ASIC Class Order [CO 03/485]

Overview

The ASIC Class Order [CO 03/485] was enacted in 2003 under the Corporations Act 2001 to address a gap in the disclosure requirements for periodic statements of financial products. This legislative instrument was made by the Australian Securities and Investments Commission (ASIC) to exempt certain issuers from specific subsections of the Corporations Act, particularly relating to the details of fees, expenses, or charges deducted from the common fund of a financial product. The objective of this Class Order is to provide relief to issuers by exempting them from detailed disclosures in periodic statements if they have already included specific information about fee deductions and their impact on product holders. This exemption aims to streamline reporting requirements while ensuring that investors are adequately informed about financial deductions affecting their returns.

Scope and Application

ASIC Class Order [CO 03/485], created under paragraph 1020F(1)(a) of the Corporations Act 2001, exempts specific issuers of financial products from the requirement to include certain details in periodic statements under section 1017D of the Act. This exemption applies to issuers who are required to provide a periodic statement for a financial product and where the statement, for a reporting period ending on or before 30 June 2003, or on or before 31 December 2003 due to a specific condition outlined in the Act, includes or is accompanied by statements that fees, expenses, or charges have been deducted from the common fund related to the financial product, these deductions are borne by the product holders, and further information can be obtained by contacting the issuer. The order is designed to offer relief to certain issuers from the obligation to include specific details in their periodic statements for particular financial products and reporting periods. The scope of the exemption is limited to those issuers and periods specified in the order.

Key Provisions

The ASIC Class Order [CO 03/485], made under paragraph 1020F(1)(a) of the Corporations Act 2001, provides an exemption from the requirements of subsection 1017D(1) of the Act for certain issuers of financial products. Specifically, issuers who are required to provide periodic statements under section 1017D of the Act are exempt from including certain details in their statements, provided the statements meet the criteria outlined in Schedule B of the Class Order. The exemption applies to periodic statements given for reporting periods ending on or before 30 June 2003 or 31 December 2003 under certain conditions. Issuers benefiting from this exemption must ensure that their periodic statements for the specified reporting periods include or are accompanied by statements indicating that fees, expenses, or charges have been deducted from the common fund related to the financial product during the reporting period. These deductions should be noted as being borne indirectly by the holders of the product, potentially affecting their returns. Additionally, the statements must provide information on how to obtain further details about these deductions, such as by contacting the issuer. The obligations imposed by the Class Order on the affected issuers include the requirement to disclose specific information about fee deductions in their periodic statements. This disclosure must be clear and must inform the holders of the financial product that these deductions have been made and may impact their returns. The issuers must also provide a means for the holders to seek further information regarding these deductions. Failure to comply with these obligations may result in the exemption no longer applying, potentially subjecting the issuers to the full requirements of subsection 1017D(1) of the Act. The Class Order does not explicitly state penalties or consequences for non-compliance with its provisions. However, any failure to meet the disclosure requirements could lead to the exemption being revoked, thereby making the issuers subject to the full disclosure obligations under section 1017D of the Act. Additionally, there could be broader implications under the Corporations Act 2001, including potential enforcement actions by the Australian Securities and Investments Commission, depending on the nature and extent of the non-compliance.