ASIC Corporations (Amendment) Instrument 2015/1073

Administered by Department of the Treasury

Legislation au F2015L01953 Not in force Legislative Instrument

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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.

  1. 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.

 

 

 

 

 

 

 

 

 

 

Overview

The ASIC Corporations (Amendment) Instrument 2015/1073, enacted by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001, aims to address the need for continued relief from the long-term superannuation returns reporting regime. This legislative instrument amends ASIC Class Order [CO 10/630] Long-term superannuation returns, providing a temporary solution until the proposed regulatory refinements are finalised. The primary objective is to offer certainty to the industry regarding their compliance obligations while awaiting the implementation of the refined regulations. The legislative instrument effectively extends the relief provided by the principal class order indefinitely, ensuring that regulated superannuation funds, other than self-managed funds, are not unduly burdened by the current reporting requirements until the new regulations are in place.

Scope and Application

The ASIC Corporations (Amendment) Instrument 2015/1073 applies to regulated superannuation funds, specifically those other than self-managed superannuation funds, and is governed under the Corporations Act 2001. This legislative instrument, created by the Australian Securities and Investments Commission (ASIC), amends the ASIC Class Order [CO 10/630] Long-term superannuation returns to refine the long-term performance reporting regime. The instrument exempts exit statements from the reporting regime, allows the use of inserts for providing five-year performance information until 30 June 2011, exempts "traditional" funds of an insurance nature, and permits approved deposit funds and pooled superannuation trusts to provide annual reports online. The purpose of the instrument is to extend the relief provided by the principal class order beyond 31 December 2015, allowing more time for proposed amending regulations to be finalised. The instrument is applicable on a national level, aligning with the de-regulation agenda of the Australian Government. No exclusions or exemptions have been specified beyond those outlined in the principal class order, and the legislative instrument does not extend the transitional disclosure requirements beyond 30 June 2011.

Key Provisions

The main operative sections of the ASIC Corporations (Amendment) Instrument 2015/1073 (the legislative instrument) amend the ASIC Class Order [CO 10/630] Long-term superannuation returns, which was initially made to provide relief from the long-term performance reporting regime pending further refinements. Section 2 of the instrument states that the purpose of this amendment is to extend the existing relief beyond 31 December 2015 to allow additional time for the proposed amending regulations to be made. Section 3 of the instrument achieves this by omitting the paragraph that specifies the end date for the relief, effectively making the relief available indefinitely until the amending regulations are enacted. The obligations and requirements imposed by the legislative instrument are primarily to provide continued relief from certain disclosure obligations under the long-term performance reporting regime for regulated superannuation funds. This relief allows these funds to avoid certain reporting requirements while the proposed refinements to the regime are being finalised and implemented. The instrument ensures that the relief, which was initially intended to be temporary, remains in effect until the permanent solution, in the form of amending regulations, is enacted. The legislative instrument itself does not introduce any new offences, penalties, or consequences for breach. However, the relief provided by the amended class order could be subject to scrutiny if it is found that the funds are not in compliance with other regulatory requirements. If the relief is abused or if funds fail to adhere to other relevant obligations, they could face enforcement actions under the Corporations Act 2001, including fines and other penalties. The maximum penalties for breaches of the Corporations Act can vary widely depending on the specific breach and the circumstances, but they can include significant fines for both individuals and corporations, as well as potential disqualification from managing corporations. The instrument, being a transitional measure, does not itself carry penalties but ensures that the regulatory framework remains coherent and effective until the permanent changes are legislated.

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