ASIC Class Order [CO 12/1209]
Relevant interests, ASIC and ASIC Chairperson
This instrument has effect under s655A(1)(b), 669(1)(b) and 673(1)(b) of the Corporations Act 2001.
This compilation was prepared on 4 October 2013 taking into account amendments up to [CO 13/854]. See the table at the end of this class order.
Prepared by the Australian Securities and Investments Commission.
Australian Securities and Investments Commission
Corporations Act 2001 — Paragraphs 655A(1)(b), 669(1)(b) and 673(1)(b) — Declaration
Enabling legislation
1. The Australian Securities and Investments Commission makes this instrument under paragraphs 655A(1)(b), 669(1)(b) and 673(1)(b) of the Corporations Act 2001 (the Act).
Title
2. This instrument is ASIC Class Order [CO 12/1209].
Commencement
3. This instrument commences on the day it is registered under the Legislative Instruments Act 2003.
Note: An instrument is registered when it is recorded on the Federal Register of Legislative Instruments (FRLI) in electronic form: see Legislative Instruments Act 2003, section 4 (definition of register). The FRLI may be accessed at http://www.frli.gov.au/.
Declaration
4. Chapters 6 and 6C of the Act applies to all persons as if section 609 of the Act were modified or varied by, after notional subsection (13), inserting:
“ASIC
(14) Subject to subsection (15), ASIC does not have a relevant interest in securities.
(15) ASIC may have a relevant interest in securities if:
(a) the securities are vested in, or held by, ASIC for and on behalf of the Commonwealth; or
(b) the securities are vested in, or held by, the Commonwealth on trust.
(16) To avoid doubt, the Chairperson of ASIC does not have a relevant interest in securities merely because ASIC has a relevant interest in securities and the Chairperson holds that office.”.
Note: Notional subsection 609(13) of the Act is inserted by ASIC Class Order [CO 13/520].
5. Chapters 6, 6A and 6C of the Act apply to all persons as if subsection 12(2) of the Act were modified or varied by, after “if, and only if,” inserting “neither of the persons is ASIC and”.
Notes to ASIC Class Order [CO 12/1209]
Note 1
ASIC Class Order [CO 12/1209] (in force under s655A(1)(b), 669(1)(b) and 673(1)(b) of the Corporations Act 2001) as shown in this compilation comprises that Class Order amended as indicated in the tables below.
Table of Instruments
Instrument number | Date of FRLI registration | Date of commencement | Application, saving or transitional provisions |
[CO 12/1209] | 8/11/2012 (see F2012L02157) | 8/11/2012 | |
[CO 13/854] | 4/10/2013 (see F2013L01766) | 4/10/2013 | - |
Table of Amendments
ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted
Provision affected | How affected |
Para 4........... | am. [CO 13/854] |
Overview
The ASIC Class Order [CO 12/1209] was enacted in 2012 under the Corporations Act 2001, with subsequent amendments up to [CO 13/854] compiled in 2013. This legislative instrument addresses a specific gap in the Corporations Act 2001 concerning the circumstances under which the Australian Securities and Investments Commission (ASIC) and its Chairperson might hold relevant interests in securities. The order modifies the Act to clarify that ASIC generally does not have a relevant interest in securities unless they are held for or on behalf of the Commonwealth or are held by the Commonwealth on trust. This legislative action was taken to enhance transparency and accountability in financial markets, ensuring that the interests of ASIC and its Chairperson are clearly defined in relation to securities. The Australian Securities and Investments Commission prepared this instrument under the authority granted by the Corporations Act 2001.
Scope and Application
ASIC Class Order [CO 12/1209] applies to all persons as if certain sections of the Corporations Act 2001 were modified to exclude the Australian Securities and Investments Commission (ASIC) from having a relevant interest in securities, except when securities are held by ASIC for and on behalf of the Commonwealth or are vested in the Commonwealth on trust. The instrument amends specific paragraphs of the Act to clarify the circumstances under which ASIC and the Chairperson of ASIC can hold relevant interests in securities, ensuring that ASIC’s role and responsibilities do not conflict with its regulatory functions. This class order extends to all relevant entities and persons under the Act, with amendments and updates reflected in subsequent instruments such as [CO 13/854], which further refine the scope and application of the original provisions. The order's jurisdictional reach is national, as it operates under the authority of the Commonwealth.
Key Provisions
The ASIC Class Order [CO 12/1209] fundamentally modifies the Corporations Act 2001 by specifying the conditions under which the Australian Securities and Investments Commission (ASIC) can hold relevant interests in securities. As per section 4 of the Class Order, ASIC is generally prohibited from having a relevant interest in securities. However, exceptions are made when the securities are either vested in, or held by, ASIC for and on behalf of the Commonwealth, or when the securities are vested in, or held by, the Commonwealth on trust. Additionally, it clarifies that the Chairperson of ASIC does not have a relevant interest in securities merely by virtue of ASIC holding such an interest. Furthermore, the Class Order amends the Act by modifying subsection 12(2) to exclude ASIC from certain provisions when dealing with securities.
The obligations imposed by the Class Order are primarily focused on ensuring transparency and preventing conflicts of interest related to securities held by ASIC. Specifically, ASIC must ensure that any securities it holds are either for the benefit of the Commonwealth or are held on trust for the Commonwealth. This requirement aims to maintain the integrity of financial markets and the public's trust in regulatory processes. Additionally, the Chairperson of ASIC must be diligent in ensuring that they do not personally benefit from any securities held by the Commission, thereby avoiding any potential conflicts of interest.
Failure to comply with the provisions of the ASIC Class Order [CO 12/1209] may result in significant penalties. Although the Class Order itself does not specify detailed penalties, breaches of the Corporations Act 2001, which the Class Order modifies, can lead to substantial civil or criminal consequences. For example, individuals or entities found to be in violation of the Act may face fines, imprisonment, or both, depending on the severity and nature of the breach. The exact penalties would be determined based on the specific sections of the Act that are contravened, with potential maximum penalties varying according to the offence. It is important for parties subject to the Act to adhere strictly to its provisions to avoid these severe consequences.