ASIC Class Order [CO 03/1092]
Further relief for joint product disclosure statements
This instrument has effect under s1020F(1)(c) of the Corporations Act 2001.
This compilation was prepared on 10 October 2007 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)(c) — Declaration
Under paragraph 1020F(1)(c) of the Corporations Act 2001 (the “Act”) the Australian Securities and Investments Commission (“ASIC”) declares that Part 7.9 of the Act applies in relation to an issuer of a financial product in the case referred to in the Schedule, as if:
1. section 1013A of the Act were modified or varied by:
(a) in subsection (1), omitting “must be a document that has been prepared by the issuer of the financial product.” and substituting:
“may relate to one or more financial products of more than one issuer, and must be a document that has been prepared by the issuer of each financial product to which the Statement relates.”; and
(b) in subsection (3), after “prepared” inserting “and who is the issuer of the product”; and
2. from 11 March 2004, regulation 7.9.07J of the Corporations Regulations 2001 were omitted.
Schedule
An offer to issue or to arrange the issue, an issue, or a recommendation to acquire by way of the issue, of a financial product where:
1. the Product Disclosure Statement (the “Statement”) or Short-Form PDS (the “Statement”) that is given for that financial product also relates to at least one other financial product of another issuer; and
2. the Statement prominently states:
(a) that the Statement covers two or more separate financial products; and
(b) the identity of the issuer of each financial product it covers; and
(c) that each issuer takes full responsibility for the whole of the Statement; and
(d) which external dispute resolution schemes are able to deal with complaints relating to each financial product covered by the Statement and how they may be contacted; and
(e) how a client may exercise their cooling off rights (if any) in relation to each product covered by the Statement.
Note 1: Where the Act requires a Product Disclosure Statement to be given for a financial product, Division 3A of Part 7.9 (as inserted by Part 3 of Schedule 10BA of the Corporations Regulations 2001) of the Act allows a Short-Form PDS to be given instead.
Note 2: A Product Disclosure Statement or Short-Form PDS cannot relate to financial products that are securities: see section 1010A of the Act. Accordingly, this instrument does not affect the extent to which a Product Disclosure Statement or Short-Form PDS may be combined with a disclosure document for an offer of securities.
Revocation
And under paragraph 1020F(1)(c) of the Act ASIC revokes Class Order [CO 03/876] with effect from 1 January 2006.
Interpretation
In this instrument Short-Form PDS has the same meaning 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.
Notes to ASIC Class Order [CO 03/1092]
Note 1
ASIC Class Order [CO 03/1092] (in force under s1020F(1)(c) of the Corporations Act 2001) as shown in this compilation comprises that Class Order amended as indicated in the tables below.
Table of Instruments
Instrument number | Date of making or FRLI registration | Date of commencement | Application, saving or transitional provisions |
[CO 03/1092] | 22/12/2003 (see F2007B00622) | 22/12/2003 | |
[CO 07/151] | 25/5/2007 (see F2007L01527) | 25/5/2007 | - |
Table of Amendments
ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted
Provision affected | How affected |
Sch............. | am. [CO 07/151] |
Note............ | rs. [CO 07/151] |
Interpretation...... | am. [CO 07/151] |
Overview
ASIC Class Order [CO 03/1092], which came into effect under the Corporations Act 2001, was introduced to address a gap in the regulation of joint product disclosure statements (PDS) in the financial services industry. This legislative instrument, prepared by the Australian Securities and Investments Commission (ASIC), modifies the application of Part 7.9 of the Act to allow for a joint PDS where two or more financial products from different issuers are covered in a single document. This was done to streamline the disclosure process and reduce redundancy for issuers and consumers alike, while ensuring that each issuer remains accountable for the content of the joint PDS. The policy objective underlying this Class Order is to facilitate more efficient and comprehensive disclosure practices for financial products, thereby enhancing consumer protection and market transparency.
Scope and Application
ASIC Class Order [CO 03/1092] applies to issuers of financial products who offer, issue, or recommend the acquisition of these products in a manner that involves a joint Product Disclosure Statement (PDS) or Short-Form PDS. This applies to cases where the disclosure document covers multiple financial products from different issuers. The Class Order modifies section 1013A of the Corporations Act 2001 to allow joint PDSs, provided they clearly state that the document covers multiple products, identify each issuer, and specify how each issuer is responsible for the entire document. The Class Order also outlines specific content requirements for joint PDSs, including details on external dispute resolution schemes and cooling-off rights for each product. The geographic reach of this legislation is national, as it is a Commonwealth instrument. Notably, the Class Order does not apply to financial products that are securities. The application of the Class Order may be extended or restricted through subordinate instruments, although the current text does not specify any such extensions or restrictions.
Key Provisions
ASIC Class Order [CO 03/1092], operating under section 1020F(1)(c) of the Corporations Act 2001, allows for certain modifications to the disclosure requirements for joint product disclosure statements. Specifically, Section 1013A of the Act is amended to permit joint product disclosure statements that cover more than one financial product issued by different issuers (Section 1(a)). This amendment requires each issuer to take responsibility for the content of the statement and ensures that it is prepared by the issuer of each product to which it relates (Section 1(b)). Additionally, Regulation 7.9.07J of the Corporations Regulations 2001 is omitted, effective from 11 March 2004. These changes apply to situations where a Product Disclosure Statement (PDS) or Short-Form PDS relates to at least one other financial product from another issuer, provided the statement clearly identifies each product and issuer, outlines available dispute resolution schemes, and details any cooling-off rights for each product.
The obligations imposed by this Class Order are primarily on issuers of financial products who participate in joint disclosure statements. Issuers must ensure that their joint PDS or Short-Form PDS includes specific information about each financial product it covers, such as the identity of each issuer and the relevant external dispute resolution schemes. Issuers must also confirm their responsibility for the entire content of the statement and clearly state how clients may exercise their cooling-off rights, if applicable, for each product. Furthermore, the statement must be prominently marked to indicate that it covers multiple financial products from different issuers.
Failure to comply with the requirements of ASIC Class Order [CO 03/1092] may result in legal consequences for the issuers involved. While the specific penalties are not detailed in the Class Order, violations of the Corporations Act 2001 can result in substantial civil and criminal penalties. For instance, under Section 1317E of the Act, individuals who are officers of a corporation and are found guilty of breaching the disclosure requirements may face fines of up to $210,000 and imprisonment for up to five years. Additionally, corporations themselves may be fined up to $1.05 million for similar breaches. These penalties underscore the importance of adhering to the obligations set forth in the Class Order to avoid severe repercussions.