ASIC Corporations (IPO Communications) Instrument 2020/722

The instrument is built around a small set of legal and factual concepts. Those concepts both define the universe of persons and communications covered, and set the boundaries of permissible content.

• Listing body and initial public offer: A listing body is a company or body seeking inclusion on the official list of a prescribed financial market in the jurisdiction (s 4). An “initial public offer” is an offer of securities in a class to be quoted on a prescribed financial market (s 4). The exemption therefore applies only at the pre-listing stage where an entity intends an IPO as so defined.

• Targeted recipient groups: The instrument differentiates among three recipient classes: holders of the listing body’s securities, employees (which expressly includes full-time, part-time, casual employees and contractors who provide services to the body), and former employees (s 4). The instrument treats communications to each group separately, and prescribes different permissible subject matter for each (s 5(3)-(5)).

• Scope of permitted communications: For each recipient group the instrument specifies permissible topics. For holders, permitted matters include that the body will undertake the IPO, timetable/structure/offer period, sell-down facility details including expected price range, proposed escrow arrangements, and matters requiring security-holder approval (s 5(3)(a)-(e)). For employees, permissible matters include that the body will undertake the IPO, timetable/structure/offer period, changes associated with being a listed body (personnel, internal management, financial/business/operations), employee incentive plans and employee priority offers (s 5(4)(a)-(e)). For former employees the permitted matters are the fact of the IPO and the treatment of existing securities and options plans and associated remuneration arrangements (s 5(5)(a)-(b)). Each listing of permitted content is qualified by the instrument’s direction that the advertisement or publication be “limited to” those matters “but nothing more” (s 5(3)-(5)).

• Disqualifier for promotional statements: A listing body loses the ability to rely on the exemption if it “advertises or publishes any statement to holders of the body’s securities, employees of the body or former employees of the body that communicates the advantages, benefits or merits of the initial public offer” (s 5(2)). That language is categorical and applies across the three recipient classes.

• Administrative condition: The instrument imposes an operational condition: the body “must have adequate arrangements in place to ensure that any advertisement or statement published in reliance on the exemption in section 5 is kept up-to-date” (s 6). The instrument does not specify what “adequate arrangements” means in detail; it requires only that arrangements exist.

• Exemption from s 734(2) only: The instrument’s stated relief is limited to non‑compliance with subsection 734(2) of the Corporations Act in relation to an advertisement or statement to the specified recipient groups (s 5(3)-(5)). The instrument therefore operates as an exemption that modifies how s 734(2) applies to the narrow class of communications identified.

These concepts delimit both the permitted communications and the operational obligations on listing bodies. The definitions section (s 4) is consequential: contractors are captured as employees, “sell-down facility” is defined and included expressly in permitted matters for holders (s 4; s 5(3)(c)), and “initial public offer” ties the instrument to securities that will be quoted on a prescribed financial market (s 4).

Primary affected parties

• Listing bodies: The instrument applies to a “listing body”, defined as a company or body seeking inclusion on the official list of a prescribed financial market operated in this jurisdiction (s 4). The direct regulatory subject is therefore any entity that intends to list securities as part of an initial public offer as defined by the instrument. The instrument is forward-looking; it applies to bodies that “intend” to offer securities under an initial public offer (s 5(1)).

• Officers and communications teams of listing bodies: Those responsible for drafting, approving and distributing investor, employee and ex-employee communications will need to assess whether proposed material falls within the permitted topics (s 5(3)-(5)) and ensure the body does not “communicate the advantages, benefits or merits” of the offer to the covered groups (s 5(2)).

• Security holders, employees and former employees: These groups are recipients of communications that the instrument treats differently from general advertising to the market. Holders of existing securities, employees (including contractors) and former employees may receive targeted communications that would otherwise fall within the ambit of s 734(2) but are permitted when limited to the specified matters (s 5(3)-(5), s 4).

Secondary affected parties

• Prospective investors generally: The instrument narrows compliance obligations for targeted communications but does not create any new disclosure obligation to the wider public. Communications outside the permitted recipient classes or beyond the permitted topics remain subject to standard legal constraints under the Corporations Act, including s 734(2) where applicable (s 5).

• Advisers and intermediaries: Legal advisers, PR and investor relations advisers, and underwriters dealing with communications planning for an IPO will need to factor the exemption into their advice and processes. For example, communications about sell-down facilities must be limited to process, implications and expected price range if delivered to holders (s 5(3)(c)).

Who bears compliance costs and decision-making

• The listing body bears the compliance burden. The instrument places affirmative responsibility on the body to ensure communications fit within the permitted scope and to maintain “adequate arrangements” to keep communications up-to-date (s 6). Decisions about content, distribution lists (holders vs wider public), and internal controls remain at the listing body’s discretion but are constrained by the instrument’s language.

Geographical and market scope

• The instrument applies in “this jurisdiction” to listing bodies seeking to be included on the official list of a prescribed financial market operated in this jurisdiction (s 4). The instrument therefore ties application to the local regulated market listing regime, not to non‑jurisdictional offerings.

Who is excluded or disqualified

• Any listing body that advertises or publishes statements to holders, employees or former employees that “communicate the advantages, benefits or merits of the initial public offer” cannot rely on the exemption (s 5(2)). The instrument also does not purport to cover communications to the broader public or to investor groups outside the three defined recipient classes; those communications remain subject to the standard rules in the Corporations Act.

The instrument creates a set of rights (an exemption) and parallel duties or operational conditions that fall on listing bodies and those who prepare IPO communications.

Right granted

• Limited exemption from s 734(2): Under s 5(3)-(5) a listing body “does not have to comply with subsection 734(2) of the Act” for advertisements or statements to holders, employees or former employees, respectively, provided the communications are restricted to the matters listed for each group and meet the other conditions in the instrument.

Duties and operational conditions

• Content constraint: Communications relying on the exemption must be strictly confined to the listed matters for each recipient class and “nothing more” (s 5(3)-(5)). The instrument uses imperative language; permitted subjects are exhaustively listed for each recipient class.

• Anti-promotion disqualification: The listing body must not “advertise or publish any statement … that communicates the advantages, benefits or merits of the initial public offer” to the relevant recipient groups. If it does so, the body “cannot rely on this section” (s 5(2)). That is a categorical duty to avoid promotional language to the three recipient groups covered by the exemption.

• Maintain up‑to‑date communications: The body “must have adequate arrangements in place to ensure that any advertisement or statement published in reliance on the exemption in section 5 is kept up-to-date” (s 6). The instrument does not define “adequate arrangements”, leaving scope for the listing body to determine what arrangements satisfy the condition.

• Targeting and recipient identification: Implicit in the exemption’s structure is a duty to ensure that communications benefiting from the exemption are addressed only to the specified recipient groups (holders, employees, former employees). The instrument frames relief in those terms (s 5(3)-(5)); it does not enable blanket public advertising that would otherwise be regulated.

• Inclusion of contractors within “employee”: The definition of “employee” includes contractors who provide services to the body (s 4). That widens the class of persons to whom employee-targeted communications may be safely directed under the exemption, and it places a duty on the listing body to recognise contractors as employees for the purposes of content targeting.

Tensions and operational choices

• Granularity of permitted matters: For employees, permitted communications include “changes associated with the body intending to be a listed body” (s 5(4)(c)) and specific sub-items: personnel and employment arrangements; internal management and proceedings; and financial, business and operations of the body (s 5(4)(c)(i)-(iii)). The body must exercise care in parsing these categories so as not to stray into proscribed promotional content that would disqualify the exemption under s 5(2).

• Sell-down facility disclosure: The instrument allows disclosure of sell-down facility process and implications and the expected price range for securities to be transferred through the facility to holders (s 5(3)(c)). This creates a duty to include expected price range information if that is to be disclosed to holders under the exemption, but also to avoid communicating advantages/benefits/merits.

Interaction with existing statutory duties

• The instrument expressly modifies application of s 734(2) by providing an exemption, not by altering substantive duties elsewhere in the Corporations Act. The right not to comply with s 734(2) in respect of certain targeted communications is granted conditionally; other statutory duties in the Act (beyond s 734(2)) are not addressed by the instrument.

Record-keeping and internal controls

• While the instrument does not prescribe record-keeping, the duty to have adequate arrangements in place to keep communications up-to-date (s 6) implies that listing bodies must adopt internal processes and decision protocols. Those processes will determine who decides content, who signs off, and how updates are managed in response to material changes during the IPO process.

The instrument itself does not specify novel civil or criminal penalties. It is framed as an exemption from a statutory obligation rather than as a freestanding regulatory regime with embedded sanctions. The enforcement and penalty implications must therefore be understood in relation to the Corporations Act under which the instrument is made.

Nature of enforcement action available under this instrument

• No express penalties in the instrument: Sections 5 and 6 set conditional permissions and operational requirements but do not prescribe fines, civil penalties or criminal offences within the instrument text itself.

• Reliance on the Corporations Act enforcement framework: The instrument is made under s 741 of the Corporations Act (s 3). Its practical enforcement consequences arise from the effect of compliance or non-compliance with the exemption when considered against s 734(2) and any other relevant provisions of the Act. The instrument’s primary effect is to define circumstances in which a listing body “does not have to comply” with s 734(2) relative to certain targeted communications (s 5(3)-(5)). Therefore, if a listing body cannot rely on the exemption because communications fall outside the permitted matters or because the body has communicated advantages/benefits/merits to the covered groups (s 5(2)), the body would then be subject to the ordinary legal obligations under s 734(2) and any enforcement measures that apply under the Act for non‑compliance with that subsection.

Enforcement mechanisms implicit from the instrument

• Loss of exemption: The instrument’s conditional nature implies that a body that does not satisfy its constraints will lose the safe-harbour it provides. The immediate operational consequence is that the body must comply with s 734(2) for such communications, and any failure to comply with the Act may be pursued under the Act’s enforcement regimes.

• Regulatory oversight by ASIC: The instrument is an ASIC legislative instrument (header and s 3), and compliance or non-compliance with the Corporations Act obligations that the exemption relates to can be the subject of ASIC attention, as ASIC is the relevant regulator empowered under the Corporations Act. The instrument itself does not set out ASIC’s enforcement powers, but it operates within the statutory scheme under which ASIC enforces compliance.

Practical enforcement uncertainties the instrument leaves open

• Undefined “adequate arrangements”: Section 6 requires “adequate arrangements” to keep communications up-to-date but does not define adequacy or prescribe standards, procedures or timelines. This creates enforcement ambiguity: a regulator would need to determine, in context, whether arrangements were adequate, rather than applying a bright‑line statutory metric from the instrument itself.

• Determination of promotional content: The threshold for whether a communication “communicates the advantages, benefits or merits” of the IPO is not defined in the instrument. That will require evaluative judgment when assessing whether a listing body can rely on the exemption, creating potential factual disputes in enforcement contexts.

• Interaction with other liabilities: Because the instrument only concerns s 734(2) relief, listing bodies remain subject to other statutory obligations and potential civil liabilities not addressed by the instrument. The instrument does not displace those other enforcement paths.

In short, the instrument provides a conditional safe-harbour rather than a new penalty regime. If the conditions are not met, or if the content falls outside the permitted matters, standard Corporations Act obligations and enforcement can apply. The instrument itself contains no fines or criminal provisions and leaves enforcement to the broader statutory framework under which the Act and ASIC operate (s 3).

This instrument is expressly made under the Corporations Act 2001 (s 3) and interacts with that Act by modifying how subsection 734(2) applies to certain targeted communications in the IPO context. The instrument’s wording and definitions create points of intersection and limits on its interaction with other statutory and market regimes.

Direct statutory interaction

• Subsection 734(2): The instrument’s operative relief is to relieve a listing body from having to comply with subsection 734(2) “in relation to an advertisement or a statement published by the body to” the specified recipient groups, subject to content limits (s 5(3)-(5)). The instrument therefore does not amend s 734(2); it provides a statutory carve-out that changes the practical application of s 734(2) for a narrow set of communications.

• Authority under s 741: The instrument is made under s 741 of the Corporations Act (s 3). The scope of the instrument is limited to the regulatory authority conferred by that section. The instrument does not purport to alter other provisions of the Act beyond the limited exemption as expressed.

Definitions that connect to other legal regimes

• “Prescribed financial market” and “official list”: The definition of “initial public offer” and “listing body” relies on concepts,prescribed financial market and official list,that are defined elsewhere in the Corporations Act and in other market regulation. The instrument therefore operates alongside the Act’s market regulatory framework and may intersect with listing rules of prescribed financial markets, though the instrument itself does not address market‑site listing rules directly (s 4).

• Securities law regime continuity: The instrument focuses exclusively on communications to holders, employees and former employees; it does not change disclosure obligations to the broader investing public or replace prospectus, continuous disclosure, market misconduct or insider trading obligations that are dealt with elsewhere in the Act and market rules. Those other obligations remain in force and will operate alongside the exemption.

Regulatory and market practice interactions

• Relationship with market conduct frameworks: While the instrument allows some communications that would otherwise attract s 734(2) constraints, it does so in a way that preserves the boundary between targeted communications and public advertising. It therefore interacts with market conduct expectations by limiting the safe-harbour to narrow content and recipients; it does not create a pathway to general advertising outside the standard statutory requirements.

• Internal corporate governance and securities processes: The instrument’s permitted content includes matters that typically require corporate decisions and approvals (for example, matters that require security-holder approval, employee incentive schemes, officer and director appointments , s 5(3)(e)). Those matters will continue to engage the broader body of corporate and securities law, including procedural and approval requirements outside the instrument.

Limits on interaction claims

• The instrument does not purport to alter any law other than to grant the specified exemption from s 734(2) in the circumstances described. It does not create rights that displace listing rules, continuous disclosure obligations, prospectus requirements or other statutory schemes in the Corporations Act, except as specifically stated in relation to s 734(2). Accordingly, any interaction with other laws will be by effect and overlap rather than by express contradiction in the instrument.

Practical consequence for compliance architecture

• Legal advisers and compliance teams must therefore treat the instrument as a narrow adjustment to how s 734(2) applies, and align internal processes so that communications to holders, employees and former employees meet the instrument’s content constraints while ensuring other statutory obligations (prospectus, continuous disclosure, market rules) are not neglected. The instrument’s reliance on definitions that refer back to market terms (prescribed financial market; official list) signals that it is meant to work within the existing market-regulatory architecture rather than replace it (s 4).

The instrument itself contains no internal amendment record beyond its making. The operative dates and making information provided in the instrument are:

• Instrument name: ASIC Corporations (IPO Communications) Instrument 2020/722 (s 1).

• Made by: Grant Moodie, delegate of the Australian Securities and Investments Commission (instrument header).

• Date made: 26 August 2020 (instrument header).

• Commencement: The instrument “commences on the day after it is registered on the Federal Register of Legislation” (s 2). The instrument provides a note that the register may be accessed at www.legislation.gov.au (s 2 note).

No amendments are recorded within the text supplied. The instrument contains no subsequent amendment schedule, no transitional provisions, and no repeal or expiry provision. The instrument’s lifecycle and any later amendments, repeals or replacements would therefore be recorded on the Federal Register of Legislation or in later legislative instruments made under the relevant provisions of the Corporations Act; the instrument text itself does not contain such material.

What the instrument records (and what it does not)

• The instrument records its making authority (s 3), its definitions (s 4), the substantive exemption and conditions (s 5), and the administrative condition requiring up-to-date arrangements (s 6). It does not record prior versions, amendment dates, or a history of changes.

• Users and advisers wanting a reliable amendment history will need to consult the Federal Register of Legislation entry for Instrument 2020/722 and any later legislative instruments or Acts that amend or revoke it. The instrument itself, as provided, is silent on subsequent amendments.

Administrative implications of the silence

• The absence of amendment entries in the instrument obliges practitioners to confirm the instrument’s current status on the official register, because any modification, revocation or expiry would be effected by subsequent entries on the legislative register rather than by notes within the instrument text. The instrument itself does provide the mechanism to locate the register (s 2 note).

The instrument text contains no record of litigation, court or tribunal decisions interpreting or affecting it. There are no cases named, no judicially imposed limits or constructions recorded in the instrument, and no internal references to litigation outcomes.

What the lack of litigation history in the instrument means for practitioners

• The absence of litigation reference in the instrument itself does not preclude later judicial or administrative interpretation. However, based solely on the instrument text provided, there are no precedents or reported decisions cited that construe its provisions.

• Where factual or legal disputes arise , for example, about whether a particular communication “communicates the advantages, benefits or merits” of the IPO (s 5(2)), or whether a listing body’s arrangements to keep communications up-to-date are “adequate” (s 6) , resolution of those disputes would be by reference to the Corporations Act enforcement framework and potential judicial or administrative review. The instrument does not supply judicial interpretation or litigation guidance.

Practical implications of no recorded litigation

• In the absence of statutory gloss from case law, two areas of interpretive uncertainty are likely to be significant in any enforcement or dispute scenario: the scope of promotional language that triggers s 5(2), and the meaning of “adequate arrangements” in s 6. These undetermined terms create fact-sensitive questions that would, if contested, require interpretive work by regulators or courts.

• Practitioners should therefore plan for conservative compliance in communications and document the rationale and governance behind decisions to rely on the exemption because there is, in the instrument itself, no litigation-driven precedent to rely on for fine-grained interpretive positions.

The instrument’s narrow scope and some undefined terms create specific practical pitfalls. The following items are visible directly from the instrument text and are practical issues that advisers and listing bodies should attend to.

1. “But nothing more” is capacious and mandatory (s 5(3)-(5)). Each category of recipient has a set list of permitted matters and each list is prefaced by the requirement that the advertisement or publication be “limited to” those matters “but nothing more”. The plain instruction is that any additional content, however tangential, may disqualify reliance on the exemption.

2. Promotional language disqualifies exemption (s 5(2)). The instrument disqualifies the exemption where the body “advertises or publishes any statement … that communicates the advantages, benefits or merits of the initial public offer.” The phrase is broad and evaluative; communications that might be framed as informative could be read as communicating benefits depending on content and context. There is no statutory test in the instrument to determine what constitutes communicating advantages/benefits/merits.

3. “Employee” includes contractors (s 4). This is a trap for the unwary: communications addressed to contracted service providers who qualify as “employees” under the instrument will be treated as employee communications. Conversely, failure to treat contractors as employees for targeting could result in misdirected communications that fall outside the exemption.

4. “Holders” are existing security-holders only (s 5(3)). The permitted matters for holders include sell-down facility details and expected price range (s 5(3)(c)), but the exemption applies to communications to holders of the body’s securities. Communications to potential retail or wholesale new investors are not covered by the holders’ carve-out and remain subject to s 734(2) and other applicable law.

5. Sell-down facility disclosures are allowed but limited (s 5(3)(c)). The instrument permits disclosure of the process, implications and expected price range for securities to be transferred through a sell-down facility. The listing body must be careful that such disclosures do not stray into communicating advantages or benefits of participation, which would disqualify the exemption under s 5(2).

6. “Adequate arrangements” undefined (s 6). Section 6 requires adequate arrangements to ensure communications are kept up-to-date but does not define “adequate”. The absence of standards creates a compliance risk: bodies must design arrangements defensibly because a regulator or court could later judge them inadequate.

7. Narrow focus on s 734(2) only (s 5). The instrument only addresses s 734(2) compliance. Other statutory obligations (for example, prospectus rules, continuous disclosure or other disclosure or misleading conduct provisions elsewhere in the Act) are not displaced by the instrument and may still apply.

8. Timing and “intends to offer” language (s 5(1)). The exemption applies to a listing body that “intends to offer securities under an initial public offer.” The line between intention and a formally launched offer can be factual. Premature communications to the public or mischaracterised targeting could expose the body to regulatory issues.

9. Jurisdictional and market scope (s 4). The terms “official list” and “prescribed financial market” tie operation to the jurisdiction and market regulatory definitions. A body seeking to list in multiple jurisdictions will need to assess whether communications are within the instrument’s scope for each jurisdictional listing process.

10. No internal timeline or expiry disclosed. The instrument contains no sunset or expiry clauses. Practitioners must confirm current status on the Federal Register of Legislation (s 2 note) to ensure the instrument has not been superseded or revoked.

Each of these gotchas arises from the instrument’s express language. They create areas where conservative handling , limited content, tight distribution lists, documented sign-offs and update processes , will reduce the risk that reliance on the exemption is later challenged.

Compliance under this instrument requires both substantive content control and operational arrangements. The instrument sets out what is permitted, what disqualifies the exemption and a requirement to keep communications current. The following checklist is grounded in the instrument text (s 4-6) and outlines practical steps consistent with its obligations.

1. Identify whether the entity is a “listing body” and whether the offer is an “initial public offer” as defined (s 4; s 5(1)). Confirm the intended securities are in a class to be quoted on a prescribed financial market and that the body is seeking inclusion on the official list in this jurisdiction.

2. Segment recipient groups precisely (s 4; s 5(3)-(5)). Maintain authoritative lists for:

   • Holders of the body’s securities (current holders).
   • Employees, explicitly including contractors who provide services to the body (s 4).
   • Former employees. Ensure distribution procedures can target communications only to these groups when relying on the exemption.

3. Draft content to the permitted lists and no more (s 5(3)-(5)). For each recipient group, ensure communications are limited to the permitted matters:

   • Holders: existence of the IPO and impending announcements; timetable, structure and offer period; sell-down facility process/implications and expected price range; proposed escrow arrangements; matters requiring security-holder approval, including appointments and employee incentive schemes (s 5(3)(a)-(e)).
   • Employees: existence of the IPO; timetable/structure/offer period; changes associated with becoming a listed body (personnel/employment arrangements; internal management and proceedings; financial/business/operations); employee incentive plans and treatments; employee priority offers (s 5(4)(a)-(e)).
   • Former employees: existence of the IPO; treatment of existing securities and options plans and associated remuneration arrangements (s 5(5)(a)-(b)). Drafters should annotate communications showing which enumerated matter is being addressed and avoid any language that could be read as communicating advantages, benefits or merits.

4. Avoid promotional language to the covered groups (s 5(2)). Affirmatively screen text to ensure it does not “communicate the advantages, benefits or merits” of the IPO to holders, employees or former employees. Where statements have mixed informational-and-promotional elements, opt to remove or rephrase them to be strictly factual, focusing on process, timetable and mechanics.

5. Establish “adequate arrangements” to keep communications up-to-date (s 6). Although the instrument does not define adequacy, the body should:

   • Appoint responsible signatories for each recipient class.
   • Create a documented update protocol triggered by material developments in the IPO timetable, offer structure, expected price range, escrow arrangements or matters requiring security-holder approval.
   • Maintain version control and distribution logs showing when communications were issued and to whom.
   • Define escalation rules for when communications must be amended or withdrawn.

6. Implement internal approval and training processes. Ensure legal and compliance sign-off precedes the release of any communication relying on the exemption. Train investor relations, HR and contractor management teams on the scope of permissible communications to avoid inadvertent promotional content.

7. Coordinate with prospectus and market disclosure teams. The exemption does not replace prospectus obligations or public disclosure requirements. Ensure that communications relying on this instrument are consistent with prospectus content and do not conflict with ongoing continuous disclosure or market listing requirements.

8. Monitor and document distribution. Keep records proving the targeted nature of communications (audience lists, delivery receipts) so the body can evidence that communications were provided only to holders, employees or former employees and that the content was confined to permitted matters.

9. Review sell-down facility communications carefully (s 5(3)(c)). If disclosing the expected price range for securities to be transferred through a sell-down facility, ensure the price range is framed factually and update it if circumstances change. Avoid promotional framing about participation benefits.

10. Verify contractor treatment as employees (s 4). When addressing contractors, confirm they fall within the instrument’s definition of “employee” before including them in employee communications under the exemption.

11. Check instrument status on the Federal Register before relying on it (s 2 note). Because the instrument’s commencement is tied to registration and the instrument text contains no amendment history, confirm there have been no intervening revocations or amendments on the Federal Register of Legislation.

12. Maintain a conservative posture where ambiguity exists. Where there is doubt whether a communication might be read as communicating advantages/benefits/merits or might exceed the permitted matters, revise the content to be purely informational about process, timetable and mechanics, or refrain from using the exemption and ensure the communication complies with s 734(2) and other relevant statutory requirements.

Documentary evidence and governance

• Keep contemporaneous documentation of the decision to rely on the exemption, internal legal advice, approval signatures and records of the content limitation and update arrangements. Because key terms such as “advantages, benefits or merits” and “adequate arrangements” are not defined in the instrument, documentary evidence of conservative, structured decision-making will assist in demonstrating compliance if later reviewed by a regulator.

By following these steps grounded in ss 4-6 of the instrument, a listing body can align operational practice with the instrument’s conditions and reduce the risk of losing the exemption or triggering downstream regulatory exposure.