ASIC Class Order [CO 02/0249]

Overview

The ASIC Class Order [CO 02/249], enacted under section 257B(7) of the Corporations Act 2001, was introduced to address the need for recognising and regulating overseas financial markets that are of significance to Australian investors. This legislative instrument was prepared by the Australian Securities and Investments Commission (ASIC) and came into effect on 11 March 2002. The policy objective behind this class order is to ensure that the Australian investment community has access to reliable information about approved overseas financial markets, thereby facilitating informed investment decisions. The order declares specific international stock exchanges as approved overseas financial markets, thereby enabling Australian financial institutions and investors to engage more confidently and knowledgeably with these markets.

Scope and Application

The ASIC Class Order [CO 02/249], which comes into effect under subsection 257B(7) of the Corporations Act 2001, specifies a list of approved overseas financial markets, including the American Stock Exchange, Borsa Italiana, Bursa Malaysia Main Board and Second Board, Euronext Amsterdam and Paris, Frankfurt Stock Exchange, Hong Kong Stock Exchange, JSE, London Stock Exchange, NASDAQ Stock Market, New York Stock Exchange, New Zealand Exchange, Singapore Exchange, SWX Swiss Exchange, and Tokyo Stock Exchange, and Toronto Stock Exchange. This order applies to financial markets and the entities or persons engaged in financial activities within these markets, ensuring that they meet the standards and requirements set forth by the Australian Securities and Investments Commission. The geographic reach of this legislation is national, as it pertains to Australian entities and individuals dealing with the listed overseas financial markets. The order was first introduced on 11 March 2002 and was amended on 18 April 2007, indicating a continuous effort to refine and update the regulatory framework. The application of this class order is further extended or restricted through subordinate instruments, as detailed in the tables provided in the order.

Key Provisions

The main operative sections of ASIC Class Order [CO 02/249] under subsection 257B(7) of the Corporations Act 2001 declare certain overseas financial markets as approved markets. These markets include the American Stock Exchange, Borsa Italiana, Bursa Malaysia Main Board and Second Board, Euronext Amsterdam, Euronext Paris, Frankfurt Stock Exchange, Hong Kong Stock Exchange, JSE, London Stock Exchange, NASDAQ Stock Market, New York Stock Exchange, New Zealand Exchange, Singapore Exchange, SWX Swiss Exchange, and Tokyo Stock Exchange. This declaration ensures that these markets meet the standards set by the Australian Securities and Investments Commission (ASIC) for cross-border financial services and investments. The order was initially made on 2 March 2002 and took effect on 11 March 2002, with subsequent amendments, such as those in [CO 07/144], which came into force on 18 April 2007. The obligations imposed by this Class Order on the parties or entities it governs primarily revolve around ensuring compliance with Australian financial regulations when dealing with the approved overseas markets. This includes adhering to disclosure requirements, maintaining appropriate financial records, and ensuring that any securities traded are listed and traded in compliance with the laws of the respective overseas markets. Entities must also ensure that any financial services they provide through these markets are conducted in a manner consistent with Australian financial services laws. Failure to comply with the provisions of this Class Order can result in various consequences, including civil and criminal penalties. Under the Corporations Act 2001, breaches can lead to significant fines, both for individuals and corporate entities. The maximum penalties for non-compliance can include fines of up to $210,000 for individuals and $1,050,000 for bodies corporate, depending on the severity of the breach. Additionally, criminal charges may be laid against individuals who knowingly participate in or facilitate breaches of the Act, which can result in imprisonment terms. It is crucial for entities to ensure that all dealings with the approved overseas financial markets adhere strictly to the provisions of this Class Order to avoid these severe penalties.