Federal Register of Legislation - Australian Government

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ASIC Class Order [CO 02/313]

Authoritative Version
CO 02/0313 Orders/ASIC Class Orders as made
This Class Order applies Div 3 of Part 7.11 of the Corporations Act 2001 and the regulations made for the purpose of that Division to transfers of specified financial products that are securities as defined in section 761A, but are not covered by section 1073A(a)-(d) of the Act. This enables the specified financial products to be transferred with the benefit of the statutory warranties and indemnities contained in the regulations made for the purposes of Div 3 of Pt 7.11. Transfers under Div 3 are usually paper-based. This Class Order has the effect that the National Guarantee Fund provisions, contained in Div 4 of Pt 7.5 of the Act and related regulations, apply to transfers of the specified financial products that are effected under Div 3 of Pt 7.11 by an ASX participant.
Administered by: Treasury
General Comments: This Class Order was published in the Australian Securities and Investments Commission Gazette on 19 March 2002.
Registered 02 Mar 2007
Gazetted 19 Mar 2002
Date of repeal 24 Sep 2016
Repealed by ASIC Corporations (Repeal) Instrument 2016/894
Table of contents.

Australian Securities and Investments Commission
Corporations Act 2001 — Subsections 1073E(1) and (2)

Declaration

Under subsections 1073E(1) and (2) of the Corporations Act 2001 (the "Act") the Australian Securities and Investments Commission hereby declares that:

(a)        the classes of securities referred to in Schedule A are securities to which Division 3 of Part 7.11 of the Act and regulations made for the purposes of section 1073D of the Act apply (as referred to paragraph 1073A(1)(e) of the Act);

(b)       the regulations made for the purposes of section 1073D apply to the classes of securities mentioned in Schedule B as if the provisions of the regulations referred to in that Schedule were modified as specified in that Schedule.

 

SCHEDULE A

Shares in, or debentures of, a foreign company that are quoted on the financial market operated by Australian Stock Exchange Limited.

 

SCHEDULE B

1.         For the securities mentioned in Schedule A:

 

(a)     insert in regulation 7.11.01 of the Corporations Regulations 2001 (the "Regulations"), in the appropriate alphabetical order, the following definitions:

 

"absolute beneficial owner, in relation to Division 3 securities, means one or more beneficiaries of a trust to which a Division 3 security is subject, who has or who together have a presently enforceable and unconditional right to require the trustee of the trust to transfer the Division 3 security to them."; and

 

 "securities loan means an agreement or arrangement under which:

 

(i)    a person ("lender") undertakes to transfer or otherwise make available to another person ("borrower") Division 3 securities; and

(ii)   the borrower undertakes to transfer or otherwise restore to the lender those Division 3 securities or the same quantity of equivalent Division 3 securities at an identifiable time in the future.";

(b)     insert in subregulation 7.11.17(4) of the Regulations after paragraph 7.11.17(4)(a) the following paragraph:

"(ba)  if a broker is given authority by or on behalf of the absolute beneficial owner of Division 3 securities to sell or transfer those Division 3 securities, the broker is taken to have authority from the transferor to:

 

(i)    sell or transfer those Division 3 securities; and

 

(ii)   execute an instrument of transfer of those Division 3 securities,

 

on the transferor's behalf, even if no authority is given by the transferor;";

(c)     insert in paragraph 7.11.19(2)(f) of the Regulations after the words "paragraph 7.11.17(4)(a)" the words "or (ba)";

(d)     omit subregulation 7.11.40(1) of the Regulations and substitute the following subregulation:

“(1)    A broker must not stamp with a broker's stamp a document (a transfer document) that relates to Division 3 securities and may be used as a sufficient transfer under this Part, unless the transfer document relates to:

(a)     a sale or purchase of the Division 3 securities, in the ordinary course of the broker's business, for a consideration of not less than their unencumbered market value at the time of the sale or purchase;

(b)     the performance of obligations under a securities loan; or

(c)     a transfer from or to a broker's clearing account in accordance with the operating rules of the financial market in which the broker is a participant.”; and

(e)     insert in paragraph 7.11.40(2)(b) of the Regulations after the words "paragraph 7.11.17(4)(a)" the words "or (ba)".

 

2.         For Division 3 rights as defined in subregulation 1.0.02 of the Regulations:

 

(a)     insert in regulation 7.11.01 of the Regulations, in the appropriate alphabetical order, the following definition:

 

"company option means a Division 3 right that is an assignable option to acquire by way of issue shares or debentures in a company upon payment of an exercise price.";

 

(b)     insert after subregulation 7.11.10 of the Regulations the following regulation:

 

"7.11.10A           Company options

 

For the purposes of regulations 7.11.11 to 7.11.14, and of the forms in

Schedule 2A to the Regulations, a Division 3 right that is a company option

shall be taken to be a Division 3 asset and not to be a Division 3 right.";

 

(c)   insert before paragraph 7.11.16(1)(a) of the Regulations the following paragraph:

 

"(aa)     to have agreed at the execution time to accept the rights subject to the terms and conditions on which the transferor held them immediately before that time, being the terms and conditions that are applicable as between the issuer in relation to, and the holder for the time being of, the rights;";

 

(d)   insert at the beginning of paragraph 7.11.16(1)(a) of the Regulations the words:

 

"at the time at which the transferee subsequently makes payment to the issuer in relation to the Division 3 assets of the application monies or, in the case of company options, the exercise price (the payment time),"; and 

 

(e)   omit wherever appearing in paragraphs 7.11.16(1)(a) and(b) and subregulation (2) of the Regulations the words "at the execution time", and substitute the words "at the payment time".

 

 

Commencement

This instrument takes effect on the commencement of Schedule 1 to the Financial Services Reform Act 2001.

 

 

Dated this 9th day of March 2002

 

 

 

 

Signed by Brendan Byrne
as a delegate of the Australian Securities and Investments Commission