ASIC CLASS ORDER [CO 12/418]
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 12/418] 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 under 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.
ASIC Class Order [CO 04/1055] (the original class order), which took effect on 30 August 2004, provided relief that had 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.
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meaning of section 4 of the Legislative Instruments Act 2003 (the LI Act) by the last day for lodging the instrument as originally made for registration under Division 3 of Part 4 of the LI Act.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 12/417] (the prospective class order); and
- ASIC Class Order [CO 12/418] (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.