Major changes to fundraising, governance, takeovers

Important changes to fundraising laws are a major feature of a Bill introduced into Parliament yesterday.

The Corporations Legislation Amendment (Simpler Regulatory System) Bill will also affect takeovers, corporate governance and corporate accounting.

A quick overview of the changes is provided below. A more detailed analysis will issue shortly.

Fundraising

• Remove the requirement for a prospectus or PDS for a rights issues for quoted securities or MIS interests
• Bring the sophisticated and professional investor rules in Ch 6D into line with the FSR wholesale investor rules
• Extend section 708A to controller sales, provided both the controller and the company lodge cleansing notices
• Make three months the new time requirement for continuously-listed securities
• Lighten the licensing and hawking restrictions affecting unlisted employee share schemes
• Amounts raised under employee shares scheme not to count towards the annual OIS threshold, and that threshold is increased to $10 million
• Align the advertising restrictions for offers of quoted securities with the advertising rules for other financial products
• Allow replacement combined prospectus/PDSs.

Corporate governance

• Shift all remuneration disclosure requirements out of the accounting standards and into the Corporations Act
• Mandatory disclosure of company policy on hedging of executive incentive remuneration and the machinery for enforcing that policy
• Make a web version of the annual report the default option, with security holders having to specifically request a hard copy
• A $5000 (per party per annum) threshold before shareholder approval is required for related party benefits (commences 1 July this year)
• Raise the large Pty threshold to any two of: $25 million revenue / $12.5 million assets / more than 50 employees
• Allow ASIC to use a "contact address" (rather than the registered office) for communicating with companies
• Electronic registration of charges (from 1 July 2007).

Takeovers

• Delete the requirement for phonecall recording in takeovers
• Remove the need for 85 percentage holder notices in sections 665D and 665E.