ASIC CLASS ORDER [CO 09/728]
EXPLANATORY STATEMENT
Prepared by the Australian Securities and Investments Commission
Corporations Act 2001
The Australian Securities and Investments Commission (ASIC) makes ASIC Class Order [CO 09/728] under ss601QA and 911A(2)(l) of the Corporations Act 2001 (the Act).
Section 601QA(1)(a) provides that ASIC may exempt a class of persons from the provisions of Ch 5C of the Act.
Section 911A(2)(l) provides that ASIC may exempt a class of persons from the requirement to hold an Australian Financial Services licence (AFS licence) under Pt 7.6 of the Act.
1. Background
ASIC Class Order [CO 08/1] gives conditional relief from the AFS licensing regime and Ch 5C of the Act for some group purchasing bodies (GPBs) who arrange or hold risk management products (insurance) for the benefit of third parties. GPBs include sporting and other not-for-profit organisations which arrange insurance for third parties (e.g. players or volunteers).
ASIC Class Order [CO 08/1] provides conditional relief only to a limited class of GPBs who organise insurance on a non-commercial basis. The transitional period for compliance with [CO 08/1] was scheduled to end on 30 September 2009. Industry have asked ASIC to clarify [CO 08/1] and its policy for relief as explained in RG 195 Group purchasing bodies for insurance and other risk management products (RG 195).
2. Purpose of the class order
ASIC Class Order [CO 09/728] extends the transitional period for compliance with [CO 08/1] by four months to enable ASIC to make any necessary amendments to [CO 08/1] and RG 195 to clarify how the eligibility tests in the relief operate.
3. Operation of the class order
Paragraph 4 amends [CO 08/1] by substituting ‘31 January 2010’ in place of ‘30 September 2009’ in subparagraph 10(f). This means that from 1 February 2010 GPBs relying on relief under [CO 08/1] will need to report any breaches of the conditions of [CO 08/1] to ASIC under subparagraph 10(f).
5. Consultation
In preparing [CO 09/728] ASIC has taken account of concerns articulated by the National Insurance Brokers Association of Australia (NIBA). ASIC did not undertake further consultation as [CO 09/728] is of a minor and machinery nature.