41 Meaning of regulated offer and of regulated product

(1)

In this Act, regulated offer

(a)

means an offer of financial products to 1 or more investors where the offer to at least 1 of those investors requires disclosure under this Part (regardless of whether or not an exclusion under Schedule 1 applies to an offer to 1 or more other investors); but

(b)

does not include an offer of financial products to 1 or more investors if—

(i)

the only investors who are able, under the terms of the offer, to acquire the products are investors to whom disclosure under this Part is not required; and

(ii)

all of the investors who acquire the products under the offer are investors to whom disclosure under this Part is not required.

Example

ABC Limited makes an offer of its ordinary shares to 100 investors.

Of those investors, 5 are wholesale investors, 15 are relatives of directors of ABC Limited, and 20 are close business associates of ABC Limited. Exclusions under Schedule 1 apply and accordingly the offers to these investors do not require disclosure under this Part.

However, none of the exclusions in Schedule 1 apply to the remaining 60 investors. The offer to each of these investors requires disclosure. This means that a product disclosure statement must be given to each of the 60 investors under section 50 (subject to section 51).

The offer of ABC Limited’s ordinary shares, as a whole, is a regulated offer because at least some of the offers to investors require disclosure.

Some obligations under this Act apply to the regulated offer as a whole. These obligations apply to all of the investors even if the offers to some of those investors do not require disclosure. For example, all money paid for the shares must be held in trust under section 87 (even if the money is paid by a wholesale investor, a relative, or a close business associate), ongoing disclosure under subpart 4 may be required to be made to a wholesale investor, a relative, or a close business associate, and registers of financial products kept under subpart 4 of Part 4 relate to products held by all product holders.

(2)

In this Act, regulated product means—

(a)

a financial product offered under a regulated offer; or

(b)

a managed investment product in a registered scheme (whether or not there has been a regulated offer).