Regulation Impact Statement Updates

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ASIC Corporations (Warrants: Out-of-use notices) Instrument 2019/148

Aust Gov
25th March 2019

Remaking of sunsetting instrument without significant amendments - Australian Securities and Investments Commission

On 12 March 2019, the Australian Securities and Investments Commission (ASIC) remade Class Order [CO 08/781] Warrants: Out of use notices in the ASIC Corporations (Warrants: Out-of-use notices) Instrument 2019/148 (ASIC Corporations Instrument 2019/148).

A Product Disclosure Statement (PDS) or supplementary PDS for warrants does not need to be lodged with ASIC. This is because warrants, are not a product specified in s1015B of the Corporations Act 2001 (the Act).  If a PDS or supplementary PDS for warrants does not need to be lodged with ASIC, then paragraph 1015D(2)(c) of the Act requires a responsible person for the PDS or supplementary PDS (other than the trustee of a self-managed superannuation fund) to lodge a notice with ASIC, in electronic form, when the financial product to which the PDS or supplementary PDS relates is no longer available to be given in a recommendation, issue or sale situation (out-of-use notice).

However, the characteristics of a warrant in terms of the underlying security, expiry date and exercise price are such that each warrant in a PDS or supplementary PDS can be considered to constitute a separate financial product under Chapter 7 of the Act. This means that, without the relief provided by ASIC Corporations Instrument 2019/148,the responsible person for a PDS or supplementary PDS covering two or more warrant products would have to lodge out-of-use notices frequently.

The purpose of ASIC Corporations Instrument 2019/148 is to minimise the burden on warrant issuers of complying with paragraph 1015D(2)(c) of the Act by modifying the lodging requirements for out-of-use notices.

ASIC Corporations Instrument 2019/148 allows the responsible person for a PDS or supplementary PDS to delay lodging an out-of-use notice with ASIC until the time when all the warrant products offered under a PDS or supplementary PDS cease to be available.

Consistent with Government best practice regulation requirements for sunsetting instruments, ASIC, after consulting stakeholders, has assessed the overall policy approach in Class Order [CO 08/781] Warrants: Out of use notices as operating effectively and efficiently. Therefore a Regulation Impact Statement is not required for remaking this instrument without significant amendments.

 

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