Overview

The Australian Securities and Investments Commission Corporations Law, enacted in 2001, serves to refine and clarify the obligations of responsible entities in relation to investor transaction statements, particularly for schemes similar to Industrial and Development Pension Schemes (IDPS). This legislative instrument, F2006B01614, was introduced to address gaps in the existing Class Order [CO 00/217], ensuring that responsible entities under Class Order [00/212] are appropriately guided in their communication with investors. The Australian Securities and Investments Commission, acting under the authority of the Corporations Act 2001, aims to enhance transparency and compliance by specifying the conditions under which transaction statements must be provided and the criteria for determining the period to which these statements apply.

Scope and Application

Subsection 741(1) of the Corporations Law, as amended by the Australian Securities and Investments Commission, modifies Class Order [CO 00/217] to clarify certain obligations for Responsible Entities of schemes, particularly those resembling Investment Depositary and Payment Services (IDPS) schemes. The alteration pertains to entities and individuals involved in managing such schemes, ensuring that they adhere to the newly defined stipulations. These modifications are geographically applicable across Australia, as the legislation is a Commonwealth instrument. Notably, the changes exempt certain Responsible Entities from providing Transaction Statements to investors, provided they comply with specific reporting requirements outlined in Class Order [00/212]. This exemption applies to the period starting from the most recent Transaction Statement, quarterly report, or annual report given to the investor, thereby adjusting the frequency and content of investor communications. The changes also allow Responsible Entities to explain or state the investor's entitlement to receive reports and information under Class Order [00/212] instead of periodic Transaction Statements, thus aligning reporting practices with the new regulatory framework.

Key Provisions

The Australian Securities and Investments Commission (ASIC) has amended Class Order [CO 00/217] under subsection 741(1) of the Corporations Law. The key changes include the modification of paragraph 2 in section A by deleting the word "The" and replacing it with "Subject to section C below, the" (subsection 741(1)(a)). Additionally, subparagraph 5(c)(ii) in section A has been altered by removing the word "otherwise" and replacing it with "if any change described in the missing documents is materially adverse from the point of view of the investor" (subsection 741(1)(b)). Furthermore, a new section C has been inserted, detailing transaction statements for IDPS-like schemes (subsection 741(1)(c)). This new section stipulates that the Responsible Entity is not required to send a Transaction Statement to a person if certain conditions in Class Order [00/212] are met (subsection C(a)). The period for the Transaction Statement must begin from the most recent date of the last Transaction Statement, quarterly report, or annual report given to the Holder, and end on the date of the request (subsection C(b)). Lastly, the Responsible Entity can explain or state the Holder's entitlement to receive reports and information under paragraphs 2(h) and 2(k) of Class Order [00/212] instead of detailing their entitlement to a periodic Transaction Statement (subsection C(c)). The amended legislation imposes specific obligations on the Responsible Entities operating under IDPS-like schemes. They must ensure compliance with paragraphs 2(h) and 2(k) of Class Order [00/212], which relate to the provision of quarterly and annual reports, respectively. In doing so, they are relieved from the requirement to send Transaction Statements to the Holders. Moreover, when communicating with the Holders, the Responsible Entity must clearly outline their entitlement to receive reports and information under the aforementioned paragraphs of Class Order [00/212], rather than detailing their entitlement to periodic Transaction Statements. Failure to adhere to the requirements outlined in the amended Class Order [CO 00/217] may result in legal consequences. While the specific offences, penalties, or civil/criminal consequences are not detailed in the legislative instrument, breaches of Corporations Law provisions generally attract penalties under the relevant legislative framework. These penalties can include fines, imprisonment, or both, depending on the severity of the breach. It is important to note that the exact penalties for non-compliance with this particular amendment would need to be determined within the broader context of the Corporations Law and any applicable regulations.