Corporations Act 2001
CCH note - modifying legislative instruments: The application of Ch 6 is affected by the following legislative instruments that commenced or were amended on or after 1 January 2022: the ASIC Corporations (Takeover Bids) Instrument 2023/683; the ASIC Corporations (Warrants: Relevant Interests and Associations) Instrument 2023/687; the ASIC Corporations (Replacement Bidder ' s and Target ' s Statements) Instrument 2023/688; and the ASIC Corporations (Relief to Facilitate Admission of Exchange Traded Funds) Instrument 2024/147.
For other legislative instruments or class orders before 1 January 2022 that affect the application of Ch 6, please consult the legislative instruments or class orders directly. These are reproduced in the regulatory-resources section of the company-law practice area in CCH iKnowConnect.
Note: This Chapter only applies to acquisitions of interests in a CCIV if the CCIV is a listed company: see Division 1 of Part 8B.7 .
View history note
Hide history noteCCH note: This provision is modified by legislative instruments. See the CCH note at the end of the provision for details.
Basic rule - relevant interest is holding, or controlling voting or disposal of, securities
608(1)
A person has a relevant interest in securities if they: (a) are the holder of the securities; or (b) have power to exercise, or control the exercise of, a right to vote attached to the securities; or (c) have power to dispose of, or control the exercise of a power to dispose of, the securities.
It does not matter how remote the relevant interest is or how it arises. If 2 or more people can jointly exercise one of these powers, each of them is taken to have that power.
Extension to control exercisable through a trust, agreement or practice
608(2)
In this section, power or control includes: (a) power or control that is indirect; and (b) power or control that is, or can be, exercised as a result of, by means of or by the revocation or breach of:
(i) a trust; or
(ii) an agreement; or
(iii) a practice; or
whether or not they are enforceable; and (c) power or control that is, or can be made, subject to restraint or restriction.
(iv) any combination of them;
It does not matter whether the power or control is express or implied, formal or informal, exercisable alone or jointly with someone else. It does not matter that the power or control cannot be related to a particular security.
[ CCH Note: S 608(2) will be amended by No 72 of 2025, s 3, Sch 1[72], by substituting " or exercisable " for " , exercisable " , (effective 4 December 2026).]
Extension to relevant interests held through bodies corporate
608(3)
A person has the relevant interests in any securities that any of the following has: (a) a body corporate, or managed investment scheme, in which the person's voting power is above 20%; (b) a body corporate, or managed investment scheme, that the person controls.
Paragraph (a) does not apply to a relevant interest that the body corporate or scheme itself has in the securities merely because of the operation of that paragraph in relation to another body corporate or managed investment scheme.
608(4)
For the purposes of paragraph (3)(b) , a person controls a body corporate if the person has the capacity to determine the outcome of decisions about the body corporate's financial and operating policies.
608(5)
In determining whether a person has this capacity: (a) the practical influence the person can exert (rather than the rights they can enforce) is the issue to be addressed; and (b) any practice or pattern of behaviour affecting the body corporate's financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).
608(6)
The person does not control the body corporate merely because the person and an entity that is not an associate jointly have the capacity to determine the outcome of decisions about the body corporate's financial and operating policies.
608(7)
A person is not taken to control a body corporate merely because of a capacity they have if they are under a legal obligation to exercise that capacity for the benefit of: (a) if the person is an individual - someone else; or (b) if the person is a body corporate - someone other than its members.
Extension to control in anticipation of performance of agreements etc.
608(8)
If at a particular time all the following conditions are satisfied: (a) a person has a relevant interest in issued securities; (b) the person (whether before or after acquiring the relevant interest):
(i) has entered or enters into an agreement with another person with respect to the securities; or
(ii) has given or gives another person an enforceable right, or has been or is given an enforceable right by another person, in relation to the securities (whether the right is enforceable presently or in the future and whether or not on the fulfilment of a condition); or
(c) the other person would have a relevant interest in the securities if the agreement were performed, the right enforced or the option exercised;
(iii) has granted or grants an option to, or has been or is granted an option by, another person with respect to the securities;
the other person is taken to already have a relevant interest in the securities.
Note: Subsections 609(6) and (7) deal with specific situations in which the agreement will not give rise to a relevant interest.
[ CCH Note: S 608(8) will be amended by No 72 of 2025, s 3, Sch 1[73] and [74], by inserting " of " after " all " and " , enforceable right or option " after " agreement " in the note, (effective 4 December 2026).]
Body corporate may have relevant interest in its own securities
608(9)
This section may result in a body corporate having a relevant interest in its own securities.
Extension to interests in listed notified foreign passport funds
608(10)
To avoid doubt, for the purposes of Chapter 6C , a person has a relevant interest in securities if the person would have a relevant interest in the securities if securities had the same meaning in this Chapter as it has in Chapter 6C .
CCH Note - modifying legislative instruments: Section 608 is modified by the following legislative instruments that commenced or were amended on or after 1 January 2022: the ASIC Corporations (Takeover Bids) Instrument 202 3/6 83.
For modifying legislative instruments or class orders before 1 January 2022, please consult the legislative instruments or class orders directly. These are reproduced in the regulatory-resources section of the company-law practice area in CCH iKnowConnect.
[
CCH Note:
S 608A will be inserted by No 72 of 2025, s 3, Sch 1[15] (effective 4 December 2026). S 608A will read:
Example 1: A person has a relevant interest in 10 shares in a company and agrees with another person to sell 5 shares in the company to the other person on a future date. The other person is taken to already have a relevant interest in 5 of the first person
'
s 10 shares under subsection
608(8)
. Example 2: A person has a relevant interest in 10 shares in a company and gives another person a right to acquire 11 shares in the company from the person in the future. The other person is taken to already have a relevant interest in the first person
'
s 10 shares under subsection
608(8)
. The other person might also have a deemed economic interest in one share in the company under Division
2
of Part
6C.1A
.]
SECTION 608A RELEVANT INTERESTS IN SECURITIES
-
WORKING OUT WHICH SECURITIES AGREEMENT ETC. RELATES TO
608A(1)
This section applies if at a particular time all of the following conditions are satisfied:
(a)
a person (the
first person
) has a relevant interest in a number of issued securities of a particular class in a body, registered scheme or notified foreign passport fund;
(b)
the first person (whether before or after acquiring the relevant interest):
(i)
has entered or enters into an agreement with another person with respect to securities of that class in the body, scheme or fund; or
(ii)
has given or gives another person an enforceable right, or has been or is given an enforceable right by another person, in relation to securities of that class in the body, scheme or fund (whether the right is enforceable presently or in the future and whether or not on the fulfilment of a condition); or
(iii)
has granted or grants an option to, or has been or is granted an option by, another person with respect to securities of that class in the body, scheme or fund;
(c)
the other person would have a relevant interest in a number of securities of that class in the body, scheme or fund if the agreement were performed, the right enforced or the option exercised.
608A(2)
For the purposes of paragraph
608(8)(b)
, the agreement is taken to be with respect to, the enforceable right is taken to relate to, or the option is taken to be with respect to, the securities in which the first person has a relevant interest as mentioned in paragraph
(1)(a)
of this section.
608A(3)
For the purposes of paragraph
608(8)(c)
, assume that, were the agreement performed, the right enforced or the option exercised, the other person would have a relevant interest in a number of the securities in which the first person has a relevant interest, as mentioned in paragraph
(1)(a)
of this section, equal to the lesser of:
(a)
the number of securities mentioned in paragraph
(1)(a)
; and
(b)
the number of securities mentioned in paragraph
(1)(c)
.
EXAMPLES
EXAMPLES
This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.