ASIC Corporations (Amendment) Instrument 2018/752

Administered by Department of the Treasury

Legislation au F2018L01566 Not in force Legislative Instrument

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EXPLANATORY STATEMENT for
ASIC Corporations (Amendment) Instrument 2018/752

Prepared by the Australian Securities and Investments Commission

Corporations Act 2001

The Australian Securities and Investments Commission (ASIC) makes ASIC Corporations (Amendment) Instrument 2018/752 under subsections 765A(2) and 1020F(1) and paragraphs 601QA(1)(a), 926A(2)(a), 951B(1)(a) and 992B(1)(a) of the Corporations Act 2001 (the Act).

Paragraph 601QA(1)(a) provides that ASIC may exempt a person from a provision in Chapter 5C of the Act.

Subsection 765A(2) provides that ASIC may declare that a specified facility, interest or other thing is not a financial product for the purposes of Chapter 7 of the Act.

Paragraph 926A(2)(a) provides that ASIC may exempt a person or class of persons from all or specified provisions to which section 926A of the Act applies.

Paragraph 951B(1)(a) provides that ASIC may exempt a person or class of persons from all or specified provisions of Part 7.7 of the Act.

Paragraph 992B(1)(a) provides that ASIC may exempt a person or class of persons from all or specified provisions of Part 7.8 of the Act.

Subsection 1020F(1) provides that ASIC may exempt a person or class of persons from all or specified provisions of Part 7.9 of the Act, exempt a financial product or a class of financial products from all or specified provisions of Part 7.9 or declare that Part 7.9 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.

ASIC Corporations (Amendment) Instrument 2018/752 amends ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211. 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, 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

The Act provides that a facility through which, or through the acquisition of which, a person makes payments otherwise than through the delivery of notes or coins – a non-cash payment facility – is a financial product.

These products are subject to the financial services regulatory regime, which requires persons to:

hold an Australian financial services (AFS) licence in order to provide financial services in relation to a financial product;
comply with the conduct obligations in Part 7.8 of the Act; and
provide Product Disclosure Statements and confirmations of transactions to retail clients.

Shortly after commencement of the financial services regulatory regime, it became apparent that the scope of some of these rules was unintentionally broad. ASIC addressed these issues by making seven legislative instruments relating to non-cash payment products:

Class Order [CO 02/1075] Travellers’ cheques and confirmation of transactions addressed the unnecessary application of the requirement to give a confirmation of transaction in relation to travellers’ cheques at the time of purchase or disposal of the cheque;
Class Order [CO 03/705] Non-cash payment facilities – licensing exemption provided relief for licensees who assist clients with payments to third parties;
Class Order [CO 05/736] Low value non-cash payment facilities contained a tailored regulatory regime for ‘low value’ products;
Class Order [CO 05/737] Loyalty schemes declared that loyalty scheme are not financial products;
Class Order [CO 05/738] Gift facilities exempted non-reloadable payment products marketed solely as gift facilities from the licensing, conduct and disclosure obligations in the Act;
Class Order [CO 05/739] Road toll facilities declared that facilities solely used for paying road tolls are not financial products; and
Class Order [CO 05/740] Prepaid mobile facilities exempted prepaid mobile phone accounts from the licensing, conduct and disclosure obligations in the Act.

The 2014 Financial System Inquiry (FSI) also considered the policy settings underpinning the regulation of non-cash payment facilities. The final report of the FSI recommended that the Government enhance graduation of retail payments regulation by clarifying thresholds for regulation by ASIC and the Australian Prudential Regulation Authority (APRA), strengthen consumer protection by mandating the ePayments Code and introduce a separate prudential regime with two tiers for purchased payment facilities.

In its response to the FSI, the Government stated that APRA, ASIC and the Reserve Bank of Australia would review the framework for payments system regulation and develop clear guidance. In 2016, as the sunset dates for the above Class Order approached, ASIC noted that this work was ongoing, and the Government, Treasury and the relevant regulators were still considering how to give effect to the FSI’s recommendation that payments regulation be made clearer and more graduated. In order to provide certainty while the final policy settings for payments regulation were being considered, ASIC remade the above Class Orders without substantive changes in ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211 for three years.

The relief in ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211 is due to cease in early 2019. Government, Treasury and the relevant regulators are continuing to consider how to give effect to the FSI recommendation. The relevant Government policy settings are unlikely to be clarified by the time ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211 ceases.

2. Purpose of the instrument

The purpose of ASIC Corporations (Amendment) Instrument 2018/752 is to preserve the effect of ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211 while policy settings for the regulation of payment products are clarified.

3. Operation of the instrument

ASIC Corporations (Amendment) Instrument 2018/752 operates to continue the effect of the relief in ASIC Corporations (Non-cash payment facilities) Instrument 2016/211 by removing the provision for a three-year cessation date in section 3.

4. Consultation

ASIC previously consulted with industry stakeholders on its proposal to remake the above Class Orders for a period of three years while the final policy settings for payments regulation were being determined and the FSI recommendation was being implemented. The four responses that ASIC received at the time broadly approved of the way in which we remade the non-cash payments relief. One response included suggested changes to the policy settings for low value payments products; we stated at the time of issuing ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211 that ASIC would consider these suggestions in the context of the implementation of the FSI recommendation.

We noted in 2016 that, once the policy uncertainty associated with payments regulation is resolved, ASIC will review ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211, and that at that subsequent time we would consult publicly on any changes that we propose to make. Accordingly, we have not further consulted with industry on our issue of ASIC Corporations (Amendment) Instrument 2018/752.

Overview

The Corporations Act 2001, enacted by the Parliament of Australia, establishes a regulatory framework for companies and financial services in Australia. One of its objectives is to ensure that financial products and services are provided in a manner that protects consumers and maintains the integrity of the financial system. The ASIC Corporations (Amendment) Instrument 2018/752 was introduced by the Australian Securities and Investments Commission (ASIC) to address the issue of the broad scope of regulations on non-cash payment facilities, which had been identified as unintentionally extensive. The instrument aims to preserve the existing regulatory relief provided by the ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211 until the government and relevant regulators can clarify the policy settings for the regulation of payment products. This amendment seeks to maintain stability in the regulatory environment while ongoing policy deliberations are finalised.

Scope and Application

The ASIC Corporations (Amendment) Instrument 2018/752 pertains to the Corporations Act 2001, and its purpose is to extend the relief measures provided in the ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211. This extension aims to maintain the status quo of certain regulatory exemptions and declarations regarding non-cash payment facilities until the government, Treasury, and relevant regulators clarify the final policy settings for payments regulation. The Instrument applies to entities and individuals involved in non-cash payment facilities within Australia, ensuring compliance with the financial services regulatory regime, which mandates AFS licences, conduct obligations, and disclosure requirements for financial products. The instrument’s geographic reach is national, covering all entities and individuals operating within Australia. Notably, the Instrument removes the three-year cessation date provision in section 3 of the 2016 Instrument, thereby preserving the current relief measures until further regulatory clarity is established. While this Amendment Instrument does not introduce new exemptions or thresholds, it ensures continuity in the regulatory environment until the final policy settings are determined and implemented.

Key Provisions

The main operative sections of ASIC Corporations (Amendment) Instrument 2018/752 (the Instrument) concern the continuation and amendment of relief provisions for non-cash payment facilities that were initially set out in ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211. Specifically, section 3 of the Instrument removes the three-year cessation date that was originally included in the 2016 Instrument, thereby extending the relief indefinitely until further amendments or policy changes are made. This extension is aimed at preserving the status quo of the regulatory regime for non-cash payment facilities while the relevant government and regulatory bodies deliberate on more definitive policy settings for such products. The Instrument imposes certain obligations and requirements on the entities it governs, particularly those involved in the provision of non-cash payment facilities. These obligations include compliance with the financial services regulatory regime, which mandates that entities must hold an Australian Financial Services (AFS) licence to provide financial services related to non-cash payment facilities. Furthermore, these entities must adhere to the conduct obligations outlined in Part 7.8 of the Corporations Act 2001 and provide appropriate Product Disclosure Statements and transaction confirmations to retail clients. The Instrument also ensures that specific categories of non-cash payment facilities, such as loyalty schemes, gift facilities, and prepaid mobile phone accounts, are exempt from certain licensing, conduct, and disclosure obligations under the Act. In terms of potential breaches and the associated consequences, the Instrument does not introduce new offences or penalties. However, non-compliance with the regulatory requirements outlined in the Act could result in civil or criminal penalties. For example, entities that fail to hold the requisite AFS licence or violate the conduct obligations may face enforcement actions from ASIC, including fines, public reprimands, and, in severe cases, criminal prosecution. The penalties for these violations are not specified within the Instrument itself but are detailed in the broader provisions of the Corporations Act 2001, which can include substantial fines and imprisonment for serious breaches. Given the ongoing deliberations on the regulatory framework for non-cash payment facilities, entities are advised to remain compliant with existing requirements to avoid potential enforcement actions.

Area of Law: Corporate Law & Governance
Instrument: Instrument
Concepts: Definitions & Interpretation; Exemptions & Exclusions; Regulatory Standards

Interactions

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.

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