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Summary of

Securities Act (Minimum Subscription) Exemption Amendment Notice 2004

2004/195

Gazetted on 29 June 2004
Expires on 30 June 2009

Effects of the exemption
The Securities Act (Minimum Subscription) Exemption Notice 2000 ("principal notice") is extended until 30 June 2009. This means that shares and units in unit trusts can continue to be offered on the basis of payment by instalment, with the first instalment payable on subscription.

An existing exemption in the principal notice relating to sub-section 37A(2) of the Securities Act 1978 is revoked.

Background
The principal notice provides exemptions from the minimum subscription requirements of the Securities Act, as they relate to shares and to units in unit trusts. The principal notice was due to expire on 30 June 2004.

Sub-section 37A(2) of the Securities Act 1978 was revoked from 14 April 2004, by the Securities Amendment Act 2004.

The exemption
The exemption in the principal notice from section 37(2) of the Securities Act 1978 is extended to 30 June 2009, subject to the same conditions as before.

The exemption in the principal notice from section 37A(2) is revoked.

Reasons
The requirement under section 37(2) of the Act that any stated minimum required subscription amount be received by the issuer within 4 months after the date of the registered prospectus prevents many issuers from offering securities on terms that permit payment by instalment.

The condition of the exemption maintains the protection for investors provided by section 37(2) of the Act by requiring that the offer must attract (and the issuer must obtain legally binding commitments from) sufficient subscribers to meet any minimum amounts required for the purpose of the offer within the 4 month time frame envisaged by the Act.