ASIC Class Order [CO 11/1340]

Overview

The ASIC Class Order [CO 11/1340], enacted in 2011, was introduced to address a gap in the regulatory framework pertaining to the regulation of financial services and products by modifying relevant provisions of the Corporations Act 2001. This instrument was created under the authority of the Australian Securities and Investments Commission (ASIC), with the overarching policy objective being to streamline and enhance the regulatory process by updating the references and resources available to regulated entities. The Class Order was specifically designed to modify references to certain websites and hotlines used by regulated persons, thereby ensuring that they are directed to the appropriate and most current resources for compliance and regulatory information. The ASIC Class Order [CO 11/1340] came into effect following its registration on the Federal Register of Legislative Instruments on 22 December 2011 and officially commenced on 23 December 2011. The Class Order was subsequently amended in 2016 to further refine the regulatory environment, with the amendment taking effect on 14 July 2016. These changes were implemented to ensure that the financial services sector remains compliant with the latest regulatory standards and that regulated persons have access to the most relevant and updated information.

Scope and Application

ASIC Class Order [CO 11/1340] applies to regulated persons as defined under Part 7.9 of the Corporations Act 2001. This includes financial services entities and individuals who provide financial services, ensuring they comply with specific regulatory requirements. The instrument modifies certain subparagraphs and paragraphs in the Corporations Regulations 2001, particularly concerning the reporting and disclosure obligations of these regulated persons. It effectively alters the website and contact information for lodging certain declarations from the Australian Prudential Regulation Authority (APRA) to the Financial Claims Scheme (FCS), thereby redirecting the regulatory reporting to the FCS website. Geographically, the application of this class order is national, as it is issued under the Commonwealth jurisdiction of the Australian Securities and Investments Commission (ASIC). This means that the modifications apply across Australia and affect all entities and individuals within the specified scope, irrespective of state or territory boundaries. Notably, this legislation does not specify any exclusions or exemptions, and it does not impose any thresholds for applicability. Any further extension or restriction of application is subject to subordinate instruments, which can be created under the enabling provisions of the Corporations Act 2001. The modifications to this class order, as evidenced by the table of amendments, reflect the ongoing adjustments to the regulatory framework to better align with the evolving financial services landscape.

Key Provisions

The main operative sections of ASIC Class Order [CO 11/1340] modify provisions under the Corporations Act 2001. Specifically, Part 7.9 of the Act is altered so that subparagraph 7.9.07FA(7A)(ca)(iii) and paragraph 7.9.14D(1)(c) of the Corporations Regulations 2001 no longer require regulated persons to report to the Australian Prudential Regulation Authority (APRA). Instead, these sections direct regulated persons to report to the Financial Claims Scheme (FCS) by accessing information at http://www.fcs.gov.au. This amendment effectively shifts the reporting requirement from APRA to the FCS for certain disclosures and notifications. The obligations imposed by this Class Order on regulated persons are primarily concerned with compliance and reporting. Regulated persons must ensure that they report to the FCS rather than to APRA, as specified by the amended subparagraphs and paragraphs. This includes making necessary disclosures and notifications to the FCS as stipulated by the legislative changes. The Class Order mandates that these changes be adhered to in all instances where the original provisions of the Corporations Act and Regulations would have required reporting to APRA. Breaching the obligations set out in ASIC Class Order [CO 11/1340] can result in both civil and criminal consequences. Under the Corporations Act, a failure to comply with the modified reporting requirements may be subject to enforcement actions. While the specific penalties are not detailed in the Class Order itself, they would typically include fines and other sanctions as prescribed by the Act. Additionally, individuals who knowingly or negligently contravene the provisions may face personal liability, including fines and potential imprisonment, depending on the severity of the breach.