Commonwealth Consolidated Acts

CORPORATIONS ACT 2001 - SECT 609

Money lending and financial accommodation

             (1)  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 .

Nominees and other trustees

             (2)  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.

Holding of securities by financial services licensee

             (3)  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.

Shares covered by buy-backs

             (4)  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.

Proxies

             (5)  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.

Market traded options and derivatives

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

                     (a)  an 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.

Conditional agreements

             (7)  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.

Pre-emptive rights

             (8)  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.

Director of body corporate holding securities

             (9)  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.

Clearing and settlement facilities

          (9A)  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.

Prescribed exclusions

           (10)  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.