ASIC Corporations (Amendment and Repeal) Instrument 2017/545

Administered by Department of the Treasury

Legislation au F2017L00875 Not in force Legislative Instrument

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EXPLANATORY STATEMENT for
ASIC Corporations (Amendment and Repeal) Instrument 2017/545

Prepared by the Australian Securities and Investments Commission

Corporations Act 2001

The Australian Securities and Investments Commission (ASIC) makes the ASIC Corporations (Amendment and Repeal) Instrument 2017/545 (Instrument) under subsection 601QA(1) of the Corporations Act 2001 (Act).

Subsection 601QA(1) of the Act provides that ASIC may exempt a person from a provision of Chapter 5C of the Act (s601QA(1)(a)) or declare that Chapter 5C of the Act applies to a person as if specified provisions were omitted, modified or varied as specified in the declaration (s601QA(1)(b)).

The Instrument commences on the day after it is registered on the Federal Register of Legislation.

Background

The Instrument remakes relief previously given by ASIC Class Order [CO 98/60] Protecting class rights in a managed investment scheme, which was due to expire ('sunset') on 1 October 2017. The Instrument repeals [CO 98/60] on the basis that it is no longer necessary where the relief has been remade.

The Instrument also repeals the following class orders, which were remade separately under ASIC Corporations (Chapter 5C-Miscelleanous Provisions) Instrument 2017/125:

Class Order [CO 98/50] Incorporating parts of other compliance plans, which was due to sunset on 1 April 2018;
Class Order [CO 98/1806] Related bodies corporate and external members of compliance committee, which was due to sunset on 1 October 2017; and
Class Order [CO 98/1808] Allowing constitutions to use Appendix 15A of the ASX Listing Rules, which was due to sunset on 1 October 2017.

Protecting class rights in a managed investment scheme - [CO 98/60]

Subsection 601GC(1) of the Act provides that the constitution of a registered scheme may be modified, or repealed and replaced with a new constitution either:

(a) by special resolution of the members of the scheme; or

(b) by the responsible entity if the responsible entity reasonably considers the change will not adversely affect members' rights.

The provisions in Pt 2F.2 of the Act that protect class rights of members of companies do not apply to, and are not replicated for, class rights of members of a registered scheme.

Our relief in [CO 98/60] modified s601GC so that the constitution of a registered scheme may protect the rights of members of a class by requiring that modifications of the constitution that impact on class rights are subject to compliance with any relevant procedure set out in the constitution.

In particular, [CO 98/60] provided that if the constitution of a registered scheme sets out a procedure for varying or cancelling rights of a class of members of the scheme, or rights attached to a class of interests under the scheme, those rights may be varied or cancelled by special resolution of the members of the scheme only if that procedure is complied with.

The effect of [CO 98/60] included that any such procedure in the constitution was not itself able to be modified without following the relevant procedure.

The Instrument remakes the relief given by [CO 98/60] without substantial changes.

2. Purpose of the instrument

The purpose of the Instrument is to continue the relief given by [CO 98/60] with minor drafting changes, and repeal [CO 98/50], [CO 98/60], [CO 98/1806] and [CO 98/1808].

3. Operation of the instrument

Section 4

Section 4 of the Instrument provides that each instrument specified in a schedule to the Instrument is amended or repealed as set out in the relevant item in the schedule, and any other item in a schedule to the Instrument has effect according to its terms.

Schedule 1 – Amendment of [CO 09/552]

Schedule 1 of the Instrument provides for the remake of [CO 98/60] by way of an amendment to ASIC Class Order [CO 09/552].

Schedule 1 modifies paragraph (b) in section 4 of [CO 09/552]. The effect of this modification is that [CO 09/552] notionally inserts a new subsection s601GC(1A) which requires that if the constitution of a scheme sets out a procedure for varying or cancelling rights of a class of members of the scheme, or rights attached to a class of interests under the scheme, those rights may be varied or cancelled by a resolution under paragraph 601GC(1)(a) only if that procedure is complied with.

If the constitution sets out a procedure for varying or cancelling rights of a class of members of the scheme, or rights attached to a class of interests under the scheme, that procedure itself is not able to be modified without following the relevant procedure.

Schedule 2 – Repeals

Schedule 2 of the Instrument repeals [CO 98/50], [CO 98/60], [CO 98/1806] and [CO 98/1808].

4. Consultation

ASIC sought feedback on proposals to remake the relief provided by [CO 98/50], [CO 98/60], [CO 98/1806] and [CO 98/1808] in Consultation Paper 270 Remaking ASIC class orders on registered schemes (CP 270).

No submissions were made in response to CP 270.

Overview

The ASIC Corporations (Amendment and Repeal) Instrument 2017/545, enacted by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001, aims to continue and refine relief previously provided by ASIC Class Order [CO 98/60], which was set to expire. The Instrument also repeals other class orders that are no longer necessary. The primary objective of this instrument is to ensure the ongoing protection of class rights within managed investment schemes by updating and maintaining the relevant regulatory framework. This legislative instrument was created to address the gap left by the expiration of previous class orders and to streamline the regulatory environment for managed investment schemes. The Instrument amends and repeals several class orders, including [CO 98/60], [CO 98/50], [CO 98/1806], and [CO 98/1808], by introducing minor drafting changes and ensuring that the necessary protections for class rights in managed investment schemes are maintained. The Instrument makes these changes to provide clarity and continuity in the regulatory requirements for managing and protecting the rights of scheme members. The changes are intended to enhance the effectiveness of the regulatory framework without altering the fundamental protections afforded to members.

Scope and Application

The ASIC Corporations (Amendment and Repeal) Instrument 2017/545 applies to entities involved in managed investment schemes, including the holders of Australian financial services (AFS) licences and Australian credit licences who are responsible for managing these schemes. This legislation operates on a Commonwealth level and is designed to continue the relief previously provided by ASIC Class Order [CO 98/60] Protecting class rights in a managed investment scheme, which has been remade with minor drafting changes. The Act amends the Corporations Act 2001 to ensure that any modifications to the constitution of a registered scheme that impact on class rights of members must comply with any relevant procedures set out in the scheme’s constitution. The Act also repeals several class orders, including [CO 98/50], [CO 98/60], [CO 98/1806], and [CO 98/1808], which were due to sunset. This instrument has no exclusions or thresholds specified within the Act itself, but its application may be further defined through subordinate instruments.

Key Provisions

The ASIC Corporations (Amendment and Repeal) Instrument 2017/545 amends and repeals various class orders, primarily focusing on protecting the rights of members in a managed investment scheme. Under section 4 of the Instrument, specific class orders are amended or repealed as detailed in the schedules. Notably, the relief previously given by ASIC Class Order [CO 98/60] is remade with minor drafting changes in Schedule 1, which amends ASIC Class Order [CO 09/552]. This amendment inserts a new subsection 601GC(1A) into the Corporations Act 2001, requiring compliance with any relevant procedure set out in the constitution if a scheme's constitution provides for varying or cancelling rights of a class of members or rights attached to a class of interests. Furthermore, if a procedure for varying or cancelling these rights is set out in the constitution, it cannot be modified without following the relevant procedure. Schedule 2 of the Instrument repeals Class Order [CO 98/50], [CO 98/60], [CO 98/1806], and [CO 98/1808]. The obligations imposed by the Instrument on parties governed by these class orders include ensuring that any modifications to a registered scheme's constitution that impact on class rights must comply with any relevant procedure specified in the constitution. This includes ensuring that any such procedure cannot itself be modified without following the specified procedure. Managed investment schemes must adhere to these requirements to safeguard the rights of their members. These obligations ensure that changes to the scheme's constitution are transparent and that members' rights are adequately protected. For breaches of the requirements set out in the amended and repealed class orders, the Corporations Act 2001 provides for potential civil and criminal penalties. Civil penalties can include fines up to $210,000 for individuals and significantly higher amounts for corporations, depending on the severity and intent of the breach. Criminal penalties may also apply, including fines and imprisonment, particularly if the breach is found to be deliberate or involves significant dishonesty. These penalties are designed to deter non-compliance and ensure the protection of members' rights in managed investment schemes.

Area of Law: Corporate Law & Governance
Instrument: Legislative Instrument
Concepts: Regulatory Standards; Prohibited Conduct; Licensing & Registration

Interactions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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