International Law

ASIC grants relief for share and interest sale facilities

ASIC has announced class order relief from provisions of the Corporations Act to facilitate the operation of certain share and interest sale facilities. This relief is provided in ASIC Class Order CO 08/10 Share and interest sale facilities and explained here .

ASIC has also released Regulatory Guide 161 Share and interest sale facilities (RG 161), which explains the relief given in CO 08/10, and ASIC?s approach for sale facilities not covered by the class order.

Share and interest sale facilities are facilities that some companies and issuers of interests in managed investment schemes offer to their members from time to time. These sale facilities can provide an easy and cheap way for their members, especially those with small holdings, to dispose of their holdings at or near their current market value.

CO 08/10 provides relief from a range of provisions of the Act. This will allow companies and product issuers to offer certain sale facilities and related facilities for the purchase of shares or interests, and reduce costs for those companies and product issuers by removing the need for them to apply to ASIC for individual relief before offering such facilities to their members.

The relief only applies to facilities where the shares or interests are sold in the ordinary course of trading on a licensed market or approved foreign market. The relief is also subject to other limitations and conditions. The details are set out in RG 161 and the class order.

If an issuer proposes to operate a sale facility that is not covered by the class order relief, it can apply for individual relief.

Full post as published by Australian Regulatory Compliance Review on March 18, 2008 (boomark / email).