Tuesday 19 December 2006 The Australian Securities and Investments Commission (ASIC) has released a consultation paper regarding a proposed policy about on-market buy-backs by managed investment schemes listed on the Australian Securities Exchange (ASX). ASIC expects the consultation paper to be of particular interest to property trusts and infrastructure funds listed on the ASX. On-market buy-backs for these types of schemes are difficult to implement because of the application of the withdrawal procedures under Part 5C.6 of the Corporations Act.
The main proposals include: • ASIC will give conditional exemptions to allow buy-backs of interests in listed schemes carried out in the ordinary course of trading on the ASX; • the buy-back price must not be greater than five per cent above the market price of the interests; • buy-backs that are greater than 10 per cent of the smallest number of interests, at any time, during the previous 12 months, must be approved by scheme members.
Buy-backs that do not exceed this limit will not require member approval, however the responsible entity must wait at least 21 days after announcing the buy-back through ASX before commencing the buy-back; and • no requirement to lodge any notices or forms with ASIC, provided the responsible entity makes all necessary disclosures through the ASX. ‘In making these proposals, ASIC is seeking to enable ASX-listed schemes to use a cost effective, transparent and fair means of returning capital to its members, without disadvantaging remaining members of the scheme’, ASIC’s Executive Director of Regulation, Mr Malcolm Rodgers said. ASIC invites comments on the proposals in the consultation paper by 12 March 2007.
After considering the comments, ASIC aims to publish a final policy by the end of August 2007. A copy of the consultation paper is available from the ASIC website at www.asic.gov.au or by calling the ASIC Infoline on 1300 300 630. For further information contact: Danielle Huck ASIC Media Unit Telephone: 03 9280 3407 Mobile: 0417 540 769