ASIC has released updated guidance on a key part of Australia’s takeover regulation. The guidance is set out in Regulatory Guide 71 Downstream acquisitions. A ‘downstream acquisition’ occurs when a person acquires a relevant interest in more than 20% of the voting securities in an Australian company (downstream entity) as a result of an acquisition in another company, including a foreign body corporate (upstream entity). Acquisitions of this kind can have a significant impact on the control of the downstream entity and therefore its shareholders. The Corporations Act 2001 prohibits a person acquiring more than 20% of a company with more than 50 members, a listed company or a listed managed investment scheme, unless an exception applies. Downstream acquisitions are not caught by this prohibition if the upstream entity is: (i) included in the official list of a prescribed financial market (such as the Australian Securities Exchange), or (ii) a foreign body conducting a financial market approved by ASIC, as set out in item 14 of s611 of the Corporations Act. The updates to RG 71 follow a public consultation process. As foreshadowed through consultation, the update takes into account developments in the law since RG 71 was first published, including amendments to the exception for downstream acquisitions in item 14, the extension of the takeovers regime in Chapter 6 to listed managed investment schemes and developments in recent Takeovers Panel matters.