FAQs

Due diligence

  1. Where a due diligence committee has been established prior to an offer, is it necessary to appoint a law firm as the Chair of that committee?

  2. the size and type of offer being made

    the complexity of the issuer’s business

    how long the business has been in operation and its future plans, including how the proceeds of the offer will be applied.

Kinds of financial products

  1. I manage a collective investment scheme that is structured as a company in which I sell shares to investors.  Should I comply with the FMC Act requirements for equity securities or for a managed investment scheme?

  2. phantom shares offered either as part of or in association with an employment agreement, may fall within the carve-out, as detailed in section 8(4)(c)(i) of the FMC Act, applying to agreements for the future provision of services

    phantom share schemes that make discretionary payments to employees, where there is no obligation for future provision of service from the employee, would not normally involve an ‘agreement’ that the employee should receive the payment.  Under section 8(4)(a) of the FMC Act, a derivative is an agreement involving consideration from both parties. These phantom share schemes are in substance a gift with no financial exposure for the employee and therefore not a derivative. 

Product disclosure statements (PDS)

  1. there are false or misleading statements, omissions or new matters requiring disclosure in the PDS, application form or register entry, and

    the matter is materially adverse from the point of view of the investor.

    a false or misleading statement, or omission 

    from the PDS, application form or register entry, 

    or a circumstance has arisen since the PDS was lodged that would have been required to be disclosed in the PDS or register entry, 

    and the matter is materially adverse from the investor’s point of view,

  2. explains it replaces or supplements an existing PDS

    identifies the PDS that it supplements or replaces; and

    if it’s a supplementary document, identifies all previous supplementary documents lodged with the Registrar about the offer. It must also explain the new document is to be read together with the PDS it supplements and any previous supplementary documents.

  3. supplement a PDS for an offer of managed investment products in a managed fund; or

    to supplement any part of the KIS unless the document covers the whole KIS.

  4. How do I amend a PDS that has already been lodged on the Disclose register?

    You can lodge a replacement PDS in order to correct, update, or add to an existing PDS. Alternatively, you can lodge a supplementary document for the same purpose, unless regulation 46 of the FMC Regulations 2014 applies.

  5. makes it clear why those circumstances are significant to the particular issuer or the particular equity securities (as compared to other issuers or equity securities)

    helps investors to assess the ‘likelihood’ of any impact arising from those circumstances

    helps investors to assess the ‘nature’ of any impact arising from those circumstances; and

    helps investors to assess the ‘potential magnitude’ of any impact arising from those circumstances.

  6. where products were issued with the intention for the original holder to deal with them

    if the issuer advises, encourages, or knowingly assists the offeror in the offer of the financial products

    when the offeror controls the issuer and the products are not sold through a licensed market.

  7. for equity, debt and managed investment products in funds and other schemes — the section in the PDS on tax

    for derivatives — the section in the PDS ‘about the issuer’.

Dual-language PDS exemption

Equity offers Financial information

  1. where there is a business acquisition

    where there are material changes affecting the comparability or usefulness of the financial information.

  2. describe the basis on which the pro forma information has been prepared

    identify where on the Disclose Register the principal assumptions on which the pro forma information is based can be obtained, and

    identify where on the Disclose Register the reconciliations to the GAAP-compliant information can be found.

Debt offers financial information

  1. where there is a business acquisition

    where there are material changes affecting the comparability or usefulness of the financial information.

  2. describe the basis on which the pro forma information has been prepared

    refer to the register where the principal assumptions on which the pro forma information is based, and

    identify where the reconciliations to the GAAP-compliant information can be found.

Schedule 1 offers

  1. will need to separately consider the safe harbour certificate when signing the relevant documents; and

    would recognise the safe harbour certificate as a separate document.

Offers under employee share purchase schemes

Small offers

  1. The first offer of shares relates to the shares that are purchased by the SPV. 

    The second offer relates to the shares of the SPV itself which are sold to the underlying investors.

Offers of financial products of same class as quoted financial products