The Australian Securities and Investments Commission (ASIC) and
the Australian Securities Exchange (ASX) have recently announced
changes to the rules governing partly-paid securities. This follows
retail investors exposing themselves to huge liabilities after
purchasing instalment receipts in BrisConnections.
BACKGROUND
In the BrisConnections case, investors were offered partly-paid
stapled units for AU$1 each in connection with the initial public
offering of BrisConnections in July 2008. Each partly-paid unit
came with an additional obligation to pay two future instalments on
those securities to the value of AU$2. The price of the party-paid
unit has subsequently dropped to AU$0.001 and shareholders have
been left with substantial liabilities to pay further installments
on virtually valueless securities. Certain retail investors who
acquired the partly-paid units are now claiming that the additional
liability to pay installments was not adequately disclosed to
