ASIC CLASS ORDER [CO 13/1473]
EXPLANATORY STATEMENT
Prepared by the Australian Securities and Investments Commission
Corporations Act 2001
The Australian Securities and Investments Commission (ASIC) makes Class Order [CO 13/1473] under subsection 1020F(1) of the Corporations Act 2001 (the Act).
Subsection 1020F(1) of the Act provides that ASIC may exempt a class of persons from all or specified provisions of Part 7.9 of the Act. Subsection 1020F(4) provides that an exemption may be subject to specified conditions. A person seeking to rely on the exemption must comply with the specified conditions.
- Background
ASIC Class Order [CO 13/1420] (the principal class order) provides temporary relief from subregulation 7.9.20(2A) of the Corporations Regulations 2001, which requires that superannuation trustees separately report low income superannuation contributions (LISC) in members' periodic statements.
The principal class order provides a conditional exemption from complying with subregulation 7.9.20(2A), subject to compliance with one of two alternative conditions, which provide for an alternative method of disclosure.
Under the second alternative condition, the trustee must include in the periodic statement, the total amount of both the Government co-contribution and LISC received during the reporting period for the periodic statement. The trustee must refer to the total amount as “Co-contribution” in the periodic statement. After the making of the principal class order, ASIC became aware that industry practice was to describe the total amount as either a “Government co-contribution” or “Co-contribution”.
2. Purpose of the class order
The purpose of this amending class order is to amend the second alternative condition in the principal class order to reflect industry practice and ensure the class order is effective and achieves its purpose.
3. Operation of the class order
The second alternative condition in the principal class order is amended to provide that the trustee must refer to the total amount of both the Government co-contribution and LISC received during the reporting period as either a “Co-contribution” or “Government co-contribution”.
The amending class order also corrects a minor grammatical error in the principal class order without effecting any substantive change.
4. Consultation
ASIC consulted a number of superannuation industry associations before making this amending class order to confirm that the amendments were necessary and desirable so as to reflect the practice of the superannuation industry.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
ASIC Class Order [CO 13/1473]
This class order 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.
Overview of the class order
The class order amends Class Order [CO 13/1473], which currently allows superannuation trustees to refer to the total amount of low income superannuation contributions and co-contributions the periodic statement as a “Co-contribution”.
The amendment will provide that the total amount can be referred to as a “Co-contribution” or a “Government co-contribution”, to reflect industry practice.
Human rights implications
This class order does not engage any of the applicable rights or freedoms.
Conclusion
This class order is compatible with human rights as it does not raise any human rights issues.
Overview
The Australian Securities and Investments Commission (ASIC) introduced Class Order [CO 13/1473] under subsection 1020F(1) of the Corporations Act 2001 to address the need for temporary relief for superannuation trustees from certain reporting requirements concerning low income superannuation contributions (LISC). Specifically, the Class Order provides an exemption from the requirement to separately report LISC in members' periodic statements, subject to certain conditions. This was intended to alleviate administrative burdens while ensuring that members are still adequately informed. The Order also corrects a minor grammatical error in the principal class order to ensure the effectiveness and clarity of the legislation. ASIC consulted with relevant superannuation industry associations to confirm the necessity and desirability of these amendments, ensuring that the Class Order aligns with industry practices. The Class Order is also compatible with human rights as it does not engage any of the applicable rights or freedoms, as confirmed in the Statement of Compatibility with Human Rights.
Scope and Application
ASIC Class Order [CO 13/1473] amends Class Order [CO 13/1420] to provide temporary relief from the requirement for superannuation trustees to separately report low income superannuation contributions (LISC) in members' periodic statements, as stipulated in subregulation 7.9.20(2A) of the Corporations Regulations 2001. The amendment extends this exemption to allow trustees to refer to the total amount of both the Government co-contribution and LISC received during the reporting period as either a “Co-contribution” or “Government co-contribution”, thereby aligning the class order with industry practice. The purpose of this amending class order is to ensure that the class order is effective and achieves its intended purpose by reflecting the existing practices of the superannuation industry. ASIC consulted relevant industry associations to confirm the necessity and desirability of these amendments. The order applies to superannuation trustees subject to the Corporations Act 2001 and is applicable across Australia, given the national scope of the Corporations Act. The order is compatible with human rights as it does not engage any of the applicable rights or freedoms.
Key Provisions
The ASIC Class Order [CO 13/1473] amends the previous Class Order [CO 13/1420], which provided a temporary exemption from the requirement for superannuation trustees to separately report low income superannuation contributions (LISC) in members' periodic statements (Section 1). This new class order allows trustees to refer to the total amount of both Government co-contributions and LISC as either a "Co-contribution" or "Government co-contribution" in the periodic statements (Section 2). This change aims to align the class order with industry practice, where trustees often describe the total amount in one of these two ways.
Compliance with the class order imposes certain obligations on superannuation trustees. Trustees must ensure that the total amount of Government co-contributions and LISC during the reporting period is appropriately disclosed in the periodic statement as either a "Co-contribution" or "Government co-contribution" (Section 3). Trustees must also be aware of the minor grammatical correction made in the class order, which does not substantively change the requirements but ensures clarity in the text.
There are no specific offences, penalties, or civil/criminal consequences outlined for breaches of this class order. However, failure to comply with the conditions of the class order could result in general enforcement actions by ASIC under the Corporations Act 2001, which could include financial penalties, public reprimands, or other regulatory measures. The precise consequences would depend on the nature and severity of the breach.
The class order has been designed to be compatible with human rights as it does not engage any of the rights or freedoms recognised in the international instruments listed in the Human Rights (Parliamentary Scrutiny) Act 2011 (Section 4). ASIC consulted with relevant industry associations to ensure that the amendments were necessary and desirable, reflecting industry practice and achieving the intended purpose of the class order without infringing on human rights.