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ASIC Class Order [CO 08/751]

Authoritative Version
CO 08/751 Orders/ASIC Class Orders as amended, taking into account amendments up to ASIC Class Order [CO 09/39]
Administered by: Treasury
Registered 25 May 2012
Start Date 25 May 2009
End Date 11 Dec 2009
Date of repeal 11 Dec 2009
Repealed by ASIC Class Order [CO 09/1063]

ASIC Class Order [CO 08/751]

Covered short sales

This instrument has effect under s1020F(1)(c) of the Corporations Act 2001.

This compilation was prepared on 25 May 2009 taking into account amendments up to [CO 09/39]. See the table at the end of this class order.

Prepared by the Australian Securities and Investments Commission.

Australian Securities and Investments Commission
Corporations Act 2001 — Paragraph 1020F(1)(c) — Declaration

Enabling legislation

1.    The Australian Securities and Investments Commission makes this instrument under paragraph 1020F(1)(c) of the Corporations Act 2001 (the Act).

Title

2.    This instrument is ASIC Class Order [CO 08/751].

Commencement

3.    This instrument commences on the date it is registered under the Legislative Instruments Act 2003.

Note: An instrument is registered when it is recorded on the Federal Register of Legislative Instruments (FRLI) in electronic form: see Legislative Instruments Act 2003, s 4 (definition of register).  The FRLI may be accessed at http://www.frli.gov.au/.

Declaration

4.    Part 7.9 applies in relation to all persons as if Division 6 of that Part were modified or varied by inserting after section 1020B:

1020BC        Disclosure in relation to the sale of section 1020B products

(1)   Subsections (2) and (3) apply to the sale of section 1020B products:

(a)   made on a licensed market; or

(b)   that are off-market crossings that must be reported to the operator of the market.

(2)   A person (the client) who requests a participant in the market to make a sale of section 1020B products on the client’s behalf must, when making the request, inform the participant which (if any) of the following kinds of sales the proposed sale would be:

(a)   a long sale;

(b)   a covered short sale.

Note:    In some cases a sale may not be either of these kinds because, for example, it is covered by an instrument made under section 1020F.

(3)   A participant in the market must before making an offer to sell section 1020B products:

(a)   if the sale is made on behalf of a client, ask the client which (if any) of the following kinds of sales the proposed sale would be:

(i)    a long sale;

(ii) a covered short sale; and

 (b)  record in written or electronic form which (if any) of the following kinds of sales the proposed sale would be:

(i)    a long sale;

(ii)    a covered short sale.

Note:    Paragraph (b) applies in relation to sales made by a participant regardless of whether the sale is made as principal or as an agent.

(4)   A participant in the market does not have to comply with paragraph (3)(a) if at the time the client makes the request to sell the section 1020B products, the client informs the participant that the sale is of a specified kind referred to in that paragraph.

Note:    The participant must nonetheless comply with paragraph (3)(b) for the sale.

(5)   Where a participant in the market makes a reportable short sale before 7 pm on a trading day (the sale day), the participant must by 9 am on the next trading day inform the operator of the market of the total number of products in the same class which the participant has sold before 7 pm on the sale day as a result of any reportable short sale.  For the purposes of this subsection, a sale that is made at or after 7 pm on a trading day and before the start of the next trading day is taken to have been made on the next trading day.

(6)   In this section:

covered short sale means a sale of section 1020B products where at the time of the sale, the person making the sale has or, if the person is selling on behalf of another person, that other person has, a presently exercisable and unconditional right to vest the products in the buyer because of a securities lending arrangement entered into before that time.

long sale means a sale of section 1020B products where at the time of the sale the person making the sale has or, if the person is selling on behalf of another person, that other person has a presently exercisable and unconditional right to vest the products in the buyer other than because of a securities lending arrangement entered into before that time.

off-market crossing means, in relation to section 1020B products that are able to be traded on a licensed market, a sale of the products where all of the following apply:

(a)   the sale is not on the market;

(b)   under the operating rules of the market, the sale must be reported to the operator of the market;

(c)   a participant in the market makes the sale:

(i)      on behalf of both the buyer and the seller of the products; or

(ii)     on behalf of the buyer of the products and on the participant’s own behalf as seller of the products; or

(iii)    on behalf of the seller of the products and on the participant’s own behalf as buyer of the products.

reportable short sale means:

(a)   a sale of section 1020B products to which subsections (2) and (3) apply (see subsection (1)) that is a covered short sale; or

(b)   a sale of section 1020B products which would contravene subsection 1020B(2) but for ASIC Class Order [CO 08/764].

section 1020B products has the meaning given by subsection 1020B(1).

securities lending arrangement means an arrangement under which:

(a)   one entity (the lender) agrees that it will:

(i)    deliver particular section 1020B products, to another entity (the borrower) or to an entity nominated by the borrower; and

(ii)   vest title in those products in the entity to which they are delivered; and

(b)   the borrower agrees that it will, after the lender does the things mentioned in paragraph (a):

(i)    deliver the products (or equivalent products) to the lender or to an entity nominated by the lender; and

(ii)   vest title in those products (or those equivalent products) in the entity to which they are delivered.

sell has a meaning affected by subsection 1020B(7).

1020BD   Prohibition of covered short selling of certain securities (deleted)

Notes to ASIC Class Order [CO 08/751]

Note 1

ASIC Class Order [CO 08/751] (in force under s1020F(1)(c) of the Corporations Act 2001) as shown in this compilation comprises that Class Order amended as indicated in the tables below.

Table of Instruments

Instrument number

Date of FRLI registration

Date of commencement

Application, saving or transitional provisions

[CO 08/751]

22/9/2008 (see F2008L03520)

22/9/2008

 

[CO 08/752]

22/9/2008 (see F2008L03525)

22/9/2008

-

[CO 08/753]

22/9/2008 (see F2008L03526)

22/9/2008

-

[CO 08/763]

23/9/2008 (see F2008L03532)

23/9/2008

-

[CO 08/801]

24/10/2008 (see F2008L04171)

24/10/2008

-

[CO 08/824]

18/11/2008 (see F2008L04330)

19/11/2008

-

[CO 09/1052]

8/1/2009 (see F2009L00020)

8/1/2009

-

[CO 09/39]

25/5/2009 (see F2009L02077)

25/5/2009

-

Table of Amendments

ad. = added or inserted     am. = amended     rep. = repealed     rs. = repealed and substituted

Provision affected

How affected

Notional s1020BC.................

rs. [CO 08/824]

Notional s1020BC(2)............

am. [CO 09/39]

Notional s1020BC(3)............

am. [CO 08/752] and [CO 09/39]

Notional s1020BC(6)............

am. [CO 09/1052] and [CO 09/39]

Notional s1020BC(7)............

rep. [CO 09/1052]

Notional s1020BD.................

ad. [CO 08/752]

 

am. [CO 08/753]

 

rep [CO 09/39]

Notional s1020BD(1A).........

ad. [CO 08/824]

Notional s1020BD(2)............

rs. [CO 08/763]

Notional s1020BD(3)............

rs. [CO 08/763]

Notional s1020BD(4)............

ad. [CO 08/763]

Notional s1020BD(5)............

ad. [CO 08/763]

Notional s1020BD(5)(b).......

rs. [CO 08/801]

Notional s1020BD(6)............

ad. [CO 08/763]

Notional s1020BD(7)............

ad. [CO 08/763]

Notional s1020BD(7A).........

ad. [CO 08/824]

Notional s1020BD(8)............

ad. [CO 08/763]