a recognised offer; or

(c) a court in a recognised jurisdiction has made an order against the person, or an associate of the person, for a contravention of the law of the recognised jurisdiction (other than an offence) in relation to an offer that is a recognised offer in this jurisdiction.

(2) Before making the declaration, ASIC must give the person an opportunity:

(a) to appear, or be represented, at a hearing before ASIC that takes place in private; or

(b) to make submissions to ASIC on the matter.

This subsection does not apply if the person does not have an address for service in this jurisdiction.

(3) ASIC may, in writing, vary or cancel the declaration, on ASIC's own initiative or on application lodged by the person in the prescribed form (if any) together with any prescribed documents, if ASIC is satisfied that a circumstance on which ASIC based the declaration has changed.

(4) If ASIC proposes to reject an application by the person to vary or cancel the declaration, ASIC must give the person an opportunity:

(a) to appear, or be represented, at a hearing before ASIC that takes place in private; or

(b) to make submissions to ASIC on the matter.

(5) The declaration, and any variation or cancellation of the declaration, takes effect:

(a) if the person to whom the declaration applies has an address for service in this jurisdiction - when it is served on the person at that address; or

(b) if the person to whom the declaration applies does not have an address for service in this jurisdiction - when it is published in the Gazette under subsection (7).

(6) A declaration that is served on a person under paragraph (5)(a) must be accompanied by a statement of ASIC's reasons for the declaration.

(7) ASIC must publish a notice in the Gazette as soon as practicable after making, varying or cancelling the declaration. The notice:

(a) must state when the action takes or took effect; and

(b) in the case of the making of a declaration - set out a copy of the declaration; and

(c) in the case of the varying of a declaration - set out a copy of the declaration as varied.

(8) A declaration under this section is not a legislative instrument.

1200Q Offence of breaching an ongoing condition

(1) A person commits an offence if, at any particular time:

(a) the person is the offeror of a recognised offer; and

(b) an offering condition in section 1200G applies in relation to the offer; and

(c) the condition is not met in relation to the offer.

(2) A person commits an offence if:

(a) the person is or has been the offeror of a recognised offer; and

(b) at any particular time:

(i) the address for service condition in section 1200H; or

(ii) the dispute resolution condition in section 1200J;

applies in relation to the offer; and

(c) the condition is not met in relation to the offer.

Division 6 - Miscellaneous

1200R Service of documents

(1) For the purposes of any law, a document may be served on a person who is, or who has been, the offeror of a recognised offer by leaving it at, or posting it to, the person's address for service in this jurisdiction.

(2) The person's address for service in this jurisdiction is:

(a) the address lodged under paragraph 1200D(1)(g); or

(b) if a change to that address has been lodged with ASIC under section 1200H - the changed address, on and from the later of:

(i) the day that is 7 days after the day on which the change (or, if more than one change has been lodged, the latest change) was lodged; or

(ii) the day specified in the notice of change as the day from which the change is to take effect.

(3) This section does not affect:

(a) any other provision of this Act, or any provision of another law, that permits a document to be served in a different way; or

(b) the power of a court to authorise a document to be served in a different way.

(4) This section does not apply in relation to a person who is, or who has been, the offeror of a recognised offer if the address for service condition in section 1200H does not apply to the person.

Part 8.3 - Offers made under foreign recognition schemes

1200S Notice to ASIC

If:

(a) a body proposes to make an offer of securities in a recognised jurisdiction under a foreign recognition scheme; and

(b) under the foreign recognition scheme, the offer is to be regulated by the law of this jurisdiction;

the body must lodge with ASIC written notice, in the prescribed form (if any), of its intention to make the offer under the foreign recognition scheme, no later than the time it notifies the recognised jurisdiction of that intention.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

1200T Extension of this Act to recognised jurisdictions

(1) If:

(a) a body proposes to make, or is making, an offer of securities in a recognised jurisdiction under a foreign recognition scheme; and

(b) under the foreign recognition scheme, the offer is to be regulated by the law of this jurisdiction;

this Act applies in the recognised jurisdiction in relation to the offer as if it were an offer being made in this jurisdiction.

(2) Despite subsection (1), the regulations may:

(a) exempt a person or class of persons from all or specified provisions of this Act as it applies by force of subsection (1); or

(b) exempt a security or a class of securities from all or specified provisions of this Act as it applies by force of subsection (1); or

(c) provide that a provision of this Act as it applies by force of subsection (1) applies with the modifications specified in the regulations.

1200U ASIC stop order for advertising in a recognised jurisdiction

(1) If ASIC is satisfied that:

(a) an offer of securities is being made or has been made in a recognised jurisdiction under a foreign recognition scheme; and

(b) there is a contravention of section 734 or 1018A (as they apply by force of section 1200T) constituted by conduct in the recognised jurisdiction in relation to the offer;

ASIC may order that no offers, issues, sales or transfers of the securities the subject of the offer be made in the recognised jurisdiction while the order is in force.

(2) Before making an order under subsection (1), ASIC must:

(a) hold a hearing; and

(b) give a reasonable opportunity to any interested people to make oral or written submissions to ASIC on whether an order should be made.

(3) If ASIC considers that any delay in making an order under subsection (1) pending the holding of a hearing would be prejudicial to the public interest, ASIC may make an interim order that no offers, issues, sales or transfers of the securities be made while the interim order is in force. The interim order may be made without holding a hearing and lasts for 21 days after the day on which it is made unless revoked before then.

(4) At any time during the hearing, ASIC may make an interim order that no offers, issues, sales or transfers of the securities be made while the interim order is in force. The interim order lasts until:

(a) ASIC makes an order under subsection (1) after the conclusion of the hearing; or

(b) the interim order is revoked;

whichever happens first.

(5) An order under subsection (1), (3) or (4) must be in writing and must be served on the person who is ordered not to offer, issue, sell or transfer securities.

(6) The person on whom the order is served must take reasonable steps to ensure that other people who engage in conduct to which the order applies are aware of the order.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

(7) The person on whom the order is served, or a person who is aware of the order, must not engage in conduct contrary to the order.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).