Reminder: is your cleansing notice compliant with the Corporations Act?

We have observed in the market that some listed companies are continuing to use outdated templates to prepare their cleansing notices, making them technically non-compliant with the Corporations Act 2001 (Cth) (Corporations Act).

On 13 August 2021, the Treasury Laws Amendment (2021 Measures No. 1) Act 2021 (Cth) (Amendment Act) commenced, introducing a fault element for civil penalty proceedings for breaches of continuous disclosure obligations (primarily by way of amendment to section 674 of the Corporations Act and the addition of a new section 674A). This resulted in consequential amendments to the technical requirements for cleansing notices under the relevant sections of the Corporations Act, namely, the requirement to confirm compliance with the new section 674A.

For example, for cleansing notices issued under section 708A of the Corporations Act, it now states that:

(6) A notice complies with this subsection if the notice:
…

 (d) states that, as at the date of the notice, the body has complied with:

                        (i) the provisions of Chapter 2M as they apply to the body; and

                        (i) sections 674 and 674A; (underlining added)
…

While this is a minor change, some companies are still overlooking it, even in their recent cleansing notices. We recommend double checking all notices to ensure they strictly comply with the requirements of the Corporations Act, otherwise you risk issuing a defective cleansing notice.

For more information about cleansing notices and what to do if yours is defective, check out our podcast on the ECM Exchange.