ASIC Class Order [CO 09/425]

About this compilation

Compilation No. 11

This is a compilation of ASIC Class Order [CO 09/425] as in force on 24 March 2017. It includes any commenced amendment affecting the legislative instrument to that date.

This compilation was prepared by the Australian Securities and Investments Commission.

The notes at the end of this compilation (the endnotes) include information

about amending instruments and the amendment history of each amended provision.

Prepared by the Australian Securities and Investments Commission.

Australian Securities and Investments Commission
Corporations Act 2001 – Paragraphs 741(1)(a) and 1020F(1)(a) –Exemption and Revocation

Enabling provisions

1. The Australian Securities and Investments Commission (ASIC) makes this instrument under paragraphs 741(1)(a) and 1020F(1)(a) of the Corporations Act 2001 (the Act).

Title

2. This instrument is ASIC Class Order [CO 09/425].

Commencement

3. This instrument commences on the date it is registered under the Legislative Instruments Act 2003.

Note:  An instrument is registered when it is recorded on the Federal Register of Legislative Instruments (FRLI) in electronic form: see Legislative Instruments Act 2003, s 4 (definition of register). The FRLI may be accessed at http://www.frli.gov.au/.

Exemption from Chapter 6D

4. A body (issuer) which is admitted to the official list of ASX does not have to comply with Part 6D.2 or 6D.3 of the Act (other than sections 736 and 738) for an offer of shares for issue under a purchase plan.

Exemption from Part 7.9

5. A responsible entity (issuer) of a registered scheme which is admitted to the official list of the ASX does not have to comply with section 1012B or Division 4 of Part 7.9 of the Act in relation to an offer of interests in the scheme for issue, or an issue of interests in the scheme, under a purchase plan.

6. Any other regulated person (within the meaning of section 1011B of the Act) does not have to comply with Divisions 2 and 4 of Part 7.9 of the Act in relation to a purchase plan.

Where relief applies

7. The exemptions in paragraphs 4 and 5 apply to a written offer for the issue of shares or interests and to the issue of interests under such an offer where the following requirements are met at the time that the offer is made:

(a) the shares or interests are in a class (the class) which:

(i) is quoted on the financial market operated by ASX; and

(ii) is not suspended from trading and was not suspended from trading on that market for more than a total of 5 days during the shorter of the period during which the class was quoted, and the period of 12 months before the day on which the offer is made;

(b) a determination under subsection 708AA(3), 708A(2), 1012DAA(3) or 1012DA(2) of the Act is not in force in relation to the issuer;

(c) no exemption under section 111AS or 111AT of the Act covered the issuer, or any person as director or auditor of the issuer, at any time in the shorter of the period during which the class was quoted, and the period of 12 months before the day on which the offer is made;

(d) no order under section 340 or 341 of the Act (other than an excluded order) covered the issuer, or any person as director or auditor of the issuer, at any time in the shorter of the period during which the class was quoted, and the period of 12 months before the day on which the offer is made;

(e) the written offer document contains the following information:

(i) the method used to calculate the issue price and the time when this price will be determined; and

(ii) a statement describing the relationship between the issue price and the market price; and

(iii) disclosure of the risk that the market price may change between the date of the offer and the date when the shares or interests are issued to an applicant under the purchase plan, and the effect this would have on the price or value of the shares or interests which the applicant would receive; and

(f) the issuer has either:

(i) not more than 30 days before the offer, given a notice to ASX that complies with subsection 708A(6) or 1012DA(6) of the Act in relation to an issue of shares or interests in the class made otherwise than under a purchase plan; or

(ii) within the 24 hour period before the offer, given a notice to ASX that:

(A) states that the issuer will make offers to issue shares and/or interests (as applicable) under a purchase plan without disclosure to investors under Part 6D.2 and/or without giving a Product Disclosure Statement under Division 2 of Part 7.9 of the Act (as applicable); and

(B) states that the notice is being given in accordance with this instrument; and

(C) states that, as at the date of the notice, the issuer has complied with the provisions of Chapter 2M of the Act as they apply to the issuer (or if the issuer is the responsible entity of a registered scheme, as they apply to the scheme) and section 674 of the Act; and

(D) sets out any information that is excluded information as at the date of the notice (in accordance with the requirements of subsections 708A(7) and (8) or subsections 1012DA(7) and (8) of the Act as if the notice were a notice under paragraph 708A(5)(e) or 1012DA(5)(e) of the Act).

Conditions

8. Subject to paragraph 9, the issuer must not issue shares or interests to a registered holder under the purchase plan unless:

(a) the holder has, on application for the shares or interests, provided the issuer with a certificate to the effect that the total of the application price for the following does not exceed $15,000:

(i) the shares or interests the subject of the application;

(ii) any other shares or interests in the class applied for under the purchase plan or any shares or interests in the class issued under a similar arrangement in the 12 months before the application;

(iii) any other shares or interests in the class which the holder has instructed a custodian to acquire on their behalf under the purchase plan;

(iv) any other shares or interests in the class issued to a custodian under an arrangement similar to the purchase plan in the 12 months before the application as a result of an instruction given by the holder to the custodian or another custodian and which resulted in the holder holding beneficial interests in the shares or interests; or

(b) if the holder has applied for shares or interests using an electronic payment facility referred to in the written offer document, the part of the offer document containing instructions for use of the facility includes:

(i) a unique identifier in relation to the holder that must be provided by the holder when making a payment using the facility and that is not provided by the issuer to the holder other than in the offer document; and

(ii) a prominent statement to the effect that the holder, in applying for shares or interests, represents to the issuer that the total of the application price for the following does not exceed $15,000:

(A) the shares or interests the subject of the application;

(B) any other shares or interests in the class applied for under the purchase plan or any shares or interests in the class issued under a similar arrangement in the 12 months before the application;

(C) any other shares or interests in the class which the holder has instructed a custodian to acquire on their behalf under the purchase plan;

(D) any other shares or interests in the class issued to a custodian under an arrangement similar to the purchase plan in the 12 months before the application as a result of an instruction given by the holder to the custodian or another custodian and which resulted in the holder holding beneficial interests in the shares or interests.

9.  If the purchase plan involves custodian offers, the issuer must not issue shares or interests to a custodian with a total application price exceeding $15,000 in any 12 month period unless on application for the shares or interests, the custodian certifies the following in writing to the issuer:

(a) either or both of the following: 

(i) that the custodian holds shares or interests in the class on behalf of one or more other persons (each a participating beneficiary) that are not custodians;

(ii) that another custodian (downstream custodian) holds  beneficial interests in shares or interests in the class on behalf of one of more other persons (each a participating beneficiary), and the custodian holds the shares or interests to which those beneficial interests relate on behalf of the downstream custodian or another custodian;

on the date referred to in paragraph (a) of the definition of purchase plan and that each participating beneficiary has subsequently instructed the following persons:

(iii) where subsubparagraph (i) applies—the custodian; and

(iv) where subsubparagraph (ii) applies—the downstream custodian;

to apply for shares or interests on their behalf under the purchase plan;

(b) the number of participating beneficiaries;

(c) the name and address of each participating beneficiary;

(d) in respect of each participating beneficiary:

(i) where subsubparagraph (a)(i) applies—the number of shares or interests in the class that the custodian holds on their behalf; and 

(ii) where subsubparagraph (a)(ii) applies—the number of shares or interests in the class to which the beneficial interests relate;

(e) in respect of each participating beneficiary:

(i) where subsubparagraph (a)(i) applies—the number or the dollar amount of shares or interests they instructed the custodian to apply for on their behalf; and

(ii) where subsubparagraph (a)(ii) applies—the number or the dollar amount of shares or interests they instructed the downstream custodian to apply for on their behalf;

(f) there are no participating beneficiaries in respect of which the total of the application price for the following exceeds $15,000:

(i) the shares or interests applied for by the custodian under the purchase plan in accordance with the instructions referred to in subparagraph (e); and

(ii) any other shares or interests in the class issued to the custodian in the 12 months before the application as a result of an instruction given by them to the custodian or the downstream custodian to apply for shares or interests on their behalf under an arrangement similar to the purchase plan;

(g) that a copy of the written offer document was given to each participating beneficiary;

(h) where subsubparagraph (a)(ii) applies—the name and address of each custodian who holds beneficial interests in the shares or interests in the class held by the custodian in relation to each participating beneficiary.

In providing a certificate under this paragraph, the custodian may rely on information provided to it by the participating beneficiary and any custodian who holds beneficial interests in the shares or interests in the class held by the custodian.             

10. The issuer must not issue shares or interests under the purchase plan unless the issuer is reasonably satisfied that the total of the application price for the following will not exceed $15,000 in relation to any person as a result of issuing the shares or interests:

(a) the shares or interests issued to the person under the purchase plan; and

(b) any other shares or interests in the class issued to the person under an arrangement similar to the purchase plan in the 12 months before the date of issue under the purchase plan; and

(c) any other shares or interests in the class issued to a custodian as a result of an instruction given by the person to the custodian or another custodian to apply for shares or interests on their behalf under the purchase plan; and

(d) any other shares or interests in the class issued to a custodian in the 12 months before the date of issue under the purchase plan as a result of an instruction given by the person to the custodian or another custodian to apply for shares or interests on their behalf under an arrangement similar to the purchase plan,

except to the extent that the person is issued with shares or interests as a custodian under a custodian offer.

11. If:

(a) a notice given under subsubparagraph 7(f)(ii) is defective; and

(b) the issuer becomes aware of the defect in the notice within 12 months after the shares or interests are issued under the offer,

the issuer must, within a reasonable time after becoming aware of the defect, give ASX a notice that sets out the information necessary to correct the defect.

12. A person may only rely on paragraph 6 if the person has no reason to suspect that the issuer has not complied with the requirements of this instrument.

Revocation

13. ASIC Class Orders [CO 02/831] and [CO 02/832] are revoked with effect from 1 September 2009.

Interpretation

14. For the purposes of this instrument:

(a) ASX means ASX Limited ACN 008 624 691.

custodial or depositary service has the meaning given by section 766E of the Act.

custodian means a person:

(a) that holds an Australian financial services licence that:

(i) covers the provision of a custodial or depositary service; or

(ii) covers the operation of an IDPS (as defined in ASIC Class Order [CO 13/763]); or

(b) that is exempt under:

(i) paragraph 7.6.01(1)(k) of the Corporations Regulations 2001 (the Regulations); or

(ia) paragraph 7.6.01(1)(na) of the Regulations; or

(ii) ASIC Class Order [CO 14/1000] or ASIC Class Order [CO 14/1001]; or

(iia) Schedule 2 to the ASIC Corporations (Repeal and Transitional) Instrument 2016/396; or

(iib) an instrument, not being a legislative instrument, made by ASIC and which applies to the person on terms similar to Schedule 2 of the legislative instrument referred to in subparagraph (iia) or any of the ASIC Class Orders repealed by that legislative instrument; or

(iii) paragraph 911A(2)(h) of the Act;

from the requirement to hold an Australian financial services licence for the provision of a custodial or depositary service; or

(c) that is a trustee of a:

(i) self-managed superannuation fund; or

(ii)  superannuation master trust; or

(d) that is the responsible entity of an IDPS-like scheme; or

(e) that is the registered holder of shares or interests in the class and is noted on the register of members of the body or scheme (as the case may be) as holding the shares or interests on account of another person.

custodian offer means an offer to a registered holder to the extent that it is of the kind referred to in paragraph (b) of the definition of purchase plan.

excluded order means a technical relief instrument to the extent it is made  under section 340 or 341 of the Act.

Note: ASIC Corporations (Disregarding Technical Relief) Instrument 2016/73 notionally inserts a definition of technical relief instrument in section 9 of the Act.

IDPS-like scheme has the meaning given by ASIC Class Order [CO 13/762] or any class order that replaces that class order.

instruction includes a direction or request.

purchase plan means an arrangement under which:

(a) an offer is made to each registered holder of shares or interests in the class on a date determined by the issuer, and whose address (as recorded in the register of members) is in a place in which, in the reasonable opinion of the issuer, it is lawful and practical for the issuer to offer and issue shares or interests to that person;

(b) an offer may enable a registered holder who is a custodian to acquire shares or interests on behalf of a person (the beneficiary) on whose behalf the custodian is holding shares or interests in the class;

(c) each offer is made on:

(i)  the same terms and conditions:

(A) to the extent it is an offer to a registered holder to acquire shares or interests on their own behalf; and

(B) to the extent (if any) it is an offer to a registered holder to acquire shares or interests as a custodian on behalf of a beneficiary; and

(ii) a non-renounceable basis;

(d) if offers of the kind referred to in subsubparagraph (c)(i)(B) are made—the terms and conditions on which a registered holder may acquire shares or interests on their own behalf or as a custodian on behalf of a beneficiary are as nearly as practicable the same;

(e) the issue price of the shares or interests is less than the market price of the shares or interests during a specified period in the 30 days before either the date of the offer or the date of the issue; and

 (f) the total application price for the shares or interests acquired:

 (i) by a person on their own behalf; and

 (ii) by a custodian on behalf of the person; and

 (iii) by a custodian in relation to which another custodian holds beneficial interests in the shares or interests on behalf of the person;

in any 12 month period does not exceed $15,000.

registered holder means:

(a) a person recorded in the register of members of a body as a member of the body; or

(b) a person recorded in the register of members of a registered scheme as a member of the scheme.

regulated superannuation fund has the same meaning as in the Superannuation Industry (Supervision) Act 1993.

self-managed superannuation fund has the meaning given by section 17A of the Superannuation Industry (Supervision) Act 1993.

superannuation master trust means a regulated superannuation fund under which:

(a)  a member of the fund is, or is entitled, to give an instruction (including a direction or request) that a particular financial product is to be acquired; and

(b)  if the member gives such an instruction, the trustee, or a custodian who holds financial products on behalf of the trustee, must (subject to any discretion they have to refuse) acquire the financial product; and

(c)  if the trustee or custodian acquires the financial product pursuant to an instruction given by the member, the member is to have rights or benefits calculated by reference to dividends or other benefits derived from the product.

(b) if 2 or more persons are recorded in the register of members as jointly holding shares or interests in the body or scheme they are taken to be a single registered holder and a certificate given by any of them for the purposes of paragraph 8 is taken to be a certificate given by all of them.

(c) subject to subparagraph (ca), if a custodian holds shares or interests jointly on behalf of 2 or more persons:

(i) the $15,000 limit applies jointly in relation to those persons as if the custodian held the shares or interests on behalf of a single person; and

(ii) the custodian is taken to have been instructed to apply for shares or interests on behalf of those persons if:

(A) the custodian has received such an instruction in accordance with the terms on which the shares or interests are held; or

(B) where the terms on which the shares or interests are held do not cover the giving of instructions of this kind—the custodian has received such an instruction from any of those persons.

(ca) If, in relation to an IDPS-like scheme, a superannuation master trust or a self-managed superannuation fund, a member of the scheme, trust or fund has their distributions of capital and income from the scheme, trust or fund determined by reference to shares or interests that are held by the responsible entity or trustee of the trust or fund (or, if applicable, another custodian) as a result of an instruction given by the member to the responsible entity or trustee, then:

(i) any shares or interests held by the responsible entity or trustee (or, if applicable, another custodian) as a result of the instruction are taken to be held on behalf of the member;

(ii) any instruction given by the member to the responsible entity or trustee to acquire shares or interests is taken to be an instruction to acquire shares or interests on behalf of the member; and

(iii) any application for shares or interests by the responsible entity or trustee (or, if applicable, another custodian) as a result of an instruction given by the member is taken to be an application to acquire shares or interests on behalf of the member.

Note: In IDPS-like schemes, superannuation master trusts and self-managed superannuation funds, the responsible entity or trustee may hold trust property on behalf of members as a whole rather on behalf of a specific member even if the property was acquired on the instructions of that member.

(d) references to an issuer offering shares or interests include the issuer inviting applications for the issue of the shares or interests.

(e) if a share or interest must under the terms on which it is traded only be transferred together with one or more other shares or interests or other financial products (together a stapled security):

(i) the $15,000 limit in paragraphs 8 to 10 (wherever occurring), and in the definition of purchase plan, applies to the stapled security as if its component shares or interests constituted a single share or interest and not to any of those components separately;

(ia) references to issue price and market price of shares or interests in paragraph (e) of the definition of purchase plan apply to the stapled security as if its component shares or interests constituted a single share or interest and not to any of those components separately;

 (ii) the share or interest is taken to be in a class which is quoted on the financial market operated by ASX if the stapled security is quoted on that market.

(f) a notice is defective if the notice:

(i) does not comply with sub-subsubparagraph 7(f)(ii)(D); or

(ii) is false in a material particular; or

(iii) has omitted from it a matter or thing the omission of which renders the notice misleading in a material respect.

(g) an arrangement covered by ASIC Class Orders [CO 02/831] or [CO 02/832] is taken to be similar to a purchase plan.

(h) an arrangement is not to be taken not to be similar to a purchase plan merely because:

(i) only one of them involves custodian offers; or

(ia) where both the arrangement and the purchase plan involve custodian offers—only one of them involves offers to a custodian to acquire shares or interests in the class where another custodian holds beneficial interests in the shares or interests on behalf of another person; or

 (ii) they involve different maximum levels of applications by registered holders.

Notes to ASIC Class Order [CO 09/425]

Note 1

ASIC Class Order [CO 09/425] (in force under s741(1)(a) and 1020F(1)(a) of the Corporations Act 2001) as shown in this compilation comprises that Class Order amended as indicated in the Tables below.

Table of Instruments

Table of Amendments

ad. = added or inserted     am. = amended     rep. = repealed     rs. = repealed and substituted