ASIC Class Order [CO 12/622]

Overview

The ASIC Class Order [CO 12/622], enacted in 2012 under the Corporations Act 2001, was introduced by the Australian Securities and Investments Commission (ASIC) to address the need for regulatory refinements within the long term performance reporting regime for superannuation funds. This regime, outlined in the Corporations Regulations 2001, was initially designed to require regulated superannuation funds to disclose long term performance returns. However, following proposals announced by the Minister for Financial Services, Superannuation and Corporate Law in February 2010, certain adjustments were made to the regime. Class Order [CO 10/630] provided interim relief, allowing industry to operate under the proposed refinements until the amending regulations could be finalised. ASIC subsequently extended this relief period through Class Order [CO 11/554] to July 2012. Class Order [CO 12/622] further extends this period to July 2013, providing additional time for the proposed amendments to be finalised and implemented, thereby ensuring compliance certainty for industry participants.

Scope and Application

ASIC Class Order [CO 12/622] applies to regulated superannuation funds, excluding self-managed superannuation funds, and is aimed at modifying the existing long term performance reporting regime for these entities as outlined in the Corporations Regulations 2001. This class order was issued under the Corporations Act 2001, which has a broad reach across the Commonwealth of Australia, applying to all corporations and financial products within its jurisdiction. The class order specifically refines the current regime by excluding exit statements, allowing the use of inserts to provide five-year performance information until 30 June 2011, exempting "traditional" funds of an insurance nature, and permitting approved deposit funds and pooled superannuation trusts to provide annual reports online. The order also extends the transitional disclosure requirements from 1 July 2010 to 30 June 2011, and its operation is further extended by Class Order [CO 11/554] to 19 July 2012, with an additional extension to 19 July 2013 under this class order to allow more time for the proposed amending regulations to be finalised. There are no stated exemptions or exclusions beyond those already mentioned, and the order operates on a national level within Australia.

Key Provisions

The ASIC Class Order [CO 12/622] extends the operation of the principal class order [CO 10/630], which provides relief from the current long term performance reporting regime for regulated superannuation funds, to allow more time for the proposed amending regulations to be made. This is achieved under section 1020F(1)(c) of the Corporations Act 2001, which allows ASIC to modify or omit specified provisions in relation to certain persons or financial products. The extended period runs until the earlier of the commencement of amending regulations or 19 July 2013, as outlined in section 3 of the class order. This extension is designed to give the superannuation industry additional time to adapt to the proposed refinements to the long term performance reporting regime, announced by the Minister for Financial Services, Superannuation and Corporate Law on 19 February 2010. These refinements include the exclusion of exit statements, the allowance for industry to use inserts for five-year performance information until 30 June 2011, the exemption of “traditional” funds of an insurance nature, and the permission for approved deposit funds and pooled superannuation trusts to provide annual reports online. Under the extended class order, regulated superannuation funds are relieved from certain obligations and requirements that were previously imposed by the long term performance reporting regime. Specifically, these funds are no longer required to disclose long term performance returns as mandated by Regulation 7.9.20AA of the Corporations Regulations 2001. Additionally, the transitional disclosure requirements under subregulation 7.9.20AA(2) of the Regulations are extended to cover the period from 1 July 2010 to 30 June 2011, but not beyond this date, as previously extended by Class Order [CO 11/554]. This extension provides certainty to the industry regarding their compliance obligations during the period leading up to the anticipated implementation of the amending regulations. The ASIC Class Order [CO 12/622] does not impose any specific offences, penalties, or civil or criminal consequences for breach. Instead, it serves as a transitional measure to provide relief from certain obligations under the long term performance reporting regime until the amending regulations are made or until 19 July 2013. The primary focus of the class order is to ensure a smooth transition for the superannuation industry while awaiting the formal legislative changes. The compatibility statement under section 4 confirms that the class order does not engage any of the applicable rights or freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. ASIC consulted with the Department of the Treasury before making this class order but did not engage in consultation with industry, as the measure is considered to be of a minor or machinery nature.