ASIC RG 5 — ASIC Regulatory Guide – RG 5 Relevant interests and deemed economic interests

Page 1 REGULATORY GUIDE 5 Relevant interests and deemed economic interests July 2026 About this guide This guide is for investors who acquire an interest in the securities of a listed entity, and their advisers. It:  discusses the concept of a ‘relevant interest’ and various issues a person must consider in determining whether they have a relevant interest in securities under the Corporations Act;  discusses the concept of a ‘deemed economic interest’; and  outlines ASIC’s legislative instrument modifications to the relevant interest and deemed economic interest provisions. Page 2 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © 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 Previous versions:  Superseded Regulatory Guide 5, issued June 2013, reissued November 2013, August 2020 and March 2024. 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 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 3 Contents A Overview .................................................................................................5 Purpose of this guide ...............................................................................5 The key concepts .....................................................................................6 How the key concepts apply ......................................................................8 Summary of this guide ...........................................................................10 B Relevant interests in securities ..........................................................12 Applying the relevant interest definition .................................................12 The basic rule for a relevant interest .....................................................14 Extension to the basic rule: Interests in a body corporate or managed investment scheme ................................................................................17 Extension to the basic rule: Anticipation of performance of agreement or exercise of right or option ..................................................................22 Exceptions to the basic rule and exceptions .........................................24 C Takeovers: Applying the relevant interest concept .........................29 The takeover and substantial holding thresholds ..................................29 Voting power ..........................................................................................32 Deemed increase in voting power: Acquisitions from an associate ......33 Associates..............................................................................................36 Disposal rights giving rise to an association ..........................................41 D Derivatives: Deemed economic interests in securities ...................43 What are equity derivatives? .................................................................43 Applying the deemed economic interest definition ................................44 The basic rule for deemed economic interests ......................................48 Extension to the basic rule: Controlling disposal of derivatives.............51 Extension to the basic rule: Interests in a body corporate or managed investment scheme ................................................................................52 Extension to the basic rule: Anticipation of performance of agreement or exercise of right or option ..................................................................52 Extension to the basic rule: No double counting ...................................53 Exceptions .............................................................................................54 E Offsetting short positions in securities.............................................57 Applying the offsetting short position definition .....................................57 The basic rule for offsetting short positions ...........................................58 Extensions to the basic rule ...................................................................60 Exception ...............................................................................................60 F Applying the deemed economic interest and offsetting short position concept ..................................................................................61 Distinguishing relevant interests from deemed economic interests ......61 Applying the offsetting short positions concept to derivatives ...............65 G Options .................................................................................................67 Call options and put options ..................................................................67 Options for the issue of new securities ..................................................68 Options over issued securities ...............................................................69 H Warrants ...............................................................................................73 What are warrants? ...............................................................................73 Our approach to warrants and relief ......................................................75 Call warrants ..........................................................................................77 Put warrants ...........................................................................................79 Trustees and associations .....................................................................80 Terms and scope of ASIC relief .............................................................82 Page 4 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 4 I Escrow arrangements .........................................................................84 Relevant interests arising from escrow arrangements ..........................84 Escrow arrangements under the listing rules of a declared financial market ....................................................................................................85 Voluntary escrow arrangements ............................................................85 Substantial holding disclosure ...............................................................91 Key terms .....................................................................................................92 Related information .....................................................................................95 Page 5 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 5 A Overview Key points The takeover provisions are designed to support an informed and efficient market for corporate control by regulating the acquisition of significant interests that may influence the affairs or direction of listed and unlisted entities. The substantial holding and beneficial ownership tracing provisions further promote transparency of those interests by requiring their disclosure. The concepts of ‘relevant interest’, ‘deemed economic interest’, and ‘offsetting short position’ define the scope of the takeover, substantial holding and beneficial ownership tracing provisions. Those provisions are variously concerned with a person’s relevant interest and deemed economic interest in voting shares or voting interests, as well as any arrangements that offset the economic exposure arising from derivatives. The provisions may require the disclosure of details about a person’s substantial interests, including both relevant interests and deemed economic interests, and any offsetting short positions. They may also regulate the acquisition of interests above levels at which a person may acquire control over certain entities. This guide discusses the relevant interest, deemed economic interest and offsetting short position concepts, including some of the circumstances in which a person may or may not have such interests or positions. It also discusses some of the modifications to the relevant provisions we have made by legislative instrument. Purpose of this guide RG 5.1 The takeover, substantial holding and beneficial ownership tracing provisions promote transparency of interests in listed and some unlisted entities and support an informed and efficient market for corporate control by requiring disclosure of significant interests that may influence the affairs or direction of the entity. This guide aims to assist investors and their legal advisers to understand and apply the concepts of: (a) a ‘relevant interest’ in securities, which is relevant to the takeover, substantial holding and beneficial ownership tracing provisions of the Corporations Act; and Page 6 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 6 (b) a ‘deemed economic interest’ and ‘offsetting short position’ in securities, which are relevant to the substantial holding and beneficial ownership provisions of the Corporations Act. Note: In this guide, references to chapters (Chs), parts (Pts), divisions (Divs) or sections (s) are to the Corporations Act (as notionally modified by ASIC relief, where relevant), unless otherwise specified. References to regulations (regs) are to the Corporations Regulations 2001 (Corporations Regulations), unless otherwise specified. RG 5.2 Where a person is required to disclose that they have a relevant interest or deemed economic interest, they may also be required to disclose arrangements that offset the economic exposure arising from any derivative (i.e. the ‘offsetting short position’). A number of people may have a relevant interest, a deemed economic interest or an offsetting short position in the same securities in a variety of different capacities. The key concepts RG 5.3 Figure 1 shows the set pathway between the basic rules, extensions and exceptions in this guide, the calculation methodologies and exclusions in ASIC Corporations (Listed Entities Enhanced Beneficial Ownership) Instrument 2026/482, and the disclosure mechanics in Regulatory Guide 222 Substantial holding disclosure and tracing requirements (RG 222) and the Substantial Holding Notice. Figure 1: Pathway for identifying, calculating and disclosing interests and positions Step 1 Review RG 5: Review this guide to understand the rules, extensions and exceptions relating to relevant interests, deemed economic interests and offsetting short positions. Step 2 Calculate the interest: If a deemed economic interest or offsetting short position needs to be quantified, apply the rules in ASIC Instrument 2026/482. Step 3 Work out disclosure: Once calculated, review RG 222 and the Substantial Holding Notice to provide substantial holding disclosure. Relevant interests RG 5.4 A relevant interest is concerned with a person’s capacity to exercise a degree of influence over issued securities. It encompasses connections wider than ownership, including connections giving rise to power or control over the voting or disposal of issued securities. Review RG 5 1 2 3 Calculate the interest Work out disclosure Review this guide to understand the rules, extensions and exceptions relating to relevant interests, deemed economic interests and offsetting short positions. If a deemed economic interest or offsetting short position needs to be quantified, apply the rules in ASIC Instrument 2026/482. Once calculated, review RG 222 and the Substantial Holding Notice to provide substantial holding disclosure. RG 5 Instrument RG 222 and notice THEN THEN Page 7 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 7 RG 5.5 The substantial holding and takeover provisions apply when the votes attached to securities, in which a person and any of their associates have a relevant interest (as a proportion of all voting shares or interests), increase above one of the following two thresholds: (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 (see 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 (see Ch 6). Note: The 5% substantial holding threshold is triggered based on a person’s combined relevant interests and deemed economic interests. For more information about deemed economic interests, see Section D. RG 5.6 In this guide, we primarily discuss the relevant interest concept as it is applied in the context of the takeover, substantial holding and beneficial ownership tracing provisions. However, the relevant interest concept is used in other contexts and different exceptions may apply to exclude a person having a relevant interest for the purposes of some regulatory requirements but not others. Deemed economic interests and offsetting short positions RG 5.7 A deemed economic interest and offsetting short position is concerned with a person’s indirect capacity to influence securities of a listed entity because of an equity derivative. A deemed economic interest is not referable to an identifiable holding of issued securities. RG 5.8 The deemed economic interest and offsetting short position requirements apply to persons who acquire economic exposure to voting shares or interests through equity derivatives. RG 5.9 A deemed economic interest arises where a person’s exposure to securities is created by a derivative, whether physically or non-physically settleable, and this exposure is not fully reflected in relevant interests that arise. Offsetting short positions must be disclosed where they reduce or hedge any long position arising from a derivative. This includes exposure giving rise to both relevant interests and deemed economic interests. RG 5.10 Disclosure is required when a person’s combined relevant interest and deemed economic interest—together with those of their associates—cross the 5% substantial holding threshold, or where there is otherwise a disclosable movement in that person’s substantial holding. Page 8 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 8 RG 5.11 This guide discusses how the deemed economic interest and offsetting short position concepts are applied in the context of the substantial holding and beneficial ownership tracing provisions and outlines relevant legislative modifications. Note: For information about how relevant interests or deemed economic interests are applied in the context of the director disclosure provisions, see Regulatory Guide 193 Notification of directors’ interests in securities: Listed companies (RG 193). How the key concepts apply RG 5.12 The concept of relevant interest in securities defines the connections with issued securities that are central to the takeover, post-bid compulsory acquisition, substantial holding disclosure and beneficial ownership tracing provisions of the Corporations Act. The takeover prohibition in s606 and the calculation of voting power under s610 rely on relevant interests in voting shares or voting interests only. Deemed economic interests and offsetting short positions are disclosure concepts. They are only considered for the purposes of the substantial holding, director disclosure and beneficial ownership tracing provisions. RG 5.13 The nature of power or control over voting or disposal that may give rise to a relevant interest, a deemed economic interest or offsetting short position is intentionally expressed in wide terms to prevent avoidance of the relevant requirements. A relevant interest, deemed economic interest and offsetting short position can arise from: (a) power or control through agreements, arrangements, understandings and practices that are legally unenforceable; and (b) whether or not the power or control is indirect, implied or informal. RG 5.14 Table 1 summarises the principal provisions of the Corporations Act that use the relevant interest, deemed economic interest and offsetting short position concepts. Page 9 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 9 Table 1: Rights and obligations under the Corporations Act depending on a person’s relevant interests, deemed economic interests or offsetting short positions in securities Topic Provisions Explanation Takeovers Ch 6 Acquisitions of a relevant interest in voting shares or interests that increase a person’s voting power to more than 20%, or from a point above 20%, are prohibited under s606 unless:  they are made under a takeover bid;  they are authorised under one of the other exceptions in s611; or  the person’s voting power is already above 90%. This prohibition also applies to:  acquiring legal or equitable interests that result in another person’s voting power increasing in the same way; and  offers or invitations that would result in a breach of s606 if accepted. Note: See Regulatory Guide 9 Takeover bids (RG 9) and Regulatory Guide 6 Takeovers: Exceptions to the general prohibition (RG 6). Post-bid compulsory acquisition and buyouts Pt 6A.1 The right of a bidder to compulsorily acquire remaining securities following a takeover bid, and the obligation to make buyout offers to remaining holders and convertible security holders, depend on whether the bidder and its associates have relevant interests in at least 90% of the securities in the bid class: see s661A(1), 662A(1) and 663A(1). Note: See Regulatory Guide 10 Compulsory acquisitions and buyouts (RG 10). Substantial holding disclosure Pt 6C.1 Persons who, together with their associates, have relevant interests or deemed economic interests in voting shares or interests representing 5% or more of the votes in a listed entity, must disclose details of their relevant interests, deemed economic interests and offsetting short positions. They must also disclose when:  there is a disclosable movement in a person’s substantial holding;  they cease to have a substantial holding;  they have a substantial holding in an entity at the time it lists; or  they make a takeover bid. Note: See RG 222. Beneficial ownership tracing Pt 6C.2 The key person for a listed entity or ASIC may direct a person to disclose details of their relevant interests in voting shares or interests in the entity: see s672A and 672B. ASIC may also direct a person to disclose details of their deemed economic interests or offsetting short positions in a listed entity: see s672A. A register of information about relevant interests disclosed in response to tracing notices must be kept by the key person for a listed entity: see s672DA. Note: See RG 222. Director disclosure s205F, 205G, 300(11) and (12) A director of a listed company must provide the relevant market operator with details of their relevant interests and deemed economic interests in any securities of the company or a related body corporate: see s205G. The annual directors’ report of a listed company or listed registered scheme must also include similar details: see s300(11) and (12). A director of a company must also give the company any information about the director that is necessary for the company to comply with Ch 6: see s205F. Note: See RG 193. Page 10 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 10 RG 5.15 Relevant interests, deemed economic interests and offsetting short positions arise in relation to voting shares or interests. A voting share or interest is an issued share or interest that carries a right to vote beyond limited matters such as a winding up, buyback or capital reduction, or the variation of rights: see the definitions of ‘voting share’ and ‘voting interest’ in s9. RG 5.16 The focus of the provisions on voting rights reflects their underlying objective—to regulate the acquisition of corporate control and the disclosure of significant interests that may dictate or influence the entity’s future direction or affairs. Association and voting power RG 5.17 The takeover, substantial holding and beneficial ownership tracing provisions operate by aggregating the voting power of people who are related or associated in relation to an entity’s affairs, under the ‘associate’ definition set out in s12. As a result, a person must consider not only their own relevant interests, deemed economic interests and offsetting short positions in voting shares or interests, but also those of their associates. This combined voting power forms the threshold trigger for the general takeover prohibition. For the substantial holding and beneficial ownership tracing provisions the trigger is the aggregate of votes connected with a person and their associates through their relevant interests and deemed economic interests. Note: We discuss the related concepts of association and voting power in Section B of this guide. Unacceptable circumstances RG 5.18 Interests or arrangements relating to securities which do not give rise to a relevant interest, deemed economic interest or offsetting short position may nonetheless result in circumstances that are contrary to the principles and purposes underlying the takeover provisions set out in s602. RG 5.19 The Takeovers Panel may make a declaration of unacceptable circumstances under s657A involving interests or arrangements of this kind. Summary of this guide RG 5.20 Table 2 summarises the guidance we have addressed in this guide. Note: Unless otherwise indicated, our guidance applies with respect to listed registered schemes. Adjustments that take account of the different features of managed investment schemes are set out in s12(3), 604 and 610(5). Page 11 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 11 Table 2: Summary of our guidance Topic What our guidance covers Reference Relevant interests in securities We discuss three principal aspects of the relevant interest concept that should be considered when applying the definition in s608 and 609: the basic rule, extensions to the basic rule and the exceptions. Section B Applying the relevant interest concepts We discuss how the relevant interest concept is applied in the context of the takeover, substantial holding and beneficial ownership tracing provisions and the related concepts of ‘voting power’ and ‘associates’. Section C Deemed economic interests in securities We discuss three principal aspects of the deemed economic interest concept that should be considered when applying the definition in s671AA and 671AF: the basic rule, extensions to the basic rule and the exceptions. Section D Offsetting short positions We discuss three principal aspects of the offsetting short position concept that should be considered when applying the definition in s671AS: the basic rule, extensions to the basic rule and the exceptions. Section E Applying the deemed economic interest and offsetting short position concepts We discuss how the deemed economic interest and offsetting short position concepts are distinguished from relevant interests and how their application differs across physically settleable and non- physically settleable derivatives. Section F Options We discuss the relevant interests that may arise from options. Section G Warrants We outline the relevant interests that may arise from warrants and the relief we have provided so that relevant interests and associations do not arise in some cases. Section H Escrow arrangements We discuss the relief we have provided for escrow arrangements required under the listing rules of a declared financial market and the individual relief we may provide for voluntary escrows. Section I Page 12 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 12 B Relevant interests in securities Key points There are three general tests to consider when determining whether a person has a relevant interest in securities: • the basic rule; • the extensions to the basic rule; and • the exceptions. The nature of power or control giving rise to a relevant interest is broadly cast to prevent avoidance of the requirements of the Corporations Act. It extends to understandings, arrangements and practices that may be informal or implied. A person may be deemed to have a relevant interest in securities as a result of: • having interests in, or control over, a body corporate or managed investment scheme; or • entering into a conditional agreement. Exceptions apply so that, in certain circumstances, a person is taken not to have a relevant interest in securities. Some of these exceptions apply when determining relevant interests in a limited context—for example, under the takeover provisions but not the substantial holding provisions. We have modified or extended some of the exceptions by legislative instrument. Applying the relevant interest definition RG 5.21 Sections 608–609 define when a person has and does not have a relevant interest in securities. Under these provisions, a person must consider and apply three general tests: (a) whether a person has a relevant interest under the basic rule; (b) whether a person is deemed to have a relevant interest under the extensions to the basic rule; and (c) whether the situation giving rise to the relevant interest falls within one of the exceptions. RG 5.22 Table 3 summarises these tests, as applied in s608–609, and includes a cross- reference to further discussion of each aspect in this guide. Note: For a discussion of how the relevant interest tests in s608–609 apply to securities lending, prime broking and agent lending, see Sections D–F of RG 222. Page 13 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 13 Table 3: Summary of the relevant interest concept Test Description Reference 1. The basic rule The basic rule: s608(1)–(2) This is the general rule which determines whether a connection a person has with securities gives rise to a relevant interest. Under the rule, a relevant interest is derived from holding securities or having some kind of power or control over voting or disposal. RG 5.25– RG 5.37 2. Extensions to the basic rule Deemed interest through one or more bodies corporate or schemes: s608(3)–(7) A person is deemed to have the same relevant interest in securities that a body corporate or managed investment scheme has if they have over 20% voting power or control of the body corporate or scheme. A person may have a deemed relevant interest through a chain of companies or schemes. RG 5.38– RG 5.58 Deemed present interest in anticipation of performance of agreement or understanding, or exercise of right: s608(8) and 608A A person acquires a relevant interest at the time of entering into an agreement or understanding or being granted enforceable rights or options to acquire securities, regardless of the time for performance or exercise, or whether any conditions are attached. The relevant interest is:  with respect to any securities the counterparty has a relevant interest in that are in the same class; and  the counterparty is taken to use the securities they have a relevant interest in to satisfy their obligations on performance, enforcement or exercise: see s608A. Note: We have modified this concept for the purposes of the substantial holding provisions as they apply to securities lending, prime broking and agent lending arrangements: see RG 222. RG 5.59– RG 5.66 3. Exceptions Exceptions: s609 In certain cases, despite the basic rule and the extended rules, a person is taken not to have a relevant interest because of a particular situation or connection with securities. These exceptions apply on their terms and do not prevent a person having a relevant interest on the basis of another connection falling outside the exception. RG 5.67– RG 5.79 Relevant interests of a body corporate in its own securities RG 5.23 Under the relevant interest concept, a body corporate may have a relevant interest in its own securities: see s608(9). This means that the takeover, substantial holding and beneficial ownership tracing provisions apply to the body in the same way that they do to any other person who has a relevant interest in the body’s securities. RG 5.24 The body’s relevant interest in its own securities may also be relevant to other persons—for example, if the other persons may be deemed to have the same relevant interest in the body’s holding in its own securities, or may be an associate of the body. Note: An interest of this kind may arise, for example, under an escrow agreement with a security holder: see RG 5.323–RG 5.327. Page 14 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 14 The basic rule for a relevant interest RG 5.25 The basic rule set out in s608(1) is that a person has a relevant interest in securities if they: (a) are the holder of the securities; (b) have power to exercise, or control the exercise of, a right to vote attached to the securities; or (c) have power to dispose of—or control the exercise of a power to dispose of—the securities. RG 5.26 It does not matter how remote the relevant interest is or how it arises under the basic rule. If two or more people can jointly exercise a power described, each is taken to have the power: see s608(1). The broad nature of power or control RG 5.27 The nature of the power or control over voting or disposal that may give rise to a relevant interest under the basic rule is deliberately cast in wide terms. Under s608(2), it expressly extends to power or control that: (a) is indirect, implied or informal; (b) may be exercised alone or jointly with someone else; (c) does not relate to a particular security; (d) may be made subject to restraint or restriction; and/or (e) may be exercised through, or counter to, a trust, agreement or practice (in combination or otherwise and whether enforceable or not). RG 5.28 The wide scope of s608(2) derives from the legislature’s concern that the objectives of the regulatory regime should not be circumvented. [W]hen dealing with a relevant interest in shares, it is important that the legislation clearly apply to the informal arrangements and gentlemen’s agreements that can so often be arrived at in order to avoid any inconvenient obligations imposed by law. The Hon John Waddy MP, Parliamentary debates, New South Wales Legislative Assembly, 9 September 1971, p. 913. RG 5.29 The breadth of the extended definition of power or control has been acknowledged and applied in a number of cases: see, for example, TVW Enterprises Ltd v Queensland Press Ltd (1983) 7 ACLR 821 (TVW Enterprises) at 839 and ASIC v Yandal Gold Pty Ltd (1999) 32 ACSR 317 (Yandal Gold) at [90]–[92]. Page 15 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 15 RG 5.30 However, in applying the expanded notion of power or control in s608(2), it is still necessary to consider whether a power exists ‘to exercise some true or actual measure of control’ over voting or disposal: see Re Kornblums Furnishings Ltd (1981) 6 ACLR 25 (Kornblums Furnishings) at 36; TVW Enterprises at 838; Yandal Gold at [73]; and Edensor Nominees Pty Ltd v ASIC (2002) 41 ACSR 325 (Edensor Nominees) at [33]. Note: Control that is minor or peripheral, or merely hypothetical, theoretical or notional, may not be included: see North Sydney Brick & Tile Co Ltd v Darvall (No 2) (1986) 10 ACLR 837 (Darvall) at 844; Corumo Holdings Pty Ltd v C Itoh Ltd (1991) 5 ACSR 720 at 747−748; and Yandal Gold at [73]. See also Azumah Resources Ltd [2006] ATP 34. Power or control through trusts, practices and relevant agreements RG 5.31 Under s608(2)(b), power or control may arise under a trust, agreement or practice (alone or in combination), whether enforceable or not. An agreement in this context means a relevant agreement: see the ‘agreement’ definition in s9. A ‘relevant agreement’ is widely defined in s9 to mean an agreement, arrangement or understanding: (a) whether formal or informal or partly formal and partly informal; (b) whether written or oral or partly written and partly oral; and (c) whether or not having legal or equitable force and whether or not based on legal or equitable rights. RG 5.32 As defined, a relevant agreement embraces a broad range of relationships that need not necessarily be legal relationships—including understandings from which relevant parties may be free to withdraw. RG 5.33 A person may therefore have a relevant interest in securities on the basis of indirect power or control arising from an informal or implied practice, or an understanding with another person that is unenforceable: see Yandal Gold at [73]. However, in determining whether some true measure of control exists as part of unenforceable arrangements or understandings of this kind, it must be assumed that the parties act in accordance with, rather than contrary to, their arrangement or understanding: see Edensor Nominees at [33]. RG 5.34 Section 608(8) may also be relevant in considering whether a relevant agreement gives rise to a relevant interest. Under this provision, if a person does not already have a relevant interest on the basis of a relevant agreement, the person would still be deemed to have a present relevant interest if one would arise, were the relevant agreement to be performed: see RG 5.59– RG 5.65. Page 16 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 16 Example 1: Voting agreements Shareholder A enters into an agreement with Shareholder B under which Shareholder B agrees, in exchange for a cash sum, to vote in accordance with Shareholder A’s direction on a resolution at an upcoming general meeting of the company. Shareholder A acquires a relevant interest in Shareholder B’s holding as a result of the voting agreement because Shareholder A will control the power, or the exercise of the power, to vote the securities: see s608(1)(b). Shareholder B continues to have a relevant interest in the securities as holder under s608(1)(a)—but also as the person with the legal power to vote and dispose of the securities (even if doing so may result in a breach of the agreement): see s608(1)(b) and (c) and 608(2)(b)(ii). Example 2: Agreements or understandings about acceptance of a takeover bid Bid Co Ltd has made a full conditional takeover bid for Target Ltd at $1.00 a share. A representative of Bid Co Ltd and a major shareholder of Target Ltd agree during a telephone conversation that the major holder will accept the bid and that Bid Co Ltd will increase the offer to $1.10 and declare it unconditional. Bid Co Ltd will obtain a relevant interest in the shareholder’s shares in Target Ltd as a result of the ‘relevant agreement’ to acquire the major holder’s shares concluded during the telephone conversation—regardless of any practical difficulties there may be in achieving enforceability of this agreement through a court. Because the relevant interest is acquired as a result of the relevant agreement rather than acceptance of the bid (even though it is to be given effect through acceptance of the bid), Bid Co Ltd may breach s606: see Corebell Pty Ltd v New Zealand Insurance Co Ltd (1988) 13 ACLR 349. Bid Co Ltd would also have acquired a relevant interest in the major shareholder’s shares if, prior to Bid Co Ltd making the bid, it had an understanding with the major shareholder that it would accept the bid, once made, even if the understanding was unenforceable. However, while an unenforceable understanding from which parties are free to withdraw may constitute a relevant agreement, a consensus of some sort between the parties may still be required: see also New Ashwick Pty Ltd v Wesfarmers Ltd (2000) 35 ACSR 263 at [37]. Negative power or control RG 5.35 Under the basic rule, a relevant interest in securities may arise from a person’s power to control ‘the exercise’ of voting rights or ‘the exercise’ of a power to dispose. Page 17 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 17 RG 5.36 A person may have a power to control the exercise of a power to dispose of, or vote, securities even if they only have a power to prevent or restrain another person from disposing of, or voting, the securities. A relevant interest may therefore arise from a ‘negative’ power over disposal or voting, which may be exercised in limited circumstances. Examples include: (a) the power to restrict the ability of a counterparty to dispose of securities (together with any other assets) that it holds, pending implementation of a merger or other transaction (Australian Pipeline Limited v Alinta Ltd [2007] FCAFC 55 (Alinta Ltd)); (b) escrow arrangements with a security holder, restricting disposal of the securities for a fixed period (see RG 5.323–RG 5.327); and (c) a pre-emptive right, or right of first refusal, over the sale and transfer of securities (Kornblums Furnishings at 36 and TVW Enterprises at 839). RG 5.37 Pre-emptive rights derived from a company, body or scheme’s constitution, which are available on the same terms to all members, are taken not to give rise to a relevant interest under s609(8). However, pre-emptive rights that do not fall within the exception (e.g. because they differ between members or arise under a private agreement) may give rise to a relevant interest in each of the securities that are the subject of pre-emption: see Darvall. Extension to the basic rule: Interests in a body corporate or managed investment scheme RG 5.38 In addition to any relevant interests arising under the basic rule, a person may be deemed to have the same relevant interest in any securities that certain connected bodies corporate or managed investment schemes have. Under s608(3), a person is taken to have the same relevant interests as: (a) a body corporate, or managed investment scheme, in which the person’s voting power is over 20% (s608(3)(a)); or (b) a body corporate, or managed investment scheme, that the person controls (s608(3)(b)). Note: The ‘voting power’ referred to in s608(3)(a) is based on the aggregate relevant interest of the person and each of their associates in relation to the entity (if any). We discuss the concepts of voting power and association further at RG 5.98–RG 5.146. See also RG 5.50–RG 5.58. RG 5.39 However, s608(3)(a) does not apply to relevant interests that the body corporate, or managed investment scheme, is itself deemed to have merely because of s608(3)(a) (i.e. merely on account of a voting power of more than 20% in another body corporate or scheme). In contrast, s608(3)(b) may be applied repeatedly: see RG 5.44–RG 5.49. Page 18 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 18 Control under s608(3) RG 5.40 Section 608(4) provides that, for the purposes of s608(3)(b), a person controls a body corporate, or managed investment scheme, if they have the capacity to determine the outcome of decisions about the financial and operating policies of that body corporate or scheme. RG 5.41 Under this test, a person will generally control a body corporate or scheme if they can command more than 50% of the votes that may be cast at a general meeting because, for example, they would have the capacity to appoint or remove directors. However, the capacity to determine the outcome of decisions about the financial and operating policies of a body corporate may also arise when a person holds less than 50% of the votes that may be cast at a general meeting but otherwise has practical or effective control. RG 5.42 Section 608(5) provides that, in determining whether a person has control of a body corporate: (a) the practical influence a person can exert (rather than the rights they can enforce) is the issue to be addressed; and (b) any practice or pattern of behaviour affecting the body corporate’s financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust). RG 5.43 However, a person is not taken to control a body corporate merely because: (a) that person, together with an entity that is not an associate, jointly has the capacity to determine the outcome of decisions about the body corporate’s financial and operating policies (s608(6)); or (b) the person has a capacity that they are under a legal obligation to exercise for the benefit of someone else (or, if the person is a body corporate, for the benefit of someone other than the body corporate’s members) (s608(7)). The operation of the deeming provisions through a chain of bodies corporate or managed investment schemes RG 5.44 Section 608(3) may operate in relation to a hierarchy of entities as the relevant interest of each entity is successively imported to the entity immediately above in the chain of interests: see NCSC v Brierley Investments Ltd (1988) 14 ACLR 177 at 190. RG 5.45 However, s608(3)(a), which deems a person to have a relevant interest in securities on the basis of having voting power of greater than 20% in a body corporate or managed investment scheme, can only be applied once in the chain. Section 608(3)(b), which deems a person to have a relevant interest on the basis of control of a body corporate or managed investment scheme, may have unlimited application. Page 19 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 19 RG 5.46 An example of the operation of s608(3) in relation to a chain of entities is discussed below, based on Figure 2. Figure 2: Relevant interests arising through interests in a body corporate or managed investment scheme Note: Figure 2 is explained in RG 5.47–RG 5.49 (accessible version). RG 5.47 Figure 2 shows Head Co Ltd at the top of three chains of entities. (a) In the left chain, Head Co Ltd has a 25% direct ownership interest in B Ltd, and in turn B Ltd has a 25% direct ownership interest in C Ltd. At the end of the left chain, D Ltd is wholly owned by C Ltd. (b) In the middle chain, Head Co Ltd has a 25% interest in L Ltd, and in turn L Ltd has a 40% direct ownership interest in and control of M Ltd. At the bottom of the middle chain, N Ltd is wholly owned by M Ltd. (c) In the right chain, W Ltd is wholly owned by Head Co Ltd, and has a 55% direct interest in X Ltd, which in turn has a 25% direct ownership interest in Y Ltd. At the end of the right chain, Y Ltd has a 25% direct ownership interest in Z Ltd. RG 5.48 In Figure 2, the companies in which Head Co Ltd has a relevant interest under s608(3) are shaded in blue. In the left chain, Head Co Ltd has a relevant interest in B Ltd and C Ltd, but not D Ltd. In the middle chain, Head Co Ltd has a relevant interest in L Ltd, M Ltd and N Ltd. In the right chain, Head Co Ltd has a relevant interest in W Ltd, X Ltd, Y Ltd and Z Ltd. The following explains why Head Co Ltd does, or does not, have a relevant interest in securities in each of the companies at the bottom of the three chains (i.e. D Ltd, N Ltd and Z Ltd): 100% 25% 40% & control Head Co Ltd B Ltd 25% C Ltd 100% D Ltd L Ltd M Ltd 100% N Ltd W Ltd 55% X Ltd 25% Y Ltd 25% Z Ltd 25% All figures show direct holdings (%). The example assumes there are no crossholdings, associate relationships (other than through a corporate group), or practical control below 50%, unless indicated. Page 20 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 20 (a) C Ltd has a relevant interest in 100% of D Ltd securities through a direct holding. B Ltd also has a relevant interest in 100% of D Ltd by virtue of its 25% holding (and voting power) in C Ltd: see s608(3)(a). However, because s608(3)(a) can only apply once, Head Co Ltd is not deemed to also have the relevant interest in 100% of D Ltd that B Ltd has, even though it has voting power of more than 20% in B Ltd. Head Co Ltd therefore has no relevant interest in D Ltd shares (but does have a relevant interest in B Ltd’s holding of C Ltd securities: see s608(3)(a)). (b) M Ltd has a relevant interest in 100% of N Ltd securities through a direct holding. L Ltd has a voting power of 40% in M Ltd, but also has practical control of M Ltd, so it is deemed to have the same relevant interest in 100% of N Ltd under s608(3)(b). As Head Co Ltd has a voting power of over 20% in L Ltd, and s608(3)(a) has not yet been applied, Head Co Ltd is deemed to also have a relevant interest in the 100% stake in N Ltd. (c) Y Ltd has a direct relevant interest in 25% of Z Ltd. X Ltd is deemed to have a relevant interest in the 25% stake in Z Ltd: s608(3)(a). W Ltd is also deemed to have a relevant interest in the 25% stake in Z Ltd on account of X Ltd’s deemed relevant interest and its controlling holding in X Ltd: see s608(3)(b). As Head Co Ltd controls W Ltd, it also has a relevant interest in the 25% stake in Z Ltd as s608(3)(b) has successive operation. RG 5.49 This example assumes there are no cross-holdings, associate relationships (other than through a corporate group), or practical control below 50% (other than where specified)however, in applying s608(3), all relevant circumstances must be taken into account. For example, if Head Co Ltd had effective control of B Ltd, even though it holds only a direct 25% stake, it would have a relevant interest in D Ltd. Association by control and s608(3)(a) RG 5.50 The deeming provision in s608(3)(b) overlaps to some extent with the definition of ‘associate’. Two bodies corporate may be associates where one controls, or is controlled by, the other, or where both are controlled by the same entity (whether the entity is a natural person, body corporate, partnership or trust): see s12(2)(a) and 64A. A similar test for control applies in this context: see s50AA. Note: Persons may also be associates for other reasons. We discuss the concept of association further at RG 5.118–RG 5.146. RG 5.51 This overlap means that, where one body corporate controls another body corporate, the parent will both: (a) have a relevant interest in any securities the subsidiary has a relevant interest in under s608(3)(b); and (b) be associated with the subsidiary under s12(2)(a). Page 21 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 21 RG 5.52 Associations, such as those arising from control within a corporate group, are relevant in applying s608(3)(a). This is because a person’s voting power in a body or scheme depends on the relevant interests both the person and their associates have in voting shares or interests in the body. As a result, a person may be deemed to have the relevant interests in securities a body corporate has under s608(3)(a) entirely, or in part, on the basis of an associate’s holding (or other relevant interests) in that body corporate. The diagram in Figure 3 illustrates this concept. Figure 3: Deemed relevant interests through holdings of associates under s608(3)(a) Note: Figure 3 is explained in RG 5.53–RG 5.57 (accessible version). RG 5.53 In Figure 3, Mr X holds 100% of the shares in both A Ltd and C Ltd. On the left side of the chain, A Ltd holds 51% of shares in B Ltd, which in turn holds 10% of shares in Y Ltd. On the right side of the chain, C Ltd holds 15% of shares in Y Ltd, which in turn holds 51% of shares in Z Ltd. RG 5.54 Y Ltd holds (and therefore has a relevant interest in) 51% of the shares in Z Ltd. However, each of the other companies listed and Mr X also have the relevant interest in 51% of Z Ltd that Y Ltd has due to the operation of s608(3)(a). This is because their ‘voting power’ in Y Ltd is greater than 20%, even though some of them do not have relevant interests in more than 20% of Y Ltd shares. RG 5.55 The relevant interests of each person in Y Ltd are as follows: (a) A Ltd and B Ltd each have a relevant interest in 10% of Y Ltd (B Ltd as holder and A Ltd because it controls B Ltd (s608(3)(b))); (b) C Ltd has a relevant interest in 15% of Y Ltd as holder; and Y Ltd A Ltd C Ltd 15% 51% B Ltd 51% Mr X 100% 100% Z Ltd 10% All figures show direct holdings of voting shares (%). Page 22 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 22 (c) Mr X has a relevant interest in 25% of Y Ltd as a result of his control over B Ltd and C Ltd, which collectively hold this number of shares (s608(3)(b)). RG 5.56 However, A Ltd, B Ltd and C Ltd are all associates of each other under s12(2)(a)(iii) because they are all controlled by the same entity—Mr X. The voting power they each have in Y Ltd is therefore the aggregate of the votes attached to both the shares they have a relevant interest in and the shares each of the others has a relevant interest in (as their associates). This means each of A Ltd, B Ltd and C Ltd have voting power of 25% in Y Ltd and are therefore deemed to have the same relevant interest that Y Ltd has in Z Ltd under s608(3)(a). Note: A Ltd and B Ltd are also associates of each other because they control, or are controlled by, each other: s12(2)(a)(i) and (ii). RG 5.57 The fact that A Ltd, B Ltd and C Ltd are associates of each other does not affect the relevant interests they each have in Y Ltd shares (as it does with respect to Z Ltd due to s608(3)(a)). While an associate’s relevant interests in securities are in effect aggregated with a person’s own to determine the person’s voting power in an entity, this does not mean the person themselves has a relevant interest in the securities in which the associate has a relevant interest merely because of the association. Whether a person has a relevant interest depends on the application of the tests in s608 and 609. As noted at RG 5.50–RG 5.52, the relevant interest tests may overlap with (or, in the case of s608(3)(a), require the application of) the test for association, but any relevant interest that arises still arises by virtue of the tests in s608–609. RG 5.58 We discuss the concepts of voting power and association further at RG 5.98– RG 5.146. Extension to the basic rule: Anticipation of performance of agreement or exercise of right or option RG 5.59 The relevant interest concept is further extended by s608(8). This provision applies to transactions and arrangements relating to securities to bring back to the earliest point in time the moment at which a person will be treated as having a relevant interest in the securities: see Re Adelaide Holdings Ltd (1982) 6 ACLR 675 at 679. The provision is sometimes referred to as the ‘accelerator provision’ because it may cause a relevant interest to arise sooner than it otherwise would. RG 5.60 Section 608(8) operates when a person has a relevant interest in issued securities and (whether before or after acquiring the relevant interest) the person: (a) has entered or enters into a relevant agreement with another person with respect to the securities (s608(8)(b)(i)); Page 23 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 23 (b) has given or gives another person an enforceable right, or has been or is given an enforceable right by another person, in relation to the securities (whether the right is enforceable presently or in the future and whether or not on the fulfilment of a condition) (s608(8)(b)(ii)); or (c) has granted or grants an option to, or has been or is granted an option by, another person with respect to the securities (s608(8)(b)(iii)). The effect of s608(8) is that the other person is taken to already have a relevant interest in the securities if they would have the relevant interest on performance of the agreement, enforcement of the right or exercise of the option. RG 5.61 Section 608A further clarifies that there is no need for the other person to ascertain whether the person entering the agreement has set aside particular securities to satisfy their obligations under the agreement or whether they are held for other purposes. The other person is taken to have a relevant interest in securities in which the person entering the agreement has a relevant interest that are in the same class as securities under the agreement. The person entering the agreement is taken to use those securities to satisfy their obligations on performance, enforcement or exercise. Example 3: Agreement to sell shares A person has a relevant interest in 10 shares in a company and agrees with another person to sell five shares in the company to the other person on a future date. The other person is taken to already have a relevant interest in five of the first person’s 10 shares under s608(8). Example 4: Agreement to acquire shares A person has a relevant interest in 10 shares in a company and gives another person a right to acquire 11 shares in the company from the person in the future. The other person is taken to already have a relevant interest in the first person’s 10 shares under s608(8). The other person might also have a deemed economic interest in one share in the company under Div 2 of Pt 6C.1A. RG 5.62 The three subparagraphs in s608(8)(b) are not mutually exclusive: see Chew v Hamilton (1985) 13 ACLR 440 at 446. The ambit of a relevant agreement referenced in s608(8)(b)(i) is particularly broad and, in many cases, will also encompass enforceable rights and options of the kind referred to in s608(8)(b)(ii) and (iii): see RG 5.31–RG 5.34. RG 5.63 One effect of the accelerator provision is to confirm that a person has a relevant interest even though their connection with a security holding is derived from a conditional transaction, arrangement or right. RG 5.64 Of course, in some cases, a conditional transaction or preliminary arrangement may, in any event, have resulted in a relevant interest under the basic rule, given the expansive nature of power or control referred to in s608(2): see for example Alinta Ltd at [243]–[246] and Nicholas v Commissioner for Corporate Affairs (Vic) (1982) 7 ACLR 45 at 54−55. Page 24 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 24 RG 5.65 The accelerator provision only operates where the person who enters into the agreement, gives the enforceable right or grants the option has a relevant interest in securities themselves. If the person acquires a relevant interest in the securities subsequently, the provision will operate in relation to those securities from that time: see s608(8)(b) and 608A. Further applications RG 5.66 We discuss further the application of the relevant interest concept, including the accelerator provision, as it applies to options and warrants in Section G and Section H. Exceptions to the basic rule and exceptions RG 5.67 Section 609 sets out a number of situations in which a person is taken not to have a relevant interest. These exceptions only apply to relevant interests arising merely because of the particular situation or circumstance. A person may still have a relevant interest because of other connections, or aspects of relevant arrangements or affairs falling outside the specified situation or circumstance. Not all the exceptions in s609 apply in the context of the substantial holding provisions: see s671E and the definition of ‘substantial holding’ in s9. RG 5.68 We have modified some of the s609 exceptions by legislative instrument to clarify their operation. We have also introduced a number of new situations that are taken not to give rise to a relevant interest by way of modification. In some cases, the modified and extended exceptions under our relief only apply when considering certain requirements under the Corporations Act (e.g. the takeover provisions but not the substantial holding provisions). RG 5.69 Where a person does not have a relevant interest in securities because of s609, no other person will be deemed to have a relevant interest in those securities through the application of s608(3). RG 5.70 Table 4 outlines the exceptions (including relief) that should be taken into account in determining whether a person has a relevant interest in securities for the purposes of the takeover, substantial holding and beneficial ownership tracing provisions. The table also includes cross-references to further discussion and guidance, where applicable. Note: Table 4 sets out the exceptions to the relevant interest concept for the purposes of the takeover, substantial holding and beneficial ownership tracing provisions only. Some of ASIC’s legislative instruments included in the table apply only to Chs 6 and 6C. When considering relevant interests in other contexts, readers should carefully consider the applicability of the exceptions introduced or modified by legislative instrument. Page 25 REGULATORY GUIDE 5: Relevant interests and deemed economic interests © Australian Securities and Investments Commission July 2026 Page 25 Table 4: Exceptions to the relevant interest concept—takeovers, substantial holdings and beneficial ownership tracing provisions Exception Situation not giving rise to a relevant interest Reference Exceptions applying for the purposes of the takeover, substantial holding and beneficial ownership tracing provisions Moneylenders’ security interests Security interests taken or acquired in the ordinary course of a non- associated person’s business of providing financial accommodation on ordinary commercial terms. Note: A ‘security interest’ is defined in s9. s609(1) Bare trustees Bare trustees (including nominees) where a beneficiary under the trust has a relevant interest because of a presently enfor