ASIC CLASS ORDER [CO 11/554]

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 11/554] Variation of Class Order [CO 10/630] under paragraph 1020F(1)(c) of the Corporations Act 2001 (Act).

Paragraph 1020F(1)(c) of the Act provides that ASIC may declare that Part 7.9 of the Act applies in relation to a person or a financial product, or a class of persons or financial products, as if specified provisions were omitted, modified or varied as specified in the declaration.

1.                  Background

The Corporations Regulations 2001 (Regulations) require regulated superannuation funds (other than self-managed funds) to disclose long term performance returns to assist members to engage with the long term performance of their superannuation.

On 19 February 2010, following discussions with the superannuation industry, the Minister for Financial Services, Superannuation and Corporate Law announced proposed refinements to the long term superannuation disclosure reporting requirements to:

(a)                exclude exit statements;

(b)               allow the industry to use inserts to provide five-year performance information for one more year up until 30 June 2011;

(c)                exempt "traditional" funds (of an insurance nature); and

(d)               allow approved deposit funds and pooled superannuation trusts to provide annual reports online.

Class Order [CO 10/630] provides relief from the operation of the current long term superannuation performance reporting requirements that are proposed to be refined, by implementing the proposed refinements pending the commencement of the proposed amending regulations.  This assists industry by providing greater certainty regarding their compliance obligations.

Class Order [C0 10/630] also extended transitional disclosure requirements under reg 7.9.20AA(2) to the period 1 July 2010 – 30 June 2011.

Class Order [CO 10/630] has effect until the earlier of the commencement of any amendments to the Regulations which have the same or similar effect to the modifications or variations contained in the class order and 12 months after the commencement of the class order.

2. Purpose of the Class Order

The purpose of Class Order [CO 11/554] is to extend the maximum period of operation of Class Order [CO 10/630] for a further 12 months so that the proposed refinements continue to apply, to allow additional time for the proposed amending regulations to be made. Class Order [CO 11/554] does not extend the transitional disclosure requirements under reg 7.9.20AA(2) for a period beyond 30 June 2011.

3. Operation of the Class Order

Class Order [CO11/554] varies Class Order [CO 10/630] by replacing the reference in subparagraph 5(b) to 12 months with a reference to 24 months.

4. Consultation

ASIC consulted with the Department of the Treasury, but did not engage in broader industry consultation with respect to Class Order [CO 11/554], as the Class Order is a transitional measure of a machinery nature.