Important Info: Foreign Ownership Restrictions (FOR)
Summary
Some specific Australian securities are subject to foreign ownership restriction (FOR) rules. The ASX's FOR rules are used to support issuing companies who have restrictions or limits on foreign ownership as a means to manage levels of foreign investment in their securities.
The impact on investors, under the FOR rules, is a requirement that either a 'foreign' or 'domestic' residency flag is recorded in ASX CHESS. The foreign residency definitions are provided by each issuing company and can change from one security to another. For instance, one security may identify you as a 'foreign' owner, whilst another might identify you as a 'domestic' owner.
CommSec FOR policy and links to further ASX information
CommSec expects clients to understand the implications of investing in securities with foreign ownership restrictions by assessing the foreign investor definition and rules on foreign ownership within associated issuer constitutions or related legislation. This is particularly important for customers who reside in or are citizens of foreign countries. For further information on how to find details of issuer’s foreign investor definition, see the FAQs on this page.
When registering a security subject to FOR rules in ASX CHESS, CommSec will, on a best endeavours basis, assess whether the residency flag associated with your account is appropriate and contact you if we believe it to be incorrect. CommSec will require you to confirm our assessment of foreign ownership before we can go ahead and update your residency flag or create a new account with an alternate residency flag.
The ASX maintains the list of foreign restricted securities here.
FAQs
We understand that you might have some questions. Here is a list of common enquiries that might help to resolve questions for you.
The current list of ASX securities with foreign ownership restrictions can be found here.
The ASX page includes links to information that may assist you in determining your residency status under the relevant company's FOR rules1
When a security lists and commences official quotation, the company will often publish a company announcement relating to their Foreign Ownership Restrictions for an investor to access. An example of this is the announcement titled Regulation S - Foreign Ownership Restrictions by Zebit Inc (ZBT) on 3:39pm on 23/10/20, which you can search for on our website (once you’re logged in). However as not all company announcements are available, especially for securities listed many years ago, we have provided you the same information the ASX has made available to us.
Although Qantas has restrictions on foreign ownership, they manage this outside of ASX FOR rules.
The second account is intended to house foreign restricted securities only, where you require more than one residency flag. You can easily sell your shares on this account using your current Client ID log on.
No. Your existing CommSec Client ID can be used to access both your existing and new account.
If an inappropriate residency status is recorded in ASX CHESS, the Issuing company may incorrectly record the level of foreign ownership in its securities, which could lead to an unintended breach in foreign ownership levels or acquisition of the securities by an excluded foreign investor. This may result in divestment of the securities. Issuing companies reserve the right to independently confirm the residency status of their investors.
Complete and return to us the: Foreign Ownership Restricted Securities Residency Instruction Form.
In order to do this you need to:
- Review the definitions of ‘Domestic’ and ‘Foreign’ holders provided by each issuing company for the securities listed in the above table.
- Confirm to us your correct residency classification by completing and returning the Foreign Ownership Restricted Securities Residency Instruction Form.
- Acknowledge that we will update your residency indicator in CHESS, based on your instruction, which will trigger a confirmation letter from the ASX.
If an Issuing companies maximum level of foreign ownership is already reached, any additional securities notified as 'Foreign' would be likely to be divested by the Issuing Company.
Where a divestment occurs the Issuing Company will issue us with an instruction to release your securities to be 'issuer sponsored' to start their process. Meaning that they will be transferred from your Trading Account without notice to you. When your shares are issuer sponsored they will be registered to you under a unique 'shareholder reference number' at the share registry, and the share registry and/or issuer will provide further details in relation to the divestment of securities.
Contact us
We're here to help
Now that you understand more about FOR requirements, if you'd like us to change your account ownership flag or have any other questions please complete this form and email us at shares@commsec.com.au or phone us on 1300 811 052 (or +61 2 8397 1206 if calling from outside Australia), Monday to Friday, 8am to 6pm (Sydney time).
Disclaimer:
Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945. CommSec is a Market Participant of ASX Limited and Cboe Australia Pty Limited (formerly CHI-X Australia Pty Limited), a Clearing Participant of ASX Clear Pty Limited and a Settlement Participant of ASX Settlement Pty Limited.
This information is not advice and has been prepared without taking account of the objectives, financial or taxation situation or needs of any particular individual. For this reason, any individual should, before acting on this information, consider the appropriateness of the information, having regards to the individual's objectives, financial or taxation situation and needs, and, if necessary, seek appropriate professional advice.
[1] The information on the linked pages, pertaining to FOR Product foreign residency definitions, has been prepared by an external third party and has not been verified by us and no warranty is made as to its accuracy, reliability or completeness. CommSec, and its related bodies corporate, do not accept any liability for any loss or damage arising out of the use of all or any part of this information.