The Corporations Legislation Amendment (Simpler Regulatory System) Bill 2007 when passed will make amendments to the fundraising provisions in the Corporations Act. There are 6 principal areas of change:
Employee unlisted share schemes disclosure
Relief
will be provided from certain of the licensing and hawking restrictions
of the Corporations Act for employee share schemes for unlisted
companies. This relief will be subject to the condition that such
employee share schemes must be accompanied by a disclosure document
such as an Offer Information Statement or a prospectus. Listed
entities may also take advantage of this relief if they wish, subject
to the same condition.
The amendments apply to employee share
schemes offered on or after the day on which the amendments commence.
Small scale offerings
The
definition of sophisticated and professional investors in Chapter 6D of
the Corporations Act will be amended to align with that used for
wholesale investors in Chapter 7.
The maximum amount of
money that may be raised using an Offer Information Statement when
combined with funds previously raised will be increased to $10 million
or less.
The amendments relating to small scale
offerings commence on Royal Assent.
Secondary sale issues
Amendments
will allow controllers to arrange sales of securities they hold without
disclosure subject to the existing section 708A conditions, but subject
to the requirement that the controller and the company provide a
cleansing notice in order to provide up to date price sensitive
information to the market.
The required period for
quotation of the securities will be reduced to three months to provide
such a track record and, therefore, provide some relief from the
current requirement of 12 months.
The amendments relating to secondary
sale issues commence on Royal Assent.
Quoted securities rights issue disclosure
Amendments
will provide that rights issues for quoted securities and interests in
managed investment schemes do not require the production of a
prospectus or PDS. A cleansing notice will have to be provided before
the rights issue offers are made, and the notice must include
appropriate information on the consequences of any potential effect of
the rights issue on the control of the entity.The amendments relating to rights issues
commence on Royal Assent.
Prospectus and PDS advertising rules
Amendments
will align the prospectus advertising provisions relating to quoted
securities and advertising post lodgment of a prospectus for unquoted
securities with those pertaining to financial products (other than
securities).
The amendments relating to advertising
rules for offers of securities requiring a disclosure document and for
offers or issues of other financial products commence on proclamation
or six months after Royal Assent, whichever is earlier.
ASIC’s stop‑order powers will be extended
to cover advertising of quoted and unquoted securities and other
financial products.
Stapled securities disclosure
The
application of the provisions regarding replacement prospectuses will
be extended to cover combined prospectus/PDSs prepared for offers of
stapled securities comprising one or more shares and one or more units
in managed investment schemes.
The amendments relating to Replacement
Product Disclosure Statements for stapled securities commence on Royal
Assent.
