What is it?

On 30 January 2015, ASX released its revised Guidance Note 27 (GN 27), to assist companies to comply with their share trading policy obligations.

What does it mean?

Revised GN 27 provides more detailed guidance in relation to trading policy obligations under Listing Rules 12.9 – 12.12, with a particular focus on listed entities having a ‘fit for purpose’ trading policy.  It makes the point that a share trading policy is not only to minimise the risk of actual insider trading, but also to avoid the appearance of insider trading and the reputational damage that may cause. There are no changes to the actual listing rules themselves.

GrilloHiggins can review your existing trading policies and provide assistance with updates to ensure compliance with revised GN 27.

Why the change?

GN 27 was revised in light of the market developments since the last update in January 2012.  This includes the market concerns that arose in 2013 when the chair of David Jones approved share trading by two directors, just prior to the release of quarterly sales figures by David Jones.  While ASIC concluded that insider trading had not occurred, they emphasised the need to address the risk of a perception of insider trading when creating share trading policies.

What does it cover?

Specifically, revised GN 27 covers:

  • Policy objectives behind trading policies;
  • Who should be restricted from trading in a listed entity’s securities;
  • When should trading in a listed entity’s securities be restricted;
  • What type of trading should be restricted;
  • Exceptions where trading may be permitted;
  • Procedures a listed entity should have to grant clearances to trade; and
  • Enforcement of trading policies.

What do I need to do?

All listed entities should review their trading policies in light of revised GN 27.  Important issues to consider include:

  • Whether the approval processes prescribed in the trading policy are sufficient to avoid not merely actual, but also any potential perception of insider trading;
  • Whether ‘closed periods’ or trading windows are appropriately tailored to the entity’s circumstances;
  • Whether the policy should extend beyond the key management personnel to close family members and a wider group of employees;
  • The circumstances and manner in which ad hoc restrictions on trading may be imposed;
  • The types of trading that should be restricted or prohibited, such as short-term trading, hedging and margin loans; and
  • Implementing appropriate measures for monitoring and enforcing compliance with the trading policy.

What is it?

ASIC has replaced Class Order [CO 03/184] Employee shares schemes with two new class orders in relation to employee incentive schemes.  Class order [CO 14/1000] Employee incentive schemes: Listed bodies and Class Order [14/1001] Employee incentive schemes: Unlisted bodies.  The new class orders exempt offers made under compliant plans from disclosure requirements governing the offer of securities, and operate in conjunction with existing exemptions such as those in s708 of the Corporations Act 2001.

What does it mean?

The new class orders require that a Notice of Reliance (Form CF08) is lodged with ASIC at any time before making an offer under a complying employee incentive scheme, but in any event no later than one month after the first reliance on either of the new class orders.  GrilloHiggins can review your existing employee incentive schemes to ensure compliance with the new class order and assist you with lodgement of Form CF08.

What are the main changes?

Under the previous class order, companies were required to submit copies of employee incentive scheme invitations and disclosure documents to ASIC.   This has now been replaced by lodgement of a one-off Notice of Reliance (although ASIC retains the power to request copies of these documents).  Companies are still required to provide eligible participants with the appropriate invitations and disclosure documents.



  • Relief now extends to cover incentive rights over shares
  • Trusts (5% holding limit), contribution plans and loans can all still be utilised
  • To be eligible, a listed company needs to have had its securities quoted for the three months prior to issue (instead of 12 months) and cannot have been suspended from quotation for more than 5 days (instead of 2 days) in the previous 12 months
  • Offers made in reliance on the class order within the last 3 years must not exceed 5% of the total issued capital of the company



  • Wholly owned subsidiaries of the issuer can now also make offers
  • Relief now extends to fully paid voting ordinary shares, options over ordinary shares, and incentive rights over ordinary shares
  • Trust structures can be utilised (20% holding limit), however, contribution plans and loans are not permitted
  • There are additional requirements for unlisted companies, including that an offer cannot be valued at more than $5000 per annum per participant and an obligation to provide participants with an audited financial or special purpose report


What happens to existing schemes?

Class Order [CO 03/184] and the relevant parts of Class Order [CO 04/671] Disclosure for on-sale of securities and other financial products that apply to employee share schemes will be discontinued.  To facilitate the movement from the former employee share scheme policy to the new revised policy, [CO 14/1000] and [CO 14/1001] grant transitional relief to enable those relying on the previous policy requirements to continue operating their existing employee share schemes with equivalent relief.

What is it?

ASIC has revised its guidance to facilitate Australian investors participating in foreign scrip offers, subject to certain conditions being met.  The relief applies to certain:

  • Rights Issues (Instrument 2015/356)
  • Schemes of Arrangement (Instrument 2015/358)
  • Scrip bids and small scale personal offers (Instrument 2015/357

Why the change?

A prospectus or PDS is usually required for an offer of securities received in Australia.  ASIC has given conditional relief from these disclosure requirements where a foreign entity makes a relatively small number of offers in Australia, to allow Australian investors to participate in offers that might not otherwise be extended to them because of the time and expense involved in complying with regulatory requirements in multiple jurisdictions.

What does the relief apply to?

  • Rights issues where the foreign company is listed on an approved foreign market and the securities are in the same class as those already held by Australian Investors;
  • Foreign scrip takeovers where the bid class securities are quoted on an approved foreign market;
  • Scrip schemes of arrangement where the scheme is regulated in Hong Kong, Malaysia, New Zealand, Singapore, South Africa or the United Kingdom;
  • Foreign entities who make 20 or fewer offers in Australia in 12 months where the entity is listed on an approved foreign market;
  • Advertising and other notices incidentally published in Australia, which relate to foreign securities and are aimed at a foreign market.

Are there any other changes?

Regulatory Guide 72 Foreign securities disclosure relief, outlines the relief that ASIC grants for offers of foreign securities and interests and has been updated to reflect the new policy.

[CO 00/181] Foreign securities: publishing of notices and reports and [CO 00/185] Foreign securities have now sunset on the basis that the relief was not required.