ASIC Corporations (Amendment) Instrument 2016/566

Overview

The ASIC Corporations (Amendment) Instrument 2016/566 was enacted by the Australian Securities and Investments Commission (ASIC) to address the need for updating contact details in relation to the Financial Claims Scheme (FCS). The FCS, established by the Australian Government, aims to protect depositors and policyholders from losses due to the failure of authorised deposit-taking institutions and general insurance companies. The instrument was made under the authority provided by the Corporations Act 2001, specifically paragraph 1020F(1)(c). The primary objective of this amendment is to ensure that consumers have quick and convenient access to information about the FCS by updating the contact details in the Corporations Regulations 2001 to refer to the new FCS website. This change streamlines communication and provides a more direct route for consumers to obtain necessary information regarding the FCS.

Scope and Application

The ASIC Corporations (Amendment) Instrument 2016/566 applies to regulated persons who must disclose certain contact information regarding the Financial Claims Scheme (FCS) as part of their compliance obligations under the Corporations Act 2001. This instrument modifies the Corporations Regulations 2001, specifically regulations 7.9.07FA and 7.9.14D, to require the disclosure of the FCS website instead of the general APRA website and hotline telephone number. The amendment is intended to ensure that consumers have the most direct access to information about the FCS, thereby facilitating quicker and more convenient access to the scheme. The instrument operates on a Commonwealth level, impacting entities and individuals involved in the sale or recommendation of specified financial products that are protected under the Banking Act 1959 or issued by authorised deposit-taking institutions and general insurers. No exclusions, exemptions, or thresholds are specified in the explanatory statement, and the application of the instrument is limited to the modifications outlined in Schedule 1.

Key Provisions

The ASIC Corporations (Amendment) Instrument 2016/566 amends the Corporations Regulations 2001 to update the contact details required under regulations 7.9.07FA and 7.9.14D (Schedule 1). Previously, these regulations required disclosure of the Australian Prudential Regulation Authority’s (APRA) contact details, such as a telephone number. The amendments mandate that regulated entities must now disclose the Financial Claims Scheme (FCS) website instead. This change is intended to provide consumers with more direct and convenient access to information about the FCS, which protects depositors and policyholders in the event of an institution failure. The modifications apply to situations where a Product Disclosure Statement (PDS) is not required, as well as to PDSs related to protected policies or accounts. The obligations imposed on regulated entities by this instrument are relatively straightforward. They must ensure that the FCS website is disclosed in place of the previous APRA contact details. This requirement applies to any recommendations, issues, or sales of specified financial products that are protected under the Banking Act 1959, and to PDSs issued by general insurers or authorised deposit-taking institutions. Regulated entities must take reasonable steps to update their disclosures to include the new FCS website address. This update should be made as soon as practicable, reflecting the amendments made by the instrument. Failure to comply with these requirements may result in regulatory scrutiny or penalties. The ASIC Corporations (Amendment) Instrument 2016/566 does not introduce new offences or penalties by itself. However, non-compliance with the amended regulations could lead to regulatory action under the Corporations Act. This may include administrative penalties or other enforcement actions if the Australian Securities and Investments Commission (ASIC) determines that an entity has failed to meet its obligations. The specific penalties for non-compliance would depend on the nature and severity of the breach, as well as any relevant case law or precedents. Regulated entities should ensure they adhere to the updated disclosure requirements to avoid potential repercussions.