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CORPORATIONS ACT 2001

CHAPTER 6D - FUNDRAISING  

PART 6D.3 - PROHIBITIONS, LIABILITIES AND REMEDIES (OTHER THAN FOR CSF OFFERS)  

Division 1 - Prohibitions and liabilities  

SECTION 727  OFFERING SECURITIES WITHOUT A CURRENT DISCLOSURE DOCUMENT  

727(1)  Offer of securities needs lodged disclosure document.  


A person must not make an offer of securities, or distribute an application form for an offer of securities, that needs disclosure to investors under Part 6D.2 unless a disclosure document for the offer has been lodged with ASIC.

727(2)  Offer form to be included in or accompanied by disclosure document.  


A person must not make an offer of securities, or distribute an application form for an offer of securities, that needs disclosure to investors under Part 6D.2 unless:


(a) if a prospectus is used for the offer - the offer or form is:


(i) included in the prospectus; or

(ii) accompanied by a copy of the prospectus; or


(b) if both a prospectus and a profile statement are used for the offer - the offer or form is:


(i) included in the prospectus or profile statement; or

(ii) accompanied by a copy of the prospectus or profile statement; or


(c) if an offer information statement is used for the offer - the offer or form is:


(i) included in the statement; or

(ii) accompanied by a copy of the statement.

Note: Sections 706, 707, 708, 708AA and 708A say when the offer needs disclosure to investors under Part 6D.2.

727(3)  Non-quoted securities - waiting period after lodgment before processing applications for securities.  

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A person must not accept an application for, or issue or transfer, non-quoted securities offered under a disclosure document until the period of 7 days after lodgment of the disclosure document has ended. ASIC may extend the period by notice in writing to the person offering the securities. The period as extended must end no more than 14 days after lodgment.

Simple corporate bonds

727(3A)  

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Subsection (3) does not apply in relation to an offer of securities under a 2-part simple corporate bonds prospectus if the securities are in the same class as existing securities that are quoted on a prescribed financial market immediately before the application period for the prospectus but for differences as to:


(a) the fixed term of the securities (if any); or


(b) the rate at which interest is payable under the securities; or


(c) the dates on which the holders are to be paid interest under the securities.

727(4)  Issue or transfer not to breach section 708 ceiling.  


If a person relies on subsection 708(1) to make offers of securities without disclosure to investors under Part 6D.2, the person must not issue or transfer securities without disclosure to investors under that Part if the issue or transfer would result in a breach of the 20 investors ceiling or the $2 million ceiling (see subsections 708(3), (4), (5), (6) and (7)).

727(5)  Circumstances in which a person is taken not to contravene this section.  


If:


(a) a person relies on subsection 708AA(2) or 708A(5) to make offers of securities for issue or sale without disclosure to investors under Part 6D.2; and
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(b) the notice given under that subsection purported to comply with subsection 708AA(7) or 708A(6) but did not actually comply with subsection 708AA(7) or 708A(6);
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the person is taken not to contravene this section.


 



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