ASIC CLASS ORDER [05/611]

EXPLANATORY STATEMENT

Prepared by the Australian Securities and Investments Commission

Corporations Act 2001

Paragraph 926A(2)(a) and 951B(1)(a) – Exemption

The Australian Securities and Investments Commission (ASIC) makes Class Order [C0 05/611] Relief for providers of superannuation calculators under s926A(2)(a) and 951B(1)(a) of the Corporations Act 2001 (the Act). Section 926A(2)(a) provides that ASIC may exempt a class of persons from all or specified provisions of Part 7.6 of the Act. Section 951B(1)(a) provides that ASIC may exempt a class of persons from all or specified provisions of Part 7.7 of the Act.

1. Background

The Class Order gives providers of superannuation calculators relief from the requirement to hold an Australian financial services licence with an advice authorisation or (where they currently hold a licence) relief from the advice conduct and disclosure requirements of Part 7.7 of the Act. This relief reflects the position taken by ASIC in Information Release [IR 04-17] ASIC provides guidance on superannuation calculators (4 May 2004).  

The Class Order has been issued as part of a project ASIC is undertaking under the Federal Government's Refinements to Financial Services Regulation as announced in Information Release [IR 05-22] ASIC provides details on financial services refinement projects (12 May 2005).

2. Purpose of the class order

The purpose of the Class Order is to deliver legal certainty for providers of superannuation calculators and to facilitate the provision of information about superannuation to consumers.

3. The class order

[CO 05/611] provides licensing or disclosure and conduct relief for providers of superannuation calculators that meet certain minimum conditions. The relief only applies where:

(a) the calculator allows the user to change default assumptions;

(b) the default assumptions are reasonable;

(c) the calculator displays clear and prominent statements:

(i) about the purpose and any limitations of the calculator;

(ii) explaining why the default assumptions are reasonable;

(iii) specifying whether or not the estimate of total value of superannuation at a future point in time takes into account an assumed change in the cost of living between now and the future time; and

(iv) that the calculator is not intended to be relied on for the purposes of making a decision about a financial product and that the user should consider obtaining advice from a financial services licensee or their representatives before making any financial decisions;

(d) the calculator does not prevent the user from readily printing or electronically storing a relevant estimate; and

(e) the calculator does not generate advice about a specific financial product.

4. Consultation

In preparing [CO 05/611], ASIC has taken into account industry views expressed at regular industry liaison meetings.  In addition, officers of ASIC met with representatives of the superannuation industry and their legal advisers to discuss the proposals for relief. 

ASIC did not undertake further consultation because [CO 05/611] is of a minor and machinery nature and does not substantially alter ASIC’s previously announced administrative position in [IR 04-17].