AUSTRALIA: ASIC publishes new guidance on Australia substantial holdings disclosure for securities lending

Monday April 18 2011

ASIC has published new regulatory guidance and relief aimed at achieving better disclosure by parties that are engaging in securities lending of Australia substantial holdings in listed entities. The guidance is contained in Regulatory Guide 222 “Substantial holding disclosure: securities lending and prime broking”, with the relief detailed in Class Order 11/272. ASIC has also released Report 235 “Response to submissions on CP 107: Securities lending and Australia substantial holding disclosure”, which summarises consultations with industry leading to the new regulatory guidance. Under the new guidance, ASIC sets out its expectations as to how:

– parties involved in securities lending (including securities lenders and borrowers) will disclose Australia substantial holdings in listed entities (interest of 5% or more)

– prime brokers &who may have on-going borrowing agreements with their clients will disclose Australia substantial holdings.

In addition, ASIC has set out its expectations of the content of substantial holding notices that parties engaged in securities lending will have to provide, and relief that ASIC has granted in CO 11/272 to simplify the content of those notices and better align timing of disclosures to changes in control over securities.

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