Overview

The Australian Securities and Investments Commission (ASIC) introduced ASIC Class Order [CO 14/1118] under section 1020F(1)(c) of the Corporations Act 2001. This class order was enacted to extend the relief provided by ASIC Class Order [CO 12/749], which initially exempted certain entities from the shorter Product Disclosure Statement (PDS) regime until 30 June 2015. The purpose of this extension, until 30 June 2016, is to allow for further consideration of the application of the shorter PDS regime to superannuation platforms, multi-funds, and hedge funds, pending the outcomes of the Financial System Inquiry and related government work. This transitional measure was implemented at the request of industry and Treasury and was deemed minor and of a machinery nature, thus not requiring formal consultation. Additionally, the class order has been assessed and found to be compatible with human rights as outlined in the Human Rights (Parliamentary Scrutiny) Act 2011.

Scope and Application

The ASIC Class Order [CO 14/1118] applies to entities involved in financial services, specifically those offering superannuation products, simple managed investment schemes, and related financial products. It targets a specific class of financial products and the entities that offer them, providing a regulatory framework that modifies the application of the Corporations Act 2001. The geographic reach of this legislation is national, operating within the framework set by the Commonwealth of Australia. The class order extends the relief from the shorter Product Disclosure Statement regime, which was initially set to conclude on 30 June 2015, to 30 June 2016. This extension excludes multifunds, superannuation platforms, and hedge funds from the shorter PDS regime during this period. The order is a transitional measure that was requested by industry and Treasury, and it does not require a formal consultation process due to its minor and machinery nature. It is compatible with human rights, as it does not engage any of the applicable rights or freedoms under the Human Rights (Parliamentary Scrutiny) Act 2011.

Key Provisions

The ASIC Class Order [CO 14/1118], made under section 1020F(1)(c) of the Corporations Act 2001, extends the relief provided by Class Order [CO 12/749] which had temporarily excluded certain entities from the shorter Product Disclosure Statement (PDS) regime. This extension is effective until 30 June 2016, aiming to give additional time to review the impact of the shorter PDS regime on superannuation platforms, multi-funds, and hedge funds. The shorter PDS regime, established by the Corporations Amendment Regulations 2010 (No 5), was designed to streamline the disclosure process for certain financial products and fully commenced on 22 June 2012. Entities governed by this class order include superannuation platforms, multi-funds, and hedge funds, which are currently exempt from the obligations to provide a shorter PDS. This exemption is intended to alleviate immediate compliance burdens as the Financial System Inquiry and further government work assess the suitability of applying the shorter PDS regime to these entities. The primary obligation for these entities is to continue operating under the existing PDS regime until the class order's extended period ends. There are no specific offences, penalties, or civil/criminal consequences outlined for breaches of this class order. However, it is important to note that failure to comply with the Corporations Act 2001 or the relevant regulations could result in enforcement actions by ASIC, including fines, legal proceedings, and potential criminal charges depending on the nature and severity of the breach. The penalties for breaches of the Corporations Act can vary widely, but they can include substantial fines for corporations and imprisonment for individuals, depending on the specific provisions contravened and the circumstances of the breach.