Overview

The ASIC Class Order [CO 09/532] was enacted in 2009 under the Corporations Act 2001 to provide regulatory relief for promoters and operators of participating horse racing syndicates, also known as horse racing schemes. The primary objective of this legislation is to streamline the regulatory environment for these managed investment schemes by offering conditional exemptions from specific provisions of Chapter 5C of the Act. This is achieved by granting relief from section 601ED of the Act, which requires the registration of managed investment schemes and mandates that promoters hold an Australian financial services licence. The Class Order is intended to simplify compliance for horse racing syndicates while ensuring that necessary oversight is maintained. The Australian Securities and Investments Commission, as the enacting body, aims to achieve this balance by modifying the definition of Lead Regulator within the existing Class Order [CO 02/319], substituting the Tasmanian Thoroughbred Racing Council with the Tasmanian Racing Board.

Scope and Application

The ASIC Class Order [CO 09/532] applies to promoters and operators of participating horse racing syndicates, which are specific types of managed investment schemes under the Corporations Act 2001. The Act mandates that these schemes must be registered, and their promoters must hold an Australian financial services licence. This Class Order specifically modifies the previous Class Order [CO 02/319] by updating the definition of Lead Regulator from the Tasmanian Thoroughbred Racing Council to the Tasmanian Racing Board, thereby aligning the regulatory framework with the current governance structure. The Class Order operates nationally, affecting entities involved in horse racing schemes across Australia, and is consistent with ASIC Regulatory Guide 20. The exemption provided by this Class Order is limited to the specific alterations mentioned and does not extend to other types of managed investment schemes or financial services activities. As the Class Order is classified as minor or machinery in nature, it was issued without prior consultation.

Key Provisions

The Australian Securities and Investments Commission (ASIC) has issued Class Order [CO 09/532] under paragraph 601QA(1)(a) of the Corporations Act 2001, which allows ASIC to exempt a person from a provision of Chapter 5C of the Act. Specifically, this Class Order varies an earlier Class Order [CO 02/319], providing conditional relief to promoters and operators of participating horse racing syndicates from section 601ED of the Act. The primary change introduced by [CO 09/532] is to update the definition of Lead Regulator, replacing the Tasmanian Thoroughbred Racing Council with the Tasmanian Racing Board. This amendment ensures that the regulatory framework aligns with the current structure of relevant authorities in Tasmania. Entities governed by these provisions must ensure that managed investment schemes, including horse racing schemes, are properly registered under Chapter 5C of the Act. Additionally, the promoter of such schemes must hold an Australian financial services licence. The Class Order is designed to provide conditional relief to participating horse racing syndicates, as outlined in ASIC Regulatory Guide 20 'Horse racing schemes'. This relief is contingent upon compliance with the terms and conditions set out in the Class Order, ensuring that these entities operate within the regulatory framework established by the Act. Failure to comply with the provisions of the Class Order may result in significant consequences. The Corporations Act 2001 provides for both civil and criminal penalties for breaches of its provisions. Civil penalties may include fines and other monetary penalties as specified in the Act. Criminal penalties could potentially involve imprisonment, reflecting the seriousness of non-compliance with financial regulations. The exact penalties depend on the nature and severity of the breach, and are determined in accordance with the provisions of the Act. ASIC, as the regulator, has the authority to enforce these penalties. In cases of non-compliance, ASIC may take enforcement action, which could include issuing infringement notices, seeking court orders, or pursuing criminal prosecutions where appropriate. The enforcement actions are intended to ensure that entities adhere to the regulatory requirements, thereby protecting investors and maintaining the integrity of the financial system.