ASIC CLASS ORDER [CO 12/416]
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 12/416] under paragraph 1020F(1)(c) of the Corporations Act 2001 (the Act).
Paragraph 1020F(1)(c) provides that ASIC may declare that Part 7.9 of the Act applies in relation to a person or class of persons as if specified provisions were omitted, modified or varied as specified in the declaration.
1. Background
Section 1015D of the Act requires that a person must lodge an “in-use” notice with ASIC in certain circumstances, including where a Product Disclosure Statement (PDS) for a financial product is first made available. The in-use notice provisions only apply where the PDS for the product is not required to be lodged with ASIC. The in-use notice provisions apply to standard employer-sponsored superannuation products.
ASIC Class Order [CO 04/1030] (the original class order), which took effect on 14 October 2004, provided relief so as to permit the lodgment of a single in-use notice in relation to the common part used by each PDS or Supplementary PDS for standard employer-sponsored superannuation products.
The original class order was inadvertently not registered on the Federal Register of Legislative Instruments (FRLI) within the meaning of section 4 of the Legislative Instruments Act 2003 (the LI Act) by the last day for lodging the instrument as originally made for registration under Division 3 of Part 4 of the LI Act. As a consequence, the original class order ceased to be enforceable by or against the Commonwealth, or by or against any other person or body, from 1 October 2006.
To overcome this problem, ASIC has made two class orders:
- ASIC Class Order [CO 12/415] (the prospective class order); and
- ASIC Class Order [CO 12/416] (the retrospective class order).
2. Purpose of the class order
The purpose of this class order is to retrospectively reinstate the effect of the original class order from the date it became unenforceable (1 October 2006) until the commencement of the prospective class order.
The purpose of the original class order and the prospective class order are more fully set out in the Explanatory Statement for the prospective class order.
3. Operation of the class order
This class order retrospectively reinstates the effect of the original class order from the date it became unenforceable (1 October 2006) until the commencement of the prospective class order.
The operation of the original class order and the prospective class order are more fully set out in the Explanatory Statement for the prospective class order.
The retrospective operation of this class order from 1 October 2006 does not disadvantageously affect the rights of any person or impose liabilities on a person in respect of anything done or omitted to be done before the date this class order is registered on the FRLI: subsection 12(2) of the LI Act.
4. Statement of Compatibility with Human Rights
This statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. This legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 because it does not engage any of the applicable rights or freedoms.
5. Consultation
As this class order retrospectively reinstates the effect of the original class order on which the financial services industry had been relying, ASIC considers the making of this class order to be of a minor and technical nature which does not require consultation.
Overview
The ASIC Class Order [CO 12/416] was enacted in 2012 by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001. This class order was introduced to address the inadvertent failure to register the original ASIC Class Order [CO 04/1030] on the Federal Register of Legislative Instruments, which rendered it unenforceable from 1 October 2006. The primary objective of the class order is to retrospectively reinstate the effect of the original class order, which provided relief to permit the lodgment of a single in-use notice in relation to the common part used by each Product Disclosure Statement (PDS) or Supplementary PDS for standard employer-sponsored superannuation products, thereby ensuring regulatory continuity and compliance with the in-use notice provisions. ASIC considers the making of this class order to be of a minor and technical nature, and thus, consultation was deemed unnecessary.
Scope and Application
The ASIC Class Order [CO 12/416] applies to entities and individuals involved in the lodgment of "in-use" notices with the Australian Securities and Investments Commission (ASIC) concerning Product Disclosure Statements (PDS) for standard employer-sponsored superannuation products, specifically where the PDS is not required to be lodged with ASIC. This Class Order reinstates the provisions of the original ASIC Class Order [CO 04/1030], which was rendered unenforceable due to its failure to be registered on the Federal Register of Legislative Instruments by the requisite date. The Class Order has a Commonwealth jurisdictional reach and applies retroactively from 1 October 2006, the date the original Class Order ceased to be enforceable, until the prospective ASIC Class Order [CO 12/415] commences. The Class Order does not disadvantage any person or impose liabilities for actions taken before its registration on the Federal Register of Legislative Instruments, in accordance with subsection 12(2) of the Legislative Instruments Act 2003. ASIC has determined that this Class Order does not require consultation as it operates on a minor and technical basis to reinstate previously enforceable provisions on which the financial services industry had been relying.
Key Provisions
The ASIC Class Order [CO 12/416] is made under the Corporations Act 2001, specifically by leveraging the authority provided in paragraph 1020F(1)(c) of the Act. This order pertains to the lodgment of an 'in-use' notice with the Australian Securities and Investments Commission (ASIC) for certain financial products, particularly standard employer-sponsored superannuation products, where a Product Disclosure Statement (PDS) is first made available but is not required to be lodged with ASIC. The order essentially reinstates the effect of an earlier class order, [CO 04/1030], which had inadvertently ceased to be enforceable due to a registration oversight.
The primary obligation imposed by this class order is the requirement for a single in-use notice to be lodged with ASIC for the common part used by each PDS or Supplementary PDS for these superannuation products. This requirement is intended to streamline the regulatory process and ensure that ASIC is properly informed of the use of financial products that necessitate such notices. The class order ensures that the in-use notice provisions apply consistently and effectively from the date it became unenforceable, 1 October 2006, until the prospective class order [CO 12/415] comes into effect.
Breaching the requirements of this class order could lead to various consequences, although specific penalties are not detailed in the Explanatory Statement. Typically, breaches of ASIC's regulatory requirements can result in administrative penalties, enforcement actions, and potentially legal proceedings under the Corporations Act. The financial services industry, which relies on these provisions, must ensure compliance to avoid any adverse regulatory consequences. The retrospective application of the class order ensures that no person is disadvantaged or held liable for actions taken before the class order was registered on the Federal Register of Legislative Instruments.