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.