CORPORATIONS ACT 2001

CHAPTER 6D - FUNDRAISING  

PART 6D.2 - DISCLOSURE TO INVESTORS ABOUT SECURITIES (OTHER THAN FOR CSF OFFERS)  

Division 5 - Procedure for offering securities  

SECTION 717   717   OVERVIEW OF PROCEDURE FOR OFFERING SECURITIES  

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 document, making sure that it:	710 711 712 713 713C 713D 713E 714 715 716	Section 728 prohibits offering securities under a disclosure document that is materially deficient.
·	sets out all the information required		Section 729 deals with the liability for breaches of this prohibition.
·	does not contain any misleading or deceptive statements		Sections 731 , 732 and 733 set out defences.
·	is dated
and that the directors consent to the disclosure document.
2	Lodge the disclosure document with ASIC	718	Subsection 727(3) prohibits processing applications for non-quoted securities for 7 days after the disclosure document is lodged.
3	Offer the securities, making sure that the offer and any application form is either included in or accompanies:	721	Sections 727 and 728 make it an offence to:
·		offer securities without a disclosure document
·	the disclosure document; or	·	offer securities if the disclosure document is materially deficient.
·	a profile statement if ASIC has approved the use of a profile statement for offers of that kind.	Subsection 729(3) deals with liability on the prospectus if a profile statement is used.
The securities hawking provisions (section 736 ) restrict the way in which the securities can be offered.
4	If it is found that the disclosure document lodged was deficient or a significant new matter arises, either:	719 719A 724	Section 728 prohibits making offers after becoming aware of a material deficiency in the disclosure document or a significant new matter.
·	lodge a supplementary or replacement document under section 719 or 719A ; or	Section 730 requires people liable on the disclosure document to inform the person making the offer about material deficiencies and new matters.
·	return money to applicants under section 724 .
5	Hold application money received on trust until the securities are issued or transferred or the money returned.	722	Investors may have a right to have their money returned if certain events occur (see sections 724 , 737 and 738 ).
6	Issue or transfer the securities, making sure that:	723	Section 721 says which disclosure document must be distributed with the application form.
·	the investor used an application form distributed with the disclosure document; and	Section 729 identifies the people who may be liable if:
·	the disclosure document is current and not materially deficient; and	·	securities are issued in response to an improper application form; or
·	any minimum subscription condition has been satisfied.	·	the disclosure document is not current or is materially deficient.
Sections 731 , 732 and 733 provide defences for the contraventions.
Section 737 provides remedies for an investor.