ASIC has today released new regulatory guidance and relief aimed at achieving better disclosure by parties that are engaging in securities lending of substantial holdings in listed entities.

The guidance is contained in Regulatory Guide 222 Substantial holding disclosure: securities lending and prime broking (RG 222) and the relief is contained in Class Order [CO 11/272].

ASIC has also released Report 235 Response to submissions on CP 107: Securities lending and substantial holding disclosure (REP 235), which summarises consultations with industry leading to the new regulatory guidance.

Under the new guidance, ASIC sets out its expectations as to how:

• parties involved in securities lending (including securities lenders and borrowers) will disclose substantial holdings in listed entities (interest of 5% or more)

• prime brokers – who may have on-going borrowing agreements with their clients – will disclose substantial holdings

Further, ASIC has set out its expectations of the content of substantial holding notices that parties engaged in securities lending will have to provide, and relief that ASIC has granted in [CO 11/272] to simplify the content of those notices and better align timing of disclosures to changes in control over securities.

The table below summarizes the main contents of RG 222.

Subject area	Applies to	Key contents of guidance	Page of RG 222
'Relevant interest' provisions	Parties in securities lending, including lenders and borrowers	'Relevant interest' provisions in s608 and 609 of Corporations Act 2001 – how they apply to securities lending	Pages 9 - 10
Securities lending leading to the need for a substantial holding disclosure	Parties in securities lending, including lenders and borrowers	Stages at which parties involved in securities lending may be required to provide substantial holding disclosure	Pages 11 – 13
'Relevant interest' and prime broking	Prime brokers and clients	Stages at which substantial holding arises for prime broker	Pages 15 – 17
Summary of substantial holding notices under s671B of Corporations Act 2001	Parties in securities lending, including lenders and borrowers	n/a	Pages 18 – 19
Relief provided by ASIC to disclosure requirements (as they apply to securities lending)	Parties in securities lending, including lenders and borrowers	Details of relief regarding AMSLA/GMSLA agreements, prime broking agreements, disclosure of consideration	Pages 19 – 21

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Download:

RG 222

[CO 11/272]

REP 235