THE CORPORATIONS LAW

CHAPTER 6D - FUNDRAISING

PART 6D.2 - DISCLOSURE TO INVESTORS ABOUT SECURITIES

Division 5 - Procedure for offering securities

SECTION 717   OVERVIEW OF PROCEDURE FOR OFFERING SECURITIES  

717     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    710   Section 728 prohibits
   document, making            offering securities
   sure that it:         711   under a disclosure
                               document that is
   o sets out all the    712   materially deficient.
     information
     required            713   Section 729 deals with
                               the liability for
                               breaches of this
   o does not contain    714   prohibition.
     any misleading or         
     deceptive           715   Sections 731, 732 and
     statements                733 set out defences.
                         716   
   o is dated

   and that the
   directors consent to
   the disclosure
   document.
--------------------------------------------------------
 2 Lodge the              718  Subsection 727(3)
   disclosure                  prohibits processing
   document with               applications for non-
   ASIC.                       quoted securities for
                               7 days after the
                               disclosure document is
                               lodged.
--------------------------------------------------------
 3 Offer the securities,  721  Sections 727 and 728
   making sure that            make it an offence to:
   the offer and any
   application form is         o offer securities
   either included in            without a disclosure
   or accompanies:               document

   o the disclosure            o offer securities if
     document; or                the disclosure
                                 document is
   o a profile                   materially deficient.
     statement if
     ASIC has                  Subsection 729(3)
     approved the use          deals with liability on
     of a profile              the prospectus if a
     statement for             profile statement is
     offers of that            used.
     kind.

                               The securities hawking
                               provisions (section
                               736) restrict the way in
                               which the securities
                               can be offered
--------------------------------------------------------
 4 If it is found that    719  Section 728 prohibits
   the disclosure              making offers after
   document lodged        724  becoming aware of a
   was deficient or a          material deficiency in
   significant new             the disclosure
   matter arises,              document or a
   either:                     significant new matter.

   o lodge a                   Section 730 requires
     supplementary             people liable on the
     or replacement            disclosure document to
     document under            inform the person
     section 719; or           making the offer about
                               material deficiencies
   o return money to           and new matters.
     applicants under
     section 724.
--------------------------------------------------------
 5 Hold application       722  Investors may have a
   money received on           right to have their
   trust until the             money returned if
   securities are issued       certain events occur
   or transferred or the       (see sections 724, 737
   money returned.             and 738).
--------------------------------------------------------
 6 Issue or transfer the  723  Section 721 says
   securities, making          which disclosure
   sure that:                  document must be
                               distributed with the
   o the investor used         application form.
     an application
     form distributed          Section 729 identifies
     with the                  the people who may be
     disclosure                liable if:
     document; and
                               o securities are issued
   o the disclosure              in response to an
     document is                 improper
     current and not             application form; or
     materially
     deficient; and            o the disclosure
                                 document is not
  o any minimum                  current or is
    subscription                 materially deficient.
    condition has
    been satisfied.              Section 731, 732 and
                                 733 provide defences
                                 for the contraventions.

                               Section 737 provides
                               remedies for an
                               investor.
--------------------------------------------------------