Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) If the conditions set out in this section are satisfied in relation to an offer of securities for issue by a body:
(a) the offer is an offer of simple corporate bonds ; and
(b) the securities are simple corporate bonds .
Securities must be debentures
(2) The securities must be debentures.
Securities must be quoted on a declared financial market
(3) The securities must be offered on the basis that:
(a) the securities have been admitted to quotation on a declared financial market; or
(b) an application for admission of the securities to quotation on a declared financial market has been made to the operator of that market; or
(c) an application for admission of the securities to quotation on a declared financial market will be made to the operator of that market within 7 days after the date of the prospectus.
(4) If, at a particular time, there is no prospectus, then, for the purposes of paragraph (3)(c), assume that:
(a) there is a prospectus; and
(b) the date of the prospectus is the first day of the offer period.
Securities must be in Australian currency
(5) The securities must be denominated in Australian currency.
Securities for fixed term
(6) The securities must be for a fixed term of not more than 15 years.
Principal payable at end of fixed term
(7) The principal in respect of the securities must be repaid by the issuing body to the holder at the end of the fixed term.
Interest rate must be fixed or floating
(8) The rate at which interest is payable on the securities must be:
(a) a fixed rate; or
(b) a floating rate that is comprised of a reference rate and a fixed margin.
Fixed rate etc. must not be decreased
(9) If a fixed rate of interest is payable on the securities, the rate must not be decreased during the term of the securities.
(10) If a floating rate of interest is payable on the securities, the fixed margin of the rate must not be decreased during the term of the securities.
Interest to be paid periodically etc.
(11) Interest payments on the securities:
(a) must be paid periodically; and
(b) must be paid no later than the end of the fixed term; and
(c) cannot be deferred or capitalised by the issuing body.
Security must not exceed $1,000
(12) The price payable for each security must not exceed $1,000.
Securities may only be redeemed before fixed term in specified circumstances
(13) The securities must not be redeemable (other than at the end of the fixed term) except in one or more of the following circumstances:
(a) at the option of the holders of the securities;
(b) as a result of the acceptance of offers made to the holders by the issuing body to buy back the securities;
(c) a change in a law, or in the application or interpretation of a law, with the effect that interest payable on the securities is not, or may not be, deductible by the issuing body for the purposes of calculating its taxation liability;
(d) a change in a law, or in the application or interpretation of a law, with the effect that:
(i) the issuing body, or any guarantor for the body, would be required to deduct or withhold an amount in respect of taxes from a payment to the holders; and
(ii) under the terms of the securities, that deduction or withholding would result in the body, or any guarantor, being required to pay an additional amount to the holders in relation to the amount deducted or withheld;
(e) there is a change of control of the issuing body (as defined in the terms of the securities) and the redemption does not take effect unless all securities issued under the offer are redeemed;
(f) fewer than 10% of the securities issued under the offer remain on issue and the redemption does not take effect unless all securities issued under the offer are redeemed.
Debt to security holders is not subordinated to debts to unsecured creditors
(14) The issuing body's debts to holders of the securities must not be subordinated to any of the issuing body's debts to unsecured creditors.
Securities not convertible
(15) The securities must not be convertible into another class of securities.
Securities are offered at single price
(16) The price payable for the securities must be the same for all persons who accept the offer.
Continuously quoted securities
(17) The issuing body must be a body that:
(a) has continuously quoted securities; or
(b) is a wholly - owned subsidiary of a body corporate that:
(i) has continuously quoted securities; and
(ii) has guaranteed, or agreed to guarantee, the repayment of any money deposited or lent to the borrower under the securities; and
(iii) has guaranteed, or agreed to guarantee, the payment of any interest payable on the securities;
where trading in the securities on a declared financial market on which the securities are quoted was not suspended for more than a total of 5 days during the shorter of the following periods:
(c) the period during which the class of securities is quoted;
(d) the period of 12 months before the day on which the offer is made.
(18) If, at a particular time, there is no prospectus, then, in determining, for the purposes of subsection (17), whether a body has continuously quoted securities at that time, assume that:
(a) there is a prospectus; and
(b) the date of the prospectus is the first day of the offer period.
Auditor's reports have not been modified
(19) If the condition in subsection (17) is satisfied because of the application of paragraph (17)(a) to the issuing body, the auditor's report on:
(a) the issuing body's financial report for the most recent financial year; or
(b) if a half - year financial report was prepared by the issuing body after the issuing body's financial report for the most recent financial year--the half - year financial report;
must not include:
(c) a statement to the effect that the auditor is of the opinion that the financial report, or the half - year financial report, as the case may be, is not in accordance with this Act; or
(d) a description of a defect or an irregularity in the financial report or the half - year financial report, as the case may be; or
(e) a description of a deficiency, failure or shortcoming in respect of the matters referred to in paragraph 307(b), (c) or (d); or
(f) an emphasis of matter paragraph related to going concern.
(20) If:
(a) the issuing body is a wholly - owned subsidiary of a body corporate; and
(b) the condition in subsection (17) is satisfied because of the application of paragraph (17)(b) to the body corporate;
the auditor's report on:
(c) the body corporate's financial report for the most recent financial year; or
(d) if a half - year financial report was prepared by the body corporate after the body corporate's financial report for the most recent financial year--the half - year financial report;
must not include:
(e) a statement to the effect that the auditor is of the opinion that the financial report, or the half - year financial report, as the case may be, is not in accordance with this Act; or
(f) a description of a defect or an irregularity in the financial report or the half - year financial report, as the case may be; or
(g) a description of a deficiency, failure or shortcoming in respect of the matters referred to in paragraph 307(b), (c) or (d); or
(h) an emphasis of matter paragraph related to going concern.
ASIC power to exclude body from this section
(21) The issuing body must not be a body in relation to which a determination is in force under subsection (23).
(22) If the issuing body is a wholly - owned subsidiary of a body corporate, the body corporate must not be a body in relation to which a determination is in force under subsection (23).
(23) ASIC may determine that a body is a body to which this subsection applies if ASIC is satisfied that, in the previous 12 months, any of the following provisions were contravened in relation to the body:
(a) subsection 283AA(1), 283AB(1) or 283AC(1);
(b) the provisions of Chapter 2M as they apply to the issuing body;
(c) section 674, 674A, 675 or 675A;
(d) section 724 or 728.
ASIC must publish a copy of the determination in the Gazette.
Regulations
(24) The securities must comply with such other conditions (if any) as are specified in the regulations.
(25) The offer must comply with such other conditions (if any) as are specified in the regulations.
(26) The issuing body must comply with such other conditions (if any) as are specified in the regulations.
(27) If the issuing body is a wholly - owned subsidiary of a body corporate, the body corporate must comply with such other conditions (if any) as are specified in the regulations.