ASIC puts price-tag on scheme and takeover lodgements

In brief

• The Australian Government has introduced new and increased fees for lodging key documents required for the acquisition of Australian entities through takeover bids, trust schemes and schemes of arrangement where the consideration is $10 million or more. The amended fees apply to lodgements occurring between 1 January 2025 and 31 December 2027.
• The value of the consideration payable under a transaction determines the bracket for calculating the fee, similar to how fees for foreign investment applications are calculated. The brackets range from $10 million to greater than $500 million, and fee amounts range in value from $10,000 to $195,000. The fees are not subject to indexation for inflation.
• The fees are said to not be for cost-recovery purposes and only one fee will be payable upon completion of a single transaction. However, the Government has stated that the new fees are estimated to increase receipts by $17.1 million and increase payments by $0.3 million over the 5 years from 2023-24, and therefore increase funding to ASIC.

Background

On 12 December 2024, amendments to the Corporations Regulations to introduce new and increased fees for lodging key documents necessary to implement acquisitions of Australian entities for takeovers, trust schemes and scheme of arrangement received Royal Assent.

The changes, effective from 1 January 2025 to 31 December 2027, are intended to better reflect the market value of, and the cost to Government for providing, the framework facilitating these corporate transactions but are said to not be for cost-recovery purposes.

New fees

The Amending Regulations apply to the following documents lodged under provisions of the Corporations Act 2001:

• Court orders of approval of certain schemes of arrangement (section 411(10));
• constitution amendments for listed registered trust schemes (section 601GC(2)); and
• compulsory acquisition notices related to takeover bids (sections 661B(1)(b) and 662B(1)(b)).

Notably, the new fees only apply to ‘control transactions’ (where a person begins to control a body, or an increase in voting power above 50% or from a starting point above 50%).

The applicable fee bracket is determined by the value of the consideration payable under a transaction, as set out in the table below, adopting a similar model to how foreign investment application fees are calculated. Only one fee is payable upon completion of a single transaction (avoiding scenarios where, for example, multiple fees could become payable if there are multiple schemes of arrangement or where there is a control transaction for stapled securities, which may involve the lodgement of an order of approval for a company and lodgement of a modified or new constitution for a registered scheme). The fees are also not subject to indexation for inflation.

Market participants should calculate the threshold value above based on the consideration payable per security at the time of lodgement. The calculation methodology varies depending on whether the consideration is in cash, listed securities, or unlisted securities.

ASIC has indicated that the new fees are not for cost-recovery purposes and remain distinct from existing fees under its Industry Funding Model. However, the Government has stated that the new fees are estimated to increase receipts by $17.1 million and increase payments by $0.3 million over the 5 years from 2023-24, and to increase funding to ASIC.