Beneficial shareholding information obtained by ASIC in response to tracing notices will now be passed on to the relevant company under a recent change in ASIC’s practice. This change will increase the amount of this type of information available because under the Corporations Act listed companies are required to include such information in a publicly accessible register.
This change also affects listed managed investment schemes and their responsible entities.
Other significant aspects of the change in practice include the following:
- The change in practice will not operate retrospectively, that is, ASIC will not release beneficial holding information which it obtained before 5 September 2005 (the date of the change in practice).
- ASIC will not disclose the identity of those who request the issue of a beneficial tracing notice.
Background on disclosure of beneficial shareholding information
Under the Corporations Act, ASIC, or the company which issued the relevant shares, may send a tracing notice requiring disclosure of certain beneficial holding information. ASIC must issue a tracing notice if requested by a shareholder unless ASIC considers it would be unreasonable to do so.
The information which must be given in response to a tracing notice includes:
- full details of the recipient’s relevant interest in the shares
- the name and address of each other person who has a relevant interest in the shares
- details of how each other person’s relevant interest arises
- the name and address of anyone who has given the recipient instructions regarding the acquisition, voting or other matters relating to the shares, and
- full details of any such instructions.
The recipient is required to provide the information requested to the extent it is known.
A company or managed investment scheme is required to keep a register of all beneficial holding information it obtains under requests made by it, or by ASIC. The register is available for inspection by members of the public at a fee of $5.00 and at no cost to the company’s shareholders.
Implications
ASIC’s policy change may mean that more information regarding the beneficial ownership of shares in listed companies and interests in listed managed investment schemes will be available.
It seems unlikely that large volumes of additional information will be made available under the revised practice, although it is difficult to determine how frequently ASIC uses this limb of its investigatory powers. Investigation of the beneficial ownership of shares in a company would be undertaken more frequently by companies themselves than by ASIC.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
