Proposed Legislative Changes Affecting Your Company - Part 2

Effect of the Proposed Changes

Will the proposed amendments under the SRS Bill materially affect the regulatory burden associated with a rights issue offering?

At face value, the removal of the requirement to lodge prospectus would seem to substantially lessen the regulatory hurdles on a company, and thereby cost, of raising capital in this manner. However, it appears that there would be risk in companies taking this view and simply preparing offer documentation and issuing the cleansing notice without undertaking the necessary due diligence cross checks, to ensure that the negative assurances provided in the cleansing notice are in fact accurate as at that date.