ASIC Class Order [CO 98/50]

Overview

The Australian Securities and Investments Commission Corporations Law Paragraph 601QA(1)(b) Declaration 1998 was enacted to address the need for enhanced oversight and accountability in the management of registered schemes, particularly regarding the role of responsible entities. This legislative instrument, issued under the authority of the Australian Securities and Investments Commission (ASIC), aims to ensure that responsible entities of registered schemes adhere to the regulatory requirements set forth in Chapter 5C of the Corporations Law. The primary policy objective is to strengthen the compliance mechanisms for responsible entities by mandating a review of the compliance plan whenever amendments are made to any part of the plan that is incorporated by reference. This ensures that the responsible entities maintain updated and effective compliance strategies, thereby safeguarding the interests of stakeholders and maintaining the integrity of the financial markets.

Scope and Application

This legislative instrument pertains to the Corporations Law, specifically targeting the responsible entity of a registered scheme. The Australian Securities and Investments Commission (ASIC) has declared that Chapter 5C of the Law applies to these entities under particular circumstances. The declaration modifies subsections 601HB(1) and 601HB(2) of the Law to include additional wording that refines the timing of compliance reviews by responsible entities for their registered schemes. The legislative instrument outlines a specific requirement for the compliance plan of a registered scheme, ensuring that any amendments to parts of the compliance plan incorporated by reference must be reviewed for their appropriateness by the responsible entity. This legislative instrument is significant for entities managing registered schemes, ensuring that compliance plans are consistently and appropriately updated in response to changes. The legislative instrument operates within the Commonwealth jurisdiction, as it involves the application of the Corporations Law, which is a federal statute. The instrument does not explicitly state exclusions, exemptions, or thresholds, but its application is inherently conditional on the specific circumstances of registered schemes and their compliance plans. The reach of this legislative instrument is limited to the modification of compliance procedures for registered schemes and does not extend to other entities or industries unless they are similarly situated. This legislative instrument may be further extended or restricted by subordinate instruments issued by ASIC, which would provide additional detail or specific instances of application.

Key Provisions

The Australian Securities and Investments Commission Corporations Law (F2008B00020) contains a declaration under paragraph 601QA(1)(b) of the Corporations Law, which applies Chapter 5C to a responsible entity of a registered scheme in specific cases outlined in the schedule (601QA(1)(b)). This application of Chapter 5C is conditional upon the insertion of certain phrases in subsections 601HB(1) and 601HB(2) of the Law, namely "or from time to time" and "or from time to time as the case may be," respectively, following the words "specified time" (601HB(1), 601HB(2)). The obligations imposed by this legislative instrument require the responsible entity of a registered scheme to review the appropriateness of the compliance plan whenever any amendment is made to a part of the compliance plan that is incorporated by reference in it. This review ensures that the compliance plan remains current and relevant, considering any changes or updates to the incorporated parts (Schedule). Failure to comply with the requirements of this legislative instrument can result in significant consequences. While the specific penalties for breach are not detailed in the text, breaches of the Corporations Law generally can lead to both civil and criminal penalties. Civil penalties can include fines up to a substantial amount, while criminal penalties can include imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as any relevant provisions in other parts of the Corporations Law.