ASIC Class Order [CO 02/0260]

ASIC Class Order [CO 02/260]

Product Disclosure Statements — application forms created by a licensee

This instrument has effect under s1020F(1)(a) of the Corporations Act 2001.

This compilation was prepared on 27 July 2011 taking into account amendments up to [CO 07/151]. See the table at the end of this class order.

Prepared by the Australian Securities and Investments Commission.

Australian Securities and Investments Commission
Corporations Act 2001 — Paragraph 1020F(1)(a) — Exemption

Under paragraph 1020F(1)(a) of the Corporations Act 2001 (the “Act”), the Australian Securities and Investments Commission hereby exempts, on the conditions in the Schedule, an issuer or seller (within the meaning of subsection 1016A(2) of the Act) of a relevant financial product (within the meaning of subsection 1016A(1) of the Act) from subsection 1016A(2) to the extent that it requires the issuer or seller only to issue or sell the relevant financial product in response to an application form (an “original form”) that:

(a) was included in, or accompanied, a Product Disclosure Statement (the “Statement”) or Short-Form PDS (the “Statement”); or

(b) was copied or directly derived by the person making the application from the original form,

and to the extent that that subsection prohibits the issuer or seller from issuing or selling the relevant financial product in response to an application form issued and partly completed by a financial services licensee (“licensee form”) where the issuer or seller had reasonable grounds to believe that the licensee form was distributed with a Statement that contained all the information that would have been required to be contained in a Statement for the product given at the time of the making of the application.

Note 1:   A reference in section 1016A to a Product Disclosure Statement includes a reference to a Short-Form PDS: see section 1017K, as notionally inserted by Part 3 of Schedule 10BA of the Corporations Regulations 2001.

 Note 2:  If a Statement is defective and the issuer or seller does not have reasonable grounds to believe that it was accompanied by a Supplementary Product Disclosure Statement or Supplementary Short-Form PDS which deals with the defect, the issuer or seller is required to deal with the relevant application under subsection 1016E(2) of the Act.

SCHEDULE

1 An issuer or seller must take all reasonable measures to ensure that a financial services licensee who issues a licensee form to a person:

(a) provides the person at the same time and by the same means, with the Statement and any Supplementary Product Disclosure Statement (“Supplementary Statement”) or Supplementary Short-Form PDS (“Supplementary Statement”);

(b) includes all the information contained in the original form in the licensee form (unless the Statement has been altered with the issuer’s or seller’s authorisation so as to contain that information);

(c) takes, where a Statement and any Supplementary Statement is provided electronically, all reasonable measures to ensure that it is received complete and unaltered;

(d) complies with any request from that person for a paper copy of the Statement (including any Supplementary Statement) or original form, without charge and within a reasonable time; and

(e) keeps for seven years:

(i) records adequate to demonstrate that the licensee has done the acts referred to in paragraphs 1(a) to 1(d) of this Schedule; and

(ii) if the financial services licensee enables a person to apply for the financial product by using software — a copy of each screen which would be displayed to a person using the software to apply for the financial product, in any durable and legible medium.

2 An issuer or seller must not issue or sell a financial product to another person who applies on a licensee form unless the issuer or seller has reasonable grounds to believe that the form contains:

(a) particulars of the relevant financial product and the Statement including its date;

(b) a prominent warning that:

(i) there is a Statement with information about the relevant financial product;

(ii) it is advisable to read the Statement before applying for the relevant financial product; and

(iii) a person who gives another person access to the licensee form must at the same time and by the same means give the other person access to the Statement including any Supplementary Statement; and

(c) a statement that the issuer or seller or financial services licensee who has provided the licensee form will send paper copies of the Statement (including any Supplementary Statement) and the application form, on request and without charge.

If the licensee form is issued as software which generates an application for the relevant financial product, the software must display the matters mentioned in this condition to a person using the software to apply for financial products.

Note: Where a licensee form is in electronic form, it may contain links and information relevant to making an application. They should not distract the applicant from reading and understanding the Statement and form.

Interpretation

1 For the avoidance of doubt, where this instrument requires one person (“A”) to have reasonable grounds for a belief that a fact exists, or to take reasonable measures to ensure that a fact exists at a particular time, A may rely on a representation or agreement by another person (“B”) that the fact exists or will exist at the proper time, if:

(a) B is more directly responsible than A for ensuring that the fact exists at the proper time; and

(b) A has no reason to doubt that the fact exists or will exist at the proper time.

2 In this instrument: a reference to a “financial services licensee” includes, during the transition period (within the meaning of subsection 1431(1) of the Act) for a regulated principal, a reference to a regulated principal described in item 1 of the table set out in section 1430 of the Act.

““Short-Form PDS” and “Supplementary Short-Form PDS” have the same meanings as in Division 3A of Part 7.9 of the Act, as notionally inserted by Part 3 of Schedule 10BA of the Corporations Regulations 2001.

Commencement

This instrument takes effect on the commencement of Schedule 1 to the Financial Services Reform Act 2001.

Notes to ASIC Class Order [CO 02/260]

Note 1

ASIC Class Order [CO 02/260] (in force under s1020F(1)(a) of the Corporations Act 2001) as shown in this compilation comprises that Class Order amended as indicated in the tables below.

Table of Instruments

Table of Amendments

ad. = added or inserted     am. = amended     rep. = repealed     rs. = repealed and substituted