FUND RAISING AND THE PROSPECTUS

Abstract

Corporate regulation of fund raising has increased steadily since the 1960s, especially since the Corporations Law commenced in 1991. As a result of the Corporations Law and of amendments to the Listing Rules of Australian Stock Exchange Limited, it is now more complex and costly to raise funds for exploration.

The fund raising concept of `offer to the public' has been replaced with a general prohibition on the offering of securities, subject to certain exceptions which are inconsistent in their application and limited in their usefulness.

Although the ASC's objective was to obtain uniformity of administration and implementation of the Corporations Law, in the authors' opinion, it has failed to do so and, in addition, has demonstrated a wholly uncommercial and impractical approach to registration and post-vetting of prospectuses.

A further impediment to fund raising is the ASX Listing Rule requiring a spread of 500 shareholders, each of which must hold a parcel of shares worth at least $2 000, before admission to the Official List may be granted.