ASIC Class Order [CO 04/527]

Administered by Department of the Treasury

Legislation au F2006B01328 Not in force Legislative Instrument

Legislation content

Australian Securities and Investments Commission
Corporations Act 2001 - Paragraph 601QA(1)(a) - Variation

 

 

Under paragraph 601QA(1)(a) of the Corporations Act 2001 the Australian. Securities and Investments Commission varies Class Order [CO 98/55] with effect from 1 June 2004 by:

 

1. omitting paragraph 1 of Schedule B and substituting:

 

“1. The investment of scheme property or the keeping of scheme property invested, in:

 

(a) a scheme that:

 

(i) is operated by a body that is incorporated or formed in Hong Kong;
               and

 

(ii) is authorised by the Securities and Futures Commission of Hong                              Kong as a collective investment scheme under section 104 of Chapter                             571 of the Laws of Hong Kong or any provision that replaces that                                           section; and

 

(iii) complies with the Code of Unit Trusts and Mutual Funds (the                              “Code”) published by the Securities and Futures Commission of                                           Hong Kong as amended from time to time; and

 

(iv) is not:

 

(A)           a recognized jurisdiction scheme (as defined in the Code); or

 

(B)           a specialized scheme for the purposes of the Code;

 

(b) a scheme that:

 

(i) is operated by a body that is incorporated or formed in the United  Kingdom (the “UK”); and

 

(ii) is authorised under section 243 of the Financial Services and Markets               Act 2000 of the UK or any provision that replaces that section; and

 

(iii) the responsible entity of the Registered Scheme reasonably believes is               a securities scheme under the Collective Investment Schemes               Sourcebook published by the Financial Services Authority of the UK               as amended from time to time;

 

(c) a scheme that:

(i)                 is operated by a body that is incorporated or formed in the United States of America (the “USA”) or a State of the USA; and

(ii)               is registered under section 8 of the Investment Company Act of 1940 of the USA (the “Investment Company Act”) or any provision that replaces that section; and

(iii)            is either:

 

(A)           an open ended company as defined in section 5.a.(l) of the Investment Company Act or any provision that replaces that section; or

 

(B)           a unit investment trust as defined in section 4(2) of the Investment Company Act or any provision that replaces that section; and

 

(iv) the responsible entity of the Registered Scheme reasonably believes invests primarily in market traded securities;

 

(d) a scheme that:

 

(i) is operated by a body that is incorporated or formed in New Zealand;               and

 

(ii) is or involves either:

 

(A)        a unit trust as defined in section 2 of the Unit Trusts Act 1960 of New Zealand or any provision that replaces that section, and in relation to which a trust deed has been approved by the Registrar or District Registrar of Companies and an authenticated copy of the trust deed has been lodged with the District Registrar of

Companies under sections 8 and 9 of that Act or any provisions that replace those sections; or

 

(B)         the issue of participatory securities as defined in subsection 2(1) of the Securities Act 1978 of New Zealand or any provision that replaces that subsection, where:

 

(I) in relation to which, a statutory supervisor has been appointed and a deed of participation registered by the Registrar of Companies under section 33(3) and 46 of that Act or any provisions that replace those sections; and

(II) the responsible entity of the Registered Scheme reasonably believes that the scheme assets are primarily invested in market traded securities;

 

(e) a scheme that:

 

(i) is operated by a body that is incorporated or formed in Guernsey; and

 

(ii) is declared by the Guernsey Financial Services Commission to be an authorised collective investment scheme, Class A, under section 8 of The Protection of Investors (Bailiwick of Guernsey) Law 1987 or any provision that replaces that section;

 

(f) a scheme that:

 

(i)                 is operated by a body that is incorporated or formed in the Isle of Man; and

(ii)               is declared by the Isle of Man Financial Supervision Commission to be an authorised scheme under section 3 of the Financial Supervision Act 1988 or any provision that replaces that section;

 

(g) a scheme that:

 

(i) is operated by a body that is incorporated or formed in Jersey; and

 

(ii) is declared by the Jersey Financial Services Commission to be a Recognised Fund under the Collective Investment Funds (Recognized Funds) (General Provisions) (Jersey) Order 1988, or the Collective Investment Funds (Recognised Funds) (Rules) (Jersey) Order 2003 or any provisions that replace those Orders;

 

where the responsible entity of the Registered Scheme reasonably believes that interests issued as a result of applications made in this jurisdiction or issued to responsible entities under registered schemes represent a minority of interests in the scheme (the “unregistered scheme”) in which the investment is made or kept (calculated both by value and by the number of holders of interests in the unregistered scheme).”; and

 

2. adding at the end of the instrument before the date:

 

“Interpretation

 

In this instrument:

 

“market traded securities” means:

(a)             financial products which are able to be traded on a financial market and that it is reasonable for the responsible entity of the Registered Scheme to believe are capable of being realised within 7 business days; or

(b)             other financial products that it is reasonable for the responsible entity of the Registered Scheme to believe can be valued by reference to reasonably comparable products that are able to be traded on a financial market.”.

 

Dated the 27th day of May 2004

 

 

 

Signed by Brendan Byrne

as a delegate of the Australian Securities and Investments Commission

Overview

The Australian Securities and Investments Commission Corporations Act 2001 was enacted to provide a comprehensive legal framework for the regulation of financial markets, financial products, and financial services in Australia. This Act was introduced to address the need for a unified regulatory structure to ensure the integrity, efficiency, and transparency of the financial system, thereby protecting investors and maintaining public confidence. The Act is administered by the Australian Securities and Investments Commission (ASIC), which has the policy objective of ensuring that financial markets operate in an orderly and fair manner. Under the authority granted by the Act, ASIC has the power to vary class orders to adapt to changing financial landscapes and regulatory requirements. For instance, on 27 May 2004, ASIC varied Class Order [CO 98/55] to update the criteria for the investment of scheme property in certain overseas schemes, ensuring that these investments comply with the latest regulatory standards and requirements set by the respective jurisdictions.

Scope and Application

The Corporations Act 2001, under paragraph 601QA(1)(a), as varied by the Australian Securities and Investments Commission, applies to the investment of scheme property or the keeping of scheme property invested, in specific types of schemes operated by bodies incorporated or formed in Hong Kong, the United Kingdom, the United States of America, New Zealand, Guernsey, the Isle of Man, and Jersey. These schemes must meet certain criteria, such as being authorised by relevant authorities in their respective jurisdictions, complying with specific regulatory codes, and not being recognised jurisdiction schemes or specialised schemes. The variation applies to situations where the interests issued as a result of applications made in Australia or issued to responsible entities under registered schemes represent a minority of interests in the unregistered scheme, both by value and by the number of holders of interests. The alteration to Class Order [CO 98/55] also includes a definition of "market traded securities" for the purposes of this instrument, specifying that these securities must be capable of being traded on a financial market or valued by reference to reasonably comparable products that can be traded on a financial market. This variation is effective from 1 June 2004 and applies nationally within Australia, impacting entities involved in the management and investment of these specified schemes.

Key Provisions

Under the Corporations Act 2001, specifically paragraph 601QA(1)(a), the Australian Securities and Investments Commission (ASIC) varies Class Order [CO 98/55] from 1 June 2004. The main changes involve the investment of scheme property by authorised bodies in various jurisdictions. The amendment removes the existing paragraph 1 of Schedule B and replaces it with detailed criteria for acceptable schemes in different jurisdictions. These include schemes operated by bodies in Hong Kong, the United Kingdom, the United States, New Zealand, Guernsey, the Isle of Man, and Jersey, provided they meet specific regulatory and authorisation criteria. The obligations imposed by this variation are detailed and require careful adherence by the responsible entities of registered schemes. They must ensure that any investment in unregistered schemes adheres to the new criteria, which include the authorisation by relevant regulatory bodies and compliance with applicable laws and codes in the respective jurisdictions. Additionally, responsible entities must reasonably believe that the interests held by them represent a minority in the unregistered scheme, calculated by both value and the number of interest holders. This places a significant burden on responsible entities to conduct thorough due diligence and maintain records to demonstrate compliance with the new requirements. The Act imposes potential civil and criminal consequences for non-compliance. While the specific penalties are not detailed in the legislative instrument, breaches of the Corporations Act 2001 can generally result in substantial fines and imprisonment for officers of the corporation, depending on the severity and intent of the breach. The exact penalties would be determined in the context of a court proceeding, but they can be severe, reflecting the importance of maintaining regulatory standards in financial markets. Responsible entities must therefore ensure strict adherence to the new provisions to avoid these potential repercussions.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.