ASIC Corporations (Amendment) Instrument 2017/518

Administered by Department of the Treasury

Legislation au F2017L00758 Not in force Legislative Instrument

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ASIC Corporations (Amendment) Instrument 2017/518

 

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 2017/518 under paragraphs 926A(2)(c), 951B(1)(c) and 1020F(1)(c) of the Corporations Act 2001 (the Act).

 

Paragraph 926A(2)(c) of the Act provides that ASIC may declare that Part 7.6 (other than Divisions 4 and 8) applies in relation to a person or financial product, or a class of persons or financial products, as if specified provisions were omitted, modified or varied as specified in the declaration.

 

Paragraph 951B(1)(c) of the Act provides that ASIC may declare that Part 7.7 of the Act applies in relation to a person or a financial product, or a class of persons or financial products, as if specified provisions were omitted, modified or varied as specified in the declaration.

 

Paragraph 1020F(1)(c) of the Act provides that ASIC may declare that Part 7.9 of the Act applies in relation to a person or a financial product, or a class of persons or financial products, as if specified provisions were omitted, modified or varied as specified in the declaration.

Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument, 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

 

ASIC Class Order [CO 14/1262] (principal class order) provides interim conditional relief to enable 31-day notice term deposits of up to five years to be treated as basic deposit products under the Act. The principal class order commenced on 22 December 2014, and provides relief for:

  • 31-day notice term deposits entered into on or before until 30 June 2017; and
  • 31-day notice term deposits that are entered into as a result of rolling over a term deposit that has the benefit of the relief.

 

The relief does not apply other term deposit entered into after 30 June 2017.

 

The principal class order was intended to give Government the opportunity to consider legislative reform regarding the meaning of basic deposit product under the Act, as it applies to 31-day notice term deposits.

 

 

 

The Government has indicated that there will not be an opportunity for any legislative changes to be made before the expiry of the principal class order.

2.      Purpose of the instrument

 

In order to preserve the current treatment of 31-day notice term deposits as an interim measure, the ASIC Corporations (Amendment) Instrument 2017/518 extends the relief given by the principal class order to:

  • 31-day notice term deposits entered into on or before until 30 June 2019; and
  • 31-day notice term deposits that are entered into as a result of rolling over such term deposits.

 

3.      Operation of the instrument

 

The legislative instrument amends sub-subparagraph (c)(i) of the definition of affected term deposit in paragraph 6 of the principal class order. The effect of this is to extend the operation of the relief given by the principal class order so that it applies to:

  • 31-day notice term deposits entered into on or before until 30 June 2019; and
  • 31-day notice term deposits that are entered into as a result of rolling over such term deposits.

 

4.      Consultation

ASIC did not undertake a formal consultation process on extending the operation of the principal class order as the extension is a transitional measure of a minor and machinery nature.  ASIC has consulted with the Treasury on the matter.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

ASIC Corporations (Amendment) Instrument 2017/518

 

ASIC Corporations (Amendment) Instrument 2017/518 (the 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

 

The purpose of the legislative instrument is to amend ASIC Class Order [CO 14/1262] (the principal class order). The principal class order provides conditional relief to enable 31-day notice term deposits of up to five years to be treated as basic deposit products under the Corporations Act 2001 (Act), until 30 June 2017 (i.e. the relief will apply to 31-day notice term deposits entered into on or before 30 June 2017 and to rollovers of such term deposits). This was intended to give Government the opportunity to consider legislative reform regarding the meaning of basic deposit product under the Act, as it applies to 31-day notice term deposits.

 

The Government has indicated that there will not be an opportunity for any legislative changes to be made before the expiry of the principal class order.

 

In order to preserve the current treatment of 31-day notice term deposits as an interim measure, the legislative instrument extends the relief given by the principal class order so that it applies to such term deposits entered into on or before 30 June 2019 (and to rollovers of such term deposits).

 

Human rights implications

 

This class order does not engage any of the applicable rights or freedoms.

 

Conclusion

 

This class order is compatible with human rights as it does not raise any human rights issues.

Overview

The ASIC Corporations (Amendment) Instrument 2017/518 was enacted by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001. This legislative instrument was introduced to address the impending expiration of ASIC Class Order [CO 14/1262], which had provided interim conditional relief to classify 31-day notice term deposits of up to five years as basic deposit products under the Corporations Act until 30 June 2017. Given that the government indicated there would be no opportunity for legislative reform before the expiration of the original class order, the instrument was designed as a transitional measure to extend the relief to 30 June 2019 for term deposits entered into before this date, and those resulting from rollovers of such term deposits. The objective was to ensure the continuity of the current treatment of 31-day notice term deposits while allowing more time for potential legislative reform.

Scope and Application

The ASIC Corporations (Amendment) Instrument 2017/518 is an instrument made by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001. It serves to amend ASIC Class Order [CO 14/1262], which provides conditional relief to treat 31-day notice term deposits of up to five years as basic deposit products under the Act. This relief was initially intended to last until 30 June 2017, with the purpose of allowing the Government time to consider legislative reforms regarding the definition of basic deposit products in the context of such term deposits. However, given that no legislative changes will be made before the expiration of the original class order, this amendment extends the relief until 30 June 2019. The instrument applies to term deposits entered into on or before this extended date, as well as rollovers of such term deposits. There were no human rights implications identified with this amendment, and it is compatible with the human rights and freedoms recognised or declared in the international instruments listed in the Human Rights (Parliamentary Scrutiny) Act 2011.

Key Provisions

The ASIC Corporations (Amendment) Instrument 2017/518 primarily concerns the amendment of ASIC Class Order [CO 14/1262], which was intended to provide temporary relief for certain 31-day notice term deposits under the Corporations Act 2001 (the Act). The key sections of this legislative instrument include the declaration under paragraphs 926A(2)(c), 951B(1)(c), and 1020F(1)(c) of the Act, which allows ASIC to modify the application of specific parts of the Act to certain persons or financial products. This instrument seeks to extend the relief provided by the principal class order, which initially applied to term deposits entered into on or before 30 June 2017, to those entered into on or before 30 June 2019, as well as to rollovers of such term deposits (sections 3 and 4). Under the amended class order, the obligations and requirements remain largely unchanged from the original order. Financial institutions and depositors must continue to adhere to the stipulations regarding the treatment of 31-day notice term deposits as basic deposit products. This means that these term deposits must be subject to the same regulatory conditions and consumer protections as other basic deposit products, ensuring that consumers are provided with adequate notice and terms when entering into such deposits. Institutions must also continue to offer any rollovers of existing term deposits under the same regulatory framework, ensuring consistency and predictability in how these products are managed and disclosed. Breaches of the provisions within the Act, including those modified by this legislative instrument, can lead to both civil and criminal consequences. While the specific penalties are not detailed in this explanatory statement, the Act generally provides for fines up to $210,000 for individuals and substantially higher amounts for corporations, depending on the nature and severity of the breach. Additionally, directors and officers can face personal penalties, including fines and imprisonment, if they are found to be complicit in the breach. It is important for financial institutions and relevant parties to comply with these provisions to avoid such consequences.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.