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A Subscription letter is a formal document that investors use to commit funds when buying shares or units in Australian companies, investment funds, or other securities offerings. It spells out the key terms of the investment, including how many shares they want to buy and at what price.

These letters play a crucial role in capital raising by creating a binding agreement between the investor and issuer. They also help satisfy ASX and ASIC requirements by documenting important details like investor qualifications, risk acknowledgments, and payment arrangements. Fund managers and companies commonly use them for private placements and initial public offerings.

Use a Subscription letter when raising capital through share offerings or investment funds in Australia. This document becomes essential during private placements, IPOs, and when launching managed investment schemes - especially when dealing with sophisticated or wholesale investors.

The timing matters most during the pre-investment phase, before any money changes hands. Companies need these letters signed and returned before finalizing share allocations or accepting investment funds. They're particularly important for compliance with ASX listing rules and ASIC regulations around disclosure requirements and investor qualification checks.

• Standard Share Subscription: Used for direct equity investments in companies, includes basic share details, payment terms, and investor warranties
• Fund Investment Subscription: Tailored for managed funds and unit trusts, featuring fund-specific terms and investor qualification checks
• IPO Subscription: Contains detailed prospectus acknowledgments and retail investor protections required by ASX listing rules
• Wholesale Investor Version: Includes additional sophisticated investor declarations and financial capacity statements required by the Corporations Act
• Convertible Note Subscription: Combines debt and equity elements, with conversion rights and specific trigger conditions

• Company Directors and Officers: Authorize and issue Subscription letters as part of capital raising activities, ensuring compliance with ASX and ASIC requirements
• Legal Counsel: Draft and review the letters to protect company interests and meet regulatory obligations
• Investment Managers: Use these documents when raising capital for managed funds or investment schemes
• Investors: Sign and return Subscription letters to formally commit to purchasing shares or units
• Company Secretaries: Manage the administrative process, maintain records, and coordinate with share registries

• Investment Details: Gather precise share or unit pricing, total investment amount, and allocation details
• Investor Information: Collect full legal names, ACN/ABN numbers, and contact details of all participating investors
• Regulatory Status: Confirm investor classification (retail, sophisticated, wholesale) and gather supporting documentation
• Payment Terms: Define clear payment deadlines, bank account details, and any staged payment arrangements
• Compliance Check: Review current ASIC and ASX requirements for disclosure and investor qualification standards
• Template Selection: Choose an appropriate Subscription letter template that matches your specific offering type

• Investment Details: Clear specification of share/unit price, quantity, and total investment amount
• Investor Declarations: Statements confirming investor status, financial capacity, and risk acknowledgments
• Payment Terms: Detailed payment instructions, deadlines, and bank account details
• Warranties: Investor representations about their capacity to invest and understanding of risks
• Governing Law: Explicit statement that Australian law governs the agreement
• Execution Block: Formal signature sections for all parties, including witness requirements
• Compliance Statements: References to relevant Corporations Act sections and ASIC requirements

A Subscription letter differs significantly from an Engagement Letter in both purpose and legal effect. While both documents establish formal relationships, they serve distinct functions in Australian business practice.

• Purpose and Timing: Subscription letters specifically commit investors to purchasing shares or units, creating an immediate binding obligation. Engagement letters outline ongoing professional service relationships and future obligations.
• Legal Framework: Subscription letters must comply with ASX listing rules and ASIC regulations for capital raising. Engagement letters focus on professional service standards and fee arrangements.
• Payment Structure: Subscription letters detail one-time or staged investment payments. Engagement letters typically outline recurring fee arrangements or project-based billing.
• Risk Disclosures: Subscription letters require specific investment risk acknowledgments and investor qualification statements. Engagement letters focus on scope limitations and professional liability terms.