Previously, ASIC provided conditional relief from preparing Chapter 6D and Part 7.9 disclosure documents for the offer of shares and interests to existing members of an ASX listed company or managed scheme. Under that Class Order, the primary condition to qualify for the relief and offer these Security Purchase Plans (SPPs) without a disclosure document was that no more than $15,000 worth of shares or interests were offered in a period of 12 months.
With the expiry of the Class Order approaching, ASIC has released its new Legislative Instrument, together with an updated Regulatory Guide, increasing this limit to $30,000. The increase was not foreshadowed in ASIC’s response to submissions on the remaking of the Class Order and has been somewhat of a surprise.
ASIC’s primary rationale for the increase is to facilitate retail investor opportunities to participate in secondary capital raisings for securities below the market price. With ASX listed entities having access to more capital from an SPP, an SPP is now more compelling when comparing other capital raising options that also attract relief from costly disclosure obligations.
We anticipate that this increased limit will see more listed entities favouring institutional placements followed by SPPs and a further shift away from entitlement offers in secondary capital raisings. Please contact GRT Lawyers if you wish to discuss an SPP or your capital raising options.