ASIC CLASS ORDER [CO 07/166]
EXPLANATORY STATEMENT
Prepared by the Australian Securities and Investments Commission
Corporations Act 2001
The Australian Securities and Investments Commission (ASIC) makes Class Order [CO 07/166] Variation of Class Order [CO 02/315] under paragraph 601QA(1)(b) of the Corporations Act 2001 (the Act).
Paragraph 601QA(1)(b) of the the Act provides that ASIC may declare that Chapter 5C of the Act applies to a person as if specified provisions were omitted, modified or varied as specified in the declaration.
1. Background
Paragraph 601GA(1)(a) of the Act requires that the constitution of a registered managed investment scheme makes adequate provision for the consideration that is to be paid to acquire an interest in the scheme.
ASIC Class Order [CO 02/315] Time-sharing schemes – use of loose-leaf price list modifies paragraph 601GA(1)(a) of the Act to allow promoters and operators of registered time-sharing schemes to specify the acquisition price of time-sharing interests in a Product Disclosure Statement instead of requiring that the acquisition price be specified in the constitution of the registered time-sharing.
ASIC granted relief from paragraph 601GA(1)(a) of the Act in Class Order [CO 02/315] because the acquisition price of a time-sharing interest is often negotiable and variable. Allowing promoters and operators of registered time-sharing schemes to use a loose-leaf price list to specify the acquisition price facilitates prices being quickly and easily updated.
ASIC has imposed requirements on responsible entities who rely on the relief in Class Order [CO 02/315] that are designed to:
(a) protect consumers from the effects of pressure selling tactics; and
(b) assist consumers make an information decision about the costs associated with the purchase of time-sharing interests.
One such requirement that has existed since 2002 is a record-keeping obligation regarding statements about cooling off periods. Recent amendments that ASIC has made to our class order confirm this record keeping obligation. These amendments take effect from 1 October 2007.
2. Purpose of the class order
This Class Order [CO 07/166] makes amendments to Class Order [CO 02/315]. The amendments are designed to clarify that a record-keeping obligation which forms part of Class Order [CO 02/315] only applies for a period of 7 years.
3. Operation of the class order
This Class Order [CO 07/166] clarifies that the record-keeping obligation which forms part of Class Order [CO 02/315] applies for a period of 7 years. As the amended record keeping obligation only applies from 1 October 2007, these changes only commence at that time.
4. Consultation
No consultation was necessary because this change is minor and machinery in nature.