Corporations Act 2001
The following table specifies the steps required for, and the sections that apply to, the different types of buy-back.
|Procedures||minimum holding||employee share scheme||on-market||equal access scheme||selective buy-back|
|[ and sections applied ]|
|within 10/12 limit||over 10/12 limit||within 10/12 limit||over 10/12 limit||within 10/12 limit||over 10/12 limit|
|ordinary resolution [ 257C ]||-||-||yes||-||yes||-||yes||-|
|special/unanimous resolution [ 257D ]||-||-||-||-||-||-||-||yes|
|lodge offer documents with ASIC [ 257E ]||-||-||-||-||-||yes||yes||yes|
|14 days notice [ 257F ]||-||yes||yes||yes||yes||yes||yes||yes|
|disclose relevant information when offer made [ 257G ]||-||-||-||-||-||yes||yes||yes|
|cancel shares [ 257H ]||yes||yes||yes||yes||yes||yes||yes||yes|
|notify cancellation to ASIC [ 254Y ]||yes||yes||yes||yes||yes||yes||yes||yes|
Note: Subsections (2) and (3) of this section explain what an equal access scheme is. The 10/12 limit is the 10% in 12 months limit laid down in subsections (4) and (5). Subsections (6) and (7) of this section explain what an on-market buy-back is. See section 9 for definitions of minimum holding buy-back, employee share scheme buy-back and selective buy-back .
[ CCH Note: S 257B(1) will be amended by No 69 of 2020, s 3, Sch 1, by substituting " the Registrar " for " ASIC " (wherever occurring) in the table, (effective 22 June 2022 or a day or days to be fixed by Proclamation).]
An equal access scheme is a scheme that satisfies all the following conditions:
(a) the offers under the scheme relate only to ordinary shares;
(b) the offers are to be made to every person who holds ordinary shares to buy back the same percentage of their ordinary shares;
(c) all of those persons have a reasonable opportunity to accept the offers made to them;
(d) buy-back agreements are not entered into until a specified time for acceptances of offers has closed;
(e) the terms of all the offers are the same. 257B(3)
In applying subsection (2), ignore:
(a) differences in consideration attributable to the fact that the offers relate to shares having different accrued dividend entitlements;
(b) differences in consideration attributable to the fact that the offers relate to shares on which different amounts remain unpaid;
(c) differences in the offers introduced solely to ensure that each shareholder is left with a whole number of shares. 257B(4) 10/12 limit.
The 10/12 limit for a company proposing to make a buy-back is 10% of the smallest number, at any time during the last 12 months, of votes attaching to voting shares of the company.Exceeding the 10/12 limit 257B(5)
A proposed buy-back would exceed the 10/12 limit if the number of votes attaching to:
(a) all the voting shares in the company that have been bought back during the last 12 months; and
(b) the voting shares that will be bought back if the proposed buy-back is made;
would exceed the 10/12 limit.On-market buy-backs 257B(6)
A buy-back is an on-market buy-back if it results from an offer made by a listed corporation on a prescribed financial market in the ordinary course of trading on that market.
A buy-back by a company (whether listed or not) is also an on-market buy-back if it results from an offer made in the ordinary course of trading in a financial market outside Australia which ASIC declares in writing to be an approved overseas financial market for the purposes of this subsection. A buy-back by a listed company is an on-market buy-back under this subsection only if an offer to buy-back those shares is also made on a prescribed financial market at the same time.
A declaration under subsection (7) may be subject to conditions. Notice of the making of the declaration must be published in the Gazette .