media release

IR 04-59 ASIC releases policy on substantial holdings

Published

The Australian Securities and Investments Commission (ASIC) today released its revised policy on substantial holdings.

The revised policy reflects legislative amendments to the Corporations Act 2001 arising from the Corporate Law Economic Reform Program Act 1999 (CLERP Act).

It also incorporates additional explanation of s671B of the Corporations Act 2001 using recent case law.

The substantial holdings policy has been added to Policy Statement 159 Takeovers, compulsory acquisitions and substantial holdings [PS 159].

This revised policy addresses issues including:

  • full, rather than minimal or technical disclosure;
  • net movements in substantial holdings;
  • time for giving a notice;
  • documents to accompany a notice; and
  • joint notices.

The revised policy also discusses Class Order [CO 04/1413], which gives relief to bidders from s671B(4) (Information to be in prescribed form and accompanied by certain documents). The effect of this relief is that substantial holding notices during the offer period do not need to be accompanied by a bidder's statement, offer document and acceptance forms. This relief is consistent with ASIC's position under former National Companies and Securities Commission Policy Statement 110 Substantial Shareholding Notices.

The revised policy replaces Interim Policy Statement 109 Substantial Shareholder Notices, Practice Note 26 Takeovers: Offerors and Substantial Shareholders and NCSC PS 110.

A copy of PS 159 can be obtained from the ASIC website at www.asic.gov.au, by calling ASIC's Infoline on 1300 300 630 or emailing infoline@asic.gov.au.

Background

Under s671B of the substantial holding provisions, a person who becomes a five per cent holder, or changes their substantial holding by at least one per cent in a listed company or listed managed investment scheme, is required to lodge a notice disclosing details of the holding with ASIC, usually within two business days.

Failure to comply with these obligations is an offence and may ultimately lead to the securities being vested in ASIC.

End of release


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