CORPORATIONS ACT 2001

CHAPTER 6 - TAKEOVERS  

PART 6.1 - PROHIBITED ACQUISITIONS OF RELEVANT INTERESTS IN VOTING SHARES  

SECTION 609   SITUATIONS NOT GIVING RISE TO RELEVANT INTERESTS  

609(1)   Money lending and financial accommodation.  

A person does not have a relevant interest in securities merely because of a security interest taken for the purpose of a transaction entered into by the person if:


(a) the security interest is taken or acquired in the ordinary course of the person ' s business of the provision of financial accommodation by any means and on ordinary commercial terms; and


(b) the person whose property is subject to the security interest is not an associate of the person.

Note: Sections 11 to 17 define associate .

609(2)   Nominees and other trustees.  

A person who would otherwise have a relevant interest in securities as a bare trustee does not have a relevant interest in the securities if a beneficiary under the trust has a relevant interest in the securities because of a presently enforceable and unconditional right of the kind referred to in subsection 608(8).

Note: This subsection will often apply to a person who holds securities as a nominee.

609(3)   Holding of securities by financial services licensee.  

A financial services licensee does not have a relevant interest in securities merely because they hold securities on behalf of someone else in the ordinary course of their financial services business.

609(4)   Shares covered by buy-backs.  

A person does not have a relevant interest in a company ' s shares if the relevant interest would arise merely because the company has entered into an agreement to buy back the shares.

609(5)   Proxies.  

A person does not have a relevant interest in securities merely because the person has been appointed to vote as a proxy or representative at a meeting of members, or of a class of members, of the company, body or managed investment scheme if:


(a) the appointment is for one meeting only; and


(b) neither the person nor any associate gives valuable consideration for the appointment.

609(6)   Market traded options and derivatives.  

A person does not have a relevant interest in securities merely because of:


(a) an [ sic ] market traded option over the securities; or


(b) a right to acquire the securities given by a derivative.

This subsection stops applying to the relevant interest when the obligation to make or take delivery of the securities arises.

Note: Without this subsection, subsection 608(8) would create a relevant interest from the option or contract.

609(7)   Conditional agreements.  

A person does not have a relevant interest in securities merely because of an agreement if the agreement:


(a) is conditional on:


(i) a resolution under item 7 in the table in section 611 being passed; or

(ii) ASIC exempting the acquisition under the agreement from the provisions of this Chapter under section 655A; and


(b) does not confer any control over, or power to substantially influence, the exercise of a voting right attached to the securities; and


(c) does not restrict disposal of the securities for more than 3 months from the date when the agreement is entered into.

The person acquires a relevant interest in the securities when the condition referred to in paragraph (a) is satisfied.

609(8)   Pre-emptive rights.  

A member of a company, body or managed investment scheme does not have a relevant interest in securities of the company, body or scheme merely because the company ' s, body ' s or scheme ' s constitution gives members pre-emptive rights on the transfer of the securities if all members have pre-emptive rights on the same terms.

609(9)   Director of body corporate holding securities.  

A person does not have a relevant interest in securities merely because:


(a) the person is a director of a body corporate; and


(b) the body corporate has a relevant interest in those securities.

609(9A)   Clearing and settlement facilities.  

The operator of a clearing and settlement facility (within the meaning of Chapter 7 ) does not have a relevant interest in securities merely because of its provision of facilities for the settlement of transactions.

609(10)   Prescribed exclusions.  

A person does not have a relevant interest in securities in the circumstances specified in the regulations. The regulations may provide that interests in securities are not relevant interests subject to specified conditions.


 

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