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A corporation that wishes to raise funds in Australia, either for a specific purpose or for general business purposes, can do so either by borrowing (creation of debt) or by offering securities (creation of equity). This subject is concerned with the regulation of offering securities. The fundamental premise of the regulation is that the offering corporation should provide all relevant information (mandatory disclosure) and investors should then decide whether to invest. The subject will examine the regulatory model, the rationale for the model and aspects of the model and other mechanisms (such as the role of securities exchanges) that may impact in a practical way on the offering. Globalisation means that offerings may be subject to requirements in a number of jurisdictions and so it will be important to consider whether the similarities and differences between jurisdictions are significant. The classes will involve a mix of lecture-style presentations and problem-solving worked on in small groups.
The subject will be of interest to those who work in a corporate advisory environment or who wish to do so
Principal topics include:
- The disclosure principle
- Debt and equity as alternatives
- Different equity-raising alternatives
- Outline of the regulatory situation
- When is a disclosure document required?
- Different types of disclosure documents
- Content of disclosure documents
- Liability for defective disclosure documents
- Due diligence defence
- Other defences
- Restrictions on advertising and securities hawking
- The role of the underwriter
- The role of the Australian Securities and Investments Commission (ASIC)
- The role of the Australian Securities Exchange Ltd (ASX)
- Continuous disclosure.
Intended learning outcomes
A student who has successfully completed this subject will:
- Have an understanding of how the Australian securities markets work in relation to equity raisings
- Have an understanding of how securities offerings are regulated under the Corporations Act 2001 (Cth) and the rules of the Australian Securities Exchange Ltd (ASX)
- Have an understanding of the major regulatory mechanisms within the Corporations Act 2001 (Cth), Chapter 6D and, in addition, the administrative network that is set up in relation to securities offerings.
Last updated: 6 December 2019