ASIC Class Order [CO 04/734]

Administered by Department of the Treasury

Legislation au F2006B01241 Not in force Legislative Instrument

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Australian Securities and Investments Commission
Corporations Act 2001 — Paragraphs 601QA(1)(a), 741(1)(a), 992B(1)(a) and 1020F(1)(a) — Variation

Under paragraphs 601QA(1)(a), 741(1)(a), 992B(1)(a) and 1020F(1)(a) of the Corporations Act 2001 the Australian Securities and Investments Commission varies Class Order [CO 02/294] by varying the table in paragraph 2(j) as follows:

1. in column 3 of item 1:

(a) omit subparagraphs 1(a) and (b), substitute:

 

 

 

“(a) the annual investor statements for the relevant IDPS financial year are or have been given to clients without material misstatements; and

 

(b) where the annual investor statements do not purport to include particulars of each transaction that would be required in quarterly reports for each quarter during the IDPS financial year:

 

(i) any quarterly reports, are or have been given to clients without material misstatements; and

 

(ii) any information that is made accessible electronically under subparagraph 2(e)(xii) in respect of the IDPS financial year is not materially misstated.”; and

 

(b) omit subparagraphs 3(a) and (b), substitute:

 

 

 

“(a) any annual investor statement for the relevant IDPS financial year given to any client is materially misstated; and

 

(b) if the annual investor statements for the IDPS financial year do not generally purport to include particulars of each transaction that would be required in quarterly reports for each quarter during the IDPS financial year:

 

(i) any quarterly reports given for the IDPS financial year are materially misstated; and

 

(ii) any information accessible electronically by clients under subparagraph 2(e)(xii) that relates to any of the following was materially misstated:

 

(A) transactions during the IDPS financial year;

 

(B) assets held during the IDPS financial year and any corresponding liabilities;

(C) revenue and expenses for the IDPS financial year.”;

2. in column 3 of item 2:

(a) omit subparagraphs 1(a) and (b), substitute:

 

 

 

“(a) the annual investor statements for the relevant IDPS financial year are not materially misstated; and

 

(b) where the annual investor statements do not purport to include particulars of each transaction that would be required in quarterly reports for each quarter during the IDPS financial year:

 

(i) any quarterly reports, are or have been given to the client contact operator without material misstatements; and

 

(ii) any information given to the client contact operator to be made accessible electronically under subparagraph 2(e)(xii) during the IDPS financial year is not materially misstated.”; and

 

(b) omit subparagraphs 3(a) and (b), substitute:

 

 

 

“(a) any annual investor statement for the relevant IDPS financial year given to the client contact operator is materially misstated; and

 

(b) if the annual investor statements for the IDPS financial year do not generally purport to include particulars of each transaction that would be required in quarterly reports for each quarter during the IDPS financial year:

 

(i) any quarterly reports required to be given for the IDPS financial year are materially misstated; and

 

(ii) any information provided for the purpose of being made accessible electronically under subparagraph 2(e)(xii) that has been given to the client contact operator and relates to any of the following was materially misstated:

 

(A) transactions during the IDPS financial year;

 

(B) assets held during the IDPS financial year and any corresponding liabilities;

 

(C) revenue and expenses for the IDPS financial year.”; and

 

3. in column 3 of item 3 omit subparagraphs (a) and (b), substitute:

 

 

 

“(a) the annual investor statements for the relevant IDPS financial year are or have been given to clients without material misstatements; and

 

(b) where the annual investor statements do not purport to include particulars of each transaction that would be required in quarterly reports for each quarter during the IDPS financial year:

 

(i) any quarterly reports, that have been given to the client contact operator by the back office operator are given to each relevant client without material alteration; and

 

(ii) any information given to the client contact operator by the back office operator to be made accessible electronically under subparagraph 2(e)(xii) that relates to any of the following:

 

(A) transactions during the IDPS financial year;

 

(B) assets held during the IDPS financial year and any corresponding liabilities;

 

(C) revenue and expenses for the IDPS financial year,

 

is so made accessible without material alteration.”.

 

Dated this 28th day of June 2004

 

 

Signed by Stephen Yen, PSM
as a delegate of the Australian Securities and Investments Commission

Overview

The Australian Securities and Investments Commission (ASIC) introduced legislative instrument F2006B01241 in 2004 to address the need for clearer and more accurate financial reporting requirements for intermediaries dealing with investment products. This instrument amends Class Order [CO 02/294] under the Corporations Act 2001, focusing on the conditions under which annual investor statements and quarterly reports must be free from material misstatements. The legislative instrument ensures that client-facing documents, including those made accessible electronically, are accurate and reflect the true financial position of the investment products. By updating the relevant paragraphs, ASIC aims to enhance investor protection and maintain transparency in financial communications, ultimately fostering greater trust and confidence in the financial markets.

Scope and Application

The Corporations Act 2001, as varied by the Australian Securities and Investments Commission (ASIC) under specified paragraphs, applies to entities subject to Class Order [CO 02/294], which predominantly includes Investment Dealer and Portfolio Service (IDPS) providers. These providers are required to ensure that their annual investor statements and any related quarterly reports or electronically accessible information do not contain material misstatements. The revised provisions mandate that such statements and reports must be accurate and any information made electronically accessible must also be free from material inaccuracies. The legislation applies nationally across Australia, governed under the Commonwealth jurisdiction. The variations to Class Order [CO 02/294] through this legislative instrument clarify and specify the conditions under which annual investor statements and related disclosures must be accurate and free from misstatements, thereby enhancing transparency and investor protection. The Act does not explicitly state exclusions or thresholds, but it is understood that the implications of material misstatements are subject to the broader regulatory oversight of ASIC.

Key Provisions

The legislative instrument under the Corporations Act 2001, specifically paragraphs 601QA(1)(a), 741(1)(a), 992B(1)(a) and 1020F(1)(a), modifies Class Order [CO 02/294]. This alteration affects the table in paragraph 2(j) which outlines conditions related to the reporting of financial information by certain entities. The primary changes focus on ensuring that annual investor statements, quarterly reports, and electronically accessible information are provided without material misstatements. This means that any financial reports or data must be accurate and complete, with no significant errors or omissions that could mislead clients or operators. Entities governed by these provisions are required to ensure that all annual investor statements, quarterly reports, and electronically accessible information are accurate and complete. This obligation extends to verifying that any information provided electronically is not materially altered from the original data. Essentially, the Act mandates that these entities maintain high standards of accuracy in their financial reporting to ensure transparency and trust with their clients. This includes verifying that no material misstatements are present in any financial documentation or data provided, whether in paper or electronic form. Failure to comply with the requirements set out in the legislative instrument can lead to serious consequences. If an entity is found to have provided materially misstated information, they could face civil penalties, criminal charges, or both. The maximum penalties for such breaches are not explicitly stated in the legislative instrument but generally, under the Corporations Act 2001, can include significant fines for corporations and imprisonment for individuals, depending on the severity and intent of the misstatements. Ensuring compliance with these provisions is crucial to avoid these potential legal repercussions.

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Corporate Law & Governance
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Definitions & Interpretation
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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.