ASIC CLASS ORDER [CO 06/704]

EXPLANATORY STATEMENT

Prepared by the Australian Securities and Investments Commission

Corporations Act 2001

Paragraph 283GA(1)(a), subsection 341(1) and paragraphs 601QA(1)(a) and (b), 741(1)(a), 911A(2)(l), 926A(2)(a), 951B(1)(a) and (c), 992B(1)(a) and       1020F(1)(a) and (c) — Variation

The Australian Securities and Investments Commission (ASIC) makes ASIC Class Order [CO 06/704] under paragraph 283GA(1)(a), subsection 341(1) and paragraphs 601QA(1)(a) and (b), 741(1)(a), 911A(2)(l), 926A(2)(a), 951B(1)(a) and (c), 992B(1)(a) and 1020F(1)(a) and (c) of the Corporations Act 2001 (the Act).

By paragraphs 283GA(1)(a), 601QA(1)(a) and 741(1)(a) ASIC may exempt a person from a provision of Chapters 2L, 5C and 6D of the Act dealing with debentures, managed investment schemes and fundraising respectively.

Subsection 341(1) enables ASIC to make an order providing relief from certain provisions of Chapter 2M of the Act dealing with financial reports and audits.

Paragraph 911A(2)(l) enables ASIC to exempt a person from the requirement to hold an Australian financial services licence.

Paragraph 926A(2)(a) enables ASIC to exempt persons from a person or a class of persons from certain provisions of Parts 7.6 of the Act dealing with the licensing of financial services providers.

By paragraphs 951B(1)(a), 992B(1)(a) and 1020F(1)(a) ASIC may exempt a person or a class of persons from all or specified provisions of Parts 7.7, 7.8 and 7.9 of the Act dealing with financial services disclosure; other provisions relating to conduct etc. connected with financial products and financial services; and financial product disclosure and other provisions relating to the issue, sale and purchase of financial products respectively.

By paragraphs 601QA(1)(b), 951B(1)(c) and 1020F(1)(c) ASIC may declare that Chapter 5C and Parts 7.7 and 7.9 of the Act dealing with managed investment schemes; financial services disclosure; and financial product disclosure and other provisions relating to the issue, sale and purchase of financial products respectively have effect as if provisions of them were omitted, modified or varied.

1. Background

In December 2005 ASIC made ASIC Class Order [CO 05/1270] to remove doubt about the efficacy of various instruments which, because they were not gazetted before 1 January 2005, were arguably rendered inoperative from 1 January 2005 by the Legislative Instruments Act 2003 (the LIA).

Since the making of that ASIC Class Order a further three instruments, namely ASIC Class Orders [CO 02/239], [CO 03/184] and [CO 04/10], (the affected instruments) have been rendered inoperative by the LIA.  This is because each affected instrument was not lodged for registration on or before the last day for lodging the instrument for registration (the last lodgment day) as worked out under section 29 of the LIA.[1]  The LIA provides that on the day after the last lodgment day that instrument ceased to be enforceable and is taken to have been repealed.

2. Purpose of the class order

ASIC Class Order [CO 06/704] has been made in relation to each affected instrument to produce, immediately after the last lodgment day, the intended effect of that instrument as in force on the last lodgment day.

3. Operation of class order

ASIC Class Order [CO 06/704] varies ASIC Class Order [CO 05/1270] to insert new provisions to produce the intended effect of the affected instruments in accordance with paragraph 2 above.

The variation will ensure that persons who have relied, or wish to rely, on an affected instrument after the last lodgment day to do so as they otherwise thought they could.  The variation will not adversely affect the rights of those persons or impose any liabilities.

4. Incorporation by reference

As a result of this variation ASIC Class Order [CO 05/1270] will incorporate by reference ASIC Class Orders [CO 02/239], [CO 03/184] and [CO 04/10].  A copy of the incorporated instruments may be obtained from ASIC’s website: http://www.asic.gov.au/co.

5. Consultation

Given the technical nature of ASIC Class Order [CO 06/704], no consultation was undertaken before it was made.

[1]  Each affected instrument was made before 1 January 2005 and was amended on or after that date.  Subsection 29(2) of the LIA brought forward the due date for the lodgment of each of those instruments from 30 September 2006 to:

• in the case of ASIC Class Order [02/239], 27 March 2006; and
• in the case of ASIC Class Orders [CO 03/184] and [CO 04/10], 7 April 2006.