ASIC Class Order [CO 02/1074]

Overview

The Australian Securities and Investments Commission Corporations Act 2001, enacted by the Commonwealth Parliament, aims to regulate financial markets and entities, including superannuation funds, to protect investors and maintain market integrity. This legislative instrument, F2007B00299, issued under section 951B of the Act, specifically addresses the exemption of trustees of superannuation entities from the obligation to provide a Financial Services Guide to members when dealing in financial products on their behalf. This exemption is intended to streamline operations for trustees while ensuring that the underlying protections for superannuation members are maintained through other regulatory mechanisms. The instrument was signed by Brendan Byrne as a delegate of the Australian Securities and Investments Commission on 9 October 2002, formalising the exemption to facilitate more efficient management of superannuation funds without compromising the safety and efficacy of the superannuation system.

Scope and Application

The Corporations Act 2001, as modified by section 951B through the legislative instrument F2007B00299, provides an exemption to trustees of superannuation entities from the obligation to furnish a Financial Services Guide under section 941A of the Act. This exemption applies specifically to dealings in financial products conducted by the trustees on behalf of the members of the superannuation entity in the ordinary course of the entity’s operations. The exemption is geographically and jurisdictionally limited to the Commonwealth of Australia, impacting trustees operating within this framework. The term "superannuation entity" is interpreted as per subsection 10(1) of the Superannuation Industry (Supervision) Act 1993, thereby delineating the entities and trustees to which this exemption pertains. Notably, this instrument does not extend or restrict its application through subordinate instruments and operates without stated exclusions or exemptions beyond the defined scope of the legislation.

Key Provisions

Section 951B of the Corporations Act 2001 provides an exemption for trustees of superannuation entities from the requirement to provide a Financial Services Guide to members of the entity when dealing in financial products on behalf of those members. This exemption applies specifically to the operations of the superannuation entity and the trustees' dealings in financial products for the benefit of its members. The Act recognises that the trustees' primary role in managing and investing superannuation funds may not necessitate the detailed disclosure typically required under section 941A, particularly when actions are taken in the ordinary course of managing the entity. The obligations imposed by this exemption pertain to the trustees of superannuation entities. Trustees are relieved from the obligation to issue Financial Services Guides when they engage in financial product dealings on behalf of the members. This means that trustees do not need to provide the comprehensive documentation and information typically required under section 941A, as long as these actions are within the scope of their duties as trustees. Trustees must still ensure that any dealings are in the best interests of the members and comply with other relevant provisions of the Act and related legislation. There are no direct offences or penalties specified in section 951B for failing to provide a Financial Services Guide in the exempted circumstances. However, trustees who do not adhere to the best interests of the members or who engage in unauthorised or improper activities could face civil or criminal liability under other sections of the Corporations Act 2001, such as sections 1041H and 12AA, which address breaches of director and officer duties and dishonest conduct, respectively. The penalties for such breaches can be severe, including fines and imprisonment, depending on the nature and severity of the breach. Additionally, trustees may face claims for damages or other remedies from affected members if they fail to act in accordance with their fiduciary duties.