EXPLANATORY STATEMENT for
ASIC CORPORATIONS (AMENDMENT) INSTRUMENT 2015/999
Prepared by the Australian Securities and Investments Commission
Corporations Act 2001
The Australian Securities and Investments Commission (ASIC) makes ASIC Corporations (Amendment) Instrument 2015/999 under subsections 283GA(1), 601QA(1), 741(1), 926A(2), 992B(1) and 1020F(1) and paragraph 911A(2)(l) of the Corporations Act 2001.
ASIC Corporations (Amendment) Instrument 2015/999 amends ASIC Class Order [CO14/1001] Employee incentive schemes: Unlisted bodies. 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 Corporations Act 2001), 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
In October 2015, ASIC made ASIC Corporations (Amendment) Instrument 2015/943 which made minor amendments to [CO14/1001]. [CO14/1001] provides relief to unlisted bodies who operate an employee incentive scheme from the requirement to comply with a range of requirements and restrictions under the Corporations Act relating to disclosure, financial services licensing, managed investment schemes, advertising, hawking and on-sale of securities.
The explanatory statement to ASIC Corporations (Amendment) Instrument 2015/943 released in October 2015 provides further detail on the operation of that instrument. This explanatory statement sets out the purpose and operation of this additional amending instrument.
2. Purpose of the instrument
The purpose of ASIC Corporations (Amendment) Instrument 2015/999 is to remove a reference in [CO14/1001] to a listed company which was inadvertently inserted as a result of the operation of ASIC Corporations (Amendment) Instrument 2015/943. [CO14/1001] deals exclusively with unlisted companies and not listed companies.
3. Operation of the instrument
ASIC Corporations (Amendment) Instrument 2015/999 amends paragraph 28 of [CO14/1001] to refer to an unlisted body instead of a listed body.
4. Consultation
Consultation was not conducted in relation to ASIC Corporations (Amendment) Instrument 2015/999, because the amendment is minor and machinery in nature.
Overview
The ASIC Corporations (Amendment) Instrument 2015/999 was enacted to correct an inadvertent error in the ASIC Class Order [CO14/1001] Employee Incentive Schemes: Unlisted Bodies, which was introduced by ASIC Corporations (Amendment) Instrument 2015/943. The primary objective of this amendment is to rectify a reference to a listed company that was mistakenly included in [CO14/1001]. This class order was originally intended to provide relief to unlisted bodies operating employee incentive schemes, exempting them from certain requirements and restrictions under the Corporations Act 2001, such as disclosure, financial services licensing, and managed investment schemes. The Australian Securities and Investments Commission (ASIC) made this amendment under various sections of the Corporations Act 2001, ensuring the correction aligns with the intended purpose of the original class order. No consultation was deemed necessary due to the minor and technical nature of the amendment.
Scope and Application
The ASIC Corporations (Amendment) Instrument 2015/999 applies to unlisted bodies that operate employee incentive schemes, providing relief from certain disclosure, financial services licensing, managed investment schemes, advertising, hawking, and on-sale of securities requirements under the Corporations Act 2001. This amendment corrects an inadvertent reference to listed companies in the previously issued ASIC Corporations (Amendment) Instrument 2015/943, clarifying that [CO14/1001] exclusively pertains to unlisted companies. The instrument operates by amending paragraph 28 of [CO14/1001] to specify that the relief applies to unlisted bodies rather than listed bodies, ensuring the correct scope of the legislation is maintained. As a minor and machinery amendment, no consultation was conducted in relation to this instrument. The amendment extends nationally across Australia as it modifies a class order issued under the Commonwealth Corporations Act 2001.
Key Provisions
The main operative sections of the ASIC Corporations (Amendment) Instrument 2015/999 are those that amend the ASIC Class Order [CO14/1001], specifically targeting the reference to a listed company within paragraph 28 of the order. This amendment rectifies an oversight from a previous instrument, ASIC Corporations (Amendment) Instrument 2015/943, which mistakenly included a reference to listed companies, while the intent of [CO14/1001] was to provide relief to unlisted bodies only. The corrected reference now appropriately directs to unlisted bodies, ensuring the class order applies accurately to its intended scope. This change is pivotal in maintaining the precision and applicability of the regulatory framework designed for unlisted entities.
The obligations and requirements imposed by the Act on the parties governed by [CO14/1001] are primarily focused on providing relief from certain compliance burdens for unlisted bodies that operate employee incentive schemes. The Act ensures these unlisted bodies do not have to comply with the stringent disclosure, financial services licensing, managed investment schemes, advertising, hawking, and on-sale of securities requirements that typically apply to other entities. This allows unlisted bodies to operate more flexibly while still being subject to basic regulatory oversight. The amended class order now clearly specifies these obligations, ensuring that unlisted bodies understand the scope of their regulatory relief.
Failure to comply with the provisions of [CO14/1001] as amended by ASIC Corporations (Amendment) Instrument 2015/999 could potentially lead to enforcement actions by ASIC. While specific offences and penalties are not detailed in the explanatory statement, breaches of class orders can generally result in a range of consequences, including fines and legal proceedings. The penalties for non-compliance could vary depending on the severity and intent behind the breach. It is essential for unlisted bodies to adhere strictly to the requirements set forth by the amended class order to avoid any regulatory repercussions.