Disclosure Requirements - Australia
Disclosure Category: 1
CBL may fall under an obligation, under the Corporations Act 2001, to disclose the identity and holdings of customers.
In order to comply with the legislation as mentioned below, customers entering into transactions in the Australian domestic market consent and are hereby deemed to consent to disclosure and to the appointment of the requestor (for example, the listed company or its agent) as their attorney-in-fact, under power of attorney to collect from CBL such information as is required to be disclosed.
Background and legal basis
Local laws and regulations (for example Parts 6C.1 and 6C.2 of the Corporations Act 2001) may require CBL or CBL's depository to disclose securities holding information with respect to CBL's securities account.
Tracing via disclosure notices
Disclosure notices derive from Part 6C.2 of the Corporations Act 2001. Section 672A of the Corporations Act 2001 allows a listed public company or the regulator (the Australian Securities and Investments Commission (ASIC)) to request the securities trading and holding information detailed under section 672B.
The primary notice under Section 672A is issued to the registered shareholder (the nominee company of CBL's Depository) who will identify CBL. This will generally prompt a secondary notice under Section 672A(1)(b) being issued to CBL who will identify its underlying customers. A cycle of secondary notices may subsequently be addressed to CBL's customers and their clients until the beneficial owners are identified.
Obligation to report threshold crossings
The obligation to report threshold crossings derives from Part 6C.1 of the Corporations Act 2001. Section 671B(1) of the Corporations Act 2001 obliges a person who obtains a “substantial holding” (5%) in a listed public company to disclose the interest to the company within two days of acquiring the interest and serve a copy of the disclosure on the relevant market operator (generally the Australian Securities Exchange (ASX)).
A substantial shareholder is a person holding or having interest in 5% of the voting shares in a company (or if there is more than one class, 5% or more of the shares in any class). The shareholder must thereafter notify the company and the relevant market operator of any subsequent change of 1% or more in their interests.
When a person ceases to be a substantial shareholder, that person must equally notify the company and the relevant market operator. Section 671B(4) prescribes the form of the disclosure that must include the terms of any relevant agreements that gave rise to the substantial holding.
If a takeover or merger bid is made for voting shares in a listed public company, or if a substantial interest is obtained during a bid period, the deadline for disclosure is accelerated to 09:30 on the next business day.
Failure to disclose a substantial holding or comply with a disclosure notice from ASIC or the company is a strict liability offence. Non-compliance may result in fines and/or remedial orders. In addition, the failure to disclose a substantial holding may give rise to a civil claim for compensation by any person damaged by the contravention.