ASIC CLASS ORDER [05/21]
EXPLANATORY STATEMENT
Prepared by the Australian Securities and Investments Commission
Corporations Act 2001
Paragraph 992B(1)(c) – Declaration
Paragraph 992B(1)(c) of the Corporations Act 2001 (the Act) provides that the Australian Securities and Investments Commission may declare that Part 7.8 of the Act applies to a person or class of persons as if specified provisions of that Part were omitted, modified or varied.
1. Modification relating to appointment of auditors for financial services licensees
Before the commencement of the Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (the CLERP 9 Act) section 990A of the Act had the effect of ensuring that a financial services licensee who was required to appoint an auditor under Chapter 2M of the Act did not also need to comply with sections 990B to 990H of the Act, which relate to the appointment, removal or resignation of auditors for the purposes of Part 7.8 of the Act.
Section 990A applies where, among other things, a financial services licensee "is a body corporate to which section 327 applies." However, section 327 was repealed by the CLERP 9 Act and replaced by Division 6, Subdivision A of Part 2M.4 of the Act, which now deals with the appointment of auditors under Part 2M.4 of the Act.
This instrument has the effect of ensuring that section 990A operates as if the reference to a body corporate to which section 327 applies were a reference to the provisions that replaced section 327. It has been issued to remove undesirable uncertainty for many financial service licensees about whether they have to appoint an auditor under both Chapters 2M and 7 of the Act.
2. Consultation
ASIC did not undertake any consultation with stakeholders before this instrument was made. Consultation was not undertaken because this instrument is essentially of a technical nature to ensure that the legislation has its apparently intended effect.