ASIC Class Order [CO 02/0146]

Overview

The Financial Services Reform Act 2001, enacted by the Australian Parliament, was introduced to modernise and streamline the financial services regulation in Australia, addressing gaps in the existing legislative framework and ensuring it could effectively accommodate the evolving financial landscape. One of the key legislative instruments under this Act is the variation to Class Order [00/168] of the Corporations Act 2001, which was made by the Australian Securities and Investments Commission (ASIC) on 6 February 2002. The primary policy objective of this variation is to align the regulatory terminology with the new nomenclature established by the Corporations Act 2001, ensuring consistency and clarity in the application of financial regulations. The legislative instrument modifies specific references within Class Order [00/168] to reflect the new legislative framework, thus facilitating a smoother transition to the updated legal environment.

Scope and Application

The Australian Securities and Investments Commission Corporations Act 2001, under the legislative instrument F2006B11657, modifies Class Order [00/168] to update references from the former Corporations Law to the current Corporations Act 2001. This legislative change applies to all entities and individuals who are governed by the Corporations Act, including companies, directors, officers, and other participants within prescribed financial markets. The amendment ensures that all references within the Class Order align with the current legal framework, maintaining consistency and clarity in regulatory language. The geographic reach of this legislation is national, applying across Australia, as the Corporations Act 2001 has jurisdiction over all entities registered under Australian law. The variation does not introduce new exclusions or exemptions but rather refines the existing language to reflect legislative updates. The application of this Act can be further extended or restricted through subordinate instruments as deemed necessary by the Australian Securities and Investments Commission.

Key Provisions

The key operative sections of this legislative instrument involve specific variations to Class Order [00/168] under subsection 741(1) of the Corporations Act 2001. These variations include amending the terminology from "Law" to "Act" and "Corporations Law" to "Corporations Act 2001" throughout the heading and introductory words of the Class Order. Additionally, it replaces the term "stock market of a securities exchange" with "prescribed financial market" in Schedule B (paragraphs 1-4). These modifications align the Class Order with the new legislative framework introduced by the Financial Services Reform Act 2001. Entities and individuals governed by the Corporations Act 2001, particularly those subject to Class Order [00/168], are required to comply with these textual changes. The obligation extends to updating their internal documents, policies, and procedures to reflect the new terminology and definitions. This includes ensuring that all references to the "Corporations Law" are replaced with references to the "Corporations Act 2001" and that any mention of "stock market of a securities exchange" is updated to "prescribed financial market" where applicable. Failure to make these changes can result in non-compliance with regulatory requirements. The legislative instrument does not explicitly state any offences, penalties, or consequences for non-compliance with the textual changes outlined. However, non-compliance with any part of the Corporations Act 2001 can lead to various civil or criminal penalties. For instance, under section 1317E of the Act, a person who contravenes a civil penalty provision can be subject to a pecuniary penalty of up to $210,000 for a corporation and $42,000 for an individual. Additionally, if the contravention is of a continuing nature, the court may order a penalty of up to $1,050,000 for a corporation and $210,000 for an individual for each day the contravention continues. These penalties underscore the importance of adhering to the legislative requirements to avoid potential legal repercussions.