Listed company – director to notify market operator of shareholdings etc.

– section 205G of the Corporations Act 2001

 
This offence applies to the director of a listed public company. The director is obliged to notify the relevant market operator of interests in securities and contracts, which benefit the director. Or interests in a management investment scheme.

What is the legal definition of Listed Company – Director to Notify Market Operator of Shareholdings etc.?

The Prosecution must show that you failed to give notice to the relevant market operator of your interests in securities of the company or another company. Or your interests in contracts that confer a benefit to you. Or you are party to a contract in a managed investment scheme. Or, you failed to give notice of your appointment as director. Or you failed to give notice that the company had been listed.

Legislation

The section that covers this offence is section 205G of the Corporations Act 2001.

Examples of offences under this provision:
  • The director of a company does not tell the market operator that she has interests in securities in a related body corporate.
  • The director of a company does not properly outline the number of interests he has in securities of the company, and the circumstances giving rise to those interests.
  • The director of a company does not tell the market operator that he is party to a contract that confers a right to shares in a management investment scheme.
  • The director of a company does not update the market operator in relation to any changes in interests within 14 days.

What are some of the possible defences to a charge of Listed Company – Director to Notify Market Operator of Shareholdings etc.?
  • You notified the market operator of your interests.
  • You do not have any interests in a body corporate or under a management investment scheme.
  • You were not aware that the market operator was not notified of your interests.
  • ASIC made an order relieving you of your duties to notify the market operator of your interests.

There are other possible defences, depending on the circumstances surrounding the alleged offending. Each matter is unique and requires an individual approach and strategy.

Questions in cases like this
  • What is your position in relation to the company?
  • When did you notify the relevant market operator about your appointment as director of the company and/or the listing of the company?
  • Do you have any interests which should be and were not notified to the market operator?
  • Did you update the market operator about any changes in your interests within 14 days?
  • Has ASIC made an order relieving you of your requirements to notify the market operator of your interests?

What can you be sentenced to for this charge?

The sentence you receive will likely depend on whether prosecution can prove that you had the intention to withhold certain information from the relevant market operator.

Most commonly this type of offending will attract a maximum penalty of 30 penalty units.1 This means that you can be fined up to $4,956.60.2

However for more severe offences, you can be sentenced up to two years imprisonment.

Matters under this provision are ordinarily dealt with in the Magistrates’ court.

 



[1] http://www5.austlii.edu.au/au/legis/cth/consol_act/ca2001172/sch3schedule.html
[2] The value of each penalty unit will change on 30 June 2020.