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ASC issues new guidance on substantial holding disclosure for securities lending

The Australian Securities and Investments Commission has released new regulatory guidance and relief aimed at achieving better disclosure by parties that are engaging in securities lending of substantial holdings in listed entities.

The guidance is contained in Regulatory Guide 222 Substantial holding disclosure: securities lending and prime broking (RG 222) and the relief is contained in Class Order [CO 11/272].

ASIC has also released Report 235 Response to submissions on CP 107: Securities lending and substantial holding disclosure (REP 235), which summarises consultations with industry leading to the new regulatory guidance.

Under the new guidance, ASIC sets out its expectations as to how:
parties involved in securities lending (including securities lenders and borrowers) will disclose substantial holdings in listed entities (interest of 5% or more); and prime brokers – who may have on-going borrowing agreements with their clients – will disclose substantial holdings

Further, ASIC has set out its expectations of the content of substantial holding notices that parties engaged in securities lending will have to provide, and relief that ASIC has granted in [CO 11/272] to simplify the content of those notices and better align timing of disclosures to changes in control over securities.

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