ASIC Class Order [CO 05/637]

Overview

ASIC Class Order [CO 05/637], issued under the Corporations Act 2001, provides an additional month for the first financial reports prepared in accordance with Australian International Financial Reporting Standards (AIFRS). This legislative instrument was introduced to address the challenges faced by entities transitioning to the new reporting standards. The Australian Securities and Investments Commission (ASIC), as the enacting body, aims to facilitate a smoother transition period for companies, registered schemes, disclosing entities, and financial services licensees. The order exempts these entities from strict adherence to the usual reporting deadlines for the specified financial years, thereby offering a practical extension to comply with the new standards. This measure was deemed necessary to alleviate the burden on entities as they adapted to the changes brought about by the adoption of AIFRS.

Scope and Application

ASIC Class Order [CO 05/637], which operates under the Corporations Act 2001, provides a one-month extension to the financial reporting deadlines for certain entities. This class order applies to companies, registered schemes, disclosing entities, and financial services licensees for financial years or half-years that commence between 1 January 2005 and 31 December 2005. The extension is limited to the last time for reporting to members or lodgment, as stipulated under various subsections of the Corporations Act. Notably, listed disclosing entities and small proprietary companies preparing a report in response to a shareholder direction are exempt from this extension. The class order was registered under the Legislative Instruments Act 2003 and came into effect on the date of registration. Subsequent amendments to this class order, such as those in [CO 06/51] and [CO 06/106], have been incorporated into this compilation, reflecting changes to the original provisions.

Key Provisions

The main operative sections of ASIC Class Order [CO 05/637] provide an additional month for the first financial reports under the Australian Accounting Standards (AIFRS) for certain entities. Specifically, section 4(a) grants relief to companies, registered schemes, and disclosing entities from the usual financial reporting deadlines for the financial year or half-year that begins between 1 January 2005 and 31 December 2005. This extension applies to the reporting to members and lodgment of financial reports. Section 4(b) further specifies that disclosing entities are relieved from lodgment requirements under subsection 320(1) of the Act, while financial services licensees are exempted from certain lodgment requirements under subsections 989B(2) and (3) of the Act. However, it is important to note that this relief does not extend to listed disclosing entities or small proprietary companies preparing a report in response to a shareholder direction under section 293 of the Act. The obligations and requirements imposed by ASIC Class Order [CO 05/637] primarily focus on extending the deadlines for financial reporting for eligible entities. Companies, registered schemes, and disclosing entities are relieved from the usual reporting deadlines by one month, provided they meet the specified criteria. This extension aims to provide these entities with additional time to comply with the new financial reporting standards without incurring penalties or facing legal consequences during the initial transition period. Financial services licensees are similarly exempted from certain lodgment requirements for a transitional period. ASIC Class Order [CO 05/637] does not explicitly outline offences, penalties, or civil/criminal consequences for breaches of its provisions. However, entities that fail to comply with the financial reporting deadlines as specified in the Act may still be subject to penalties under other sections of the Corporations Act 2001. For instance, companies and disclosing entities that fail to lodge financial reports by the specified deadlines may face penalties as outlined in sections 912A and 1317E of the Act. Additionally, directors or officers of these entities may be held personally liable for non-compliance, potentially resulting in fines or imprisonment. It is crucial for entities to adhere to the deadlines and comply with the requirements to avoid such consequences.