The Corporations Legislation Amendment (Simpler Regulatory System) Act 2007,
allows listed entities to conduct a rights issue without a prospectus
or product disclosure statement (PDS) disclosure.

ASIC has now released a consultation paper (pdf) seeking
comments on its proposal to widen the disclosure exemption for rights
issues to cover non-traditional features developed by issuers and their
advisers to raise capital more effectively.

ASIC’s proposal would extend the disclosure
exemption to rights issues that allow accelerated institutional
participation and other deviations from the ‘vanilla’ rights issue
format, provided there is, in substance, an equality of opportunity to
participate for all holders.

The exemption is
intended to benefit retail holders by encouraging listed entities to
use rights issues, rather than other forms of fundraising that exclude
retail participation (e.g. placements). 

For technical reasons, some rights issues would not
qualify for the disclosure exemption without ASIC relief and ASIC has
therefore proposed the widening of the exemption.

ASIC invites comments on the consultation paper by Wednesday 7 November 2007.