This notice is the Securities Act (Rights, Options, and Convertible Securities) Exemption Notice 2002.

This notice comes into force on 1 October 2002.

This notice expires on the close of 31 March 2013.

(1) In this notice, unless the context otherwise requires,—

(2) In this notice, a reference to an option, share warrant, convertible note, preference share, or preference unit includes a reference to a security that is in the nature of an option, share warrant, convertible note, preference share, or preference unit.

(3) Any term or expression that is defined in the Act or the Regulations and used, but not defined, in this notice has the same meaning as in the Act or the Regulations.

(1) Every person is exempted from section 37 of the Act in respect of any equity securities that are, or are to be, allotted—

• (a) by an issuer that meets the requirements in clause 8; and

• (b) under the terms of, or on the exercise by any person of a right conferred by, any convertible security.

(2) [Revoked]

(1) Every person is exempted from section 37 of the Act in respect of any units that are, or are to be, allotted—

• (a) by an issuer that meets the requirements in clause 8; and

• (b) under the terms of, or on the exercise by any person of a right conferred by, any convertible security.

(2) [Revoked]

(1) Every person is exempted from section 37A of the Act in respect of any equity securities that are, or are to be, allotted—

• (a) by an issuer that meets the requirements in clause 8; and

• (b) under the terms of, or on the exercise by any person of a right conferred by, any convertible security that was allotted before 1 October 1997.

(2) [Revoked]

(1) The requirements referred to in clauses 5 to 7 are that—

• (a) the issuer of the new security and the issuer of the convertible security must be the same person; or

• (b) the following circumstances must apply:

  • (i) the issuer of the convertible security was a wholly-owned subsidiary of the issuer of the new security at the time the convertible security was offered and allotted and is also a wholly-owned subsidiary of the issuer of the new security at the time of the offer and the allotment of the new security; and

  • (ii) equity securities or units (as the case may be) issued by the issuer of the new security were quoted on a specified securities market at the time of the offer and allotment of the convertible security, and also at the time of the offer and allotment of the new security; and

  • (iii) the convertible security was quoted on a specified securities market on allotment, and remains quoted on a specified securities market for the period that it is current; and

  • (iv) the new security is quoted on a specified securities market on allotment.

(2) In clauses 8 and 9, new security means the equity security or unit referred to in clause 5(1) or clause 6(1) or clause 7(1), as the case may be.

(1) Each exemption in clauses 5, 6, and 7 is subject to the condition that the convertible security has been allotted under a registered prospectus that contains particulars of all material matters relating to the offer of the new security.

(2) Each exemption in clauses 5, 6, and 7 is subject to the further condition that, before allotment of the new security and before the exercise of any right conferred by the convertible security, the following documents have been sent to every person who was, at the time the financial statements were sent, a registered holder of the same class of convertible security in respect of which the new securities are allotted or a right is exercised:

• (a) a copy of the most recent audited consolidated statement of financial position and audited consolidated statement of financial performance of the issuing group or the scheme (as the case may be) that comply with the provisions of the Financial Reporting Act 1993 relating to financial statements (or, if applicable, group financial statements) and with the provisions of any other enactment to which the issuer is subject; and

• (b) if the date of allotment of the new security or the date of the exercise of any right conferred by the convertible securities would be later than 9 months after the date of the statement of financial position referred to in paragraph (a),—

  • (i) an interim consolidated statement of financial position as at the end of, and an interim consolidated statement of financial performance for, a period commencing on the day after the date of the statement of financial position referred to in paragraph (a) and ending on a date that is not later than 9 months after that date that comply with the provisions of the Financial Reporting Act 1993 relating to financial statements (or, if applicable, group financial statements) and with the provisions of any other enactment to which the issuer is subject (except in each case that they need not be audited); and

  • (ii) a statement containing a description of the issuing group or the scheme (as the case may be).

(3) Each exemption in clauses 5, 6, and 7 is subject to the further condition that the date of the allotment of the new security under the terms of, or the exercise of any right conferred by, the convertible security is not more than 9 months after the date of the statement of financial position or interim statement of financial position, as the case may be, referred to in subclause (2).

(1) Every person is exempted from section 37A(1)(a) of the Act in respect of any allotment of securities to any subscriber for those securities in whose favour an offer of those securities (being an offer of securities to which regulation 4(1)(a) of the Securities Regulations 1983 or regulation 6(1)(a) and (2) of the Regulations applies) has been renounced.

(2) Every person is exempted from section 37A(1)(ab)(i) of the Act in respect of an allotment of securities to a subscriber for those securities in whose favour an offer of those securities has been renounced to the extent that the offer is an offer made to persons who already hold securities of the issuer.

(1) If this clause applies, every person is exempted, in respect of the allotment of new securities under the terms of, or on the exercise by any person of a right conferred by, a convertible security, from—

• (a) section 37A(1)(a) of the Act; and

• (b) section 37A(1)(b) of the Act (so far as it relates to an investment statement relating to the new security).

(1A) This clause applies if—

• (a) securities that are issued by the issuer of the new security, and are of the same class as the new security,—

  • (i) either—

    • (A) were quoted on a specified securities market at the time of the offer and allotment of the convertible security; or

    • (B) were quoted on a specified securities market after allotment of the convertible security, and had been the subject of an application to be quoted on that specified securities market at the time the convertible security was offered; and

  • (ii) are quoted on a specified securities market at the time of the offer and allotment of the new securities; and

• (b) the convertible security—

  • (i) either—

    • (A) was quoted on a specified securities market at the time it was allotted; or

    • (B) was quoted on a specified securities market after it was allotted, and had been the subject of an application to be quoted on that specified securities market at the time it was offered; and

  • (ii) remains quoted on a specified securities market for the period that it is current; and

• (c) the new securities are to be quoted on a specified securities market on allotment.

(2) In this clause, new security means an equity security or unit that is allotted under the terms of, or on the exercise by any person of a right conferred by, any convertible security.

The exemption in clause 11 from section 37A(1)(a) of the Act is subject to the conditions that—

• (a) the convertible security was issued under an investment statement that relates to both the convertible security and the new security; and

• (b) if the terms of the convertible security permit the issuer to vary the terms of the convertible security or the new security (including varying the terms of conversion), the investment statement must—

  • (i) state clearly that the issuer may vary the terms of conversion; and

  • (ii) state what steps the issuer will take, before an election to convert is made, to inform holders of convertible securities of the terms of conversion.

(1) This clause applies if the holder of a convertible security referred to in clause 11(1A)(b) is entitled to elect to convert that security, whether or not the issuer also has rights in relation to the conversion of the security.

(2) If this clause applies, the exemption in clause 11 from section 37A(1)(b) of the Act is subject to the following conditions:

• (a) that the investment statement relating to both the convertible securities and the new securities includes the following:

  • (i) a statement to the effect that changes of circumstance occurring between the date of the allotment of the convertible securities and the conversion date of those securities may have a material effect on the new securities (including their price) or the issuer:

  • (ii) a statement that important information relating to the securities (including their price) and the issuer will be disclosed in accordance with the continuous disclosure provisions of the listing rules of each specified securities market on which the convertible security is quoted:

  • (iii) notice that, between 5 and 10 working days before the earliest date on which the election to convert may be made, a pre-conversion statement—

    • (A) will be provided to the operator of each specified securities market on which the convertible security is quoted, for release to the market; and

    • (B) will be available on the issuer's Internet site:

  • (iv) notice of what the pre-conversion statement will contain, as described in subclause (3):

  • (v) a statement that holders of the convertible securities should consider the pre-conversion statement, the market price of the new securities, and all other information made available concerning the new securities and the issuer, before an election to convert is made:

• (b) that the issuer makes a pre-conversion statement that complies with subclause (3) available—

  • (i) to the operator of each specified securities market on which the convertible security is quoted, for release to the market, between 5 and 10 working days before the earliest date on which the election to convert may be made; and

  • (ii) following its release to the market, on the issuer's Internet site:

• (c) that no new securities may be allotted if, at the time of allotment, the investment statement, taken together with the pre-conversion statement, is known by the issuer, or any director of the issuer, to be false or misleading in a material particular by reason of failing to refer, or give proper emphasis, to adverse circumstances, whenever those adverse circumstances occurred.

(3) The pre-conversion statement must include the following, set out in a succinct manner:

• (a) a statement to the effect that the purpose of the pre-conversion statement is to assist registered holders of convertible securities to decide whether to elect to convert those securities:

• (b) a description of any adverse circumstances (whenever they occurred) that make the investment statement false or misleading in a material particular by reason of failing to refer, or give proper emphasis, to those circumstances:

• (c) a description of the effect of any adverse circumstances, to the extent that the effect can be assessed, or, where the effect of the adverse circumstances cannot be assessed, a statement to that effect:

• (d) a list of any other documents that are, in the opinion of the issuer, relevant to a decision about whether to elect to convert, in which case the documents must either be included in the pre-conversion statement or the pre-conversion statement must clearly indicate where those documents may be viewed and how they may be accessed:

• (e) a statement by the issuer that the pre-conversion statement is not known by the issuer, or any director of the issuer, to be false or misleading in a material particular by reason of failing to refer, or give proper emphasis, to adverse circumstances.

(1) This clause applies if the holder of a convertible security referred to in clause 11(1A)(b) does not have a right to elect to convert that security.

(2) If this clause applies, the exemption in clause 11 from section 37A(1)(b) of the Act is subject to the condition that the investment statement relating to both the convertible securities and the new securities includes the following:

• (a) a statement to the effect that changes of circumstance occurring between the date of the allotment of the convertible securities and the conversion date of those securities may have a material effect on the new securities (including their price) or the issuer:

• (b) a statement that important information relating to the securities (including their price) and the issuer will be disclosed in accordance with the continuous disclosure provisions of the listing rules of each specified securities market on which the convertible security is quoted:

• (c) a statement describing the principal risks assumed by holders of the convertible securities:

• (d) a statement to the effect that holders of the securities have no right to elect to convert:

• (e) a statement that new securities will or may be alloted (as the case may be) even if, at the time of allotment, there are adverse circumstances that make the investment statement false or misleading in a material particular by reason of failing to refer, or give proper emphasis to, those circumstances.