ASIC Class Order [CO 98/67]

Overview

The Australian Securities and Investments Commission (ASIC) Corporations Law — Subsection 111AT was enacted in 1998 to address the gap in regulatory requirements for securities issued by charitable bodies. This legislative instrument was created to streamline and simplify the disclosure obligations for entities that issue securities on behalf of charitable organisations. The enacting body, ASIC, aimed to ensure that charitable entities, which are often exempt from income tax and operate for specific benevolent purposes, do not face unnecessary regulatory burdens that could detract from their charitable missions. The exemption provided by ASIC under section 111AT of the Corporations Law ensures that these entities are not subjected to all disclosing entity provisions, thereby facilitating their operations and allowing them to focus on their charitable activities without undue regulatory constraints.

Scope and Application

This legislative instrument issued by the Australian Securities and Investments Commission under section 111AT of the Corporations Law provides an exemption from disclosing entity provisions for certain securities issued by charitable bodies or their trustees. Specifically, the exemption applies to any person who has already been exempted by ASIC from compliance with Chapter 5C of the Corporations Law in relation to securities issued or proposed to be issued by a charitable body or the trustee of such a body. The definition of "charitable body" encompasses entities that are exempt from income tax under specified sections of the Income Tax Assessment Act 1997, those eligible for tax deductions for gifts under other specified sections, and entities recognised by law as being constituted for religious, educational, community, or other charitable purposes. The exemption applies nationally, but the scope of its application is limited to securities issued or proposed to be issued by entities meeting the criteria of a "charitable body." This exemption extends the relief provided by ASIC to streamline compliance for certain charitable issuers, potentially reducing the administrative burden associated with disclosing entity provisions.

Key Provisions

The key provision of this legislative instrument, as outlined in subsection 111AT of the Corporations Law (subsection 111AT(1)), is that the Australian Securities and Investments Commission (ASIC) grants an exemption from all disclosing entity provisions for individuals who have been exempted by ASIC from compliance with Chapter 5C of the Law in relation to securities issued or proposed to be issued by a charitable body or the trustee of a charitable body. This exemption applies to those securities only, and not to any other provisions of the Law. The obligations imposed by this instrument on the entities it governs include ensuring that any securities issued or proposed to be issued by a charitable body or the trustee of a charitable body are exempt from the disclosing entity provisions, as per subsection 111AT(1). The charitable bodies themselves must ensure that they meet the criteria for being recognised as a charitable body for the purposes of this exemption, as outlined in the Interpretation section of the instrument. There are no specific offences, penalties, or consequences outlined in this legislative instrument for breach of its provisions. However, it is important to note that any breach of the Corporations Law, including failure to comply with the disclosing entity provisions, may result in civil or criminal penalties under the Law. The specific penalties for such breaches will depend on the nature and severity of the breach, and may include fines, imprisonment, or both. It is therefore essential for entities subject to this instrument to ensure that they comply with all relevant provisions of the Law to avoid any potential penalties or consequences.