ASIC Corporations (Amendment) Instrument 2018/1028

Administered by Department of the Treasury

Legislation au F2018L01565 Not in force Legislative Instrument

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EXPLANATORY STATEMENT


ASIC Corporations (Amendment) Instrument 2018/1028

 

Prepared by the Australian Securities and Investments Commission

 

Corporations Act 2001

 

The Australian Securities and Investments Commission (ASIC) makes the ASIC Corporations (Amendment) Instrument 2018/1028 (the amending instrument) under subsections 992B(1) and 1020F(1) of the Corporations Act 2001 (the Act).

 

Subsections 992B(1) and 1020F(1) of the Act respectively provide that ASIC may exempt a person or class of persons from all or specified provisions of Part 7.8 and 7.9 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 an instrument, the power is construed as including a power exercisable in the like manner to amend the instrument.

 

1. Background

 

1.1 ASIC Class Order [CO 13/763] (the principal instrument) implements ASIC’s policy in relation to investor directed portfolio services (IDPSs). An IDPS is a kind of ‘platform’ which provides custodial, transactional and reporting services where the investor makes the investment decisions. An IDPS operator must hold an Australian financial services licence authorising it to operate an IDPS.     

 

1.2 An IDPS is a managed investment scheme. ASIC’s policy is to exempt IDPS operators from the requirement to register the IDPS under Chapter 5C and from Division 8 of Part 7.8 (the hawking prohibition) and Part 7.9 (which deals with, among other things, financial product disclosure) of the Act in relation to a financial product that is an interest in the IDPS scheme arising out of participation in the IDPS.

 

1.3 In lieu of the requirement to give a Product Disclosure Statement for the financial product that is an interest in the IDPS scheme, an IDPS operator is required to give an IDPS Guide. The IDPS Guide must include all information that a person would reasonably require to make a decision, as a retail client, whether to become a client of the IDPS.

 

1.4 ASIC made amendments to the principal instrument in December 2016. The amendments were made by the ASIC Corporations (Amendment) Instrument 2016/1158. At that time, ASIC inadvertently removed the exemption granted to IDPS operators from Division 8 of Part 7.8, and Part 7.9, in relation to a financial product that is an interest in a managed investment scheme arising out of participation in the IDPS.

 

 

2. Purpose of the instrument

 

2.1 The purpose of the instrument is to reinstate the exemptions previously granted to IPDS operators from Division 8 of Part 7.8, and Part 7.9, in relation to a financial product that is an interest in a managed investment scheme arising out of participation in the IDPS.

 

3. Operation of the instrument

 

3.1 The amending instrument amends the principal instrument by omitting subparagraph 4(b) of the principal instrument and substituting a new subparagraph 4(b) which includes the exemptions that were inadvertently removed in December 2016.

 

3.2 The amendments do not affect the obligations that are otherwise imposed on IDPS operators under ASIC’s policy for regulating IDPSs.

 

4. Consultation

 

4.1 ASIC did not engage in consultation before making the amending instrument. ASIC did not consider that consultation was necessary because the amendments merely reinstates an aspect of ASIC’s long-standing policy on IDPSs.

 

 


 

 

Statement of Compatibility with Human Rights

 

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

 

ASIC Corporations (Amendment) Instrument 2018/1028

 

ASIC Corporations (Amendment) Instrument 2018/1028 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

 

ASIC Corporations (Amendment) Instrument 2018/1028 (the amending instrument) amends ASIC Class Order [CO 13/763] (the principal instrument).

 

The principal instrument implements ASIC’s policy in relation to investor directed portfolio services (IDPSs). An IDPS is a kind of ‘platform’ which provides custodial, transactional and reporting services where the investor makes the investment decisions.

The purpose of the amending instrument is to reinstate some exemptions granted to IDPS operators, which were inadvertently removed following amendments made in 2016.

 

ASIC’s policy is to exempt operators from Division 8 of Part 7.8 (the hawking prohibition) and Part 7.9 (which deals with, among others, financial product disclosure) of the Act in relation to a financial product that is an interest in the IDPS scheme arising out of participation in the IDPS. These exemptions have now been reinstated.

 

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.

 

 

 

 

 

Overview

The ASIC Corporations (Amendment) Instrument 2018/1028 was enacted by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001 to address an oversight in the regulation of investor directed portfolio services (IDPS). The amending instrument reinstates exemptions for IDPS operators from specific provisions of the Corporations Act, which were inadvertently removed in 2016. This ensures that IDPS operators remain exempt from certain regulatory requirements such as registration and financial product disclosure, while still being subject to ASIC’s broader regulatory framework for IDPS. The instrument does not require consultation as it merely reinstates existing policy, and it is compatible with human rights, having no adverse impact on the rights and freedoms recognised in international human rights instruments.

Scope and Application

The ASIC Corporations (Amendment) Instrument 2018/1028 amends ASIC Class Order [CO 13/763], which implements the Australian Securities and Investments Commission’s (ASIC) policy concerning investor directed portfolio services (IDPSs). This Act applies to IDPS operators, who are entities that provide custodial, transactional, and reporting services where the investor makes the investment decisions. The geographic reach of the Act is national, as it applies throughout Australia. The exemptions granted under the Act extend to IDPS operators from certain provisions of the Corporations Act 2001, such as the requirement to register the IDPS under Chapter 5C, the hawking prohibition in Division 8 of Part 7.8, and Part 7.9 which deals with financial product disclosure in relation to a financial product that is an interest in the IDPS scheme. The exemptions were inadvertently removed in December 2016, and the amending instrument seeks to reinstate them. The exemptions do not affect the obligations imposed on IDPS operators under ASIC’s policy for regulating IDPSs. ASIC did not engage in consultation for this amendment, considering it unnecessary as it merely reinstates an aspect of ASIC’s long-standing policy on IDPSs.

Key Provisions

The ASIC Corporations (Amendment) Instrument 2018/1028 amends ASIC Class Order [CO 13/763], which implements the Australian Securities and Investments Commission's (ASIC) policy on investor-directed portfolio services (IDPSs). Section 1.3 of the amending instrument clarifies that an IDPS operator, which provides custodial, transactional and reporting services where the investor makes the investment decisions, must provide an IDPS Guide instead of a Product Disclosure Statement for the financial product that is an interest in the IDPS scheme. This guide must include all information that a person would reasonably require to decide whether to become a client of the IDPS. The main operative sections of this amending instrument are sections 3.1 and 3.2, which respectively omit subparagraph 4(b) of the principal instrument and substitute a new subparagraph 4(b) that reinstates the exemptions that were inadvertently removed in December 2016. These exemptions pertain to Division 8 of Part 7.8 (the hawking prohibition) and Part 7.9 (which deals with, among other things, financial product disclosure) of the Act in relation to a financial product that is an interest in a managed investment scheme arising out of participation in the IDPS. The amending instrument imposes specific obligations on IDPS operators. Firstly, they must hold an Australian financial services licence authorising them to operate an IDPS. Secondly, they must provide an IDPS Guide that includes all necessary information for a person to decide whether to become a client of the IDPS. Importantly, the amendments do not affect the existing obligations imposed on IDPS operators under ASIC’s policy for regulating IDPSs, as outlined in section 3.2. Regarding potential breaches, the amending instrument does not introduce new offences or penalties. However, any failure by an IDPS operator to comply with the obligations set out in the instrument, such as not providing the required IDPS Guide or operating without the necessary financial services licence, could result in enforcement actions by ASIC under the Corporations Act 2001. These actions may include issuing infringement notices, seeking court orders for compliance, or imposing fines and other penalties as deemed appropriate by the court. The specific penalties for breaches of the Act would be determined based on the nature and severity of the breach, and could include substantial financial penalties for both individuals and corporations.

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Area of Law
Corporate Law & Governance
Instrument
Regulation
Concepts
Definitions & Interpretation
Repeal & Amendment
Licensing & Registration
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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.