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CORPORATIONS ACT 2001

CHAPTER 6 - TAKEOVERS  

PART 6.1 - PROHIBITED ACQUISITIONS OF RELEVANT INTERESTS IN VOTING SHARES  

SECTION 609  SITUATIONS NOT GIVING RISE TO RELEVANT INTERESTS  

609(1)  Money lending and financial accommodation.  

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A person does not have a relevant interest in securities merely because of a security interest taken for the purpose of a transaction entered into by the person if:


(a) the security interest is taken or acquired in the ordinary course of the person's business of the provision of financial accommodation by any means and on ordinary commercial terms; and
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(b) the person whose property is subject to the security interest is not an associate of the person.

Note: Sections 11 to 17 define associate.

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609(2)  Nominees and other trustees.  


A person who would otherwise have a relevant interest in securities as a bare trustee does not have a relevant interest in the securities if a beneficiary under the trust has a relevant interest in the securities because of a presently enforceable and unconditional right of the kind referred to in subsection 608(8).

Note: This subsection will often apply to a person who holds securities as a nominee.

609(3)  Holding of securities by financial services licensee.  

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A financial services licensee does not have a relevant interest in securities merely because they hold securities on behalf of someone else in the ordinary course of their financial services business.

609(4)  Shares covered by buy-backs.  


A person does not have a relevant interest in a company's shares if the relevant interest would arise merely because the company has entered into an agreement to buy back the shares.

609(5)  Proxies.  


A person does not have a relevant interest in securities merely because the person has been appointed to vote as a proxy or representative at a meeting of members, or of a class of members, of the company, body or managed investment scheme if:


(a) the appointment is for one meeting only; and


(b) neither the person nor any associate gives valuable consideration for the appointment.

609(6)  Market traded options and derivatives.  


A person does not have a relevant interest in securities merely because of:


(a) an [sic] market traded option over the securities; or
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(b) a right to acquire the securities given by a derivative.
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This subsection stops applying to the relevant interest when the obligation to make or take delivery of the securities arises.

Note: Without this subsection, subsection 608(8) would create a relevant interest from the option or contract.

609(7)  Conditional agreements.  


A person does not have a relevant interest in securities merely because of an agreement if the agreement:


(a) is conditional on:


(i) a resolution under item 7 in the table in section 611 being passed; or

(ii) ASIC exempting the acquisition under the agreement from the provisions of this Chapter under section 655A; and


(b) does not confer any control over, or power to substantially influence, the exercise of a voting right attached to the securities; and


(c) does not restrict disposal of the securities for more than 3 months from the date when the agreement is entered into.

The person acquires a relevant interest in the securities when the condition referred to in paragraph (a) is satisfied.

609(8)  Pre-emptive rights.  


A member of a company, body or managed investment scheme does not have a relevant interest in securities of the company, body or scheme merely because the company's, body's or scheme's constitution gives members pre-emptive rights on the transfer of the securities if all members have pre-emptive rights on the same terms.

609(9)  Director of body corporate holding securities.  


A person does not have a relevant interest in securities merely because:


(a) the person is a director of a body corporate; and


(b) the body corporate has a relevant interest in those securities.

609(9A)  Clearing and settlement facilities.  

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The operator of a clearing and settlement facility (within the meaning of Chapter 7) does not have a relevant interest in securities merely because of its provision of facilities for the settlement of transactions.

609(10)  Prescribed exclusions.  


A person does not have a relevant interest in securities in the circumstances specified in the regulations. The regulations may provide that interests in securities are not relevant interests subject to specified conditions.

 



This information is provided by CCH Australia Limited. View the disclaimer and notice of copyright.
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