Australian Securities and Investments Commission
Corporations Act 2001 — Subsections 601QA(1), 741(1) and 1020F(1) — Variation
Under subsections 601QA(1), 741(1) and 1020F(1) of the Corporations Act 2001 the Australian Securities and Investments Commission varies Class Order [CO 02/296] as follows:
1. omit subparagraphs 2(n)(i)(A) and (B), substitute:
“(A) the annual investor statements for the relevant financial year of the IDPS-like scheme are or have been given to members 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 financial year of the IDPS-like scheme:
(I) any quarterly reports, are or have been given to members without material misstatements; and
(II) any information that is made accessible electronically under subparagraph 2(j)(ii) in respect of the financial year is not materially misstated.”;
2. in subparagraph 2(n)(ii) omit “clients’”, substitute “members’”; and
3. omit subparagraphs 2(n)(iii)(a) and (b), substitute:
“(A) any annual investor statement for the relevant financial year of the IDPS-like scheme given to any member is materially misstated; and
(B) if the annual investor statements for the financial year of the IDPS-like scheme do not generally purport to include particulars of each transaction that would be required in quarterly reports for each quarter during the financial year:
(I) any quarterly reports given for the financial year are materially misstated; and
(II) any information accessible electronically by members under subparagraph 2(j)(ii) that relates to any of the following was materially misstated:
(aa) transactions during the financial year;
(bb) assets held during the financial year and any corresponding liabilities;
(cc) revenue and expenses for the financial year;”.
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 Corporations Act 2001 was enacted to provide a comprehensive regulatory framework for corporations in Australia, ensuring transparency, accountability, and investor protection. This Act addresses gaps in corporate governance and disclosure requirements to safeguard the interests of investors and the integrity of financial markets. The legislation is enacted by the Parliament of Australia, with a clear policy objective to foster a fair and efficient market by imposing obligations on corporations to ensure that they provide accurate and timely financial information to stakeholders. The legislative instrument F2006B01272 amends Class Order [CO 02/296] under the Corporations Act 2001, focusing on the reporting requirements for annual investor statements and quarterly reports to ensure they are free from material misstatements. This amendment aims to enhance the accuracy and reliability of financial information provided to members, thereby strengthening investor confidence and market stability.
Scope and Application
The Australian Securities and Investments Commission Corporations Act 2001 applies to entities engaged in financial services, specifically those offering Investment Deposit Plans (IDPS) or similar schemes, and the members of these schemes. This legislation falls under the jurisdiction of the Commonwealth of Australia, affecting the entire nation. The act pertains to the reporting and disclosure obligations of entities running IDPS-like schemes, ensuring that annual investor statements and quarterly reports are provided without material misstatements, and that any electronically accessible information is accurate. The legislative instrument modifies Class Order [CO 02/296] to refine the requirements for the accuracy of financial disclosures, thus enhancing transparency and protecting the interests of scheme members. The changes include altering the wording to clarify the conditions under which financial statements and reports must be accurate and specifying the consequences if these conditions are not met.
Key Provisions
The Australian Securities and Investments Commission, through its legislative instrument F2006B01272, has amended Class Order [CO 02/296] as per subsections 601QA(1), 741(1), and 1020F(1) of the Corporations Act 2001. This variation specifically targets the requirements and conditions for annual investor statements and quarterly reports for schemes similar to an Investment Defence and Protection Scheme (IDPS). According to the new provisions in subparagraph 2(n)(i), annual investor statements must now be provided to members without material misstatements, and if they do not include transaction particulars required in quarterly reports, these quarterly reports must also be given to members without material misstatements. Additionally, any electronic information accessible to members must not be materially misstated.
The obligations imposed on parties governed by these changes include ensuring that all financial reporting is accurate and transparent. For annual investor statements, this means they must be free from significant errors or misrepresentations. If these statements do not cover all transactions, then the accompanying quarterly reports must be reliable. Furthermore, any information made available electronically must also be correct and not misleading. The substitution of “members” for “clients” in subparagraph 2(n)(ii) further clarifies the scope of who these requirements apply to, ensuring that all members receive accurate and complete financial information.
Failure to comply with these requirements can lead to significant consequences. Under the Act, providing materially misstated financial information can constitute an offence, potentially leading to both civil and criminal penalties. For instance, subparagraph 2(n)(iii) specifies that if annual investor statements or related quarterly reports are materially misstated, or if electronically accessible information regarding transactions, assets, liabilities, revenue, or expenses is inaccurate, this can be considered a breach. The specific penalties for such breaches are not detailed in the legislative instrument but would typically be guided by the severity of the misstatement and the intent behind it, potentially including fines and imprisonment for serious or repeated offences.