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15-375MR ASIC remakes instruments on takeovers and schemes of arrangement
Following public consultation, ASIC has remade six legislative instruments that facilitate takeovers and schemes of arrangements.
The relief applies to certain domestic and foreign takeover bids, accelerated rights issues, investor directed portfolio services (IDPS), share buy-backs and downstream acquisitions and is set out in the following new legislative instruments:
- ASIC Corporations (IDPS - Relevant Interests) Instrument 2015/1067
- ASIC Corporations (Minimum Bid Price) Instrument 2015/1068
- ASIC Corporations (Takeovers - Accelerated Rights Issues) Instrument 2015/1069
- ASIC Corporations (Unsolicited Offers - Foreign Bids) Instrument 2015/1070
- ASIC Corporations (Approved Foreign Financial Markets) Instrument 2015/1071.
ASIC remade these instruments without significant changes before they were due to sunset under the Legislative Instruments Act 2003 (Legislative Instruments Act).
IDPS – Relevant interests in securities
ASIC has made the ASIC Corporations (IDPS – Relevant Interests) Instrument 2015/1067, which affords operators of an IDPS similar relief to that provided to bare trustees in section 609(2) of the Corporations Act 2001 (Corporations Act) with respect to the acquisition of relevant interests in securities.
Minimum bid price
ASIC has made ASIC Corporations (Minimum Bid Price) Instrument 2015/1068, which addresses certain technical and practical difficulties that arise in the takeovers process where the value of quoted securities offered under the bid decreases between the day the bidder lodged its statement with ASIC and the first day of the offer.
Takeovers – Accelerated rights issues
ASIC Corporations (Takeovers – Accelerated Rights Issues) Instrument 2015/1069 creates an exception for persons who will, for technical reasons, temporarily exceed the takeover threshold in section 606 of the Corporations Act merely as a result of participating in an accelerated rights issue.
Foreign bids and approved foreign financial markets
Foreign takeover bids regulated in certain jurisdictions are likely to be accompanied by adequate disclosure because these jurisdictions have takeover regimes that offer comparable levels of disclosure and investor protection to that provided in Australia. As such, these regulated foreign takeover bids should not be subject to the disclosure provisions in Division 5A of Part 7.9 of the Corporations Act.
ASIC has made the ASIC Corporations (Unsolicited Offers – Foreign bids) Instrument 2015/1070 to facilitate such foreign takeover bids by providing relief from the disclosure provisions in Division 5A of Part 7.9 of the Corporations Act.
ASIC has also made ASIC Corporations (Approved Foreign Financial Markets) Instrument 2015/1071 which creates a uniform list of approved overseas financial markets for the purposes of section 257B(7) (on-market buy backs) and item 14 of section 611 (downstream acquisitions through a listed foreign company).
On 4 August 2015, ASIC released Consultation Paper 234 Remaking ASIC class orders on takeovers and schemes of arrangement (CP 234), which outlined our proposals to remake Class Order [CO 05/850] Unsolicited offers under a regulated foreign takeover bid, Class Order [CO 02/259] Downstream acquisitions: foreign stock markets, Class Order [CO 00/2338] Relief from the minimum bid price principle—s621(3), Class Order [CO 02/249] Approved overseas financial markets—s257B(7), Class Order [CO 04/523] Investor directed portfolio services takeover relief and Class Order [CO 09/459] Takeovers relief for accelerated rights issues with minor changes, including:
- combining [CO 02/249] and [CO 02/259] into a single instrument
- updating the name, format, legislative references and definitions, and
- simplifying and modernising the drafting to make the new instruments easier to understand.
ASIC received two submissions in response to CP 234. Both submissions supported ASIC's proposals to remake the legislative instruments. We received some technical suggestions from one party, most of which have been adopted.
ASIC Corporations (Amendment and Repeal) Instrument 2015/1079 repeals the previous instruments.
Under the Legislative Instruments Act, all class orders are repealed automatically on 'sunset' after a specified period of time (mostly 10 years) unless we take action to exempt or preserve them. This ensures that legislative instruments like class orders are kept up to date and only remain in force while they are fit for purpose and relevant.
All government organisations are responsible for considering whether the legislative instruments they have made that are due to sunset will be relevant after their sunset date.