Under Chapter 5.18 of the ASX Settlement Operating Rules, issuers may request that ASX place a “FOR” tag on their securities where they are subject to any foreign holder restrictions. If a security is subject to a FOR tag, Participants may identify whether a holder is permitted to hold those securities based on their residency indicator.

The list of financial products subject to a FOR tag (and therefore considered “FOR Financial Products”) is called the “Schedule 1 FOR Financial Products” list and is published by ASX Settlement on the ASX Online website (https://www.asxonline.com/) and updated as required from time to time.

Telstra Corporation Limited is undertaking a scheme of arrangement (Scheme) to finalise a corporate restructure. The Scheme became effective today (20 October 2022). As part of the scheme: 

-          Telstra Group Limited will be listed and its ordinary shares will be quoted on ASX. Telstra Group Limited's listing on ASX is expected to occur following the close of trading today and, assuming that occurs, its ordinary shares will commence trading on a deferred settlement basis on 21 October 2022; and

-          ordinary shares in Telstra Corporation Limited will become wholly-owned by Telstra Group Limited and will cease to be quoted on ASX. Today, being 20 October 2022, is expected to be the last day of trading in Telstra Corporation Limited’s ordinary shares on the ASX.

On implementation of the top-hat component of the Scheme (which is expected to occur on 31 October 2022) Telstra Group Limited will replace Telstra Corporation Limited as the head entity of the Telstra group.

Addition of certain classes of financial products to the list

Subject to Telstra Group Limited’s listing on the ASX following the close of trading today (being 20 October 2022), the following class of financial products will be included in Schedule 1 of the ASX Settlement Operating Rules as a FOR Financial Product effective 21 October 2022. As noted above, this is the date when Telstra Group Limited Shares commence trading on ASX on a deferred settlement basis.

Removal of certain classes of financial products from the list

As noted above, subject to Telstra Group Limited’s listing on the ASX following the close of trading today, ordinary shares in Telstra Corporation Limited will cease trading after close of trading today. On this basis, Telstra Corporation Limited has requested that the class of financial products in the table below be removed from Schedule 1 of the ASX Settlement Operating Rules as a FOR Financial Product.

Issuers and Participants are advised that, subject to Telstra Group Limited’s listing on the ASX following the close of trading today, ASX Settlement will remove the below class of financial products from the list of financial products included in Schedule 1 as “FOR Financial Products” with effect from 27 October 2022, in accordance with ASX Settlement Operating Rule 5.18.9(a).

What do I need to do and by when?

Shares in Telstra Group Limited are subject to aggregate foreign ownership restrictions pursuant to the Telstra Corporation Act 1991 (Cth).  In the context of the ownership of Telstra Group Limited’s ordinary shares, this means that “Foreign Persons” (as defined in the attachment to this Notice) in aggregate cannot have an interest in more than 35% of Telstra Group Limited’s ordinary shares, and that a single foreign person (together with its “Associates”) cannot have an interest in more than 5% of Telstra Group Limited’s ordinary shares.

To ensure that the above foreign ownership restrictions can be monitored, ASX Settlement has agreed:

a)       to classify Telstra Group Limited ordinary shares as FOR Financial Products under the ASX Settlement Operating Rules and to include those shares in Schedule 1 of the ASX Settlement Operating Rules Procedures; and

b)      to implement certain additional procedures as contemplated in Guidance Note 13 of the ASX Settlement Operating Rules (Financial Products subject to Foreign Ownership Restrictions) in relation to ordinary shares in Telstra Group Limited.

Telstra Group Limited, as Issuer of the Telstra Group Limited ordinary shares, has agreed to be bound by the additional obligations of an Issuer of FOR Financial Products under Rule 5.18 of the ASX Settlement Operating Rules.

Consequences of breach of ownership restrictions

If the foreign ownership restrictions referred to above are breached, this may amount to an offence under the Telstra Corporation Act 1991 (Cth). In addition, any Telstra Group Limited ordinary shares acquired in breach of the foreign ownership restrictions may become subject to court-ordered divestment or forfeiture action.

Participants should liaise with clients intending to purchase or hold ordinary shares in Telstra Group Limited and make all necessary enquiries to identify whether those clients are Foreign Persons for the purposes of the Telstra Corporation Act 1991 (Cth) and, if so, to ensure that those clients are made aware of the aggregate foreign ownership restrictions referred to above. Failure to do so may result in client loss.

Mixed Holdings - Notification Requirements

Participants are reminded of their obligations under ASX Settlement Operating Rule 6.9.1 with respect to notification to issuers of beneficial ownership interests of Foreign Persons. Participants should confirm directly with relevant issuers any requirements that they may have with respect to frequency of notification.

Attachment - Definitions of “Foreign Person”, “Foreign Citizen” and “Foreign Company”

Note: the below definitions have been extracted from the Telstra Corporation Act 1991 (Cth). Please see the Telstra Corporation Act 1991 (Cth) for further definitions which may be relevant to this notice.

Associates:

(1)  For the purposes of the ownership provisions, the following persons are associates of a person:

 (a)  a relative of the person;

 (b)  a partner of the person;

 (c)  a company of which the person is an officer;

 (d)  if the person is a company--an officer of the company;

 (e)  an employee or employer of the person;

 (f)  an officer of a company of which the person is an officer;

 (g)  an employee of an individual of whom the person is an employee;

(h)  the trustee of a discretionary trust where the person or another person who is an associate of the person by virtue of another paragraph of this subclause benefits, or is capable (whether by the exercise of a power of appointment or otherwise) of benefiting, under the trust, either directly or through any interposed companies, partnerships or trusts;

(i)  a company whose directors are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the person;

(j)  a company where the person is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the company;

(k)  a company in which the person has, apart from this paragraph, a particular type of stake of not less than 15%;

(l)  if the person is a company--a person who holds, apart from this paragraph, a particular type of stake in the company of not less than 15%;

(m)  a person who is, because of this subclause, an associate of any other person who is an associate of the person (including a person who is an associate of the person by any other application or applications of this paragraph).

(2)  If a person (the first person ) enters, or proposes to enter, into an arrangement with another person (the second person ) that relates to any of the following matters:

(a)  the first person and the second person being in a position, by acting together, to control any of the voting power in a company;

(b)  the power of the first person and the second person, by acting together, to appoint or remove a director of a company;

(c)  the situation where one or more of the directors of a company are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the first person and the second person acting together; then, the second person is taken to be an associate of the first person for the purposes of the application of a provision of the ownership provisions in relation to the matter concerned.

Foreign Person means:

(a) a Foreign Citizen not ordinarily resident in Australia; or

(b) a company where:

(i) a Foreign Citizen not ordinarily resident in Australia; or

(ii) a Foreign Company;

holds a particular type of stake in the company of 15% or more; or

(c) a company where a group of 2 or more persons, each of whom is either:

(i) a Foreign Citizen not ordinarily resident in Australia; or

(ii) a Foreign Company;

holds, in total, a particular type of stake in the company of 40% or more; or

(d) the trustee of a trust estate in which a Foreign Citizen not ordinarily resident in Australia or a foreign company holds a substantial interest; or

(e) the trustee of a trust estate in which 2 or more persons, each of whom is either a Foreign Citizen not ordinarily resident in Australia or a Foreign Company, hold an aggregate substantial interest.

Foreign Citizen means an individual who is not an Australian citizen.

Foreign Company means a company incorporated outside Australia.

Need more information?

Issued by

Anjita Sharma, Equity Operations

Contact information

Anjita Sharma
1800 814 051
chesshelp@asx.com.au

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