ASIC CLASS ORDER [CO 06/6]
EXPLANATORY STATEMENT
Prepared by the Australian Securities and Investments Commission
Corporations Act 2001
Subsection 341(1) – Class Order
The Australian Securities and Investments Commission (ASIC) has made ASIC Class Order [CO 06/6] under subsection 341(1) of the Corporations Act 2001 (the Act).
Subsection 341(1) provides that ASIC may make an order providing relief from the financial reporting requirements of Part 2M.3 of Chapter 2M of the Act.
1. Background
Subsections 319(1) and 320(1) of the Act require disclosing entities to lodge their full and half financial year financial report, directors' report and auditor's report (the reports) with ASIC. Disclosing entities (NSX-listed disclosing entities) included in the official list of the licensed market operated by Stock Exchange of Newcastle Limited ACN 000 902 063 (NSX) are also required to lodge the same reports with NSX under NSX Listing Rules.
2. Purpose of the Class Order
ASIC Class Order [CO 06/6] has been made to avoid the need for NSX-listed disclosing entities to lodge the same reports with both ASIC and NSX.
3. Operation of the Class Order
The effect of ASIC Class Order [CO 06/6] is to exempt NSX-listed disclosing entities from the requirement to lodge the reports and associated prescribed forms with ASIC in certain circumstances. Those circumstances are that the reports must be lodged with NSX within the prescribed time for lodgment under the Act and there must be no fees payable to ASIC in relation to the lodgment of the reports.
This means that if an NSX-listed disclosing entity lodges a report with NSX outside the prescribed time for lodgment, the entity must also lodge the report directly with ASIC, together with the associated prescribed form and the prescribed late lodgment fee. This also means that the relief does not apply to lodgment of a full financial year report of an NSX-listed disclosing entity that is not a company or a registered scheme, as a lodgment fee is payable in respect of such reports.
4. Consultation
ASIC consulted NSX before making ASIC Class Order [CO 06/6]. Given the minor and technical nature of the relief and the fact that it corresponds with existing relief given in relation to the ASX-listed disclosing entities, broader consultation was not undertaken.
Overview
ASIC Class Order [CO 06/6], enacted in 2006 under the Corporations Act 2001, was introduced by the Australian Securities and Investments Commission (ASIC) to streamline the reporting requirements for NSX-listed disclosing entities. The primary issue this legislation aimed to address was the redundancy of requiring these entities to submit the same financial reports and associated documents to both ASIC and the Stock Exchange of Newcastle Limited (NSX). The Class Order was designed to eliminate the duplication of effort by allowing NSX-listed disclosing entities to lodge their reports directly with NSX under certain conditions, thereby reducing administrative burdens and costs. This measure was intended to align with the existing framework for ASX-listed disclosing entities, ensuring consistency and efficiency in compliance processes.
Scope and Application
The ASIC Class Order [CO 06/6] applies to disclosing entities listed on the Newcastle Stock Exchange (NSX) and is designed to streamline the financial reporting process for these entities by exempting them from the need to lodge financial reports with both ASIC and NSX under certain conditions. This relief is intended to avoid duplication and reduce administrative burden on NSX-listed disclosing entities. The order applies when these entities lodge their required reports with NSX within the stipulated timeframe and when no fees are payable to ASIC for the lodgment of these reports. However, if the reports are lodged with NSX outside the prescribed period or if the entity is not a company or registered scheme, the relief does not apply, and the entity must still lodge the reports directly with ASIC, along with any applicable fees. This class order reflects a targeted approach to regulatory relief, aligning with existing provisions for entities listed on the Australian Securities Exchange (ASX).
Key Provisions
The main operative sections of ASIC Class Order [CO 06/6] are designed to streamline the financial reporting process for NSX-listed disclosing entities. Under Section 1, the order exempts these entities from lodging their full and half financial year financial reports, directors' reports and auditor's reports with ASIC, provided that these reports are lodged with the Stock Exchange of Newcastle Limited (NSX) within the prescribed time and no fees are payable to ASIC for the lodgment (Section 3). If a report is lodged with NSX outside the prescribed time, or if the report is a full financial year report of an entity that is not a company or a registered scheme, the entity must still lodge the report with ASIC, along with the prescribed form and any applicable fees (Section 3).
ASIC Class Order [CO 06/6] imposes several obligations on NSX-listed disclosing entities. Firstly, these entities must ensure that their financial reports are lodged with NSX within the prescribed timeframes (Section 3). This requirement is crucial to maintain the exemption from lodging the reports with ASIC. Secondly, if the reports are lodged with NSX outside the prescribed time or if the entity is not a company or registered scheme, they must also lodge the reports with ASIC, along with the associated prescribed form and any required fees (Section 3). These obligations ensure that the relief provided by the Class Order is not misused and that all necessary reports are still submitted to the appropriate authorities.
The Class Order does not explicitly detail offences, penalties, or civil/criminal consequences for breach in the explanatory statement. However, it is implied that failure to comply with the conditions set out in Section 3 could result in penalties under the Corporations Act 2001. For instance, not lodging the required reports with ASIC when necessary could be considered a breach of the Act, potentially leading to civil or criminal penalties. The maximum penalties for breaches of the Corporations Act can vary widely, depending on the nature and severity of the breach, and can include substantial fines and imprisonment for individuals, as well as fines for corporations.