Updated ASIC relief for Share Purchase Plans increases cap to $30,000
Corporate News - 04 September 2019
The Australian Securities & Investments Commission (ASIC) has recently released a new instrument, ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/547 (Corporations Instrument) which remakes the relief in Class Order [CO 09/425] (which was due to sunset on 1 October 2019).
The new Corporations Instrument largely reflects the earlier Class Order by allowing ASX-listed issuers to make purchase plan offers without a prospectus or product disclosure statement subject to meeting certain conditions. One of the conditions restricts the amount that each registered holder may invest in purchase plans offered in reliance of the Corporations Instrument. Under the new Corporations Instrument, that cap has increased from $15,000 to $30,000 worth of shares or interests per securityholder per 12-month period.
Increasing the cap to $30,000 may make using an institutional placement followed by a share purchase plan (SPP) offer a more attractive option for issuers. This is because $30,000 under an SPP is likely to be more than what most retail securityholders would be able to take up in a pro rata entitlement offer and a SPP offer is generally a quicker and a less cumbersome disclosure process than for an entitlement offer.
If you would like any further advice on how to structure your capital raisings or specific advice in relation to share purchase plans and the new Corporations Instrument, please contact us in our Perth office on
+61 8 9321 4000 or our Melbourne office on +61 3 9111 9400.