ASIC Class Order [CO 98/1808]

Overview

The Australian Securities and Investments Commission (ASIC) Corporations Law Paragraph 601QA(1)(b) Declaration, enacted in 1998, addresses a specific issue concerning the constitutions of registered schemes under the Corporations Law. The declaration was made pursuant to the powers vested in ASIC to modify or vary the application of Chapter 5C of the Law to responsible entities and members of registered schemes. The overarching objective of this legislative instrument is to ensure that the constitutions of these schemes can include provisions consistent with Appendix 15A of the Exchange's listing rules as in force on 1 July 1998, without such inclusions being treated as modifications or repeals of the constitution under the specified subsections. This legislative action was taken to provide clarity and legal certainty regarding the permissible content and treatment of such provisions in the constitutions of registered schemes, thereby facilitating compliance and governance within the financial sector.

Scope and Application

The Australian Securities and Investments Commission (ASIC) Corporations Law applies specifically to the responsible entities of registered schemes and the members of those schemes, as outlined in the declaration pursuant to paragraph 601QA(1)(b) of the Law. This legislative instrument modifies section 601GB to allow the constitution of a registered scheme to include a provision mirroring Appendix 15A of the listing rules of the Exchange as in force on 1 July 1998. The text of the constitution, when including such a provision, is considered to comply with the requirements of the Law. Importantly, any changes to the constitution resulting from this provision do not constitute a modification, repeal, or replacement of the constitution for the purposes of subsections 601GC(1) and (2). This declaration extends the application of Chapter 5C of the Corporations Law to these entities and members, ensuring that their operations and governance structures are aligned with the specified regulatory framework.

Key Provisions

Pursuant to paragraph 601QA(1)(b) of the Corporations Law, the Australian Securities and Investments Commission (ASIC) has declared that Chapter 5C of the Law applies to responsible entities of registered schemes and their members, with a specific modification to section 601GB. This section, as amended, permits the constitution of a registered scheme to include a provision similar to Appendix 15A of the listing rules of the Exchange as in force on 1 July 1998. When this provision is included, the constitution's text is considered to comply with the requirements of Appendix 15A. Additionally, any changes to the constitution arising from this provision do not constitute a modification or repeal and replacement of the constitution for the purposes of subsections 601GC(1) and (2). The obligations imposed by this legislative instrument primarily focus on the responsible entities of registered schemes and their members. These parties must ensure that their scheme’s constitution includes a provision consistent with Appendix 15A of the Exchange's listing rules. They are also required to adhere to the specific interpretation of the constitution as outlined, ensuring that any changes due to the inclusion of this provision are recognised under the law as not constituting a modification or replacement of the constitution. The Act does not explicitly outline specific offences, penalties, or civil and criminal consequences for breaches. However, it is understood that non-compliance with the Corporations Law, including the provisions of Chapter 5C, could lead to legal action under the general provisions of the Corporations Act 2001. Such actions may include enforcement by ASIC, which can impose penalties, including fines and other remedies to ensure compliance with the law. The exact penalties would be determined by the specific breach and the court's discretion, with potential maximum penalties varying based on the nature and severity of the offence.