ASIC extends disclosure relief for rights issues

ASIC has released Regulatory Guide 189: Disclosure relief for rights issues (RG 189). This regulatory guide explains the relief ASIC has given in Class Order (CO 08/35) Disclosure relief for rights issues. This includes relief:

• for accelerated offers to institutions;
• from the requirement to lodge multiple cleansing notices;
• for disposal of a shortfall (e.g. through a book-build); and
• to make offers of shares to convertible security holders

CO 08/35 also gives technical relief in relation to the treatment of foreign holders, offers of stapled securities and rounding of entitlements.

The aim of the disclosure exemption is to encourage companies to use pro rata rights issues, rather than placements, so retail investors can participate,.

ASIC considers that any rights issue should fall within the disclosure exemption where it provides an equal opportunity to all holders to participate and does not compromise retail investor protection.