Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

PART 7.9 - FINANCIAL PRODUCT DISCLOSURE AND OTHER PROVISIONS RELATING TO ISSUE, SALE AND PURCHASE OF FINANCIAL PRODUCTS  

Division 2 - Product Disclosure Statements  

Subdivision B - Requirement for a Product Disclosure Statement to be given  

SECTION 1012DA   PRODUCT DISCLOSURE STATEMENT NOT REQUIRED FOR SALE AMOUNTING TO INDIRECT ISSUE  

Product Disclosure Statement not required

1012DA(1)    
In a recommendation situation or sale situation, the regulated person does not have to give the client a Product Disclosure Statement if:

(a)    but for subsection (5) , (11) or (12) , the regulated person would be required by section 1012A or 1012C to give a Product Disclosure Statement for the relevant product; and

(b)    the transfer or sale of the financial product (the relevant product ) to the client would take place in circumstances covered by subsection 1012C(6) ; and

(c)    the relevant product was not issued by the issuer with the purpose referred to in subparagraph 1012C(6)(c)(i) ; and

(d)    a determination under subsection (2) was not in force in relation to the issuer of the relevant product at the time when the relevant product was issued.

1012DA(1A)    

In a recommendation situation or sale situation, the regulated person does not have to give the client a Product Disclosure Statement if:

(a)    but for subsection (5) , the regulated person would be required by section 1012C to give a Product Disclosure Statement for the transfer or sale of the financial product (the relevant product ); and

(b)    the transfer or sale of the relevant product to the client would take place in circumstances covered by subsection 1012C(8) ; and

(c)    the relevant product was not sold by the controller with the purpose referred to in subparagraph 1012C(8)(d)(i) ; and

(d)    a determination under subsection (2) was not in force in relation to the issuer of the relevant product at the time when the relevant product was issued.

Determination by ASIC

1012DA(2)    
ASIC may make a determination under this subsection if ASIC is satisfied that in the previous 12 months the issuer of the relevant product contravened any of the following provisions:

(a)    

the provisions of Chapter 2M as they apply to:

(i) the issuer; or

(ii) if the relevant product is an interest in a registered scheme - the scheme; or

(iii) if the relevant product is an interest in a notified foreign passport fund - the fund;

(b)    

section 674 , 674A , 675 or 675A as it applies to:

(i) the issuer; or

(ii) if the relevant product is an interest in a registered scheme - the scheme; or

(iii) if the relevant product is an interest in a notified foreign passport fund - the fund;

(c)    section 1016E , 1021D , 1021E or 1021J ;

(d)    subsection (9) of this section;

(e)    section 1308 as it applies to a notice under subsection (5) of this section.

1012DA(3)    
The determination must be made in writing and a copy must be published in the Gazette as soon as practicable after the determination is made.

1012DA(4)    
A failure to publish a copy of the determination does not affect the validity of the determination.

Transfer or sale of quoted securities - case 1

1012DA(5)    
The regulated person does not have to give the client a Product Disclosure Statement if:

(a)    

the relevant product is in a class of financial products that were quoted securities at all times in the 3 months before the day on which the relevant product was issued; and

(b)    

trading in that class of financial products on a prescribed financial market on which they were quoted was not suspended for more than a total of 5 days during the shorter of the period during which the class of financial product was quoted, and the period of 12 months before the day on which the relevant product was issued; and

(c)    

no exemption under section 111AS or 111AT covered the issue of the relevant product, or any person as director or auditor of the issuer, at any time during the relevant period referred to in paragraph (b) ; and

(d)    

no order under section 340 , 340A , 341 or 341A covered the issuer of the relevant product, or any person as director or auditor of the issuer, at any time during the relevant period referred to in paragraph (b) ; and

(e)    

either:

(i) if the regulated person is not required under subsection (1) to give a Product Disclosure Statement - the issuer of the relevant product gives the relevant market operator for the issuer a written notice that complies with subsection (6) before the relevant conduct occurs; or

(ii) if the regulated person is not required under subsection (1A) to give a Product Disclosure Statement - both the issuer of the relevant product, and the controller, give the relevant market operator for the issuer a written notice that complies with subsection (6) before the relevant conduct occurs.

1012DA(6)    
A notice complies with this subsection if the notice:

(a)    is given within 5 business days after the day on which the relevant product was issued; and

(b)    states that the relevant product was issued without a Product Disclosure Statement for the relevant product being prepared; and

(c)    states that the notice is being given under paragraph (5)(e) ; and

(d)    states that, as a disclosing entity, the issuer of the relevant product is subject to regular reporting and disclosure obligations; and

(e)    

states that, as at the date of the notice, the issuer of the relevant product has complied with the provisions of Chapter 2M , and of sections 674 and 674A , as those provisions apply to:

(i) the issuer; or

(ii) if the relevant product is an interest in a registered scheme - the scheme; or

(iii) if the relevant product is an interest is a notified foreign passport fund - the fund; and

(f)    sets out any information that is excluded information as at the date of the notice (see subsections (7) and (8) ).

Note 1: A person is taken not to contravene section 1021C if a notice purports to comply with this subsection but does not actually comply with this subsection: see subsection 1021C(5) .

Note 2: A notice must not be false or misleading in a material particular, or omit anything that would render it misleading in a material respect: see sections 1308 and 1309 . The issuer has an obligation to correct a defective notice: see subsection (9) of this section.

1012DA(7)    
For the purposes of subsection (6) , excluded information is information:

(a)    that has been excluded from a continuous disclosure notice in accordance with the listing rules of the relevant market operator to whom that notice is required to be given; and

(b)    that a person would reasonably require for the purpose of making a decision, as a retail client, whether to acquire the relevant product.

1012DA(8)    
The notice given under subsection (5) must contain any excluded information only to the extent to which it is reasonable for a person considering, as a retail client, whether to acquire the relevant product to expect to find the information in a Product Disclosure Statement.

Obligation to correct defective notice

1012DA(9)    
The issuer of the relevant product contravenes this subsection if:

(a)    the notice given under subsection (5) is defective; and

(b)    the issuer becomes aware of the defect in the notice within 12 months after the relevant product is issued; and

(c)    the issuer does not, within a reasonable time after becoming aware of the defect, give the relevant market operator a notice that sets out the information necessary to correct the defect.

1012DA(10)    
For the purposes of subsection (9) , the notice under subsection (5) is defective if the notice:

(a)    does not comply with paragraph (6)(f) ; or

(b)    is false or misleading in a material particular; or

(c)    has omitted from it a matter or thing the omission of which renders the notice misleading in a material respect.

Transfer or sale of quoted securities - case 2

1012DA(11)    
The regulated person does not have to give the client a Product Disclosure Statement if:

(a)    the relevant product is in a class of financial products that are quoted securities of the issuer; and

(b)    either:

(i) a Product Disclosure Statement required to be given by section 1012B is lodged with ASIC on or after the day on which the relevant product is issued but before the day on which the relevant conduct occurs; or

(ii) a Product Disclosure Statement required to be given by section 1012B is lodged with ASIC before the day on which the relevant product is issued and, on the day on which the relevant product is issued, the Product Disclosure Statement is still being used by the issuer of the relevant product for offers of financial products in the same class of financial products as the relevant product; and

(c)    the Product Disclosure Statement is for a financial product of the issuer of the relevant product that is in the same class of financial products as the relevant product.

Transfer or sale of quoted securities - case 3

1012DA(12)    
The regulated person does not have to give the client a Product Disclosure Statement if:

(a)    a Product Disclosure Statement for a financial product was given under section 1012B ; and

(b)    the relevant product was issued to:

(i) a person (the underwriter ) named in that Product Disclosure Statement as an underwriter of the issue of the financial product; or

(ii) a person nominated by the underwriter; and

(c)    the relevant product was issued to the underwriter, or the person nominated by the underwriter, at or about the time that persons who applied for the financial product under that Product Disclosure Statement were issued with that product; and

(d)    the relevant product is in a class of financial products that were quoted securities of the issuer.