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Corporations Act 2001

CHAPTER 6D - FUNDRAISING  

PART 6D.2 - DISCLOSURE TO INVESTORS ABOUT SECURITIES (OTHER THAN FOR CSF OFFERS)  

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Division 5 - Procedure for offering securities  

SECTION 717  

717   OVERVIEW OF PROCEDURE FOR OFFERING SECURITIES  

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The following table summarises what a person who wants to offer securities must do to make an offer of securities that needs disclosure to investors under this Part and gives signposts to relevant sections:


Offering securities (disclosure documents and procedure)
Action required Sections Comments and related sections
1 Prepare disclosure document, making sure that it: 710
711
712
713
713C
713D
713E
714
715
716		 Section 728 prohibits offering securities under a disclosure document that is materially deficient.
  • sets out all the information required Section 729 deals with the liability for breaches of this prohibition.
  • does not contain any misleading or deceptive statements Sections 731 , 732 and 733 set out defences.
  • is dated  
  and that the directors consent to the disclosure document.  
2 Lodge the disclosure document with ASIC 718 Subsection 727(3) prohibits processing applications for non-quoted securities for 7 days after the disclosure document is lodged.
3 Offer the securities, making sure that the offer and any application form is either included in or accompanies: 721 Sections 727 and 728 make it an offence to:
    • offer securities without a disclosure document
  • the disclosure document; or   • offer securities if the disclosure document is materially deficient.
  • a profile statement if ASIC has approved the use of a profile statement for offers of that kind.   Subsection 729(3) deals with liability on the prospectus if a profile statement is used.
      The securities hawking provisions (section 736 ) restrict the way in which the securities can be offered.
4 If it is found that the disclosure document lodged was deficient or a significant new matter arises, either: 719
719A
724		 Section 728 prohibits making offers after becoming aware of a material deficiency in the disclosure document or a significant new matter.
  • lodge a supplementary or replacement document under section 719 or 719A ; or   Section 730 requires people liable on the disclosure document to inform the person making the offer about material deficiencies and new matters.
  • return money to applicants under section 724 .  
5 Hold application money received on trust until the securities are issued or transferred or the money returned. 722 Investors may have a right to have their money returned if certain events occur (see sections 724 , 737 and 738 ).
6 Issue or transfer the securities, making sure that: 723 Section 721 says which disclosure document must be distributed with the application form.
  • the investor used an application form distributed with the disclosure document; and   Section 729 identifies the people who may be liable if:
  • the disclosure document is current and not materially deficient; and   • securities are issued in response to an improper application form; or
  • any minimum subscription condition has been satisfied.   • the disclosure document is not current or is materially deficient.
        Sections 731 , 732 and 733 provide defences for the contraventions.
        Section 737 provides remedies for an investor.

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