ASIC Corporations (Definition of Approved Foreign Market) Instrument 2017/669

The central concept is the “approved foreign market”. Under the instrument, this is an exhaustive list of 19 foreign financial markets, each identified by its current name and sometimes a former name (e.g., Bursa Malaysia previously known as Bursa Malaysia Main Board and Bursa Malaysia Second Board; Cboe Canada previously known as NEO Exchange Inc.; SIX Swiss Exchange previously known as SWX Swiss Exchange). The list includes markets from Europe, Asia, North America, Africa and Oceania. Notably absent are markets from South America, the Middle East, the Indian subcontinent and many Asian exchanges such as the Shanghai or Shenzhen stock exchanges, the Bombay Stock Exchange, or the Australian Stock Exchange (the latter being domestic, not foreign).

The second key concept is the “applicable ASIC legislative instrument”. Section 4 defines this as any of 13 specific instruments: ASIC Corporations (Share and Interest Sale Facilities) Instrument 2018/99; the financial requirements instruments for OTC derivative issuers, responsible entities, custodial providers; the employee incentive schemes ongoing relief; foreign rights issues, scrip bids, publishing notices, small scale offers; managed investment product consideration; minimum bid price; and consents to statements. These instruments each provide some form of relief, exemption or modified application of the Corporations Act. The definition of “approved foreign market” only becomes operative when a party relies on any of these instruments. So if a person is relying on, say, ASIC Corporations (Employee Incentive Schemes,Ongoing Relief) Instrument 2025/169, they need to check whether the foreign market they are dealing with is on the approved list; if it is, then certain provisions in the Act treat it as if it were an approved financial market for the limited purposes of the relief.

A related concept is the “determination” under section 1100K. This is a separate but linked concept: section 6 of the instrument simply states that each approved foreign market (as defined in section 5) is determined for the purposes of s1100K of the Act. That section allows ASIC to determine a foreign market, which then exempts the operator of that market from the requirement to hold an Australian market licence for providing certain services to Australian investors. So the instrument provides an automatic determination for all listed markets, rather than requiring a separate determination for each.

The instrument also uses the concept of “modification by insertion” into section 9 of the Act. This is a legislative technique whereby the instrument does not permanently amend the Act; instead it provides that, for a defined set of circumstances, the Act is to be read as if it contained the extra definition. The practical effect is the same for those who can rely on it, but it limits the scope of the definition to avoid unintended consequences in other parts of the Act.

The instrument directly affects any person who seeks to rely on one of the 13 applicable ASIC legislative instruments. That includes a broad range of market participants: companies conducting employee share schemes that involve foreign markets; issuers of retail over-the-counter derivatives; responsible entities of managed investment schemes; custodial and depository service providers; entities making foreign rights issues, scrip bids, or small scale offers to Australian investors; and parties dealing with share and interest sale facilities.

Indirectly, the instrument affects the operators of the 19 listed foreign markets themselves, because the determination under s1100K gives them a presumptive exemption from holding an Australian market licence. This means they can offer trading services to Australian wholesale and retail clients (subject to the terms of the applicable instruments) without needing to individually apply for ASIC recognition. The absence of a market from the list imposes a compliance burden on those operators, as they would need to seek a separate determination or rely on other exemptions.

The instrument also affects Australian investors and intermediaries who transact on foreign markets. For example, a fund manager who trades on the Johannesburg Stock Exchange can rely on the definition to access relief under the managed investment product consideration instrument, reducing the cost of offering certain products. Conversely, a manager who trades on the Shanghai Stock Exchange cannot rely on this instrument, so the compliance costs may be higher.

From a compliance perspective, the instrument creates a bifurcated regime: some foreign markets are treated as “approved” without further analysis, while others are not. This reduces due diligence costs for transactions on the listed markets but also creates an implicit hierarchy. The list is static unless amended by ASIC, so market participants must monitor amendments to see if a market they use is added.

The instrument also advantages incumbents: a market that gets onto the list may attract more Australian capital, while a market that is omitted may lose business. The decision to list a market is not based on any formal assessment of equivalent regulation, so there is a risk of regulatory capture or arbitrary outcomes. The instrument does not provide any criteria for inclusion; it simply lists markets.

The instrument does not impose any direct duties or create any direct rights on its own. Instead, it operates as a gateway to the relief provided by the applicable instruments. The most significant right it confers is the ability to treat a foreign market as “approved” for the purposes of exemptions in the Act. For example, under the employee incentive schemes relief, a company can issue shares or options to Australian employees via an offshore plan without needing to comply with all of the fundraising provisions if the shares are listed on an approved foreign market. Without this definition, the company would either need to find another exemption or comply with full disclosure requirements.

Similarly, the determination under s1100K gives operators of the listed markets a right to provide market services in Australia without obtaining a licence, subject to any conditions imposed by other provisions. However, the instrument does not spell out those conditions; they are found in s1100K and the regulations.

For persons relying on the applicable instruments, the main duty is to ensure that the market they are relying upon is indeed on the current list at the time of the transaction. The list is subject to amendment (as shown by the frequent amendments). A market that was on the list when a transaction was structured may later be removed, potentially affecting ongoing compliance. The instrument does not contain any transitional provisions for removal of a market, so reliance on a market that is later delisted could create retrospective compliance issues.

Another duty arises from the conditional nature of the modification: the definition of “approved foreign market” only applies if a person purports to rely on an applicable instrument. This means the person must actually satisfy the conditions of that instrument, and the instrument’s terms may impose additional requirements (e.g., disclosure, reporting, or limits on offers). The definition does not stand alone; it is only a building block for the relief.

The instrument also creates a right for ASIC to amend the list unilaterally, as it has done multiple times. This right is not constrained by criteria, so ASIC can add or remove markets for policy reasons without legislative oversight beyond the usual disallowance process for legislative instruments.

The instrument itself contains no penalty provisions. Penalties for non-compliance arise from the underlying Act. For example, if a person purports to rely on an exemption that requires the market to be an “approved foreign market”, but the market is not on the list (or has been removed), then the exemption does not apply. The person would then be in breach of the relevant provisions of the Act, such as the need for a disclosure document under Chapter 6D, or the need for an Australian market licence under s1100K. Those provisions carry significant civil and criminal penalties.

For instance, if a company makes an offer of shares to Australian employees under an employee incentive scheme relying on the ongoing relief instrument, and the shares are traded on a market that is not on the list (say, the Bombay Stock Exchange), the exemption falls away. The company would have contravened s727 (prohibition on offering securities without disclosure) and could face penalties of up to a maximum of 5,000 penalty units for an individual or 50,000 for a body corporate (currently about $1.3 million and $13 million respectively, with indexation).

Similarly, if an operator of a foreign market that is not determined under s1100K provides market services in Australia, it may be operating an unlicensed market and face penalties under s791A (requirement to hold a licence) and s1311 (general penalty provisions). The maximum penalty for a body corporate is the greater of 50,000 penalty units or three times the benefit obtained.

Enforcement is by ASIC, which can issue infringement notices, seek civil penalties, or pursue criminal prosecution. There is no private right of action under this instrument, but affected investors could bring a claim for misleading or deceptive conduct if a market was represented as approved when it was not.

The frequent amendments to the instrument (nine versions in eight years) create a compliance risk: a person who relied on the list at one time may find that a market has been added or removed. The instrument does not contain transitional provisions giving a grace period when a market is removed. This means that ongoing offerings or continuous disclosure obligations could be disrupted.

The instrument interacts with multiple provisions of the Corporations Act 2001 and the 13 listed ASIC instruments. The foundational interaction is with section 9, the definitions section. The instrument effectively inserts a new definition for limited purposes, but only when a person relies on an applicable instrument. This means that for all other purposes of the Act, the definition of “approved foreign market” does not exist; the Act only has the definition of “approved market” (which refers to Australian markets). So the instrument creates a split regime.

The interaction with Chapters 2L, 5C, 6, 6D and Parts 7.6, 7.8, 7.9 is explicitly stated. Chapter 2L deals with convertible notes and debt instruments; Chapter 5C deals with managed investment schemes; Chapter 6 deals with takeovers; Chapter 6D deals with fundraising; Part 7.6 deals with licensing and registration of financial services providers (excluding Divisions 4 and 8 which cover specific exemptions and compensation schemes); Part 7.8 deals with conduct and disclosure obligations for financial services; Part 7.9 deals with superannuation and retirement savings accounts. In each of these areas, the effect is that a transaction or product that references a listed foreign market can potentially benefit from relief under the applicable instruments.

The most significant interaction is with the 13 applicable instruments themselves. Those instruments provide relief from various provisions; the definition here supplies a key condition for that relief. For example, the ASIC Corporations (Employee Incentive Schemes,Ongoing Relief) Instrument 2025/169 allows offers of securities under an employee incentive scheme without a prospectus if, among other conditions, the securities are quoted on an approved foreign market. Without this instrument, that condition could not be met for foreign markets other than those few that ASIC had individually determined.

The determination under section 1100K interacts with the licensing provisions. Section 1100K says that a person who operates a foreign financial market that is determined by ASIC does not need an Australian market licence for providing services to wholesale or retail clients. This instrument determines all 19 markets automatically, so they are all exempt without further application. However, s1100K also imposes conditions: the market must comply with its home regulation and provide ASIC with information upon request. The instrument does not waive those conditions; it only satisfies the determination requirement.

The instrument also interacts with the legislative framework for delegated legislation. It is made under eight different subsections of the Act, giving it broad authority. The Legislation Act 2003 applies, meaning the instrument is subject to disallowance by Parliament and must be registered and published. The frequent amendments suggest active use of the power.

Importantly, the instrument does not affect the operation of the ASX or Chi-X as approved domestic markets. It only creates a category for foreign markets.

The instrument was originally made on 4 September 2017 and registered on 5 September 2017. It has undergone nine compilations, reflecting nine amending instruments up to 3 December 2025. The amendments show a pattern of adding markets and updating the list of applicable ASIC instruments.

The first amendment (2017/1119) was made shortly after the original, on 22 December 2017, and amended section 5 (the definition list). The content of that amendment is not visible from the text but likely added or adjusted market names.

The 2018/98 amendment amended the definition of “applicable ASIC legislative instrument” by changing paragraph (a) (the share and interest sale facilities instrument).

The 2021/895 amendment added paragraph (oa) to the list of approved foreign markets: Oslo Bors (also known as Oslo Stock Exchange). This was the first addition of a Nordic market.

The 2023/160 amendment added the current section 6 (determination under s1100K) and also amended the applicable instruments list in section 4 by adding paragraphs (b) through (e) - the financial requirements instruments for responsible entities, custodial providers, and retail OTC derivative issuers.

The 2023/649 and 2023/694 amendments further adjusted the applicable instruments list, including updating references to newer versions of the financial requirements instruments.

The big batch of 2025 amendments is notable. The 2025/617 amendment added three new applicable instruments: employee incentive schemes relief, foreign rights issues, foreign scrip bids, foreign securities publishing notices, foreign small scale offers, and managed investment product consideration. It also amended section 3 (authority) to include those subsections. The 2025/630 amendment added paragraph (k) to the applicable instruments list - the ASIC Corporations (Managed investment product consideration) Instrument 2025/629.

The most recent amendment, 2025/750, added three new markets to the list in section 5: Cboe Canada (previously NEO Exchange Inc.), Cboe US (also known as Cboe BZX Exchange), and the Canadian Securities Exchange (CSE). This brought the total to 19 markets.

The amendment history shows that the instrument is actively updated in response to new relief instruments being made and to changes in foreign market branding or availability. There is no discernible pattern of removing markets; all additions have been additive. The frequency of amendments - sometimes multiple in a year - means that practitioners must check the compilation date of the instrument they are using and confirm that the list has not changed since the relevant transaction.

The instrument itself has not been the subject of any reported litigation, based on the source text which does not refer to any cases. This is typical for a delegated legislative instrument of this nature; it is rarely litigated directly because it is a definitional mechanism. However, the underlying applicable instruments have been subject to court interpretation, and the definition of “approved foreign market” could be relevant to any dispute about whether a particular market qualifies.

For example, if a company relied on the employee incentive scheme relief and the market was later removed from the list, a shareholder might challenge the validity of the share issue. No such cases are reported in the instrument, but the risk exists.

The lack of litigation may also reflect the clarity of the list: because it is an exhaustive list, there is little room for interpretive dispute. The main potential for litigation would be if a market claimed to be covered by a previous name but the instrument had been amended to remove that name, or if a market argued it was the same entity as a listed market despite a rebranding. The instrument includes some predecessor names (e.g., “previously known as …”) which reduces that risk.

The determination under s1100K could be challenged if ASIC revoked a determination, but the instrument does not provide for revocation of individual markets; it determines them en masse. Any change to the list would be by amending instrument, which could be challenged under administrative law if the amendment was procedurally flawed or irrational. Again, no such challenge is recorded.

The broader context is that ASIC’s exercise of its exemption and modification powers under the Corporations Act has been judicially reviewed in other contexts, but not specifically for this instrument.

The instrument contains several traps that practitioners need to be alert to.

First, the definition of “approved foreign market” only applies when a person purports to rely on an applicable ASIC legislative instrument. If a person is not relying on any of the 13 listed instruments, the definition does not apply at all. So a market that is on the list cannot simply be called an “approved foreign market” for any purpose; it is only approved for the limited purposes of those instruments. For example, if a company wants to use the takeover exemptions in Chapter 6, but does not rely on a relevant applicable instrument (like the foreign scrip bids instrument), then the definition is not engaged. The Act’s own definition in section 9 for “approved market” refers only to domestic markets; there is no general concept of “approved foreign market” in the Act outside this instrument.

Second, the list is exhaustive and includes only the named markets. Markets that are operationally similar but not listed - such as the Shanghai Stock Exchange, Shenzhen Stock Exchange, Bombay Stock Exchange, Deutsche Börse (note Frankfurt Stock Exchange is listed, but Deutsche Börse is not), or the Australian Securities Exchange itself (being domestic) - are not approved. Even if a market is a well-regulated, major exchange, if it is not on the list, it cannot be relied upon for the relief.

Third, market names change. The instrument tries to capture some predecessor names, but not all. For example, the list includes “NYSE MKT (previously known as American Stock Exchange)”; if that market changes name again, the old name may no longer match. Likewise, “Cboe Canada (previously known as NEO Exchange Inc.)” - but if Cboe Canada rebrands, the instrument would need to be amended. A person relying on the instrument at a point in time should check the exact name on the ASIC register on the day of reliance.

Fourth, the applicable instruments themselves have their own conditions and expiry dates. Even if a market is on the list, the relief may not be available if the applicable instrument has been repealed, amended, or sunsetted (the Legislation Act 2003 provides for automatic repeal of legislative instruments after 10 years, but ASIC may remake them). The instrument does not guarantee that the applicable instruments are still in force.

Fifth, the determination under s1100K is absolute for the listed markets, but s1100K also requires the market operator to comply with certain ongoing obligations (e.g., giving ASIC information). The instrument does not waive those. So the operator may still need to take steps to maintain the exemption.

Sixth, the instrument has been amended nine times. Any compliance manual that references an outdated list (e.g., a version from 2023 that lacked Cboe Canada or Oslo Bors) would be erroneous. Continuous monitoring is required.

Seventh, the instrument modifies the Act only for Chapters 2L, 5C, 6, 6D and Parts 7.6, 7.8, 7.9. If a transaction falls outside those parts - for example, a licensing issue under Part 7.2 (which is not covered) - the definition does not help.

Compliance with the instrument is essentially a matter of checklist verification. There is no active reporting or registration requirement; the instrument simply provides a safe harbour if the conditions are met. The following steps are recommended for any person seeking to rely on an approved foreign market designation.

Step 1: Identify the applicable ASIC legislative instrument you intend to rely upon. Ensure that instrument is still in force and that the specific relief you need is covered. For example, if you are making a foreign scrip bid for an Australian target, check that the ASIC Corporations (Foreign Scrip Bids) Instrument 2025/612 is current and that the bid meets its conditions.

Step 2: Confirm that the foreign market on which the securities are traded or will be traded is listed in section 5 of this instrument. Use the compilation that is current on the date of the transaction. Do not rely on a printed version from a previous month; check the Federal Register of Legislation for the latest compilation. Note that the instrument uses both current and previous names; ensure your market matches exactly.

Step 3: If the market is listed, you can treat it as an “approved foreign market” for the purposes of the applicable instrument. That means the relief conditions that require an approved foreign market are satisfied. Proceed with the transaction under the terms of the applicable instrument, ensuring all other conditions are met (e.g., disclosure thresholds, offer limits, reporting obligations).

Step 4: For operators of the 19 listed markets, the determination under s1100K is automatic. However, the exemption from licensing is not unconditional. The operator must still comply with s1100K(2), which may include requirements to give ASIC access to information, comply with home-country regulation, and not do anything that would be harmful to Australian investors. Operators should verify that they meet these conditions and maintain records.

Step 5: Monitor amendments. The instrument is amended regularly. Subscribe to ASIC announcements or legislative updates to know when markets are added or removed, and when the list of applicable instruments changes. A market that is removed from the list may require you to find an alternative exemption or cease relying on the relief for future transactions.

Step 6: Document reliance. In any compliance file, note the date of the transaction, the specific compilation of the instrument relied upon, and the market name as it appears. This documentation may be needed if ASIC later queries the validity of the relief.

Step 7: Beware of transitional timing. The instrument does not contain transitional provisions when a market is added. So if a market is added, you can rely on it immediately after the amendment’s registration. Conversely, if a market is removed, there is no grace period; any transaction after the removal must not rely on that market. Plan accordingly.

Step 8: If a market is not listed, consider applying to ASIC for a class ruling or individual exemption. The instrument is not the only way to get relief; ASIC may still grant modifications or exemptions for other markets on a case-by-case basis, but that involves time and cost.