ASIC Class Order [CO 03/957]

Overview

The ASIC Class Order [CO 03/957], effective under sections 111AT(1) and 1020F(1) of the Corporations Act 2001, was introduced to streamline the regulatory obligations for issuers of exchange-traded managed investment warrants, particularly those listed on the Australian Securities Exchange (ASX) and Chi-X Australia. This instrument, prepared by the Australian Securities and Investments Commission (ASIC), provides exemptions from certain disclosure and reporting requirements for warrant issuers. The primary objective of this class order is to ensure that warrant issuers comply with the Corporations Act, while allowing them to focus on the operational aspects of managing warrants without the burden of extensive regulatory disclosures. The exemptions granted under this class order apply on the condition that the warrant issuers adhere to specific conditions, such as ensuring that the warrants are traded on approved exchanges and that they comply with the Act's general requirements as closely as possible.

Scope and Application

ASIC Class Order [CO 03/957], effective under the Corporations Act 2001, provides exemptions for warrant issuers concerning disclosure and reporting obligations for exchange traded managed investment warrants. This legislative instrument applies to warrant issuers who issue warrants traded on the Australian Securities Exchange (ASX) or Chi-X Australia, essentially financial products that are derivatives and transferable. The exemptions are primarily focused on the Product Disclosure Statement (PDS) or Short-Form PDS requirements under sections 1013I, 1015B, and 1017D of the Corporations Act, with conditions that the warrant issuer complies with section 1017B as if subsection 1017B(2) were omitted. These exemptions aim to streamline the regulatory burden on issuers of exchange traded managed investment warrants. The Class Order also clarifies the scope of terms such as "ASX traded managed investment warrant" and "warrant issuer," ensuring precise application of the exemptions. The exemptions apply nationally and are subject to changes via subordinate instruments as reflected in the amendments table.

Key Provisions

The ASIC Class Order [CO 03/957], effective under subsections 1020F(1) and 111AT(1) of the Corporations Act 2001, provides exemptions for warrant issuers concerning specific disclosure and reporting obligations related to exchange-traded managed investment warrants. Under section 1020F(1) of the Act, the Australian Securities and Investments Commission (ASIC) exempts warrant issuers from certain sections of the Act, including sections 1013I, 1015B, and 1017D, provided the issuers comply with section 1017B as if subsection 1017B(2) were omitted. This means that warrant issuers are not required to prepare and lodge Product Disclosure Statements (PDS) or Short-Form PDSs for their exchange-traded managed investment warrants, but they must still ensure compliance with section 1017B. The obligations imposed by this Class Order require warrant issuers to adhere strictly to the conditions set forth to qualify for the exemptions. Specifically, issuers must comply with section 1017B of the Act, ensuring they meet the necessary requirements for disclosure and reporting, despite the exemptions from other sections. Additionally, the Class Order mandates that warrant issuers remain compliant with the broader regulatory framework of the Corporations Act, including any other applicable sections not explicitly exempted by this order. The Class Order also delineates the consequences for non-compliance. If a warrant issuer fails to meet the conditions set out in the exemptions, they may face various penalties and consequences. While the specific penalties are not detailed within this Class Order, breaches of the Corporations Act can lead to substantial civil and criminal penalties. These can include fines, imprisonment, or both, depending on the severity of the breach and the specific provisions of the Act that have been contravened. The exact penalties would be determined by the courts and are subject to the broader regulatory provisions of the Corporations Act.