Overview

The Australian Securities and Investments Commission Corporations Act 2001, enacted by the Commonwealth Parliament, is a foundational piece of legislation designed to regulate corporate activities and financial markets in Australia. This Act provides the framework for the establishment, operation, and regulation of financial markets and entities in Australia, including the oversight of financial services and consumer protection. The legislation was introduced to address the need for a comprehensive regulatory regime to maintain market integrity and protect investors. This particular legislative instrument, dated 22 February 2002, revokes Class Order [00/234] and provides exemptions under specific provisions of the Act for certain entities involved in operating or offering interests in managed investment schemes for the development or production of cinematograph films, commonly referred to as "Film Investment Schemes". The policy objective is to facilitate investment in the film industry by easing regulatory burdens on certain types of offers and issues under defined conditions.

Scope and Application

The Australian Securities and Investments Commission (ASIC) has issued a legislative instrument under the Corporations Act 2001, revoking Class Order [00/234] and providing certain exemptions. The instrument primarily affects persons involved in the operation or offering of managed investment schemes for the development or production of cinematograph films, known as Film Investment Schemes, and the entities involved in these operations. The geographic and jurisdictional reach of this Act is national, as it pertains to entities and transactions within Australia. The exemptions provided under the Act are detailed in Schedule A and Schedule B, which specify the class of persons exempt from certain regulatory requirements, including licensing and disclosure obligations. These exemptions apply to offers and issues of interests in Film Investment Schemes made to specified entities and under certain conditions, as outlined in Schedule B. The Act does not specify exclusions or exemptions beyond those detailed in the schedules, and it does not extend or restrict its application through subordinate instruments. The instrument's application is contingent on the date of the issuance of Film Investment Scheme interests, with different effective dates for schemes based on when the interests were first issued relative to the instrument's commencement date.

Key Provisions

The main operative sections of this legislation include the revocation of Class Order [00/234] under paragraphs 601QA(1)(a) and 741(1)(a) of the Corporations Act 2001 (referred to as the "Act") and the exemption of certain classes of persons from various regulatory requirements related to managed investment schemes, particularly those involving the development or production of cinematograph films, as described in Schedule A. Specifically, under paragraphs 601QA(1)(a), 911A(2)(l), 992B(1)(a) and 1020F(1)(a) of the Act, ASIC exempts the class of persons detailed in Schedule A from several obligations under the Act, including those under Chapter 5C, sections 992A and 992AA, and Part 7.9 of the Act, as well as from the requirement to hold an Australian financial services licence for financial services related to these investments. Similarly, under paragraphs 911A(2)(l) and 1020F(1)(a), other persons are exempted from the requirement to hold such a licence and from Part 7.9 of the Act for recommendations and offers related to these investments, provided they are not aware or should not reasonably be aware that the offers and issues are not as described in Schedule B. The Act imposes specific obligations on the parties governed by it, primarily concerning the exemption of certain classes of persons from various regulatory requirements. These obligations include ensuring that offers and issues of interests in managed investment schemes, particularly those related to the development or production of cinematograph films, are made only to specified entities or under certain conditions as outlined in Schedule B. Additionally, the Act requires that those involved in the operation of these schemes or in offering or issuing interests in them must adhere to the exemptions and conditions set out in Schedule A and Schedule B. Furthermore, it mandates that other persons not involved in the operation of these schemes must not be aware or reasonably aware that the offers and issues of interests are not as described in Schedule B. The Act also outlines potential offences, penalties, and civil or criminal consequences for breaches of its provisions. While the specific penalties are not detailed in the text, it is common under Australian legislation that breaches of financial services laws, such as those governed by the Corporations Act 2001, can result in substantial fines and, in severe cases, imprisonment. For corporate entities, the fines can be particularly significant, often calculated based on the severity of the breach and the entity's ability to pay. Additionally, individuals involved in the management or operation of the schemes who contravene the Act may face personal penalties, including fines and imprisonment. The precise penalties would depend on the nature and extent of the breach, as well as the specific sections of the Act that are violated.