Guidance Update

Published 21 September 2020

The Panel has recently updated a number of Guidance Notes.  Available on the Panel’s website are the updated versions, as well as compare versions showing all updates, of the following Guidance Notes:

  • Schemes of Arrangement
  • Lock-up Agreements
  • Exemptions
  • Creeping Acquisitions

In summary:

  • The Guidance Note on Schemes of Arrangement has been updated to reflect the following:
    • The new class exemption the Panel has granted in respect of voting agreements in relation to schemes of arrangement.
    • There are schemes where the change in the holding or control of voting rights in a Code company is so immaterial that section 236A of the Companies Act does not apply. An example of this may be where there is only a change in the voting rights as a result of rounding to an insignificant decimal point. To illustrate this point, Tilt Renewables Limited’s recent pro-rata return of capital by cancellation of shares under a scheme has been included as a reference. In this case, there was no change in the relative voting control of shareholders when control percentages were rounded to the 8th decimal point, and the Court decided that section 236A did not apply to the scheme.
  • Cross-references have been included in the Guidance Note on Lock-up Agreements to the relevant material in the Guidance Note on Schemes of Arrangement for additional clarity.
  • The Guidance Note on Exemptions has been updated to:
    • clarify that, at the present time, whilst the Panel may defer publication of an exemption notice on its website and notification of an exemption in the Gazette on the grounds of commercial confidentiality, the exemption notice must still be presented to the House of Representatives within 16 sitting days after the notice has been signed. However, there is a bill before Parliament that includes an amendment which provides an exemption from this obligation on the grounds of commercial confidentiality. We will update the market once this bill has been passed.
    • reflect the new class exemption for voting agreements in relation to schemes of arrangement. It exempts, from rule 6(1) of the Code, persons and their upstream parties, who may enforce a voting commitment to vote for or against a scheme of arrangement. The class exemption, which takes effect from 21 September 2020, is subject to certain conditions.
  • The Guidance Note on Creeping Acquisitions has been updated to include new guidance and examples of the calculation of the holding or control of voting rights for the purposes of rule 6(1) and 7(e) of the Code. This updated material is from the article Be careful with the Code if you hold shares through different entities in this issue of CodeWord.