ASIC Class Order [CO 12/417]

Administered by Department of the Treasury

Legislation au F2012L00981 Not in force Legislative Instrument

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ASIC CLASS ORDER [CO 12/417]

 

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 12/417] under paragraph 951B(1)(c) of the Corporations Act 2001 (the Act).

Paragraph 951B(1)(c) provides that ASIC may declare that Part 7.7 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

A Financial Services Guide (FSG) is a key disclosure document under the Act that sets out the terms and basis on which a financial services licensee or an authorised representative of a such a licensee, will provide a financial service.

The FSG is provided to retail clients to assist them to make an informed decision on whether to acquire a financial service from the licensee or authorised representative.

In a time critical situation, such as during the provision of a financial service over the telephone, it may not be reasonably practicable to provide an FSG before the financial service is provided. Instead, section 941D of the Act permits a statement of certain key information to be given at the time, with the FSG given to the retail client within five days, or sooner if practicable, after the financial service is provided.

However, as section 941E of the Act requires an FSG to be “up to date” at the time it is given to the client, the information in the FSG provided later may contain different information to an FSG that would be given in normal circumstances. This may mean that an FSG needs to contain tailored information that is known after the financial service is provided, resulting in an increased compliance burden in having to provide customised information in the FSG.

ASIC Class Order [CO 04/1055]

ASIC Class Order [CO 04/1055] (the original class order), which took effect on 30 August 2004, provided relief that is identical to the relief provided by this class order.

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meaning of section 4 of the Legislative Instruments Act 2003 (the LI Act) by the last day for lodging the instrument as originally made for registration under Division 3 of Part 4 of the LI Act.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. Both ASIC and the financial services industry had been erroneously proceeding on the basis that the original class order continued to have effect in accordance with its terms.

ASIC Class Order [CO 12/418]

This class order is being made in conjunction with ASIC Class Order [CO 12/418] (the retrospective class order). The retrospective class order provides the same relief as this class order but with retrospective effect from 1 October 2006 to the date of commencement of this class order.

2. Purpose of the class order

The purpose of the class order is to prospectively reinstate the effect of the original class order.

The purpose of the original class order and this class order is to reduce the potential for a significantly increased compliance burden in having to provide customised information in an FSG in a time critical situation, without reducing the level of information provided to retail clients to assist them to decide whether to acquire a financial service.

3. Operation of the class order

This class order has the effect that information in an FSG given in a time critical situation need only be up to date as at the time the earlier statement of key information was given to a retail client. In other words, an FSG given after the provision of a financial service in a time critical case will be the same as an FSG that is given before the provision of a financial service in normal cases.

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 prospectively 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 Australian Securities and Investments Commission (ASIC) enacted ASIC Class Order [CO 12/417] under the Corporations Act 2001 to address the issue of compliance burdens arising from the need to provide customised Financial Services Guides (FSG) in time-critical situations, such as when financial services are provided over the telephone. The original class order, ASIC Class Order [CO 04/1055], which provided similar relief, inadvertently ceased to be enforceable due to a registration oversight, prompting the need for this new class order to reinstate its effect. The purpose of this class order is to reduce the potential for a significantly increased compliance burden without diminishing the information provided to retail clients. By allowing FSGs provided in time-critical situations to be up to date only as of the time the earlier statement of key information was given, the class order aims to alleviate the need for tailored information post-service provision, thereby easing the compliance burden on financial services licensees and their authorised representatives.

Scope and Application

ASIC Class Order [CO 12/417] applies to financial services licensees and their authorised representatives who provide financial services to retail clients under the Corporations Act 2001. The class order is intended to reduce the compliance burden on these entities by modifying the requirements for Financial Services Guides (FSG) in time-critical situations. The FSG must still be provided to the client within five days, but it need only be up-to-date as at the time the earlier statement of key information was given to the client. This means that the FSG provided after the financial service is rendered can contain the same information as an FSG provided before the service, thereby alleviating the need for tailored information in urgent circumstances. The class order operates prospectively and is applicable within the Commonwealth of Australia, extending to any financial services licensees or authorised representatives operating under the Corporations Act. Notably, it does not provide retrospective relief, which is covered by a separate class order, ASIC Class Order [CO 12/418]. The class order does not explicitly state any exclusions or exemptions, but it is understood that it applies to situations where providing an FSG before the financial service is rendered is not reasonably practicable.

Key Provisions

ASIC Class Order [CO 12/417] is a directive issued by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001 (section 951B(1)(c)). This class order serves to reinstate the effect of an earlier class order [CO 04/1055], which had inadvertently ceased to be enforceable from 1 October 2006 due to a failure in registration. The primary focus of the class order is to alleviate the compliance burden on financial services licensees and their authorised representatives when providing Financial Services Guides (FSG) in time-critical situations. According to section 941D of the Act, in situations where it is not practicable to provide an FSG before offering a financial service, a statement of key information can be provided at the time, with the FSG to be delivered within five days or sooner if possible. However, this sometimes results in an FSG containing information that differs from what would be provided in a normal situation, potentially necessitating customised information that increases the compliance burden. The obligations imposed by the class order require that in a time-critical situation, the FSG need only be up to date as at the time the earlier statement of key information was given. This means that the FSG provided post-service can be the same as one provided pre-service in normal circumstances, thereby reducing the need for additional, tailored disclosures. By setting this condition, the class order aims to ensure that the information provided to retail clients is consistent and reliable, without imposing an undue compliance burden on financial service providers. Failure to comply with the provisions of this class order could result in various consequences, although specific penalties are not outlined within the explanatory statement. Generally, breaches of class orders under the Corporations Act can lead to administrative penalties, enforcement actions, or even legal proceedings against the offending party. These actions are intended to ensure adherence to the regulatory requirements and to protect the interests of retail clients in the financial services sector.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.