On 15 March 2010, ASIC issued an amended Class Order 09/425: Share and interest purchase plans (Class Order) and an amended Regulatory Guide 125: Share Purchase Plans (Regulatory Guide) to enable participation in Securities Purchase Plans (SPP) by investors holding their securities through multiple-level custodian structures, including investor-directed portfolio services (IDPS) and superannuation master trusts.

As noted in our December 2009 Equity Capital Markets Update, the Class Order, which was first released in June 2009, had:

  • increased the value of securities that could be issued to a security holder under an SPP without prospectus or PDS to $15,000 in a rolling 12-month period, and  
  • made it clear that custodians who hold securities for multiple underlying beneficiaries may apply for more than $15,000 worth of securities under an SPP, provided that the custodian meets certain conditions (including the provision of a certificate) and applies for no more that $15,000 worth of securities for each beneficiary in the relevant 12-month period.

However, the original Regulatory Guide 125, stated that a second-level custodian (ie a custodian that is a client of the first-level custodian, such as an IDPS operator), could not accept SPP offers for each of its clients. This was seemingly at odds with a statement in the Explanatory Statement to the Class Order, which indicated that ASIC’s intention was to enable participation by ‘retail investors…who own shares or units through investment platforms (such as master trusts)’.

While a number of issuers obtained specific ASIC relief to enable second-level custodians to participate in SPPs, we consider that it is a very positive response by ASIC to amend the Class Order to enable a broader and fairer participation by investors in SPPs.

ASIC also:

  • clarified that that investors who pay for their securities through an electronic payment facility, such as BPAY, will not be required to return a physical application form, and
  • made a change to Class Order 05/26 to facilitate the operation of interest purchase plans undertaken by listed managed investment schemes.