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Commencement of dispute resolution scheme requirements for trustee companies deferred

by Hilary Kincaid 1. April 2011 14:06

ASIC issued class order CO 11/261 today. It amends the start date for ‘traditional services’ trustee companies (see Sch 8AA of the Corporations Regulations) to have a dispute resolution scheme under s 912A(1)(g) of the Act, to 1 Jan 2012.


A copy of the explanatory statement is available on Comlaw.


It takes effect from the date of registration (1 April 2011).



ASIC opens consultation on minor modifications to ASX guidance

by Hilary Kincaid 30. March 2011 14:16

CP 152 ASIC’s conversion of ASX and SFE guidance: General operational obligations seeks feedback on proposed modification to five ASX guidance notes and one SFE guidance note.


It is the next step in the review identified in Table 1 of RG 214 Guidance on ASIC market integrity rules for ASX and ASX 24 markets.


Comment is open until 13 May 2011. More information is available on the ASIC site.

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Revised regulatory guidance on related party transaction and expert reports

by Hilary Kincaid 30. March 2011 14:16

RG 76 Related party transactions has been updated. The aim of the guidance is to improve disclosure by public companies and registered managed investment schemes regarding related party transactions. More information is available on the ASIC site.


RG 111 Content of expert reports and RG 112 Independence of experts have also been revised. The object of the revision, which follows public consultation, is to ensure reliability and quality of reports commissioned to assist security holders in making major decision on schemes of arrangement, takeover bids and related party transactions.


Additional guidance is provided on how experts should assess whether a proposal is fair and reasonable, and how experts should explain any material difference between their assessed value of a security and its recent market price.

There is clarification about the use of the discounted cash flow methodology, particularly when valuing a start up project where there is a long lead time until cash is generated. The expert must have a reasonable basis for the forward looking information and be explicit in disclosing the extent and nature of the adjustments made to allow for development stage risks.


ASIC | Compliance

New consultation paper on debt securities

by Hilary Kincaid 30. March 2011 14:16

CP 151 Debt securities: modifying the naming provisions and advertising requirements sets out proposals to:

  • introduce class order relief to provide for a new class of debt security (in addition to the current classes of ‘debenture’, ‘mortgage debenture’ and ‘unsecured note’) called a ‘note’, providing certain conditions (including sufficiency of security) are met; and
  • revise ASIC’s advertising standards for offers of debt securities and interests in mortgage schemes, in particular the standards relating to risk of loss and comparing these types of securities with bank deposits.


Comment is open until 6 May 2011. More information is available on the ASIC site.

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ASIC | Disclosure

Opes Prime directors to stand trial

by Hilary Kincaid 15. March 2011 10:28

Two former directors of Opes Prime Stockbroking Limited, Anthony Blumberg and Julian Smith, have been committed to stand trial in the Victorian Supreme Court after pleading not guilty to charges brought by ASIC. The two men are charged with breaches of their duties as directors of OPSL and associated companies.

Mr Blumberg and Mr Smith will appear in the Supreme Court on 21 March 2011.

More information is available on the ASIC site.




ASX/SGX merger proposal lodged with Foreign Investment Review Board

by Hilary Kincaid 14. March 2011 12:06

In a media release issued on Friday, the ASX has advised that Singapore Exchange Limited has lodged a formal application with the Foreign Investment Review Board in relation to the proposed merger of the two companies.




ASIC announces timetable for market competition - Chi-X is coming

by Hilary Kincaid 3. March 2011 15:24

ASIC announced its framework for the introduction of market competition today, taking into account comments received in relation to CP145. That timetable sees Chi-X commencing operation in October-November 2011.


That framework includes some draft market integrity rules. ASIC has indicated that it intends to issue the final rules for competition in April 2011. The market will be informed of the operative date (likely to be late in 2011) at that time.


CP 145 also sought comment on some broader rules in relation to market structure, in relation to which ASIC intends to conduct further consultation.


The ASX has issued a media release in response, which reiterates its willingness to be involved in market competition but also states that they believe some of the proposals in CP 145 (particularly proposals relating to the adequate regulation of dark pools) remain unresolved: “an opportunity exists in Australia to avoid these issues occurring locally, and to prevent market quality and integrity from being impaired”.


More detailed information is available on the ASIC official site.



New consultation paper on disclosure for hedge fund investors

by Hilary Kincaid 24. February 2011 15:17

ASIC released CP 147 Hedge funds: Improving disclosure for retail investors today. As ASIC points out, the complexity of hedge funds means that investors need a better understanding of how things work than with other retail funds; before they can make an informed decision regarding investment, asset valuation and leveraging (see the FIDO site for more detail). In particular, ASIC is seeking feedback on the interaction of proposed disclosure guidance with tailored PDS requirements for simple managed investment schemes.


More information is available on the ASIC site.


Comments on the paper are due by 21 April 2011.

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Litigation funding class order relief extended again

by Hilary Kincaid 22. February 2011 16:35

ASIC has once more extended the operation of the relief granted in CO 10/333 Funded representative proceedings and funded proof of debt arrangements, until 1 June 2011.

Our previous post on the subject sets out details of the Corporations Act requirements addressed by the relief.

A copy of the amending class order ([CO 11/128]) is available on the Comlaw site, together with explanatory material.


ASIC | Litigation

Snapshot from the ASIC Summer School

by Hilary Kincaid 22. February 2011 16:28

"The pace of new regulatory requirements has never been quicker and this raises particular challenges for non-executive directors".

Professor Ian Ramsay, Harold Ford Professor of Commercial Law, University of Melbourne

(via the Australian Financial Review, 22 February 2011, p 5)


Ford's Principles of Corporations Law


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