Short form prospectuses and electronic lodgement for securities based investments are about to become a reality.
Short form prospectuses and electronic lodgement for securities based investments are about to become a reality.
Years of talk and no action have finally come to an end thanks to the release, by the Australian Securities and Investment Commission (ASIC), of Policy Statement 150 which covers electronic and issuer personalised applications.
The changes, issued as relief from certain sections of the Corporations Law allows issuers to directly receive electronic applications for securities.
This will allow investors to bypass the current method of lodging a physical form, even those printed from an electronic version, which ASIC says will still be re-ceived as well.
Freehill, Hollindale and Page financial services partner Luke Gannon says the most obvious application of this change will be in applying for managed funds but the scope could be wider.
“ASIC has clearly said companies offering shares will be included but as the over-all relief is for those offering securities there could be implications for other com-panies,” Gannon says.
One of the main conditions of the change is an investor must have the same access to the relevant prospectus and other information as would an investor using the conventional paper method.
ASIC has also allowed licensed dealers to personalise and issue applications forms but it must contain the same information as the original form and be tied to a pro-spectus.
Gannon says ASIC is currently examining the expansion of the relief provisions to cover superannuation and life products.
“The reason these products haven’t been included at present is due to the different status of the laws which cover them and the way information is passed onto poten-tial investors,” Gannon says.
“But these will be drawn together and I expect will be fully covered under the Cor-poration Law Economic Reform Program (CLERP) 6 Act set to be active in 2001.”
On the thorny issue of signing forms, according to ASIC, the Corporations Law does not require an investor to sign an application form in either paper or electronic form.
In the policy statement ASIC says it now considers signing off an application, within an electronic lodgement, as a matter between issuer and investor to decide if that occurs and how to resolve the technical issues involved.
