Australian Securities and Investments Commission
Corporations Act 2001 — Paragraphs 951B(1)(a) and 1020F(1)(a) — Exemption
1. The Australian Securities and Investments Commission (ASIC) grants this exemption under paragraphs 951B(1)(a) and 1020F(1)(a) of the Corporations Act 2001 (the Act).
Statements of Advice
2. A providing entity does not have to comply with paragraphs 947B(2)(h), 947C(2)(i) and 947D(2)(d) of the Act in relation to information about non‑monetary benefits or interests to be disclosed in accordance with paragraph 947B(2)(d), subparagraph 947B(2)(e)(i), paragraph 947C(2)(e), subparagraph 947C(2)(f)(i) and paragraph 947D(2)(a) of the Act in a Statement of Advice.
3. This exemption only applies where the Statement of Advice includes the following information about the non-monetary benefit or interest:
(a) the nature and extent of the non-monetary benefit or non-monetary interest; and
(b) for non-monetary benefits or non-monetary interests which may be provided or that may arise in the future, the circumstances in which the non-monetary benefit or non-monetary interest may be provided or may arise; and
(c) the estimated value of the non-monetary benefit or non-monetary interest (expressed as an amount in dollars or a range of amounts in dollars) where a retail client would reasonably require such an estimated value for the purposes of deciding whether to act on the advice provided.
Product Disclosure Statements
4. A responsible person for a Product Disclosure Statement does not have to comply with paragraph 1013D(1)(m) of the Act in relation to information concerning non-monetary benefits to be disclosed in the Product Disclosure Statement in accordance with paragraph 1013D(1)(b) of the Act.
5. This exemption only applies where the PDS includes the following information:
(a) the nature and extent of the non-monetary benefit; and
(b) for non-monetary benefits which may be provided or that may arise in the future, the circumstances in which the non-monetary benefit may be provided or may arise; and
(c) the estimated value of the non-monetary benefit (expressed as an amount in dollars or a range of amounts in dollars) in cases where a retail client would reasonably require such an estimated value for the purposes of deciding whether to acquire the financial product.
Exclusion from relying on exemptions
6. An exemption in paragraph 2 or 4 does not apply to a person from a date if:
(a) ASIC has given the person a notice in writing that they may not rely on the exemption from the date; and
(b) the notice has not been withdrawn by ASIC in writing.
Interpretation
7. In this instrument:
providing entity has the meaning given in section 944A of the Act; and
responsible person has the meaning given in section 1013A of the Act.
Dated this 8th day of December 2004
Signed by Brendan Byrne
as a delegate of the Australian Securities and Investments Commission
Overview
The Australian Securities and Investments Commission (ASIC) Corporations Act 2001 — Exemptions from Certain Disclosure Requirements for Non-Monetary Benefits (Exemption Instrument No. 1 of 2004) was enacted in 2004 to provide relief from specific disclosure requirements for non-monetary benefits in Statements of Advice and Product Disclosure Statements. This legislative instrument was introduced to address the complexity and potential burden of disclosing non-monetary benefits in financial advice and product documentation, aiming to facilitate more straightforward communication without compromising the quality of information necessary for informed decision-making. The instrument was enacted by the Australian Securities and Investments Commission under its authority granted by the Corporations Act 2001. The policy objective of this exemption is to streamline the disclosure process while ensuring that consumers receive adequate information to make informed decisions regarding financial products and advice.
Scope and Application
The Corporations Act 2001, as modified by this legislative instrument, applies to providing entities and responsible persons within the financial services industry. Specifically, this Act exempts these entities from certain disclosure requirements regarding non-monetary benefits or interests in Statements of Advice and Product Disclosure Statements, provided certain information is included. The exemption applies nationwide, covering all states and territories under the Commonwealth jurisdiction. However, this exemption does not apply if the Australian Securities and Investments Commission (ASIC) withdraws it by issuing a written notice to the entity or person. The definitions of "providing entity" and "responsible person" are derived from sections 944A and 1013A of the Corporations Act 2001, respectively. The scope of this exemption can be further defined or modified through subordinate instruments as necessary.
Key Provisions
The Australian Securities and Investments Commission (ASIC) provides exemptions under paragraphs 951B(1)(a) and 1020F(1)(a) of the Corporations Act 2001, focusing on specific disclosures regarding non-monetary benefits. This exemption means that a 'providing entity' is not required to comply with certain provisions of the Act when disclosing information about non-monetary benefits or interests in a Statement of Advice, as outlined in paragraphs 947B(2)(h), 947C(2)(i), and 947D(2)(d). Instead, the Statement of Advice must include detailed information about the nature and extent of the non-monetary benefit or interest, the circumstances under which it may be provided, and its estimated value in monetary terms where necessary. Similarly, for Product Disclosure Statements, a 'responsible person' is not required to comply with paragraph 1013D(1)(m) of the Act, but must include equivalent information about non-monetary benefits.
These exemptions impose specific obligations on providing entities and responsible persons. They must ensure that their Statements of Advice and Product Disclosure Statements contain detailed descriptions of any non-monetary benefits or interests, including the circumstances under which these benefits may arise and their estimated monetary value. These requirements are designed to ensure that clients have sufficient information to make informed decisions. Failure to include the required information could result in non-compliance with the Act.
There are potential civil or criminal consequences for breaches of the Corporations Act 2001. Specifically, providing entities and responsible persons who fail to include the necessary information in their Statements of Advice or Product Disclosure Statements could be subject to penalties under the Act. Although the exact penalties are not specified in this legislative instrument, they may include fines and other civil penalties. In more severe cases, individuals involved in the breaches could face criminal charges, which may result in imprisonment. The precise penalties would depend on the nature and severity of the breach, as well as the specific provisions of the Act being contravened.