EXPLANATORY STATEMENT for
ASIC Corporations (Amendment) Instrument 2015/1073
Prepared by the Australian Securities and Investments Commission
Corporations Act 2001
The Australian Securities and Investments Commission (ASIC) makes ASIC Corporations (Amendment) Instrument 2015/1073 (the legislative instrument) under subsection 1020F(1) of the Corporations Act 2001 (the Act). This subsection of the Act provides that ASIC may exempt a person or a financial product or class of financial products from all or specified provisions of Part 7.9 of the Act or declare that Part 7.9 applies to a person, financial product or class of financial products as if specified provisions were omitted, modified or varied as specified in the declaration.
The amending instrument amends ASIC Class Order [CO 10/630] Long-term superannuation returns (the principal class order). The principal class order was made under paragraph 1020F(1)(c) of the Act.
Under subsection 33(3) of the Acts Interpretation Act 1901 (as in force as at 1 January 2005 and as applicable to the relevant powers because of section 5C of the Act), where an Act confers a power to make, grant or issue any instrument (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
- Background
Regulation 7.9.20AA of the Corporations Regulations 2001 (the Regulations) requires regulated superannuation funds (other than self-managed superannuation funds) to disclose long term performance returns to assist members to understand the long term performance of their superannuation. These are referred to in this Explanatory Statement as the “long term performance reporting regime”.
On 19 February 2010, following discussions with the superannuation industry, the then Minister for Financial Services, Superannuation and Corporate Law announced refinement proposals to the long term performance reporting regime. This aligns with the current Government's de-regulation agenda.
Under the proposals:
(a) exit statements are to be excluded from the regime;
(b) industry were permitted to use inserts to provide five-year performance information until 30 June 2011;
(c) “traditional” funds of an insurance nature are to be exempted from the regime; and
(d) approved deposit funds and pooled superannuation trusts are to be permitted to provide annual reports online.
The principal class order provides relief from the operation of the current long term performance reporting regime that are proposed to be refined, by implementing the proposed refinements pending the making of amending regulations. This assists industry by providing greater certainty regarding their compliance obligations.
The principal class order also extended transitional disclosure requirements under subregulation 7.9.20AA(2) of the Regulations so that it also covered the period from 1 July 2010 to 30 June 2011.
ASIC subsequently made Class Orders [CO 11/554], [CO12/622], [CO13/752],[CO 14/425] and ASIC Corporations (Amendment No. 3) Instrument 2015 which varied the principal class order to extend the maximum period of operation of the principal class order to 31 December 2015. Class Orders [CO 11/554], [CO 12/622], [CO13/752], [CO 14/425] and ASIC Corporations (Amendment No. 3) Instrument 2015 did not extend the transitional disclosure requirements under subregulation 7.9.20AA(2) of the Regulations for a period beyond 30 June 2011.
2. Purpose of the instrument
The purpose of the legislative instrument is to extend the existing relief in the principal class order beyond 31 December 2015, so as to allow additional time for the proposed amending regulations to be made to implement the refinements. The extension has been made for an indefinite period as it is uncertain when those regulations will be made.
3. Operation of the instrument
The legislative instrument amends paragraph 5 of the principal class order by omitting that paragraph. This has the effect of making the relief provided by that class order available indefinitely.
4. Consultation
Before making the legislative instrument, ASIC consulted with the Department of the Treasury, but did not undertake a public consultation process. Prior to making the legislative instrument we did inform the superannuation industry of the proposal to extend the relief in the principal class order. The amendment made by the legislative instrument is a transitional measure of a minor or machinery nature.