ASIC Class Order [CO 03/1097]
Deferral of s1012IA
This instrument has effect under s1020F(1)(a) of the Corporations Act 2001.
This compilation was prepared on 14 January 2008 taking into account amendments up to [CO 07/386]. 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 — Exemption
1. The Australian Securities and Investments Commission grants this exemption under paragraph 1020F(1)(a) of the Corporations Act 2001 (the “Act”).
2. Until 30 June 2008each provider of a custodial arrangement under which the client is the holder of a superannuation product issued to the client by the provider is exempt from the requirement to give the client a Product Disclosure Statement before a regulated acquisition occurs that would, but for this exemption, apply to the provider under subsection 1012IA(2) of the Act, where the provider has not given any client a Product Disclosure Statement for the superannuation product that is required to be dated later than 1 July 2007.
Note: The date that is required to be given to a Product Disclosure Statement is that specified by section 1013G. That date is not affected by the date of any Supplementary Product Disclosure Statement that supplements the Statement.
3. This exemption is available for so long as and on the condition that the provider takes all reasonable steps to ensure that any document given or made available to a client by or on behalf of the provider which specifies a particular financial product which may be acquired under the custodial arrangement and for which a Product Disclosure Statement may, but for this exemption, be required to be given under subsection 1012IA of the Act:
(a) includes or is accompanied by written information about how the client can obtain a copy of the Statement for the product; or
(b) in the case of a document given or made available through the Internet or otherwise in an electronic form — prominently draws attention to information about how a copy of the Statement for the product may be accessed, for example by including a hypertext link to that information in a prominent place.
Interpretation
In this instrument:
client, custodial arrangement, provider and regulated acquisition have the meanings given by subsection 1012IA(1) of the Act; and
superannuation product has the meaning given by section 761B of the Act.
Notes to ASIC Class Order [CO 03/1097]
Note 1
ASIC Class Order [CO 03/1097] (in force under s1020F(1)(a) 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 03/1097] | 22/12/2003 (see F2006B01648) | 22/12/2003 | |
[CO 04/1347] | 10/11/2004 (see F2006B01649) | 10/11/2004 | - |
[CO 05/346] | 9/6/2005 (see F2005L01444) | 9/6/2005 | - |
[CO 06/330] | 23/6/2006 (see F2006L01955) | 23/6/2006 | - |
[CO 07/386] | 15/6/2007 (see F2007L01697) | 15/6/2007 | - |
Table of Amendments
ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted
Provision affected | How affected |
Para 2........... | am. [CO 04/1347]; [CO 05/346]; [CO 06/330] and [CO 07/386] |
Overview
The ASIC Class Order [CO 03/1097], effective under section 1020F(1)(a) of the Corporations Act 2001, was enacted by the Australian Securities and Investments Commission (ASIC) on 22 December 2003 and came into force on the same date. This legislative instrument provides a temporary exemption for providers of custodial arrangements for superannuation products from the requirement to furnish a Product Disclosure Statement (PDS) to clients before a regulated acquisition occurs, provided that the PDS was not issued after 1 July 2007. The policy objective of this exemption is to alleviate immediate compliance burdens on financial service providers during a transition period, ensuring that clients are still informed about how they can obtain the necessary PDS for their superannuation products.
The exemption applies until 30 June 2008, contingent on the provider taking reasonable steps to inform clients about how to access the PDS, either through written information accompanying the document or by prominently displaying access information if the document is provided electronically. This approach seeks to balance the need for timely regulatory compliance with the practical difficulties faced by providers in updating their documentation and client communications within a specified timeframe.
Scope and Application
The ASIC Class Order [CO 03/1097] provides a specific exemption under the Corporations Act 2001 for providers of custodial arrangements related to superannuation products. This exemption applies to entities offering custodial services where clients are holders of superannuation products issued by the provider. The exemption relieves these providers from the requirement to furnish a Product Disclosure Statement (PDS) before a regulated acquisition occurs, provided no PDS dated later than 1 July 2007 has been given to any client. This exemption is effective until 30 June 2008, and it is contingent on the provider taking reasonable steps to ensure that any document specifying a particular financial product includes or is accompanied by information on how to obtain the PDS or prominently draws attention to the access information, such as through a hypertext link. The exemption is applicable nationally, extending to all jurisdictions under the Corporations Act 2001, and it is subject to amendments as noted in the accompanying tables.
Key Provisions
The ASIC Class Order [CO 03/1097] (referred to as the "Class Order") provides a temporary exemption from certain requirements of the Corporations Act 2001 (the "Act"). Specifically, under subsection 1012IA(2) of the Act, providers of custodial arrangements for superannuation products are generally required to provide clients with a Product Disclosure Statement (PDS) before a regulated acquisition occurs. However, the Class Order exempts these providers from this requirement until 30 June 2008, provided that they have not issued any PDS for the superannuation product dated later than 1 July 2007. This exemption applies to providers who have not previously given a PDS to any client.
The exemption imposed by the Class Order carries specific obligations for providers of custodial arrangements. To qualify for the exemption, providers must take reasonable steps to ensure that any document given to clients that specifies a particular financial product which may be acquired under the custodial arrangement includes or is accompanied by written information about how the client can obtain a copy of the PDS for that product. In the case of documents provided electronically, providers must prominently draw attention to information about how a copy of the PDS may be accessed, for example by including a hypertext link to that information in a prominent place. This ensures that clients are still made aware of their right to receive a PDS despite the temporary exemption.
Failure to comply with the obligations set out in the Class Order can result in various consequences. While the Class Order itself does not explicitly state penalties for non-compliance, breaches of the Corporations Act 2001, which the Class Order operates under, can lead to both civil and criminal penalties. Civil penalties for corporations can include fines of up to $210,000 for each contravention of the Act, while individual officers can face fines of up to $42,000 for each contravention. Criminal penalties for individuals can include fines of up to $210,000 and imprisonment for up to five years for each contravention. Therefore, providers must ensure strict compliance with the requirements of the Class Order to avoid potential legal repercussions.