Relief granted for share and interest sale facilities
On 18 March 2008 ASIC announced Class Order relief from provisions of the Corporations Act 2001 (Cth) (Act) to facilitate the operation of certain share and interest sale facilities.
The Class Order, CO 08/10 Share and interest sale facilities (Class Order) operates in circumstances where ASIC is satisfied that the prohibitions in s1019F, the managed investment provisions and related provisions of the Act were not intended to apply; strict compliance with these provisions would be impractical and disproportionately burdensome; and there would be no significant regulatory benefit in requiring compliance.
The Class Order allows companies and product issuers to offer certain sale facilities for the purchase of shares or interests, and reduces costs by removing the need to apply to ASIC for individual relief before offering such facilities to their members.
Click here to view the Class Order, the accompanying Regulatory Guide 161 Share and interest sale facilities and the Explanatory Statement.
Reminder of disclosure obligations regarding stock lending
On 6 March 2008 ASIC reminded market participants of their disclosure obligations for those involved in stock lending or stock borrowing practices. The acquisition of a substantial holding, under a stock lending arrangement, would often give rise to a duty to disclose the holding to both the listed company and the market operator. As a result, it is the view of ASIC that such an arrangement requires consideration of relevant interest and substantial holding provisions under the Corporations Act 2001 (Cth).
Click here for the full media release.
New online reporting system for dual-regulated institutions
On 11 March 2008, APRA, in conjunction with ASIC, released a new online breach reporting system for dual regulated institutions. The system enables APRA regulated institutions (ie authorised deposit taking institutions, general insurers, life insurance companies, friendly societies and superannuation licensees) to report breaches or prospective breaches online with greater ease. The system prevents potential duplication by allowing institutions regulated by both APRA and ASIC to lodge a single breach report with either regulator in full satisfaction of their reporting requirements.
Click here to access the media release in full.
Securitisation of assets for contingent liquidity purposes
On 13 March 2008 APRA responded to a number of authorised deposit taking institutions (ADIs) who had approached APRA, seeking to securitise a portion of their loan portfolio, specifically to create mortgage-backed securities that are eligible for repurchase agreement (repo) transactions with the Reserve Bank of Australia (RBA).
APRA released a letter to all ADIs stating that APRA supported initiatives to provide ADIs with alternative sources of liquidity and that the proposed structures can be designed to meet APRA's prudential requirements subject to a number of provisions and the RBA's repo eligibility rules for mortgage backed securities.
Click here to view the letter.
Short selling in the current market
In an attempt to address transparency and settlement risk issues associated with short selling, ASX released a reminder to market participants of their reporting obligations, specifically concerning "naked" and "covered" short selling.
Click here to view the media release and a summary of the market rules in relation to short selling.
Graeme Samuel speech on new predatory pricing provisions
On 3 March 2008, ACCC Chairman Graeme Samuel delivered a speech on the predatory pricing amendments in section 46 of the Trade Practices Act 1974 (Cth).
A common form of predatory pricing is when a corporation with a substantial degree of market power takes advantage of that power by selling below cost in the short-term for the purpose of driving out a competitor.
Mr Samuel discussed the key elements that need to be satisfied in order to establish a breach of the new sections 46(1AA) and (1AB), which are often referred to as the 'Birdsville amendments'.
However, he noted that there is considerable uncertainty as to how these elements will be interpreted by the courts, saying that the ACCC would attempt to help build certainty by prosecuting appropriate test cases.
Click here to access the speech in full.
New regulation for collective bargaining notification regime
On 7 March the Trade Practices Amendment Regulations 2008 (No. 1) 2008 No. 16 (Cth) (Regulation), which amends the Trade Practices Regulations 1974 No. 170 (Cth) (Principal Regulation), commenced. The regulation temporarily extends the time period applicable to the collective bargaining notification regime from 14 days to 28 days until 1 January 2009.
The principal regulation extended the relevant time period from 14 days to 28 days during the first year of the new collective bargaining regime (1 January 2007 – 31 December 2007). However, it was considered that the extended time periods should continue until 31 December 2008 to allow businesses and the ACCC additional time to familiarise themselves with the regime.
Click here to view the regulation and the explanatory statement.
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