ASIC Class Order [CO 98/1806]

Overview

The Australian Securities and Investments Commission Corporations Law Declaration, enacted in 1998, is a legislative instrument aimed at addressing specific legal requirements pertaining to the responsibilities and obligations of responsible entities and members of the compliance committee of registered schemes under the Corporations Law. This instrument was introduced to ensure the enforcement of compliance measures for entities involved in managing registered schemes, thereby safeguarding the interests of investors and maintaining the integrity of the financial markets. The declaration is issued under the authority of the Australian Securities and Investments Commission, which is the relevant federal body responsible for enforcing and regulating the securities and financial markets in Australia. The policy objective is to align the responsibilities and obligations of these entities with the regulatory framework, ensuring that they adhere to the necessary compliance standards and provisions outlined in the Corporations Law.

Scope and Application

The Australian Securities and Investments Commission Corporations Law, specifically referencing the Legislative instrument F2007B01002, pertains to the application of Chapter 5C of the Corporations Law in relation to the conduct of responsible entities of registered schemes and members of the compliance committee of these schemes. This legislative declaration is designed to ensure that these entities and committee members adhere to enhanced disclosure requirements and other relevant obligations as outlined in the Law. The modifications specified in the legislative instrument, including the insertion of "and paragraph 4(a)" in subsection 601JB(3) and the amendment of subsection 601JB(4) to include "or a related body corporate" after "responsible entity", aim to extend the scope of accountability for these roles. The application of these provisions ensures that there is greater transparency and compliance in the management of registered schemes, thereby protecting the interests of investors and maintaining the integrity of the financial markets. This legislative declaration applies at the national level and extends its reach to all responsible entities and compliance committee members across Australia, without specific exclusions or exemptions mentioned in the text.

Key Provisions

The legislative instrument in question primarily modifies the application of Chapter 5C of the Corporations Law for specific entities within registered schemes. According to section 601QA(1)(b) of the Corporations Law, the Australian Securities and Investments Commission (ASIC) has declared that Chapter 5C applies to a responsible entity of a registered scheme and a member of the compliance committee of a registered scheme as if certain textual changes were made. Specifically, subsection 601JB(3) is amended by inserting "and paragraph 4(a)" after "2(a)" (paragraph a). Furthermore, subsection 601JB(4) is modified by inserting "or a related body corporate" after "responsible entity" wherever it appears (paragraph b). These changes aim to refine the scope and application of regulatory provisions to ensure comprehensive oversight and compliance. The obligations and requirements imposed by this legislative instrument on the parties it governs include the need for responsible entities and compliance committee members to adhere to the amended provisions of Chapter 5C. For responsible entities, this means they must now account for additional elements as specified by the modified subsection 601JB(3). Members of the compliance committee, on the other hand, must ensure that the new insertions in subsection 601JB(4) are properly implemented, extending their regulatory obligations to related body corporates. These amendments necessitate careful review and updating of internal policies and procedures to align with the legislative changes. Failure to comply with the provisions of Chapter 5C as amended by this legislative instrument may result in significant legal consequences. The Corporations Law includes a range of potential penalties and sanctions for breaches, although the specific penalties are not detailed in the legislative instrument itself. Generally, breaches of the Corporations Law can lead to both civil and criminal penalties. Civil penalties may include fines, while criminal penalties could involve imprisonment, depending on the severity and nature of the breach. The exact penalties would be determined in the context of a court proceeding, taking into account the specific circumstances of the non-compliance. Therefore, it is crucial for responsible entities and compliance committee members to ensure strict adherence to the legislative requirements to avoid such adverse outcomes.