ASIC CLASS ORDER [CO 05/0643]

EXPLANATORY STATEMENT

Prepared by the Australian Securities and Investments Commission

Corporations Act 2001

Subsection  341(1) - Order

Subsections 341(1) of the Corporations Act 2001 (the Act) provides that the Australian Securities and Investments Commission (ASIC) may make an order in respect of a specified class of companies, registered schemes or disclosing entities that relieves the entities in question, their directors and/or auditors from specified requirements of Parts 2M.2, 2M.3 or 2M.4 (other than Division 4) of the Act.

1. Background

In the Act as it applies both for financial years commencing before 1 July 2004 and for financial years commencing on or after 1 July 2004, ss.295(2) and 303(2) only allow financial reports to include those financial statements specified by those provisions.  An entity’s financial report is not permitted to include the financial statements of another entity.

Nevertheless, it is the current practice of some responsible entities to include the financial statements of different registered schemes for which they are the responsible entity in adjacent columns in a single financial report.  This practice is applied where there is some ability for members to switch monies between the schemes.

2. Class Order [CO 05/0643] “Combining registered scheme financial reports”

Class Order [CO 05/0643] “Combining registered scheme financial reports” allows responsible entities to continue the current practice of including the financial statements of related registered schemes that have a common responsible entity in adjacent columns in a single financial report where there is a facility for investors to switch monies between the related schemes.  The relief applies to full year financial reports, concise financial reports and half-year financial reports.

3.  Consultation

As [CO 05/0643] is minor and machinery in nature, ASIC did not undertake any consultation with stakeholders before that class order was made.