Overview

The Australian Securities and Investments Commission Corporations Act 2001 was enacted to address various corporate governance and regulatory issues to protect investors and maintain the integrity of the financial markets. The Act provides a comprehensive framework for regulating corporations, financial markets, and financial services in Australia. This legislative instrument, dated 8th December 2004, was issued under the authority of the Australian Securities and Investments Commission, which was established to enforce the Act and administer related legislation. The primary objective of this exemption is to alleviate the burden on entities when they need to convert foreign currency amounts into Australian currency for statements of advice, product disclosure statements, and periodic statements, thereby facilitating smoother operations and compliance for financial service providers.

Scope and Application

The Australian Securities and Investments Commission (ASIC) has provided an exemption under the Corporations Act 2001 (the Act) as stated in paragraphs 951B(1)(a) and 1020F(1)(a), which applies to certain entities and individuals involved in providing financial services. Specifically, the exemption applies to entities defined as "providing entities" and "responsible persons" as per sections 944A and 1013A of the Act, respectively. This means that the exemption affects financial advisers and entities responsible for providing financial product disclosure statements and periodic statements. The exemption applies to instances where these entities are required to convert foreign currency amounts into Australian currency in Statements of Advice, Product Disclosure Statements, and periodic statements, as stipulated in specific sections of the Act. However, the exemption does not extend to other requirements of the Act, and entities must still comply with other obligations not specifically mentioned in the exemption. The scope of this exemption is limited to the conversion of currency amounts and does not affect other financial reporting requirements. This exemption is applicable nationally across Australia and is effective as of the date of the legislative instrument, 8th December 2004.

Key Provisions

Under the Corporations Act 2001, the Australian Securities and Investments Commission (ASIC) has issued an exemption affecting the presentation of foreign currency amounts in Statements of Advice and other financial documents. Specifically, paragraph 951B(1)(a) and 1020F(1)(a) allow a providing entity to forgo certain obligations regarding the conversion of foreign currency amounts into Australian currency in Statements of Advice. Paragraphs 947B(2)(h), 947C(2)(i), and 947D(2)(d) typically require the conversion of foreign currency amounts to Australian currency in Statements of Advice, but this requirement is waived under the exemption. Similarly, paragraph 1013D(1)(m) and subsection 1017D(5A) normally mandate the conversion of foreign currency amounts to Australian currency in Product Disclosure Statements and periodic statements, but the exemption exempts a responsible person from these requirements. This means that entities and individuals governed by these sections can present foreign currency amounts without converting them into Australian currency in certain specified financial documents. The obligations imposed by the Corporations Act 2001 are altered by this exemption for the entities and individuals it governs. A providing entity, as defined in section 944A of the Act, is relieved from the necessity to convert foreign currency amounts into Australian currency in Statements of Advice. This means that these entities can continue to provide financial advice and documentation without the additional burden of currency conversion, potentially simplifying the preparation and presentation of such documents. Similarly, a responsible person, as defined in section 1013A of the Act, is exempt from converting foreign currency amounts to Australian currency in Product Disclosure Statements and periodic statements, thereby reducing the administrative requirements associated with these documents. The exemption does not specify any particular offences, penalties, or consequences for breach. Instead, it serves to relieve certain entities and individuals from specific obligations under the Act. It is important for entities and individuals to be aware of the conditions under which this exemption applies and to ensure they remain compliant with the other provisions of the Corporations Act 2001. Failure to adhere to the general requirements of the Act could result in penalties or other consequences, although the exemption itself does not introduce additional sanctions for non-compliance with its specific terms.