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

Schedule 1   Amendments

Part 1   Amendments commencing on Royal Assent

Corporations Act 2001

10   At the end of Division 1 of Part 1.2

Add:

9A Meaning of rights issue

(1) A rights issue is an offer of a body's securities for issue in respect of which the following conditions are met:

(a) the securities being offered for issue are in a particular class;

(b) either:

(i) the offer is made to every person who holds securities in that class to issue them, or their assignee, with the percentage of the securities to be issued that is the same as the percentage of the securities in that class that they hold before the offer; or

(ii) if the conditions in subsection (3) are met - such an offer is made to every person with a registered address in Australia or New Zealand who holds securities in that class;

(c) the terms of each offer are the same.

(2) A rights issue is an offer of interests in a managed investment scheme for issue in respect of which the following conditions are met:

(a) the interests being offered for issue are in a particular class;

(b) either:

(i) the offer is made to every person who holds interests in that class to issue them, or their assignee, with the percentage of the interests to be issued that is the same as the percentage of the interests in that class that they hold before the offer; or

(ii) if the conditions in subsection (3) are met - such an offer is made to every person with a registered address in Australia or New Zealand who holds interests in that class;

(c) the terms of each offer are the same.

(3) The conditions in this subsection are met if:

(a) the body or responsible entity (as the case requires) decides that it is unreasonable to offer securities or interests (as the case requires) for issue to persons (the non-residents) with a registered address in a place outside Australia or New Zealand, after taking into account the following matters:

(i) the number of non-residents, in that place, to whom offers would otherwise be made;

(ii) the number and value of the securities or interests that would otherwise be offered for issue;

(iii) the cost of complying with the laws, and any requirements of any regulatory authority, of the place where the securities or interests would otherwise be offered for issue; and

(b) the body or responsible entity:

(i) sends details of the offer to each non-resident in that place; and

(ii) advises each non-resident in that place that the non-resident will not be offered the securities or interests; and

(c) if the invitation to apply for, or the right to be issued with, the securities or interests is able to be assigned - the body or responsible entity:

(i) advises each non-resident in that place that a nominee will be appointed to sell the invitation or right that would otherwise have been offered to the non-resident; and

(ii) advises each non-resident that the nominee will send the non-resident any net proceeds from the sale of that invitation or those rights; and

(iii) appoints a nominee in Australia to carry out the obligations referred to in subparagraphs (i) and (ii).

(4) For the purposes of this section, a reference to an offer of securities includes a reference to an invitation to apply for the issue of securities.