ASIC Class Order [CO 13/854]

Administered by Department of the Treasury

Legislation au F2013L01766 Not in force Legislative Instrument

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ASIC CLASS ORDER [CO 13/854]

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 13/854] under paragraphs 655A(1)(b), 673(1)(b), 741(1)(a) and 1020F(1)(a) of the Corporations Act 2001 (the Act).

Paragraph 655A(1)(b) of the Act provides that ASIC may declare that Chapter 6 of the Act applies to a person as if specified provisions were omitted, modified or varied as specified in the declaration.

Paragraph 673(1)(b) of the Act provides that ASIC may declare that Chapter 6C of the Act applies to a person as if specified provisions were omitted, modified or varied as specified in the declaration.

Paragraph 741(1)(a) of the Act provides that ASIC may exempt a person from a provision of Chapter 6D of the Act.

Paragraph 1020F(1)(a) of the Act provides that ASIC may exempt a person or a class of persons from all or specified provisions of Part 7.9 of the Act.

1. Background

ASIC Class Order [CO 04/523] Investor directed portfolio service takeovers relief modifies section 609 of the Act so that the operator, and certain persons involved in the operation, of an investor directed portfolio service (IDPS) do not have a relevant interest in securities held through the IDPS. However, the relief will not apply to the operator (and potentially other persons) if the operator has not complied with the requirements of ASIC Class Order [CO 02/294] Investor Directed Portfolio Services.

ASIC Class Order [CO 09/425] Share and interest purchase plans provides conditional relief from certain provisions in:

(i) Ch 6D of the Act for shares offered by ASX-listed companies to existing members under a share purchase plan; and

(ii) Part 7.9 of the Act for interests offered by ASX-listed managed investment schemes to existing members under an interest purchase plan.

Relief under [CO 09/425] is subject to conditions including a $15,000 limit on the value of securities that can be issued to an investor under a purchase plan without a prospectus or PDS in a rolling 12 month period. However, in some cases custodians or nominees can invest more than $15,000 if they are acting on behalf of their clients and each client does not invest more than $15,000. The term “custodian” in [CO 09/425] includes persons whose Australian financial services licence requires them to comply with [CO 02/294].

ASIC Class Order [CO 13/763] Investor Directed Portfolio Services provides various relief in relation to the operation of IDPSs. Similar relief was previously provided by Class Order [CO 02/294]. [CO 02/294] was revoked by [CO 13/763], but may continue to apply to existing operators of IDPSs until 30 June 2014 under transitional provisions. Amendments to [CO 04/523] and the definition of “custodian” in [CO 09/425] are necessary to deal with the revocation of [CO 02/294] and the fact that it may continue to apply to certain persons until 30 June 2014.

A number of other ASIC class orders notionally modify Chapters 6 and 6C of the Act (including by notionally inserting new provisions) for other purposes. These include:

(i) ASIC Class Order [CO 00/455] Collective action by institutional investors;

(ii) ASIC Class Order [CO 11/272] Substantial holding disclosure: securities lending and prime brokering; and

(iii) ASIC Class Order [CO 12/1209] Relevant interests, ASIC and ASIC Chairperson.

2. Purpose of the class order

Class Order [CO 13/854] updates [CO 04/523] and [CO 09/425] to reflect the introduction of [CO 13/763], including by amending:

(i) the definitions of “IDPS” and “operator” in [CO 04/523];

(ii) the application of the relief under [CO 04/523]; and

(iii) the definition of “custodian” in [CO 09/425].

Class Order [CO 13/854] also makes a number of minor and technical changes relating to the numbering and presentation of the provisions notionally amended and inserted into Chapters 6 and 6C by [CO 04/523], [CO 00/455], [CO 11/272] and [CO 12/1209] to clarify their concurrent operation. These changes do not affect the substantive operation of the class orders.

3. Operation of the class order

Class Order [CO 13/854] amends [CO 04/523] and [CO 09/425] so that:

(i) the definitions for “IDPS” and “operator” in [CO 04-523] reflect the definitions for those terms in [CO 13/763];

(ii) a person will not be able to rely on the relief in [CO 04/523] if ASIC has given a notice in writing to the person to the effect that the relief does not apply to the person and has not withdrawn that notice;

(iii) an operator of an IDPS that continues to rely on [CO 02/294] under transitional provisions will not be able to rely on the relief in [CO 04/523] if the operator has not complied with or taken reasonable steps to comply with [CO 02/294]; and

(iv) the limb of the definition of “custodian” in [CO 09/425] that covers the operation of an IDPS reflects the definition of IDPS in [CO 13/763].

Class Order [CO 13/854] also updates the numbering and layout of a number of provisions notionally inserted by [CO 04/523], [CO 00/455], [CO 11/272] and [CO 12/1209].

4. Documents incorporated by reference

Class Order [CO 13/854] incorporates by reference [CO 13/763]. This document is available on ASIC’s website at www.asic.gov.au and is registered on the Federal Register of Legislative Instruments.

5. Consultation

ASIC did not conduct any public consultation for the purposes of Class Order [CO 13/854] because the class order merely:

(i) effects consequential changes required as a result of the changes to ASIC’s policy on platforms (including IDPSs) which was the subject of public consultation in March 2012; and

(ii) makes other changes that are of a minor or machinery nature.

In March 2012, ASIC published a consultation paper setting out our proposals and supporting rationale for reviewing our regulatory approach to platforms: see Consultation Paper 176 Review of ASIC policy on platforms: Update to RG 148. The consultation process closed on 20 April 2012. A summary of key submissions made in response to the consultation paper and further targeted consultation, together with our consideration of those responses, can be found in Report 351 Response to submissions on CP 176 Review of ASIC policy on platforms: Update to RG 148.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

ASIC Class Order [CO 13/854]

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

This class order amends Class Orders [CO 04/523] and [CO 09/425] to deal with the fact that:

(i) relief previously provided by Class Order [CO 02/294] in relation to the operation of certain investment platforms known as Investor Directed Portfolio Services (IDPSs) was replaced by new relief in Class Order [CO 13/763]; and

(ii) the former relief may continue to apply to certain persons until 30 June 2014 under transitional provisions.

In particular, Class Order [CO 13/854] amends [CO 04/523] and [CO 09/425] so that:

(i) certain definitions in [CO 04/523] (which provides takeovers relief in relation to IDPSs) and in [CO 09/425) (which provides disclosure relief in relation to share and interest purchase plans) reflect definitions used in [CO 13/763];

(ii) a person will not be able to rely on the takeovers relief in [CO 04/523] if ASIC has given a notice in writing to the person to the effect that the relief does not apply to the person and has not withdrawn that notice; and

This class order also updates the numbering and layout of a number of provisions notionally inserted into Chapters 6 and 6C of the Corporations Act 2001 by Class Orders [CO 04/523], [CO 00/455], [CO 11/272] and [CO 12/1209].

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 ASIC Class Order [CO 13/854], enacted in 2013, serves to update and clarify existing regulatory reliefs for investor directed portfolio services (IDPS) and share and interest purchase plans. This class order was introduced by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001, with the primary aim of ensuring the consistency and clarity of regulatory provisions in the wake of the revocation and replacement of earlier class orders. Specifically, it addresses the transition from ASIC Class Order [CO 02/294] to [CO 13/763], ensuring that the relief provided under Class Order [CO 04/523] for takeovers involving IDPSs and under Class Order [CO 09/425] for share and interest purchase plans remains applicable and coherent. The order also rectifies technical discrepancies and updates definitions to align with the new regulatory framework, ensuring that the relief provisions function as intended without creating ambiguities or regulatory gaps.

Scope and Application

ASIC Class Order [CO 13/854] applies to entities and individuals operating within the Australian financial services sector, particularly those involved in the operation of investor directed portfolio services (IDPS) and those executing share or interest purchase plans offered by ASX-listed companies or managed investment schemes. The scope of the Class Order is national, as it operates under the authority granted by the Commonwealth through the Corporations Act 2001. The order modifies the application of certain provisions of the Act to provide specific relief to operators of IDPS and to participants in share or interest purchase plans, subject to compliance with the requirements outlined in the Class Order and related regulatory frameworks. It includes exclusions where ASIC has explicitly notified an individual or entity that the relief does not apply, or where such entities have not complied with previous relief provisions such as [CO 02/294]. The Class Order further adjusts definitions and the presentation of certain provisions to ensure clarity and effective administration, without altering the substantive legal obligations or relief provided. This Class Order extends and modifies the application of the Corporations Act through subordinate instruments, ensuring alignment with the latest regulatory standards and transitional provisions for existing operators.

Key Provisions

ASIC Class Order [CO 13/854] amends the existing Class Orders [CO 04/523] and [CO 09/425] to reflect the introduction of new relief provisions in Class Order [CO 13/763]. This order updates the definitions of key terms such as "IDPS" and "operator" in [CO 04/523] to align with those in [CO 13/763]. It also modifies the relief conditions in [CO 04/523] to ensure that individuals cannot rely on the takeovers relief if ASIC has issued a written notice stating that the relief does not apply to them, and if the notice remains in effect. Furthermore, operators of an IDPS that continue to rely on [CO 02/294] under transitional provisions will not be eligible for relief in [CO 04/523] unless they comply with or have taken reasonable steps to comply with [CO 02/294]. Additionally, Class Order [CO 13/854] adjusts the definition of "custodian" in [CO 09/425] to reflect the definition of IDPS in [CO 13/763]. This class order also updates the numbering and presentation of the provisions notionally amended and inserted into Chapters 6 and 6C by other class orders to ensure clarity and consistency in their application. The obligations imposed by this class order include ensuring that definitions and relief conditions in Class Orders [CO 04/523] and [CO 09/425] are updated to reflect the changes made in Class Order [CO 13/763]. Operators of IDPS must comply with or take reasonable steps to comply with [CO 02/294] if they are continuing to rely on it under transitional provisions. Additionally, individuals must adhere to the conditions set by ASIC, such as not relying on the takeovers relief if ASIC has issued a notice stating that the relief does not apply to them. These obligations are designed to ensure that the regulatory framework remains consistent and effective in governing the operation of investor directed portfolio services. The class order does not explicitly outline specific offences or penalties for non-compliance. However, breaches of the Corporations Act 2001 or related regulations, which these class orders aim to modify, could result in civil or criminal penalties. For instance, contraventions of the Corporations Act could lead to fines, imprisonment, or both, depending on the severity of the breach. The maximum penalties can vary widely, but for corporate entities, fines can be substantial, often reaching millions of dollars, while individuals can face fines and imprisonment for serious or repeated offences. In summary, ASIC Class Order [CO 13/854] serves to update and align existing class orders with the new provisions introduced in Class Order [CO 13/763]. It imposes specific obligations on operators of investor directed portfolio services and individuals involved in takeovers, ensuring compliance with updated definitions and relief conditions. Although the class order itself does not specify penalties, non-compliance with the underlying Corporations Act or related regulations could result in significant civil or criminal consequences.

Area of Law: Corporate Law & Governance
Instrument: Regulation
Concepts: Delegated & Subordinate Legislation; Regulatory Standards; Reporting & Disclosure Obligations; Enforcement Powers

Interactions

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.

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