ASIC RG 128 — ASIC Regulatory Guide – RG 128 Collective action by investors

Page 1 REGULATORY GUIDE 128 Collective action by investors July 2026 About this guide This guide is for investors who wish to cooperate with each other in relation to their investment in a listed company, listed bodies (other than notified foreign passport funds) or a listed registered scheme. It provides guidance to promote investor engagement on corporate governance issues. It also identifies circumstances where acting together may lead to investors becoming associates or entering into a relevant agreement for the purposes of the takeover and substantial holding provisions of the Corporations Act. Page 2 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 2 About ASIC regulatory documents In administering legislation ASIC issues the following types of regulatory documents. Consultation papers: seek feedback from stakeholders on matters ASIC is considering, such as proposed relief or proposed regulatory guidance. Regulatory guides: give guidance to regulated entities by:  explaining when and how ASIC will exercise specific powers under legislation (primarily the Corporations Act)  explaining how ASIC interprets the law  describing the principles underlying ASIC’s approach  giving practical guidance (e.g. describing the steps of a process such as applying for a licence or giving practical examples of how regulated entities may decide to meet their obligations). Information sheets: provide concise guidance on a specific process or compliance issue or an overview of detailed guidance. Reports: describe ASIC compliance or relief activity or the results of a research project. Document history This guide was issued in July 2026 and is based on legislation and regulations as at the date of issue. Previous versions:  Superseded Regulatory Guide 128, issued June 2015  Superseded Policy Statement 128, issued January 1998, reissued July 1998 and rebadged as a regulatory guide 5 July 2007. Disclaimer This guide does not constitute legal advice. We encourage you to seek your own professional advice to find out how the Corporations Act and other applicable laws apply to you, as it is your responsibility to determine your obligations. Examples in this guide are purely for illustration; they are not exhaustive and are not intended to impose or imply particular rules or requirements. Page 3 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 3 Contents A Overview ........................................................................................... 4 Balancing the benefits of engagement against the risk of inappropriate acquisition of control .................................................... 4 Purpose of this guide ......................................................................... 5 Scope of this guide ............................................................................ 6 B Permissible and prohibited conduct ............................................. 7 The takeover and substantial holding provisions............................... 7 Collective action conduct ................................................................. 11 Consequences of problematic collective action............................... 14 Relief ................................................................................................ 17 C Additional legal considerations ................................................... 18 Issues for investors to consider ....................................................... 18 Issues for entities to consider .......................................................... 19 Key terms ............................................................................................... 21 Related information ............................................................................... 22 Page 4 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 4 A Overview Key points Effective investor engagement can enhance corporate governance and the long-term performance and corporate value of a listed entity. In some instances, the Corporations Act 2001 (Corporations Act) can present obstacles to investors cooperating, as engagement of this kind may require lodgement of substantial holding notices or result in a breach of the takeover provisions of the Corporations Act. Section B of this guide provides guidance on the likely legal effect of different types of collective action by investors and whether these may constitute unacceptable circumstances. It also provides guidance on our approach to enforcement of the takeover and substantial holding provisions in the context of investor engagement. Section C of this guide identifies some other legal issues that investors and entities need to consider in relation to investor engagement. Balancing the benefits of engagement against the risk of inappropriate acquisition of control RG 128.1 A fundamental principle of corporate governance is that investors should be able to hold the board—and, through the board, management—to account for the entity’s performance. To do so, investors need to engage with the entity. RG 128.2 Investor engagement can take many different forms and investors may wish to engage with entities in a variety of ways, either individually or collectively. We recognise that investors should be allowed to cooperate and coordinate their actions concerning an entity in which they have invested, in the interests of promoting long-term value for all investors. At times, this type of engagement can be more effective and efficient than individual investor engagement. RG 128.3 However, there is a difference between investors expressing views and promoting appropriate discipline in entity decision making and investors effectively taking control of entity decision making. Regulatory support for collective action by investors must recognise that the takeover and substantial holding provisions place limits on cooperation between investors to avoid control over an entity being acquired inappropriately. Page 5 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 5 Takeover and substantial holding provisions RG 128.4 We recognise the importance of the underlying purposes of the takeover and substantial holding provisions, as set out in s602 of the Corporations Act. The aims of these provisions include, in broad terms, ensuring: (a) transparency to the market about those persons who control an entity; and (b) that all investors are provided with equal opportunities to consider and benefit from control proposals. Note: In this guide, references to chapters (Chs), parts (Pts) or sections (s) are to the Corporations Act (as notionally modified by ASIC relief, where relevant), unless otherwise specified. RG 128.5 Investors acting collectively to surreptitiously obtain a substantial stake in or illegitimately obtain control over an entity can negatively affect the entity and the position of other investors in the entity. RG 128.6 Investors concerned about common issues may become ‘associates’ or be regarded as having entered into a ‘relevant agreement’ for the purposes of the takeover or substantial holding provisions. This is because these provisions are not only concerned with the power of individual investors in relation to the voting and disposal of shares in companies or interests in registered schemes, but also the aggregated voting power of groups of investors who are either related or associated with each other in relation to some aspect of the entity’s affairs. RG 128.7 Depending on the aggregated voting power of the group, investors acting collectively in this way may be required to lodge substantial holding notices relating to the group, may be prohibited from acquiring further interests in the entity under the takeover prohibition in s606 or may even breach the takeover provisions. Purpose of this guide RG 128.8 The purpose of this guide is to provide guidance on how the takeover and substantial holding provisions apply to collective action by investors and to provide more clarity on when we will consider that collective action may constitute unacceptable circumstances despite not contravening those provisions. RG 128.9 Our aims in providing this guidance are to: (a) encourage collective action by investors that can promote corporate governance improvements for the long-term benefit of an entity and its investors. Many forms of this action may occur without giving rise to any contravention of the Corporations Act or other unacceptable circumstances; and Page 6 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 6 (b) deter investors from undertaking collective action that is not consistent with the letter or spirit of the takeover and substantial holding provisions. At its worst, the conduct may amount to the passing of control in circumstances where those investors not engaged in the conduct are uninformed about this passing of control and are not given any opportunity to obtain benefits that might need to be paid if control were to pass legitimately. RG 128.10 While our guidance aims to reduce uncertainty about the position of investors when acting collectively, the circumstances of each case need to be considered individually and there may be other relevant factors that trigger the takeover and substantial holding provisions. Scope of this guide RG 128.11 This guidance is focused on investor engagement with listed companies, particular listed bodies and listed registered schemes, in relation to which the takeover and substantial holding provisions will apply. The guidance may have some more limited relevance to engagement in relation to unlisted companies with more than 50 members, but the substantial holding provisions will not apply to these companies. Page 7 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 7 B Permissible and prohibited conduct Key points This section provides guidance on how the takeover and substantial holding provisions apply to collective action. It also provides practical guidance to understand our approach to when certain conduct may raise concerns in relation to compliance with those provisions or otherwise gives rise to unacceptable circumstances. We have included illustrative examples of activities that are unlikely or more likely to trigger the provisions. This section also: • discusses the consequences of triggering the takeover and substantial holding provisions or undertaking conduct amounting to unacceptable circumstances; • sets out the factors we will consider when deciding whether to review conduct and take enforcement action; and • discusses the circumstances in which we might consider giving relief from the law to allow investors to engage in collective action that would otherwise be prohibited. The takeover and substantial holding provisions RG 128.12 The takeover and substantial holding provisions are triggered when the following thresholds are met: (a) the 5% substantial holding threshold—after which a person must provide substantial holding notices relating to movements above or below the threshold, and any change of 1% or more in their substantial holding (Pt 6C.1); and (b) the 20% takeover threshold—after which acquisitions and offers to acquire relevant interests in voting shares or interests are only permitted through certain transactions or in certain circumstances (Ch 6). RG 128.13 The thresholds are made up of a person’s relevant interest in voting shares or interests, combined with that of any of their associates. The deemed economic interest that a person or their associate has in voting shares or interests may also contribute towards the substantial holding threshold. This is the case if the person would have a substantial holding if they or their associate had a relevant interest in the number of voting shares or interests: see s671D. RG 128.14 The thresholds for both the takeover and substantial holding provisions involve similar calculations incorporating two essential elements: Page 8 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 8 (a) accounting for the votes attached to voting shares or interests in which a person has a relevant interest; and (b) the aggregation of the relevant interests in voting shares or interests of a person and their associates. As noted in RG 128.13, the threshold for the substantial holding provisions also accounts for the votes attached to voting shares or interests in which a person, or their associate, has a deemed economic interest. RG 128.15 The concepts of a person’s relevant interest and deemed economic interest revolve around control over voting and disposal of shares or interests. Because the concepts are concerned with a person’s capacity to exercise a degree of influence over securities, they encompass connections wider than ownership. As such, a number of people may have a relevant interest or deemed economic interest in the same securities in a variety of different capacities. Note: See Regulatory Guide 5 Relevant interests and deemed economic interests (RG 5) for a discussion on when relevant interests and deemed economic interests may arise. RG 128.16 Depending on the form and circumstances, collective action by investors can result in the investors acquiring a relevant interest or deemed economic interest in the shares or interests held by the other investors. For instance, investors might undertake to each other that they will vote a particular way in relation to a particular resolution. Investors may also undertake to each other that they will not dispose of their shares or interests, including shares or interests arising from an equity derivative, until a particular issue about an entity’s performance is resolved. RG 128.17 Even where a particular kind of investor engagement does not result in the investors acquiring a relevant interest or deemed economic interest in each other’s securities, the engagement may still be relevant for the purposes of the takeover or substantial holding provisions. This will most commonly be the case where the investors’ collective actions do not involve any arrangement regarding the voting or disposal of shares or interests but nonetheless results in one or more investors becoming associates. RG 128.18 An investor can become an associate of another investor under s12(2) if they propose to: (a) enter into, or have already entered into, a relevant agreement with the other investor for the purpose of controlling or influencing the composition of the entity’s board or the conduct of the entity’s affairs (s12(2)(b)); or (b) act, or are acting, in concert in relation to the entity’s affairs (s12(2)(c)). Page 9 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 9 RG 128.19 An association may arise from a relevant agreement or concerted action relating to matters set out in s53, which include the broad variety of an entity’s affairs. Therefore, it is possible for the takeover or substantial holding provisions to apply to collective action by investors relating to a range of corporate governance matters, which is not necessarily being undertaken for a control purpose. RG 128.20 It can sometimes be important when analysing the legal position to understand that a person does not automatically have a relevant interest or deemed economic interest in all the shares or interests in which an associate has a relevant interest or deemed economic interest. RG 128.21 Detailed guidance in relation to the concepts of ‘relevant interest’, ‘deemed economic interest’ and ‘associates’ is provided in RG 5: see, in particular, our guidance in Sections B, C and E. Substantial holding provisions RG 128.22 A person has a substantial holding if they and their associates have relevant interests in voting shares or interests carrying 5% or more of the total votes attached to all voting shares or interests of a listed entity. This definition includes relevant interests disregarded under s609(6) (market traded options), s609(7) (conditional agreements) and s609B (securities subject to escrow agreement in connection with initial public offer etc.): see the definition of ‘substantial holding’ in s9 and Table 4 in RG 5. Note: A person also has a substantial holding if they or their associate has a deemed economic interest in a number of voting shares or interests that would be a substantial holding if the person or their associate had a relevant interest in that number and in any securities in which they actually have a relevant interest: see s671D. RG 128.23 A person must lodge a substantial holding notice under Pt 6C.1 if they: (a) begin to have, or cease to have, a substantial holding in a listed entity; (b) have a substantial holding in an entity at the time the entity is listed on a declared financial market; (c) have a substantial holding in a listed entity and there is a disclosable movement in their holding; or (d) make a takeover bid for securities of the listed entity: see s671B. Note: For the definition of ‘disclosable movement’, see s671BK. RG 128.24 In assessing what level of substantial holding an investor has at any point, it is important to consider whether any collective action may have caused another person to be their associate, with the result that the other person’s relevant interests or deemed economic interests must also be counted. Page 10 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 10 RG 128.25 The substantial holding provisions require disclosure of the identity of the associate and, if the association arises as a result of a relevant agreement, details of the relevant agreement: see s671BB(1)(d). RG 128.26 The substantial holding notice obligations do not prevent investors in a listed entity acting collectively. Rather, the obligations ensure that in some cases the investors will be obliged to disclose their cooperation to the market. Takeover prohibition RG 128.27 The takeover prohibition in s606 will be contravened if an investor acquires a relevant interest in issued voting shares or interests through a transaction in relation to securities so that it or another person’s voting power in an entity increases: (a) from 20% or below to more than 20%; or (b) from a starting point above 20% and below 90%: see s606(1)–(2). A person’s voting power is the aggregate of the votes attached to the shares or interests in which the person and associates of the person have a relevant interest. RG 128.28 In determining whether this provision may be breached, an investor needs to be aware of whether the collective action the investor proposes to undertake will result in any investors: (a) acquiring a relevant interest in the shares or interest of another investor or any other person; and/or (b) becoming associates of any other investors or any other person. RG 128.29 The takeover prohibition does not prohibit collective action occurring when: (a) the investors are not associates and have not acquired a relevant interest as a result of their engagement and interaction; (b) the collective action does not involve the acquisition of a relevant interest because it is conduct that is subject to a specific exclusion under the Corporations Act (e.g. being appointed as proxy within the terms of s609(5) or entering into conditional agreement within the terms of s609(7)); Note: Substantial holding notice disclosure must be made as if the relevant interests acquired through the conditional agreement are not disregarded: see s671E. There may of course be other circumstances applicable that mean a relevant interest arises despite the specific exclusion. (c) the aggregate voting power of the investors involved in the collective action is less than 20%; or Page 11 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 11 (d) despite the aggregate voting power of the investors being more than 20%, no transaction in relation to securities has been entered into, and no legal or equitable interest in securities has been acquired, that increases a person’s relevant interest (even if one or more of the investors have otherwise become associates). Note: The Corporations Act definition of ‘enter into’ is broadly defined and can include entering into a relevant agreement in relation to the securities: see s9. The prohibition in s606(2) also requires the acquisition of a relevant interest in voting shares (or interests), but not necessarily through a transaction. RG 128.30 It is important to then consider whether the collective action will affect the ability of investors to engage in transactions involving the acquisition of relevant interests in the future. For instance, if an investor’s situation is as described in RG 128.29(d), it may not be possible for them to acquire more shares or interests in the entity as a result of the takeover prohibition applying in the future. Collective action conduct RG 128.31 There are a number of collective activities by investors that provide a means of effectively engaging with an entity but that do not result in an investor acquiring a relevant interest in someone else’s shares or interests, nor result in an associate relationship. We recognise the value of these activities in promoting good corporate governance in Australian entities. RG 128.32 While in some instances it can be clear whether conduct falls within or outside the scope of the legal provisions, the nature of concepts like ‘relevant agreement’ and ‘associate’ means there can be uncertainty about their application to a range of conduct. RG 128.33 We have provided some illustrative examples of conduct where collective action is unlikely (Table 1) or more likely (Table 2) to constitute entry into a relevant agreement resulting in the acquisition of a relevant interest or triggering an associate relationship. These examples are illustrative only. The circumstances of each case need to be considered individually. There may be other relevant factors that trigger the takeover or substantial holding provisions. RG 128.34 In addition, when regulating the takeover provisions we also need to consider the possibility that unacceptable circumstances may exist: see s657A and Takeovers Panel Guidance Note 1 Unacceptable circumstances (GN 1). Table 1 and Table 2 also note whether the conduct may give rise to unacceptable circumstances. Page 12 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 12 RG 128.35 To the extent that it is ambiguous whether particular conduct is caught by the takeover and substantial holding provisions or conduct is outside these provisions, our attitude to whether unacceptable circumstances exist and enforcement action is warranted will depend on whether it appears that the conduct has a control purpose and effect, rather than simply promoting good corporate governance: see RG 128.36–RG 128.42. Table 1: Conduct unlikely to constitute acting as associates or entering into a relevant agreement giving rise to a relevant interest Type of conduct Explanation and analysis of issues Investors:  holding discussions or meetings about voting at a specific or proposed meeting of an entity;  discussing issues about the entity, including problems and potential solutions;  discussing possible matters to be raised with the entity’s board;  discussing and exchanging views on a resolution to be voted on at a meeting; or  disclosing individual voting intentions on a resolution. If the conduct is confined to the exchange of views or information between the investors, this is unlikely to give rise to an association, involve entering into a relevant agreement, or give rise to unacceptable circumstances, as each investor is not bound to act in a certain way and retains its own discretion in terms of approach to an issue. If the conduct extends to the formulation of joint proposals to be pursued together, or if there is an understanding that the investors will act or vote in a particular way, then concerns may arise. Investors recommending that another investor votes in a particular way. This is unlikely to make the investors associates or constitute entering into a relevant agreement giving rise to a relevant interest if no undertaking or agreement to follow the recommendation or act in a particular way is obtained. Note: This type of conduct may have the benefit of the associate exclusions set out in s16 (if one entity is providing advice in a professional capacity to another entity). The conduct is unlikely to give rise to unacceptable circumstances. Page 13 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 13 Type of conduct Explanation and analysis of issues Investors making representations to the company’s board about the company’s policies or practices or particular actions that the company might consider taking. If the conduct comprises merely raising the same general issues of concern raised by other shareholders—either in one-on-one or joint meetings with the company—in order to understand the company’s position and discuss alternative viewpoints, then this is unlikely to result in the investors being associates. These general issues may range from corporate governance issues to long-term strategic or commercial risks facing the company. For instance, dialogue in relation to:  some aspect of executive remuneration, such as the structure of the company’s incentive schemes; or  forward-looking or long-term strategic matters about how the entity is positioning itself for the future, taking into account the specific large-scale risks and trends that are affecting the future of the industry in which the entity operates. This conduct is also unlikely to give rise to unacceptable circumstances, particularly if focused on governance issues. However, if this forms part of pursuing agreed joint proposals about the company (or it is suggested) that joint proposals will be pursued if the company does not give a satisfactory response, then this may suggest that the investors are associates. If accompanied by overt threats of some form of collective or coordinated exercise of rights attached to shares, it can raise concerns that the investors have acquired relevant interests in each other’s shares via a relevant agreement. Making the same representations to the company’s board about a control transaction proposed by one of the investors, or about particular transactions that the investors may benefit from over and above any benefit to shareholders generally, may in particular give rise to concerns that unacceptable circumstances exist. Note: These examples are unlikely to give rise to an association or involve entering into a relevant agreement giving rise to a relevant interest only if the conduct is confined to the actions in the examples and does not go any further. Page 14 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 14 Table 2: Conduct more likely to constitute acting as associates or entering into a relevant agreement giving rise to a relevant interest Type of conduct Explanation and analysis of issues Investors jointly signing with other investors:  a s249D notice (or s252B notice in the case of registered schemes) to requisition a general meeting of an entity for the purposes of putting forward a resolution relating to the composition of the board or the entity’s affairs; or  a s249N notice (or s252L notice in the case of registered schemes) to request a resolution relating to the composition of the board or for the entity’s affairs be considered at a general meeting of the entity. Jointly signing a s249D or s249N notice (or a s252B or s252L notice in the case of registered schemes) in these circumstances is likely to be considered entering into a relevant agreement and for these investors to be considered associates. If this is accompanied by an understanding about the exercise of voting rights, it will also result in the acquisition of a relevant interest. We expect that this would be the case in most instances. We expect that it would be rare for a person to elect to publicly sign a notice requisitioning a resolution without having formed any understanding with their co-signatories as to voting. In these cases, signing a s249D, s249N, s252B or s252L notice will likely give rise to an association, but may not result in an acquisition of a relevant interest. Concerns that unacceptable circumstances could exist may arise where the subject matter of the resolution:  is the proposed removal of directors to be replaced with new directors who are aligned with the requisitioning investors (i.e. the purpose of the resolution is to facilitate the investors pursuing their plans for the company); or  seeks approval of a transaction (such as a selective buy-back) on unduly favourable or on non-commercial terms, or a transaction that has an effect on the ‘control’ of the company. Investors formulating joint proposals relating to board appointments or a strategic issue. This conduct is likely to indicate that there is an understanding between the investors on a particular matter relating to the affairs of the company, which amounts to a relevant agreement or acting in concert and these investors being considered associates. Investors:  accepting an inducement to vote or act in a specific way;  agreeing on a plan concerning voting; or  limiting their freedom to vote (e.g. by granting another investor their irrevocable proxy). This conduct is likely to constitute entering into a relevant agreement and for these investors to be considered associates. In addition, it may give a person control over the votes attached to shares or interests, resulting in the acquisition of a relevant interest by that person. Consequences of problematic collective action RG 128.36 In some circumstances, collective action conducted by investors will result in the acquisition of a relevant interest or an associate relationship. The consequences of this will depend on whether there has been a transaction (or acquisition of legal or equitable interest) and what the resulting level of voting power is: see RG 128.28–RG 128.29. Where the resulting voting power of a person or group is 5% or more, but no more than 20%, and the Page 15 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 15 collective action results in the acquisition of relevant interest or the formation of an association, the Corporations Act will require only disclosure of information. The takeover prohibition potentially applies only if the voting power of a person or group increases above 20%. RG 128.37 We will consider enforcement action against investors who act collectively in breach of the takeover and substantial holding provisions. If investors act contrary to the underlying principles of Ch 6, we are likely to consider that unacceptable circumstances have occurred and may refer the matter to the Takeovers Panel. RG 128.38 We are likely to look more closely at potential collective action that has the characteristics set out in Table 3. Table 3: Conduct that may attract ASIC scrutiny Control transaction This conduct involves an actual or proposed control transaction, being either a takeover bid or a transaction of the kind listed in s611. It is more likely in these circumstances that the collective action is being undertaken to acquire or maintain control of the entity. Note: For further guidance regarding joint bids, see Section M of Regulatory Guide 9 Takeover bids (RG 9). Board control This conduct involves the replacement of directors of a company and other circumstances involving directing the exercise of the board’s power. Particularly in circumstances where the proposed directors have a connection with the investors who may be engaged in collective action, board control activity can be used as a pathway to control over the entity and more traditional control transactions. It can also be used to exert illegitimate undisclosed control by using threats to the position of existing board members to persuade an entity’s board to make decisions. We will be particularly concerned by collective action that seeks to change the composition of the board for the purpose of facilitating the investors proposing the change pursuing their plans for the company. Benefits to some investors only This conduct concerns proposals that have benefits for particular investors rather than investors as a whole. Some of the potential for cooperative investor engagement to increase the long- term value for all investors will not be realised if only particular investor interests are served. Generally, entities are cautious about benefiting particular investors only and investors seeking to obtain these benefits may be more likely to engage in behaviour to acquire control of, rather than simply make representations about, entity decision making. Proposals to give investors veto rights (greater than those carried by the level of their holding) over the entity engaging in particular types of conduct (e.g. equity fundraising proposals) may be one example of this kind of benefit. Page 16 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 16 Pattern of collective action The investors involved have a history of collective action in relation to this entity or other entities that suggest that they act in concert for control purposes. As finding associations often depends on inferences from circumstances, it is important to consider the broader history of investors who may be acting collectively. If there is a long history of investors pursuing joint proposals, it is more likely that the particular issue where the views of these investors are aligned is not a common approach to one matter but part of a broader arrangement about controlling the entity. This kind of history may also mean that it is easier to imply to the entity that the voting influence of each will be combined. RG 128.39 In contrast, we are less likely to closely examine collective action that satisfies all the following criteria: (a) the subject matter of the collective action relates solely to: (i) the improvement of the entity’s corporate governance; or (ii) issues that can properly be determined at a general meeting; (b) the collective action is temporary and purely related to the resolution of that issue; and (c) the collective action is not concerned with the acquisition of a substantial interest or the exercise of control, and there is no ongoing undisclosed association between the investors involved. RG 128.40 Examples of matters that relate solely to the improvement of the entity’s corporate governance may include encouraging: (a) better disclosure to the market, including ensuring information communicated through investor briefings is as widely available as possible; (b) more comprehensive board evaluation processes; (c) more sophisticated risk management systems; (d) improved sustainability or corporate social responsibility reporting; and (e) changes to executive remuneration structures. RG 128.41 We may take action where investors fail to lodge substantial holding notices when they are required to do so under the Corporations Act or where the disclosure in the substantial holding notice is inadequate: see Regulatory Guide 222 Substantial holding disclosure and tracing requirements (RG 222) for further guidance in relation to substantial holding notices. RG 128.42 See Section C for other legal considerations under the Corporations Act that can also arise in relation to collective actions. Page 17 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 17 Relief RG 128.43 We are prepared to give relief in circumstances where the collective action proposed is clearly caught by the takeover provisions, yet the nature of it is not concerned with the acquisition of a substantial interest or control over the entity. To the extent we are prepared to grant relief, we will be more likely to facilitate short-term, specific arrangements that do not include the provision of consideration. These arrangements more closely resemble the exception to the relevant interest provisions for proxies. RG 128.44 We will generally be reluctant to provide relief simply because there is some residual uncertainty about the legal position of collective action. The exhaustive analysis of the facts required in such cases, and the need to cast relief by reference to these facts, is unlikely to result in timely or useful relief. RG 128.45 In addition, any relief that we are prepared to give will generally require disclosure to the market. Given the emphasis in the Corporations Act on disclosure of substantial holdings and control transactions, we consider that in most cases the benefits of disclosure to the market outweigh the burden on the parties involved in making the disclosure. Page 18 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 18 C Additional legal considerations Key points This section identifies several other important legal considerations for investors and entities involved in investor engagement. These include: • the prohibition on insider trading; • shadow directors; • directors’ duties; • misleading and deceptive conduct; and • handling confidential information. Issues for investors to consider Insider trading RG 128.46 An investor that has entered into a voting agreement or discussions with other investors or with the entity may be in possession of inside information. For example, the mere existence of a voting agreement or the occurrence of these discussions may be price-sensitive information. RG 128.47 Persons possessing information that is price sensitive and not generally available to the market must not trade for as long as those circumstances apply. Otherwise they could contravene the insider trading prohibition in s1043A if they apply for, acquire, or dispose of shares or interests (or enter into an agreement to do so), or procure another person to apply for, acquire, or dispose of shares or interests (or enter into an agreement to do so), after entering into a relevant agreement without informing the market that an agreement exists: see s1043A and the definition of ‘inside information’ in s1042A(1). The exceptions in s1043H–1043J (exception for knowledge of person’s own intentions or activities) are unlikely to apply in these circumstances. Shadow directors RG 128.48 Investors should be mindful of whether their actions result in them effectively managing the entity. If they do, investors may be acting as shadow directors. RG 128.49 The definition of ‘director’ in s9AC of the Corporations Act covers both appointed directors and shadow directors—that is, it includes persons who have not been appointed directors but: (a) who act in the position of a director; or Page 19 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 19 (b) whose wishes or instructions the directors of the company or body are accustomed to act in accordance with. As it is possible for the concept of a shadow director to extend beyond natural persons, investors should be conscious of whether their actions could constitute a shadow directorship. Liability for directors’ duties imposed by the Corporations Act extends to shadow directors. Misleading and deceptive conduct RG 128.50 Some instances of investor engagement, including collective statements, occur through statements made by investors publicly, including in the media. When making public statements, investors should be careful that the statements are not misleading or deceptive: see s1041H of the Corporations Act and s12DA of the Australian Securities and Investments Commission Act 2001 (ASIC Act). Issues for entities to consider Best interests duty RG 128.51 While we recognise the benefits of directors engaging with investors, directors have a duty to act in the best interests of the company: see s181(1). That is, directors have a duty to act in the best interests of the company as a whole, as opposed to the interest of any individual investor or collection of investors. RG 128.52 The responsible entity of a registered scheme, and its officers, also have a duty to act in the best interests of members: see s601FC(1)(c) and 601FD(1)(c), respectively. Duty to act for a proper purpose RG 128.53 Directors have a duty to act for a proper purpose: see s181(1)(b). That is, directors must use their powers for their intended purpose, not a collateral purpose. A collateral purpose may include where a director uses their powers or corporate funds to advance personal interests in responding to an approach by an investor. RG 128.54 In election and proxy solicitation cases, which may have commenced because of collective action by investors, directors may be exceeding or abusing their powers where they: (a) expend an unreasonable sum of the entity’s money; (b) expend corporate funds on material relevant only to questions of personality and not corporate policy; or Page 20 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 20 (c) otherwise act in a manner that is excessive or unfair in the circumstances, given the corporate purpose to be attained. Confidential information RG 128.55 Engagement with investors should not be viewed as a way in which those investors can gain price-sensitive information additional to that already disclosed to the market as a whole. This type of engagement should instead focus on investors providing the listed entity with feedback regarding previously disclosed information or discussion of information that is clearly not price sensitive. RG 128.56 While we recognise it is important that listed entities actively engage with their investors, these entities should be careful that they are not selectively disclosing confidential, price-sensitive information when doing so. This could constitute a breach of the entity’s continuous disclosure obligations under the ASX Listing Rules and the Corporations Act, and creates the risk of insider trading. Note: See Handling corporate information on the ASIC website for more information and resources about handling confidential information. Misleading and deceptive conduct RG 128.57 As noted at RG 128.50, some instances of investor engagement occur through statements made by investors publicly, including in the media. Companies should be careful when making public statements in response to investor communications to the market that the statements are not misleading or deceptive: see s1041H of the Corporations Act and s12DA of the ASIC Act. Note: Regulatory Guide 25 Takeovers: False and misleading statements (RG 25) provides guidance to market participants (bidders, targets and substantial holders) in relation to making public statements during takeover bids. Page 21 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 21 Key terms Term Meaning in this document ASIC Australian Securities and Investments Commission ASIC Act Australian Securities and Investments Commission Act 2001 associates Has the meaning given in s10–17 of the Corporations Act Ch 6 (for example) A Chapter of the Corporations Act (in this example numbered 6) Corporations Act Corporations Act 2001, including regulations made for the purposes of that Act declared financial market Has the meaning given in s9D(1) of the Corporations Act. Until the first declaration is made under s9D(2), a market that was prescribed as a prescribed financial market by former reg 1.0.02A of the Corporations Regulations is taken to be a declared financial market: see s1705F Note: References to ‘prescribed financial market’ or ‘prescribed financial markets’ in any ASIC instrument should be read as ‘declared financial market’ or ‘declared financial markets’: see s1705G deemed economic interest Has the meaning given in Div 2 of Pt 6C.1A of the Corporations Act Pt 6C.1 (for example) A Part of the Corporations Act (in this example numbered 6C.1) registered scheme A managed investment scheme that is registered under s601EB of the Corporations Act relevant interest Has the meaning given by s9 of the Corporations Act REP 393 (for example) An ASIC report (in this example numbered 393) RG 9 (for example) An ASIC regulatory guide (in this example numbered 9) s602 (for example) A section of the Corporations Act (in this example numbered 602) substantial holding Has the meaning given in s9 of the Corporations Act voting power Has the meaning given in s610 of the Corporations Act Page 22 REGULATORY GUIDE 128: Collective action by investors © Australian Securities and Investments Commission July 2026 Page 22 Related information Headnotes associates, collective action, corporate governance, investor engagement, investors, listed body, listed company, listed registered scheme, relevant agreement, relevant interest, substantial holding, takeover, unacceptable circumstances, voting agreement Regulatory guides RG 5 Relevant interests and deemed economic interests RG 9 Takeover bids RG 25 Takeovers: False and misleading statements RG 222 Substantial holding disclosure and tracing requirements Legislation Australian Securities and Investments Commission Act 2001, s12DA Corporations Act 2001, Ch 6; Pt 6C.1; s9, 12, 16, 53, 64, 181, 249D, 249N, 252B, 252L, 601FC, 601FD, 602, 606, 609, 609, 609, 611, 657A, 671B, 671D, 671BB, 1041H, 1042A, 1043A, 1043H–1043J Other documents ASX Listing Rules GN 1 Unacceptable circumstances