ASIC CLASS ORDER [CO 11/261]

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 11/261] for the purposes of s926A(2)(c) of the Corporations Act (the Act).

This paragraph of the Act enables ASIC to declare that certain parts of the Act, and regulations made under it, apply in relation to a class of persons, as if specified provisions were omitted, modified or varied as specified in the declaration.

1. Background

Trustee companies providing traditional trustee company services (traditional services) who are listed at Schedule 8AA to the Corporations Regulations 2001 (Corporations Regulations), must have a compliant dispute resolution system from 1 May 2011 for s912A(1)(g) of the Act.

The dispute resolution system must consist of:

(a)  internal dispute resolution (IDR) procedures that meet ASIC’s approved standards and requirements; and

(b)  membership of an external dispute resolution (EDR) scheme approved by ASIC.

2. Purpose of the class order

The purpose of this class order is to defer the date by which trustee companies providing traditional services must have a compliant dispute resolution system for their retail clients.

The date has been deferred until 1 January 2012.

ASIC has deferred the start date for the following reasons:

• to enable EDR schemes to recruit specialist teams and make the necessary changes to their complaints handling processes and procedures, including their Terms of Reference or Rules; and
• to allow industry sufficient time to adjust to the changes, whether those who are yet to obtain an Australian Financial Services (AFS) licence consolidate their traditional trustee company business or become a new AFS licensee themself.

Consumers will not be significantly disadvantaged by a deferral of the start of the dispute resolution requirements because consumers will still be able to lodge a complaint with an EDR scheme on or after 1 January 2012 with respect to trustee company conduct that occurred before this time.

3. Operation of the class order

This class order declares that the trustee companies providing traditional trustee company services listed at Schedule 8AA of the Corporations Regulations do not have to have a dispute resolution system for handling retail clients complaints (i.e. IDR procedures and membership of an ASIC-approved EDR scheme) until 1 January 2012.   
 

4. Consultation

ASIC consulted with the EDR schemes, the Superannuation Complaints Tribunal, industry (the Trustee Company Association of Australia) and consumer representatives about the policy underlying this class order.