ASIC Corporations (Amendment) Instrument 2015/624
EXPLANATORY STATEMENT
Prepared by the Australian Securities and Investments Commission
Corporations Act 2001
The Australian Securities and Investments Commission (ASIC) makes ASIC Corporations (Amendment) Instrument 2015/624 under paragraphs 601QA(1)(a) and 911A(2)(l) of the Corporations Act 2001 (the Act).
Paragraph 601QA(1)(a) of the Act provides that ASIC may exempt a class of persons from the provisions of Chapter 5C of the Act.
Paragraph 911A(2)(l) of the Act provides that ASIC may exempt a class of persons from the requirement to hold an Australian financial services licence (AFS licence).
1. Background
ASIC Class Order [CO 08/1] Group purchasing bodies, the principal legislative instrument, gives conditional relief from the AFS licensing regime and Chapter 5C of the Act for some group purchasing bodies (GPBs) who arrange or hold risk management products (insurance) for the benefit of third parties. GPBs include sporting and other not-for-profit organisations which arrange insurance for third parties (e.g. players or volunteers).
[CO 08/1] provides conditional relief to a limited class of GPBs that organise insurance on a non-commercial basis. It contains a condition that requires a GPB who relies on the relief to report to ASIC breaches of conditions of the relief. The requirement to comply with the breach reporting condition was subject to a delayed start to allow for transition. Based on the current wording of [CO 08/1], the transitional period for compliance with the breach reporting condition in [CO 08/1] ended on 30 June 2015.
2. Purpose of the legislative instrument
ASIC Corporations (Amendment) Instrument 2015/624, an amending legislative instrument, extends the transitional period for compliance with the breach reporting conditions in [CO 08/1] until the end of 30 June 2016 while the Government and ASIC consider the issue. That is, GPBs will not need to report breaches of [CO 08/1] to ASIC until after the earlier of the first time that the GPB acquires, renews or renegotiates the terms of the risk management product on or after 30 June 2016, or 30 June 2017. This extension will enable the Government and ASIC to consider how the issues raised by GPBs can be addressed by amendments to the Corporations Regulations 2001 and to consult with stakeholders in the development of the regulations.
3. Operation of the legislative instrument
Paragraph 4 of ASIC Corporations (Amendment) Instrument 2015/624 amends [CO 08/1] by substituting ‘30 June 2016’ in place of ‘30 June 2015’ and substituting ‘30 June 2017’ in place of ‘30 June 2016’ in subparagraphs 10(f)(i) and (ii), respectively. This means that GPBs relying on relief under [CO 08/1] will need to report any breaches of the conditions of [CO 08/1] to ASIC under subparagraph 10(f) after the earlier of: the first time the GPB acquires, renews or renegotiates the terms of the risk management product on or after 30 June 2016; and 30 June 2017.
4. Consultation
ASIC did not undertake consultation with respect to ASIC Corporations (Amendment) Instrument 2015/624, as it is a transitional measure of a minor and machinery nature and was required as a matter of urgency to extend the transitional period in [CO 08/1].
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
ASIC Corporations (Amendment) Instrument 2015/624
This legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the legislative instrument
This legislative instrument amends ASIC Class Order [CO 08/1] (the principal legislative instrument). The principal legislative instrument gives conditional relief from the Australian financial services licensing regime and Chapter 5C of the Corporations Act 2001 to a limited class of group purchasing bodies (GPBs) that organise insurance on a non-commercial basis for the benefit of third parties. GPBs include sporting and other not-for-profit organisations.
The transitional period for compliance with the breach reporting conditions in the principal legislative instrument ended on 30 June 2015. This legislative instrument extends that transitional period until the end of 30 June 2016 while the Government considers the issue.
Human rights implications
This legislative instrument does not engage any of the applicable rights or freedoms.
Conclusion
This legislative instrument is compatible with human rights as it does not raise any human rights issues.