Australian Securities and Investments Commission Class Order [Co 05/566] (Cth)

ASIC Class Order [CO 05/566]

Managed investment schemes: perpetuity clauses in scheme constitutions

This instrument has effect under s601QA(1)(b) of the Corporations Act 2001.

This compilation was prepared on 2 October 2009 taking into account amendments up to [CO 09/702]. See the table at the end of this class order.

Prepared by the Australian Securities and Investments Commission.

Australian Securities and Investments Commission
Corporations Act 2001 — Paragraph 601QA(1)(b) — Declaration

Enabling legislation

1. The Australian Securities and Investments Commission makes this declaration under paragraph 601QA(1)(b) of the Corporations Act 2001 (the Act).

Title

2.    This instrument is ASIC Class Order [CO 05/566].

Commencement

3.    This instrument commences on the date it is registered under the Legislative Instruments Act 2003.

Note:  An instrument is registered when it is recorded on the Federal Register of Legislative Instruments (FRLI) in electronic form: see Legislative Instruments Act 2003, s 4 (definition of register ). The FRLI may be accessed at

Declaration – perpetuity clauses in scheme constitutions

4. Chapter 5C of the Act applies to all persons in relation to an eligible registered scheme as if section 601GC of the Act were modified or varied as follows:

(a)   [Deleted]

(b)   insert after subsection (1):

“(1AA)  The responsible entity may modify the constitution of a registered scheme by removing a termination clause where the responsible entity reasonably considers that:

(a)     the clause was included in the constitution to avoid the application of the rules of law relating to perpetuities in relation to the scheme; and

(b)     the removal of the clause does not either:

(i)      materially change the nature of the scheme; or

(ii)     have a materially adverse effect on the interests of members.

Note:   By paragraph 601FC(1)(c), the responsible entity must also act in the best interests of the members in exercising this power to remove the termination clause.

(1AB)    A responsible entity that makes modifications of the scheme constitution of the kind covered by subsection (1AA) must give each member of the scheme a notice in writing that sets out the reason for, and the effect of, the modifications.  The notice must be:      

(a)     given no later than the date of the giving of the first communication by the responsible entity to all members of the scheme after the date when the modifications are made; and 

(b)     worded in a clear, concise and effective manner.

(1AC) In subsection (1AA), termination clause means a clause in a scheme’s constitution which has the effect of terminating the scheme at a specified time (for the avoidance of doubt, including a time specified by reference to the life of a person).”.

Interpretation

5.    In this instrument:

eligible registered scheme means a registered scheme to which either of the following applies:

(a)   the scheme is included in the official list of a prescribed financial market;

(b)   the scheme is not included in the official list of a prescribed financial market and its constitution does not make provision for members to withdraw from the scheme.

Notes to ASIC Class Order [CO 05/566]

Note 1

ASIC Class Order [CO 05/566] (in force under s601QA(1)(b) of the Corporations Act 2001) as shown in this compilation comprises that Class Order amended as indicated in the tables below.

Table of Instruments

Instrument number	Date of FRLI registration	Date of commencement	Application, saving or transitional provisions
[CO 05/566]	8/6/2005 (see F2005L01432)	8/6/2005
[CO 09/702]	23/9/2009 (see F2009L03604)	23/9/2009	-

Table of Amendments

ad. = added or inserted     am. = amended     rep. = repealed     rs. = repealed and substituted

Provision affected	How affected
Subpara 4(a)................	rep. [CO 09/702]