Australian Securities and Investments Commission
Corporations Act 2001- Paragraphs 601QA(1)(a), 741(1)(a), 911A(2)(1), 992B(1)(a) and 1020F(l)(a) - Revocation and Exemption
1. Under paragraphs 601QA(1)(a) and 741(1)(a) of the Corporations Act 2001 (the "Act") the Australian Securities and Investments Commission ("ASIC") hereby revokes Class Order [00/205].
2. Under paragraphs 601QA(1)(a), 992B(1)(a) and 1020F(l)(a) of the Act, ASIC hereby exempts any person who operates a Broodmare Scheme ("Operator") from Chapter 5C, sections 992A and 992AA and Part 7.9 (other than sections 1017E, 1017F, 1020D and 1021O) of the Act in relation to:
(a) the operation of a managed investment scheme the principal purpose of which is to breed horses out of broodmares to which the scheme relates (a "Broodmare Scheme");
(b) the making of offers for issue or sale of, or recommendations to acquire, interests in a Broodmare Scheme; and
(c) issuing or selling interests in a Broodmare Scheme,
where:
(d) each interest in the Broodmare Scheme is issued as the result of.
(i) an issue to which section 1477 of the Corporations Law (as continued in force by section 1408 of the Act) applies; or
(ii) an offer made before the Effective Date which assuming that interests in a Broodmare Scheme were securities to which Part 6D.2 of the Act applied at the time the offer was made, would not have required disclosure to investors because of a provision of section 708 of the Act; or
(iii) acceptance of a personal offer as defined in subsection 1012E(5) of the Act whether made before or after the Effective Date; or
(iv) an offer made on or after the Effective Date which does not need a Product Disclosure Statement; and
(e) the Operator together with any of its associates (as defined in Division 2 of Part 1.2 of the Act) have not, at the same time or during the previous 12 months, issued or sold more than 20 interests in aggregate in managed investment schemes, the principal purpose of which is to breed horses.
3. Under paragraph 911A(2)(1) of the Act, ASIC hereby exempts each person who is an Operator from the requirement to hold an Australian financial
services licence for the provision of financial services in relation to interests in a Broodmare Scheme operated on a basis which meets the requirements in paragraph 2 of this instrument.
4. Under paragraphs 911A(2)(l) and 1020F(1)(a) of the Act, ASIC hereby exempts each person other than an Operator from:
(a) the requirement to hold an Australian financial services licence for the provision of financial services in relation to, and
(b) Part 7.9 of the Act in relation to a recommendation that a client acquires and an offer to arrange the issue of an interest in,
a Broodmare Scheme offered on a basis which appears to meet the requirements in paragraph 2 of this instrument except where the person is aware, or reasonably ought to be aware, that those requirements have not been met.
Interpretation
For the purposes of this instrument:
"Commencement Date" means the date of the commencement of Schedule 1 to the Financial Services Reform Act 2001; and
"Effective Date" means:
(a) for interests in a Broodmare Scheme in a class which were first issued on or after the Commencement Date - the Commencement Date; and
(b) for any other interests in a Broodmare Scheme - the date on which the new product disclosure provisions (as defined in section 1438 of the Act) first apply to interests in the Broodmare Scheme.
Commencement
This instrument takes effect on the Commencement Date.
Dated the 12th day of February 2002
Signed by Brendan Byrne
as a delegate of the Australian Securities and Investments Commission
Overview
The Australian Securities and Investments Commission Corporations Act 2001 was enacted to provide a comprehensive legal framework governing the operation of financial markets, securities, and investment schemes in Australia. This Act addresses gaps in financial regulation, particularly concerning the oversight and regulation of managed investment schemes, ensuring that they comply with national standards to protect investors. The Corporations Act 2001 was enacted by the Australian Parliament and its primary policy objective is to enhance the transparency, efficiency, and integrity of financial markets, while protecting investors and maintaining public confidence in the financial system.
The legislative instrument F2007B00636, dated 12 February 2002, is a revocation and exemption instrument issued by the Australian Securities and Investments Commission (ASIC) under the authority of the Corporations Act 2001. This instrument revokes Class Order [00/205] and provides specific exemptions for operators of Broodmare Schemes from certain sections of the Act. These exemptions are designed to streamline the regulatory environment for certain small-scale managed investment schemes focused on breeding horses, while still ensuring that investors are adequately informed and protected. The instrument also exempts non-operators from holding an Australian financial services licence and certain disclosure requirements, provided they are not aware that the scheme does not meet the specified criteria.
Scope and Application
The Australian Securities and Investments Commission (ASIC) has revoked Class Order [00/205] under the Corporations Act 2001, thereby altering regulatory requirements pertaining to certain financial services. ASIC has also issued specific exemptions to certain persons operating what are termed "Broodmare Schemes" from various sections of the Act, including Chapter 5C, sections 992A and 992AA, and Part 7.9, except for certain subsections. These exemptions apply to operators of managed investment schemes whose principal purpose is to breed horses using broodmares, including the making of offers or recommendations to acquire interests in such schemes, and the issuing or selling of interests therein. The exemptions are conditional on the manner in which interests are issued, specifically relating to certain types of offers and acceptances, and on the aggregate number of interests issued or sold by the operator and their associates over a 12-month period. Furthermore, operators of these schemes are exempt from holding an Australian financial services licence for the provision of financial services in relation to these schemes, provided the schemes meet the specified conditions. Other individuals or entities are exempt from holding a licence and certain provisions of Part 7.9 of the Act in relation to recommendations and offers to arrange the issue of interests in a Broodmare Scheme, except when they are aware, or should reasonably be aware, that the conditions for these exemptions have not been met. This legislative instrument applies to the Commonwealth of Australia and takes effect on the date specified as the "Commencement Date."
Key Provisions
In accordance with paragraphs 601QA(1)(a) and 741(1)(a) of the Corporations Act 2001, the Australian Securities and Investments Commission (ASIC) has revoked Class Order [00/205]. This revocation pertains to specific provisions within the Act, streamlining regulatory requirements for certain activities. Further, under paragraphs 601QA(1)(a), 992B(1)(a), and 1020F(1)(a) of the Act, ASIC grants exemptions to operators of a "Broodmare Scheme" from certain sections of the Act. A Broodmare Scheme is defined as a managed investment scheme where the primary purpose is to breed horses using broodmares related to the scheme. The exemptions cover the operation of such schemes, the making of offers or recommendations regarding scheme interests, and the issuance or sale of scheme interests. These exemptions apply if certain conditions are met, such as the method of issuing interests and the number of interests issued within a specified period.
The Act imposes specific obligations on the parties it governs. Operators of Broodmare Schemes must ensure their activities comply with the conditions outlined in the exemptions. This includes adhering to the criteria for issuing interests, such as those defined by section 1477 of the Corporations Law and section 708 of the Act. Additionally, operators must not exceed the limit of 20 interests issued in aggregate within a 12-month period in managed investment schemes for breeding horses. The Act also mandates that operators and their associates comply with these conditions to maintain the exemption from certain regulatory requirements.
Under paragraph 911A(2)(1) of the Act, operators of Broodmare Schemes are exempt from the requirement to hold an Australian financial services licence for providing financial services related to these schemes, provided the scheme meets the specified conditions. Furthermore, under paragraphs 911A(2)(1) and 1020F(1)(a), individuals who are not operators but who provide financial services or recommendations regarding Broodmare Schemes are exempt from holding a financial services licence and from specific sections of the Act, unless they are aware that the scheme does not meet the required conditions. Failure to comply with these provisions may lead to civil or criminal penalties, although the specific penalties are not detailed within the excerpt provided. However, breaches of the Corporations Act generally carry significant penalties, including fines and imprisonment, depending on the severity and nature of the breach.