Commonwealth Numbered Regulations - Explanatory Statements

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Issued by the Authority of the Treasurer

Corporations Act 1989

Corporations Regulations (Amendment)

Section 22 of the Corporations Act 1989 (the Act) empowers the Governor-General to make regulations, not inconsistent with the Act or the Corporations Law, prescribing, inter alia, matters which are required by the Corporations Law to be prescribed by regulations, or necessary or convenient to be prescribed by regulations for carrying out or giving effect to the Corporations Law.

Part 6.7 of the Corporations Law (the Law) imposes an obligation upon each person who is a "substantial shareholder" in a listed company to give notice of his or her substantial shareholding.

The purpose of the regulations is threefold. Firstly, the substantial shareholder forms have been redrafted into plain English to make them easier to understand and use. Secondly, the requirement that a person making a substantial shareholder declaration list all share transactions during the previous twelve months has been reduced to four months. Thirdly, the new pro forma format for the substantial shareholder forms reduces the amount of paperwork involved in meeting the requirements of the Law and presents the information in a uniform fashion.

Details of the regulations are contained in the Attachment.

The regulations commence on the date of Gazettal.


The information required by Part 6.7 of the Law to be provided by substantial shareholders is required to be in the prescribed Forms 603, 604 and 605 of Schedule 2 to the Corporations Regulations.

There are 3 types of substantial shareholder notices which include initial notice of entitlement to a substantial shareholding (section 709 and Form 603), notice of change in entitlement to the substantial shareholding (section 7 10 and Form 604), and notice where a person ceases to be entitled to a substantial shareholding (section 711 and Form 605).

Regulation 1

Regulation 1 provides that the regulations are amended as set out in these regulations.

Regulations 2.1

Previously, subregulation 6.7.01(2) effectively required prescribed documents to be attached to the initial shareholding notice relating to the period of 12 months before the date of the notice. The amendments reduce the relevant period from 12 months to 4 months.

The 12 month period is the same period as when the substantial shareholding threshold was 10% under the Companies (Acquisition of Shares) Act 1980. The threshold is now 5% and as such, it is appropriate to reduce the 12 month period. 4 months is consistent with the waiting periods in section 641 ( the time period within which earlier acquisitions affect the offeror's minimum takeover price) and section 698 (the period within which external benefits are prohibited before a takeover bid).

Regulations 2.2, 3 and 4

Part 6.7 of the Law (ss.709(3)(c), 710(3)(d) and 711(3)(e)) formerly required that the prescribed documents accompany the prescribed forms. Previous subregulations 6.7.01, 6.7.02 and 6.7.03 prescribed that copies of the contracts evidencing the transaction that led to the requirement to lodge the notices accompany the forms.

It is considered that where the relevant transaction took place on an approved stock exchange (see Part 7.2 of the Law) that it is unnecessary to require the attachment of the relevant contract note. The contract note adds little information but creates unnecessary paperwork. Therefore, the new subregulations remove the requirement to provide a contract note where the relevant transaction took place on an approved stock exchange.

Regulation 5

Schedule 1 lists all the forms in the Corporations Regulations. Regulation 5 changes the name of the substantial shareholder forms.

Regulation 6

Forms 603, 604 and 605 are being replaced by new forms. Generally, the new forms differ from the old forms in the use of language and layout. The new forms also represent a streamlining of the substantive requirements of the current forms.

The new forms are drafted in plain English and are set out in tabular format so that they are easier to comprehend, both to those who must fill them out and those who wish to access the information therein.

This regulation inserts the new forms in Schedule 2 of the regulations.

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