ASIC Class Order [CO 98/1805]

Overview

The Australian Securities and Investments Commission Corporations Law Paragraph 601QA(1)(b) - Declaration, enacted in 1998, is a legislative instrument designed to address issues related to the application of certain provisions of the Corporations Law to responsible entities of registered schemes and members of compliance committees of such schemes. This legislative instrument was introduced by the Australian Securities and Investments Commission (ASIC) and aims to clarify and streamline the legal responsibilities of natural persons acting in these capacities. By declaring that specific chapters and divisions of the Corporations Law apply to these entities as if certain sections were modified, the legislation seeks to ensure that individuals acting in these roles are held to appropriate standards of accountability and compliance, thereby protecting investors and maintaining the integrity of financial markets.

Scope and Application

The Corporations Law Paragraph 601QA(1)(b) pertains specifically to the application of certain provisions within the Corporations Act 2001, extending the scope of Chapter 5C and Division 11 (second appearing) of Part 11.2 of the Law to responsible entities of registered schemes and members of a compliance committee of such schemes. This declaration by the Australian Securities and Investments Commission modifies these provisions to include natural persons who acted in the capacity of these bodies. This means that individuals acting in the capacity of a responsible entity or a member of a compliance committee are subject to the same legal obligations and responsibilities as the corporate entities themselves. The application of this legislation is comprehensive in its jurisdictional reach, applying nationally across Australia, thereby impacting entities and individuals involved in managing or overseeing registered schemes, ensuring they adhere to the stringent regulatory standards set forth in the Corporations Act. The declaration ensures that there are no exclusions or exemptions from these obligations, thereby enforcing accountability and compliance across the board for all relevant parties.

Key Provisions

The primary sections of this legislative instrument pertain to the Corporations Law, specifically focusing on Chapter 5C and Division 11 of Part 11.2 (second appearing). These sections are declared applicable to responsible entities of a registered scheme and members of a compliance committee of a registered scheme. The declaration modifies the interpretation of section 1464 by adding phrases that include natural persons acting in the capacity of these entities or committees. This means that individuals who function in these roles are now explicitly covered under the stated provisions of the Corporations Law (section 601QA(1)(b)). Under the Corporations Law, the obligations imposed on responsible entities of a registered scheme and members of a compliance committee are stringent. These parties must adhere to the rules and regulations outlined in Chapter 5C and Division 11 of Part 11.2. This includes ensuring compliance with the standards set forth for managing and overseeing the schemes, as well as maintaining the integrity of their roles within the scheme. The law mandates that these entities and individuals act in good faith, exercise due diligence, and report any breaches or non-compliance to the appropriate authorities. Failure to meet these obligations can result in serious repercussions. The legislative instrument also outlines the potential offences, penalties, and consequences for breaches of the Corporations Law. Any individual or entity that fails to comply with the provisions of Chapter 5C and Division 11 of Part 11.2 may be subject to civil or criminal penalties. For civil penalties, the maximum fines can be substantial, reflecting the seriousness of the breach. Criminal penalties may also apply, depending on the nature and severity of the violation. These can include imprisonment for natural persons who are found guilty of serious misconduct. The specific penalties are detailed within the relevant sections of the Corporations Law, and the Australian Securities and Investments Commission has the authority to enforce these sanctions.