Commonwealth Repealed Acts

This legislation has been repealed.

CORPORATIONS LAW- SECT 608

Basic rule—relevant interest is holding, or controlling voting or disposal of, securities

(1)

A person has a relevant interest in securities if they:

(a)

are the holder of the securities; or

(b)

have power to exercise, or control the exercise of, a right to vote attached to the securities; or

(c)

have power to dispose of, or control the exercise of a power to dispose of, the securities.

It does not matter how remote the relevant interest is or how it arises. If 2 or more people can jointly exercise one of these powers, each of them is taken to have that power.

Extension to control exercisable through a trust, agreement or practice

(2)

In this section, power or control includes:

(a)

power or control that is indirect; and

(b)

power or control that is, or can be, exercised as a result of, by means of or by the revocation or breach of:

(i)

a trust; or

(ii)

an agreement; or

(iii)

a practice; or

(iv)

any combination of them;

whether or not they are enforceable; and

(c)

power or control that is, or can be made, subject to restraint or restriction.

It does not matter whether the power or control is express or implied, formal or informal, exercisable alone or jointly with someone else. It does not matter that the power or control cannot be related to a particular security.

Extension to relevant interests held through bodies corporate

(3)

A person has the relevant interests in any securities that any of the following has:

(a)

a body corporate, or managed investment scheme, in which the person's voting power is above 20%

(b)

a body corporate, or managed investment scheme, that the person controls.

Paragraph (a) does not apply to a relevant interest that the body corporate or scheme itself has in the securities merely because of the operation of that paragraph in relation to another body corporate or managed investment scheme.

(4)

For the purposes of paragraph (3)(b), a person controls a body corporate if the person has the capacity to determine the outcome of decisions about the body corporate's financial and operating policies.

(5)

In determining whether a person has this capacity:

(a)

the practical influence the person can exert (rather than the rights they can enforce) is the issue to be addressed; and

(b)

any practice or pattern of behaviour affecting the body corporate's financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).

(6)

The person does not control the body corporate merely because the person and an entity that is not an associate jointly have the capacity to determine the outcome of decisions about the body corporate's financial and operating policies.

(7)

A person is not to be taken to control a body corporate merely because of a capacity they have if they are under a legal obligation to exercise that capacity for the benefit of:

(a)

if the person is an individual—someone else; or

(b)

if the person is a body corporate—someone other than its members.

Extension to control in anticipation of performance of agreements etc.

(8)

If at a particular time all the following conditions are satisfied:

(a)

a person has a relevant interest in issued securities

(b)

the person (whether before or after acquiring the relevant interest):

(i)

has entered or enters into an agreement with another person with respect to the securities; or

(ii)

has given or gives another person an enforceable right, or has been or is given an enforceable right by another person, in relation to the securities (whether the right is enforceable presently or in the future and whether or not on the fulfilment of a condition); or

(iii)

has granted or grants an option to, or has been or is granted an option by, another person with respect to the securities

(c)

the other person would have a relevant interest in the securities if the agreement were performed, the right enforced or the option exercised;

the other person is taken to already have a relevant interest in the securities.

Note: Subsections 609(6) and (7) deal with specific situations in which the agreement will not give rise to a relevant interest.

Body corporate may have relevant interest in its own securities

(9)

This section may result in a body corporate having a relevant interest in its own securities.