CORPORATIONS ACT 2001

CHAPTER 6D - FUNDRAISING  

PART 6D.3A - CROWD-SOURCED FUNDING  

Division 4 - Defective etc. CSF offer documents  

SECTION 738Y   OTHER LIABILITIES RELATING TO DEFECTIVE CSF OFFER DOCUMENTS  

Obligations giving rise to liabilities

738Y(1)  
A company must not offer securities under a CSF offer document if the document is defective.

Note 1: A defect may be corrected by a supplementary CSF offer document or a replacement CSF offer document (see section 738W ).

Note 2: If this subsection is contravened, ASIC may make a stop order under section 739 .

738Y(2)  
For the purposes of subsection (1), a company is taken to offer securities under a CSF offer document at all times, before the offer is closed, when the offer document is published on a platform of a CSF intermediary.

738Y(3)  
A CSF intermediary must not publish (or continue to publish) a CSF offer document on a platform of the intermediary if:


(a) the document is defective; and


(b) the intermediary knows that the document is defective.

Note 1: A defect may be corrected by a supplementary CSF offer document or a replacement CSF offer document (see section 738W ).

Note 2: The question whether a CSF intermediary knows that a document is defective is affected by subsection 738Q(4) .

Criminal liability

738Y(4)  
A person commits an offence if:


(a) the person contravenes subsection (1) or (3) in relation to a defective CSF offer document; and


(b) the statement, omission or new circumstance because of which the document is defective is materially adverse from the point of view of an investor.

Note: For exceptions to liability, see section 738Z .

Right to recover loss or damage

738Y(5)  
A person who suffers loss or damage because an offer of securities under a CSF offer document contravenes subsection (1) may recover the amount of the loss or damage from a person referred to in the following table if the loss or damage is one that the table makes the person liable for. This is so even if the person did not commit, and was not involved in, the contravention.


People liable on disclosure document
Item These people ... are liable for loss or damage caused by ...
1 the company making the CSF offer any contravention of subsection (1) in relation to the CSF offer document
2 each director of the company making the CSF offer any contravention of subsection (1) in relation to the CSF offer document
3 a person named in the CSF offer document with their consent as a proposed director of the company any contravention of subsection (1) in relation to the CSF offer document
4 an underwriter (but not a sub-underwriter) to the issue named in the CSF offer document with their consent any contravention of subsection (1) in relation to the CSF offer document
5 a person named in the CSF offer document with their consent as having made a statement: the inclusion of the statement in the CSF offer document
(a) that is included in the CSF offer document; or
(b) on which a statement made in the CSF offer document is based
6 a person who contravenes, or is involved in the contravention of, subsection (1) that contravention
7 a CSF intermediary that publishes the CSF offer document on a platform of the intermediary a contravention of subsection (1) in relation to the CSF offer document, but only if paragraph (3)(b) is satisfied

Note: For exceptions to liability, see section 738Z .

738Y(6)  
An action under subsection (5) may be begun at any time within 6 years after the day the cause of action arose.


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