ASIC Class Order [CO 02/183]

Administered by Department of the Treasury

Legislation au F2007B00609 Not in force Legislative Instrument

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Australian Securities and Investments Commission
Corporations Act 2001 — Paragraphs 601QA(1)(a), 741(1)(a), 911A(2)(l),
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 [00/215).

2. Under paragraphs 601QA(1)(a), 911A(2)(l), 992B(1)(a) and 1020F(l)(a) of the Act, ASIC hereby exempts the class of persons mentioned in Schedule A from:

(a) sections 601ED, 992A and 992AA and Part 7.9 of the Act in the case mentioned in Schedule B on the conditions set out in Schedule C and for as long as they are met; and

(b) the requirement to hold an Australian financial services licence for the provision of financial services by the person in relation to Syndicate Interests (as defined in Schedule B) offered on a basis which meets the conditions and requirements in Schedules C and D.

3. Under paragraph 911A(2)(l) and 1020F(l)(a) of the Act, ASIC hereby exempts a person (other than a person in the class of persons mentioned in Schedule A) from:

(a) the requirement to hold an Australian financial services licence for the provision of financial services by the person in relation to interests in; and

(b) Part 7.9 of the Act in relation to a recommendation that a retail client acquire, and an offer to arrange the issue of an interest in,

a Syndicate that is being offered on a basis which appears to meet the conditions and requirements in Schedules C and D, except where the person is aware, or ought reasonably to be aware, that those conditions and requirements have not been met.

SCHEDULE A

Persons operating a Syndicate or offering to issue or sell or issuing interests in a Syndicate.

SCHEDULE B

The operation of, and offering for issue or sale, recommending to acquire and issuing interests in, a managed investment scheme ("Syndicate") under which each interest that has been offered ("Syndicate Interest") comprises:

(a) an agreement ("Syndicate Agreement") that complies with Schedule D between the persons ("Investors") who are to purchase or who hold legally and beneficially a fee simple title to real property or fee simple titles to adjoining real properties ("Syndicate Property");

(b) any agreement between Investors and a person ("Manager") that the Manager will provide property management services including arranging leases, collecting rent, and arranging repair and maintenance work in relation to the Syndicate Property.

SCHEDULE C

Persons involved in offering for issue or sale a Syndicate Interest in the Syndicate ("offerors"):

(a) must not issue or sell any Syndicate Interest if that would result in more than 15 Investors (with joint holders and tenants in common being counted separately) holding Syndicate Interests;

(b) must have no associate (as defined for the purposes of Chapter 7 of the Act) who is in the ordinary business of promoting property syndicates unless none of the offerors and their associates may benefit from the Syndicate other than on the same basis as all the Investors in the Syndicate;

(c) must hold for the duration of the Syndicate a Syndicate Interest of at least 5% of the total value of the Syndicate Interests;

(d) if:

(i) Investors do not contract to buy the Syndicate Property within 6 months after the date on which an Investor first made an application to purchase a Syndicate Interest; or

(ii) the title to the Syndicate Property is not held by the Investors within 9 months after that date,

and the Syndicate Agreement is terminated at the request of an Investor pursuant to the Syndicate Agreement - must return to Investors within 14 days any money paid to an offeror or its associates by Investors in connection with Syndicate Interests (together with any interest that has accrued on that money) less any expenses permitted under the Syndicate Agreement;

(e) must ensure that any money paid to apply for the Syndicate Interests is immediately deposited by an offeror on trust for the Investors in a separate account with an Australian bank or in units in a cash management trust that is a registered scheme pending the title to the Syndicate Property being held by the Investors and is disbursed only in accordance with the Syndicate Agreement;

(f) must ensure that no charge, mortgage or other security interest ("mortgage") applies to any part of the Syndicate Property on the Investors being vested with the property except as specified in the Syndicate Agreement and must not be involved in the creation of any mortgage except in accordance with the Syndicate Agreement;

(g) must not agree to or be involved in any amendment to the Syndicate Agreement that causes non-compliance with Schedule D; and

(h) must comply with their obligations under the Syndicate Agreement.

SCHEDULE D

The Syndicate Agreement must contain provisions to the effect of the following:

(a) identifying the Syndicate Property by its address and particulars of title or, if this is not known when the Syndicate Agreement is entered into, describing the type of property to be purchased by reference to its physical location, its function, the desired annual yield or return and price range;

(b) if the Syndicate Property is not identified in the Syndicate Agreement, that no Syndicate Property will be purchased without the approval in writing of all Investors to the purchase of that property;

(c) if the Investors do not contract to buy the Syndicate Property within 6 months after the date on which an Investor first made an application to purchase a Syndicate Interest, or if title to the Syndicate Property is not held by the Investors within 9 months after that date, the Syndicate Agreement will be terminated at the request of any Investor and all money held on behalf of the Investors under the Syndicate Agreement (including any interest that has accrued on that money) must be returned to the Investors (less any expenses incurred by an offeror in paying persons other than its associates permitted under the Syndicate Agreement) in proportion to the value of their Syndicate Interests within 14 days of such a request;

(d) no mortgage over any part of the Syndicate Property other than any mortgage specified in the Syndicate Agreement may be created unless all Investors who are registered proprietors of that part of the Syndicate Property agree to that mortgage;

(e) the agreement is to hold and lease the Syndicate Property (if necessary after having purchased it) as an investment and not for any other purpose that is not incidental to the purchase, lease, and holding of the Syndicate Property for gain;

(f) if for any period of 3 consecutive months after the first acquisition of Syndicate Property, the value of any property to which the Syndicate Agreement relates but which is not real property, exceeds 20% of the value of all the property to which the Syndicate Agreement relates, the Syndicate Agreement will be terminated at the request of any Investor and all money held on behalf of the Investors under the Syndicate Agreement after meeting any expenses payable under the Syndicate Agreement must be paid to Investors in proportion to the value of their Syndicate Interests as soon as practicable;

(g) if any moneys are paid to an offeror or its associates in relation to Syndicate Interests the moneys will be immediately deposited on trust for the Investors in a separate account with an Australian bank or in units in a cash management trust that is a registered scheme and disbursed only in accordance with the Syndicate Agreement; and

(h) the Syndicate Agreement may not be amended unless all Investors agree in writing and the amendment does not result in the Syndicate Agreement not complying with this Schedule.

Interpretation

For the purposes of this instrument the value of the Syndicate Interest of an Investor relative to the total value of the Syndicate Interests is to be taken to be the proportion that the amount paid upon application for issue of that Syndicate Interest (regardless of any amount paid on a transfer of the interest) bears to the total of amounts paid upon application for all Syndicate Interests.

Commencement

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

Dated the 16th 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 regulate the financial services sector in Australia, ensuring that companies and individuals comply with the relevant laws and standards. This legislative instrument, F2007B00609, was introduced to address specific issues within the financial services industry, particularly concerning the operation of syndicates and the sale of syndicate interests. The instrument was enacted by the Australian Securities and Investments Commission (ASIC) under the authority granted by the Corporations Act 2001. The policy objective is to provide exemptions for certain classes of persons involved in syndicates, ensuring that they operate within a regulated framework while promoting the growth and stability of the financial services sector. Under this legislative instrument, ASIC revokes a specific class order and grants exemptions to certain classes of persons from certain sections of the Corporations Act 2001. These exemptions are subject to conditions outlined in accompanying schedules, ensuring that syndicates are managed responsibly and that investors' interests are protected. The exemptions cover various aspects, including the requirement to hold an Australian financial services licence and specific sections of the Act. The exemptions are designed to facilitate the legitimate operation of syndicates while maintaining the integrity and stability of the financial services market.

Scope and Application

The Australian Securities and Investments Commission Corporations Act 2001 (the "Act") provides the framework under which the Australian Securities and Investments Commission (ASIC) can revoke class orders and grant exemptions related to financial services and managed investment schemes. In this legislative instrument, ASIC revokes Class Order [00/215] and provides exemptions to certain persons involved in the operation or offer of Syndicate Interests, which are interests in managed investment schemes where each interest comprises an agreement between investors who hold or are to purchase fee simple titles to real property or adjoining properties, and a manager who provides property management services. The exemptions apply to persons operating a Syndicate or offering to issue or sell interests in a Syndicate, as specified in Schedule A. These exemptions cover sections 601ED, 992A, 992AA and Part 7.9 of the Act, as well as the requirement to hold an Australian financial services licence for certain financial services provided in relation to Syndicate Interests, under conditions outlined in Schedules C and D. Additionally, other persons involved in offering Syndicate Interests are exempt from the requirement to hold a financial services licence and from Part 7.9 of the Act, provided they comply with specific conditions and requirements detailed in the schedules. The exemptions are subject to conditions, such as the limitation on the number of investors, the prohibition of certain associations, and the requirement to hold a Syndicate Interest of at least 5% of the total value of Syndicate Interests, among others. This legislative instrument applies nationally within Australia and came into effect upon the commencement of Schedule 1 to the Financial Services Reform Act 2001.

Key Provisions

The legislative instrument revokes Class Order [00/215] under paragraphs 601QA(1)(a) and 741(1)(a) of the Corporations Act 2001, and provides exemptions to certain classes of persons under various paragraphs of the Act. Specifically, the instrument exempts certain classes of persons from certain sections and parts of the Act in relation to the provision of financial services by them with respect to Syndicate Interests, provided that certain conditions and requirements are met. These conditions and requirements are set out in Schedules C and D. The instrument also exempts certain persons from the requirement to hold an Australian financial services licence for the provision of financial services by them with respect to interests in Syndicates, provided that certain conditions and requirements are met. These conditions and requirements are also set out in Schedules C and D. The obligations and requirements imposed by the Act on the parties or entities it governs include, but are not limited to, the requirement that offerors must not issue or sell any Syndicate Interest if that would result in more than 15 Investors holding Syndicate Interests; must have no associate who is in the ordinary business of promoting property syndicates unless none of the offerors and their associates may benefit from the Syndicate other than on the same basis as all the Investors in the Syndicate; must hold for the duration of the Syndicate a Syndicate Interest of at least 5% of the total value of the Syndicate Interests; must return to Investors any money paid to an offeror or its associates by Investors in connection with Syndicate Interests, less any expenses permitted under the Syndicate Agreement, if certain conditions are met; must ensure that any money paid to apply for the Syndicate Interests is immediately deposited by an offeror on trust for the Investors in a separate account with an Australian bank or in units in a cash management trust that is a registered scheme pending the title to the Syndicate Property being held by the Investors and is disbursed only in accordance with the Syndicate Agreement; must ensure that no charge, mortgage or other security interest applies to any part of the Syndicate Property on the Investors being vested with the property except as specified in the Syndicate Agreement and must not be involved in the creation of any mortgage except in accordance with the Syndicate Agreement; must not agree to or be involved in any amendment to the Syndicate Agreement that causes non-compliance with Schedule D; and must comply with their obligations under the Syndicate Agreement. The instrument also sets out offences, penalties, or civil/criminal consequences for breach, including maximum penalties where stated. However, the instrument does not specify the exact nature of these offences, penalties, or consequences. It is likely that the Act provides for civil and/or criminal penalties for breach of its provisions, and that the maximum penalties for such breaches are set out in the Act. It is also possible that the instrument provides for specific penalties or consequences for breach of certain provisions, but this is not clear from the text of the instrument.

Area of Law: Financial Services Law; Corporate Law & Governance
Instrument: Legislative Instrument
Concepts: Regulatory Standards; Licensing & Registration; Compliance Obligations

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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