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ASIC issues quarterly report on relief decisions

by Martha.Ware 31. May 2011 15:13

ASIC has released a report, Overview of decisions on relief applications (October 2010 to January 2011) (REP 241), outlining decisions on relief applications between 1 October 2010 and 31 January 2011. The report aims to improve the level of transparency and the quality of publicly available information about decisions ASIC makes. 

The report summarises situations where ASIC has exercised, or refused to exercise, its exemption and modification powers under the Corporations Act 2001, the licensing and responsible lending provisions of the National Consumer Credit Protection Act 2009 and the registration provisions of Schedule 2 of the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009.

The report also highlights instances where ASIC has decided to adopt a no-action position regarding specified non-compliance with statutory provisions. Decisions by ASIC to refuse to exercise its powers are described on an anonymous basis.

REP 241 is available from the ASIC website or by calling ASIC’s Infoline on 1300 300 630.

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ASIC

Takeovers Panel Accepts Undertakings - oOh!media Group Limited

by Martha.Ware 31. May 2011 14:08

The Takeovers Panel has accepted undertakings from QMS Asia Pacific Outdoor Pte Ltd (QMS) and William Shaw Capital Pty Ltd (WSC) and declined to make a declaration of unacceptable circumstances in response to an application dated 4 May 2011 from oOh!media Group Limited in relation to its affairs.

The application raised a number of concerns affecting an efficient, competitive and informed market. These included that the call option deed entered into by QMS with PFG Investments Pty Limited (in voluntary liquidation) (PFG) was not disclosed in a timely manner and that the deed with WSC may have caused QMS to contravene s 606 and may have been an abuse of s 609(7).

The Takeovers Panel was satisfied that the terms of the undertakings adequately addressed the unacceptable circumstances alleged in the application. In particular, the terms of the undertaking by QMS require it to compensate OOH shareholders (other than PFG, WSC and their associates) in relation to on-market and certain off-market transactions from 23 August 2010 to 22 March 2011. This is expected to remedy the effects of any loss suffered. Similarly, OOH will be compensated in relation to the placements.

Call option deed 2 will be unwound and shareholdings of QMS and WSC sold down. QMS's holding in OOH will be sold down to 15%. QMS will be restricted from voting more than 4.9% of its remaining holding until 31 January 2012, and will be subject to a standstill and board nomination freeze for 6 months.

The Panel considers that it is not against the public interest to decline to make a declaration of unacceptable circumstances.

The sitting Panel was Paula Dwyer (sitting President), David Friedlander and Mike Roche. The Panel will publish its reasons for the decision in due course on its website www.takeovers.gov.au.

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Takeovers and Reconstructions

Premium Income Fund - Undertaking

by Martha.Ware 31. May 2011 14:06

The Takeovers Panel has accepted an undertaking from Wellington Capital Limited as Responsible Entity of the Premium Income Fund (PIF) in relation to the application dated 11 May 2011 by Wellington in relation to the affairs of PIF.

The Panel was concerned that a statement in the media release made by Wellington on 24 May 2011 was contrary to the undertakings given in its Notice of Appearance. The effect of the undertaking is that Wellington will satisfy its obligations under the Notice of Appearance it gave regarding media canvassing.

The sitting Panel in this matter is Peter Scott (sitting President), Byron Koster and Diana Chang.  The Panel makes no comment on the merits of the application.

A copy of the undertaking is available on the Takeovers Panel website.

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Takeovers and Reconstructions

ASIC bans WA financial adviser

by Martha.Ware 30. May 2011 11:27

ASIC has permanently banned financial adviser, Todd Michael King, of Perth, Western Australia, after an investigation found he engaged in misleading and deceptive conduct.

Mr King, 41, was an authorised representative of Australian Stockbroking and Advisory Services Limited (ASANDAS) between 9 May 2006 and 3 September 2008. He was also a director of Stripe Capital Pty Ltd, which was a corporate authorised representative of ASANDAS between 24 March 2006 and 31 July 2009.

ASIC found that Mr King engaged in misleading and deceptive conduct between July 2007 and June 2008 in breach of the Corporations Act 2001 (the Act) by:

  • Placing a scanned copy of a client’s signature on a document which made possible the unauthorised transfer of 40,000 client shares with a value of approximately $1.5 million,
  • Transferring funds from a client’s account for his own use in breach of an agreement with another client not to do so,
  • Accepting an appointment as a director of a client’s company, and
  • Undertaking unauthorised discretionary trading on a client’s account.

ASIC also found that Mr King operated managed discretionary accounts in contravention of ASANDAS’ Australian financial services (AFS) licence and in contravention of section 911B(1) of the Act.

ASIC’s action reflects its focus on protecting the public, deterring similar conduct and maintaining consumer confidence in the financial services industry.

Mr King has the right to lodge an application with the Administrative Appeals Tribunal for a review of ASIC’s decision.

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ASIC

New guidance proposed for takeover acquisitions approved by members

by Martha.Ware 30. May 2011 08:24

ASIC is inviting industry feedback on proposed updates to its guidance relating to a key aspect of Australia’s takeover regulation.

Consultation Paper 159 Acquisitions approved by members: update to RG 74 details ASIC’s plans to update guidance on the takeovers exception for acquisitions approved by members set out in item 7 of s 611 of the Corporations Act 2001. This exception allows a person to acquire more than 20 per cent of an entity on the condition members are provided with sufficient disclosure and approve the acquisition.

ASIC’s policy on ‘member approved acquisitions’ is currently set out in Regulatory Guide 74 Acquisitions agreed to by shareholders.
The proposed update of this guide emphasises that members need to be fully informed when deciding whether to give approval to acquisitions.

ASIC is also proposing to update RG 74 to take into account the significant developments to the law since the guide’s initial publication in 1994. These developments include more specific disclosure requirements and an extension of the regime to listed managed investment schemes. Importantly, there is significant new guidance about the circumstances in which ASIC will provide relief for ‘trust schemes’- complex transactions used to acquire control of a managed investment scheme.

ASIC’s updated guide will provide entities and their advisers with our current views on how the exception in item 7 applies, how we monitor compliance with item 7’s requirements and our policy on granting relief in relation to those requirements.

ASIC is seeking comments on the proposed update to RG 74 by 1 August 2011 and plans to publish a final guide by the end of the year.

The consultation paper is available on ASIC's website.

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ASIC | Takeovers and Reconstructions

ASIC sets out the Markets Disciplinary Panel practices and procedures

by Martha.Ware 30. May 2011 08:18

ASIC has published the operational framework for its Markets Disciplinary Panel to abide by when conducting proceedings into alleged breaches of the market integrity rules.

The independent peer review body, chaired by the former General Counsel of Goldman Sachs JB Were, Lisa Gay, was set up last year.

The MDP has the power delegated by ASIC to issue infringement notices and accept enforceable undertakings relating to breaches of market integrity rules, as an alternative to civil proceedings.

Ms Gay said: “The release of this guidance is for people and their advisers who may find themselves involved with the Markets Disciplinary Panel, and those interested in our operations generally.

“I think it is very important that when a party comes before the panel, that they know exactly what to expect, and that there will be a high level of continuity regarding panel matters and decisions.”

Among the guidance that Regulatory Guide 225 Markets Disciplinary Panel practices and procedures provides, of particular note are:

  • panel proceedings are initiated either by the ASIC serving a statement of reasons, which the recipient can make a reply, or by way of a joint request by the parties for the panel to approve a negotiated settlement;
  • convening a sitting panel of the MDP;
  • determining any panel member conflicts of interest;
  • serving a notice of hearing;
  • options open to the recipient on how to proceed;
  • handling communication between the MDP and parties; and
  • making and communicating a decision.


RG 225 also sets out the options and the procedures available to a recipient once proceedings before the MDP are initiated, namely concerning:

  • negotiating and seeking approval of a settlement by the MDP;
  • a determination of the matter by the MDP on the papers; and
  • an oral private hearing.

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ASIC

Mintails Limited - Further Undertaking

by Martha.Ware 30. May 2011 08:14

The Takeovers Panel has accepted a further undertaking from Mintails Limited in relation to the application dated 17 May 2011 by Mr Seager Rex Harbour (Application). The President of the Takeovers Panel previously accepted an undertaking from Mintails in relation to the Application on 18 May 2011 which is due to expire on 27 May 2011. The further undertaking essentially extends the expiry date to 3 June 2011.

A copy of the undertaking is available on the Takeovers Panel website.

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Takeovers and Reconstructions

Financial adviser banned following $3m fraud

by Martha.Ware 25. May 2011 08:13

ASIC has permanently banned a financial adviser following an investigation by the corporate regulator which found that he had defrauded more than $3 million from his clients over a seven year period.

ASIC’s investigation focused on the conduct of Robert Owen Bean while he was a securities representative and an authorised representative of Charter Financial Planning Ltd between 30 June 2003 and 30 June 2010. The investigation found that Mr Bean acted dishonestly and in breach of financial services laws, misappropriating more than $3.1 million from eight of his clients’ investment/superannuation accounts. The majority of defrauded funds were paid to unrelated clients and other third parties. A portion of the money was also used for Mr Bean’s personal benefit.

Mr Bean’s conduct was brought to ASIC’s attention by Charter Financial Planning Ltd, which has cooperated fully with ASIC’s investigation and has compensated all clients affected by this conduct.

ASIC banned Mr Bean in order to protect the public, deter similar conduct and maintain consumer confidence in the financial services sector.

Mr Bean has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.

Mr Bean is a director of BCFR Financial Services Group Pty Ltd, TCAS Group Pty Ltd and The County Group Pty Ltd, which operate financial planning businesses based at North Adelaide. Mr Bean provided financial advice to clients of these businesses.

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ASIC

Takeovers Panel Receives Review Application - Bentley Capital Limited

by Martha.Ware 25. May 2011 08:11

The Takeovers Panel has received an application dated 24 May 2011 from Bellwether Investments Pty Ltd and Mr Jim Craig seeking a review of the Panel's decision in Bentley Capital Limited.

A review Panel has not been appointed at this stage and no decision has been made whether to conduct proceedings. The Panel makes no comment on the merits of the application.

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Takeovers and Reconstructions

Takeovers Panel Makes Interim Orders - Premium Income Fund

by Martha.Ware 24. May 2011 16:46

The Takeovers Panel has made interim orders in response to an application dated 11 May 2011 by Wellington Capital Limited as responsible entity for the Premium Income Fund (PIF) in relation to the affairs of PIF.

The interim orders provide that Mr James Byrnes and ALF PIF Finance Limited (ALF Finance) not publish or dispatch any further material to PIF unitholders in respect of the off-market takeover bid by ALF Finance for all of the units in PIF (ALF PIF Offer) or make any variations to the ALF PIF Offer.

The interim orders have effect until the earliest of further order of the Panel, determination of the proceedings or 2 months from the date of the interim orders.

A copy of the interim orders is available on the Takeovers Panel website.

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Takeovers and Reconstructions



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