ASIC Class Order [CO 02/0187]

Overview

The Australian Securities and Investments CommissionCorporations Act 2001 is a legislative instrument that was enacted in 2001 to address gaps and problems in the financial services sector. This legislation was introduced by the Australian Parliament with the policy objective of ensuring the integrity and transparency of financial markets. One such legislative instrument, F2006B01640, was issued on 16 February 2002 by Brendan Byrne, acting as a delegate of the Australian Securities and Investments Commission. This particular instrument involves variations to Class Order [00/229], updating references to reflect changes from the former Corporations Law to the current Corporations Act 2001, and clarifying the types of trusts that can be considered under the order. The overarching aim is to align the regulatory framework with the updated legislative context, ensuring that financial service providers and regulators operate under a consistent and coherent legal structure.

Scope and Application

The Australian Securities and Investments Commission Corporations Act 2001, as varied under paragraphs 283GA(1)(a) and 741(1)(a), applies to entities and individuals involved in financial services and securities trading in Australia. Specifically, the legislation pertains to those holding securities dealer's licences or Australian financial services licences, as well as cash management trusts that are registered schemes under the Trustee Companies Act 1984 of Victoria or equivalent state laws. The geographic reach of this Act is national, as it applies across all jurisdictions in Australia. This legislative instrument does not specify any exclusions, exemptions, or thresholds, but it may be subject to further definition or restriction through subordinate instruments issued by the Australian Securities and Investments Commission. The variations to Class Order [00/229] reflect updates necessitated by the transition from the former Corporations Law to the current Corporations Act 2001, ensuring that references and definitions within the regulatory framework are consistent with the new legislative text.

Key Provisions

The legislative instrument under discussion modifies Class Order [00/229] pursuant to sections 283GA(1)(a) and 741(1)(a) of the Corporations Act 2001, effective from the commencement of Schedule 1 to the Financial Services Reform Act 2001. The variations primarily involve updating references and terminology to align with the new legislative framework. Firstly, the heading is amended to replace the term "Law" with "Act 2001," and the reference to "260MA(1)" is substituted with "283GA(1)" (paragraph 1). Additionally, throughout the introductory words, "260MA(1)" is replaced with "283GA(1)" (paragraph 2), and the phrase "Corporations Law (Law)" is replaced with "Corporations Act 2001 (the 'Act')" (paragraph 3). The third occurrence of the word "Law" is replaced with "Act" (paragraph 4). Moreover, the term "or an Australian financial services licence" is inserted after "a securities dealer's licence" in paragraph 1 (paragraph 5). Lastly, subparagraph 2(a)(ii) is replaced to specify that a cash management trust must be a registered scheme or a cash common fund within the meaning of Part VII of the Trustee Companies Act 1984 of the State of Victoria or a corresponding State law which is a registered scheme (paragraph 7). This legislative instrument imposes specific obligations on the entities governed by the Class Order, requiring them to update their references and terminology to comply with the updated legislative framework. Entities must ensure that their documents, licenses, and any related communications reflect the changes as per the updated Class Order. This includes replacing the outdated references to "Law" and "Corporations Law" with the correct references to "Act 2001" and "Corporations Act 2001," respectively. Additionally, the inclusion of "or an Australian financial services licence" necessitates that entities recognise and comply with the new licensing requirements. The substitution of subparagraph 2(a)(ii) also imposes an obligation on entities to ensure that their cash management trusts are registered schemes or cash common funds as defined by the relevant State law. The legislation does not explicitly state any specific offences, penalties, or civil/criminal consequences for non-compliance with the variations made in the Class Order. However, non-compliance with the Corporations Act 2001 or any related regulations can lead to enforcement actions by the Australian Securities and Investments Commission. Such actions may include fines, administrative penalties, and legal proceedings under the Act. The penalties for non-compliance with the Corporations Act can be severe, depending on the nature and severity of the breach. The specific penalties are not outlined in the legislative instrument but are governed by the broader provisions of the Corporations Act 2001 and other relevant legislation.