ASIC today released a consultation paper proposing to update and consolidate its takeover regulatory guidance, making it clearer, more certain and more accessible for investors and companies.
ASIC proposes to consolidate 17 existing regulatory guides, which represents the bulk of its policies covering Chapters 6–6C of the Corporations Act 2001 – which deal with takeovers - into 4 new guides covering topics including takeover bids, substantial holdings, and compulsory acquisition and buy-outs.
The guides will also contain updated policy to reflect ASIC’s current views on takeovers and will also address some discrete issues ASIC has identified in the administration of the law.
‘ASIC’s policies have evolved since the early 1990s as business practices and laws have changed. While most of these policies reflect relatively well accepted legal interpretations and policy settings, the evolutionary process resulted in our published policy spreading across 23 regulatory guides,’ ASIC Commissioner John Price said.
‘Much of our policy relevant to a single type of transaction is spread across more than one guide and in many cases our guidance refers to provisions of the old Corporations Law.
‘We saw a real opportunity to substantially update our main regulatory guides, and include some important aspects of ASIC’s takeovers policy are not currently reflected in written guides.
‘Proposals for amendments to existing policies are limited to matters associated with past legislative changes and other technical matters ASIC considers necessary or desirable to address to ensure the revised guidance on each topic reflects ASIC’s current approach.’
Specific revisions and new policy proposals include:
- discussion on rights issues and underwriting arrangements which have the potential to affect control of an entity
- updated guidance on when a selective benefit may be prohibited in a takeover bid because it may be likely to induce a person to accept the bid or dispose of target securities
- new guidance and class order relief in relation to the use and operation of acceptance facilities in takeover bids, and
- updated guidance on when a person may have a ‘relevant interest’ in securities and the associated requirements to disclose substantial holdings and comply with the takeover provisions.
‘The principles underlying our regulation of takeovers include maintaining an efficient, competitive and informed market, and the equality of opportunity to participate in the benefits of transactions,’ Mr Price said.
Submissions close 22 February 2013.
Download Consultation Paper 193 Takeovers, compulsory acquisition and substantial holdings: Update of ASIC guidance (CP 193) and the attached four draft regulatory guides.
Earlier this year, ASIC also raised a number of issues with Treasury regarding reforms to takeovers law. ASIC highlighted a number of areas that may need to be addressed to ensure the law continues to respond successfully to market developments, including creeping acquisitions, the use and disclosure of equity derivatives, clarity of takeover proposals, the issue of association of shareholders, and the impact of new media. As a result Treasury has released a scoping paper for comment.
Treasury’s consultation is independent of CP 193 however ASIC will take into account the outcome of the Treasury process and any revisions to the law in finalising our guidance.