ASIC Class Order [CO 03/1096]

Overview

The ASIC Class Order [CO 03/1096], enacted in 2003, addresses the need to exempt eligible actuaries from holding an Australian financial services licence when providing financial product advice under specific circumstances, as permitted under section 911A(2)(l) of the Corporations Act 2001. This exemption applies to advice provided to wholesale clients, the Commonwealth, a State or a Territory, or an exempt public authority, when the advice is given in the ordinary course of professional actuarial services and does not involve certain documents or statements. The objective of this legislation is to facilitate the provision of actuarial advice without the necessity of an Australian financial services licence, provided the advice is given before a specified date and adheres to the outlined conditions. The Australian Securities and Investments Commission is the enacting body responsible for this class order, ensuring compliance with the broader regulatory framework of the Corporations Act 2001.

Scope and Application

The ASIC Class Order [CO 03/1096] under the Corporations Act 2001 provides an exemption from the requirement for eligible actuaries to hold an Australian financial services licence when providing financial product advice. This exemption applies to actuaries who provide advice to wholesale clients, the Commonwealth, a State or a Territory, or an exempt public authority. The advice must be given in the ordinary course of providing professional actuarial services and should not be included in certain specified documents or statements, such as those that could reasonably be expected to be given to a retail client. The exemption is conditional on the advice being provided before 31 August 2007. The term "eligible actuary" includes actuaries defined under various Acts such as the Superannuation Industry (Supervision) Act 1993, the Insurance Act 1973, and the Life Insurance Act 1995. The Class Order was initially made on 22 December 2003 and took effect on 23 December 2003, with subsequent amendments made on various dates, each taking effect on the dates specified. This Class Order is an instrument under the Corporations Act 2001, demonstrating the flexibility and responsiveness of the legislative framework in addressing specific professional practices.

Key Provisions

The ASIC Class Order [CO 03/1096] under the Corporations Act 2001 provides exemptions for eligible actuaries from the requirement to hold an Australian financial services licence for certain types of financial product advice. Specifically, section 2(1) of the Class Order exempts eligible actuaries from needing this licence if the advice is provided to a wholesale client (section 2(1)(a)(i)), the Commonwealth, a State, or a Territory (section 2(1)(a)(ii)), or an exempt public authority (section 2(1)(a)(iii)); it is provided in the ordinary course of professional actuarial services (section 2(1)(b)); it is not intended for inclusion in any exempt or regulated documents or those reasonably expected to be given to retail clients (section 2(1)(c)); and the advice was provided before 31 August 2007 (section 2(1)(d)). The term "eligible actuary" is defined broadly in section 3, encompassing various types of actuaries appointed under different acts. The obligations imposed by this Class Order are primarily on eligible actuaries, requiring them to adhere to the conditions outlined in section 2 to qualify for the exemption. They must ensure the advice provided falls within the specified criteria, such as the type of client, the nature of the advice, and the timing of the advice. The Class Order also includes detailed definitions in section 4, clarifying terms such as "exempt document or statement," "financial product advice," "regulated document," "retail client," and "wholesale client." These definitions are crucial for interpreting the scope and application of the exemption. Furthermore, the commencement section indicates that the Class Order takes effect upon gazette, ensuring immediate applicability once published. The note section and tables provide a historical record of amendments and their effective dates, allowing stakeholders to track changes and understand the evolution of the exemption criteria over time. In terms of consequences for non-compliance, the Class Order does not explicitly detail penalties within its text. However, it operates under the broader framework of the Corporations Act 2001, which includes provisions for offences and penalties related to financial services. Breaches of the requirements set out in the Class Order could potentially lead to civil or criminal penalties as stipulated in the Act, including fines and imprisonment. The maximum penalties would be in accordance with the relevant sections of the Corporations Act, reflecting the seriousness of non-compliance with financial services regulations.