ASIC Corporations (Amendment) Instrument 2022/0077

Administered by Department of the Treasury

Legislation au F2022L00444 Not in force Legislative Instrument

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Replacement Explanatory Statement

 

ASIC Corporations (Amendment) Instrument 2022/0077

This is the Replacement Explanatory Statement for ASIC Corporations (Amendment) Instrument 2022/0077.

The Replacement Explanatory Statement is approved by the Australian Securities and Investments Commission (ASIC).

Summary

  1. ASIC Corporations (Amendment) Instrument 2022/0077 (Amendment Instrument) amends ASIC Corporations (Repeal and Transitional) Instrument 2017/186 (Instrument 2017/186) to extend its effect until 1 October 2022.
  2. Instrument 2017/186 repealed ASIC Class Order [CO 02/273] ([CO 02/273]) but preserved its effect for two years until 23 March 2019.
  3. ASIC Corporations (Amendment) Instrument 2019/216 (ASIC Instrument 2019/216) preserved the relief provided by [CO 02/273] until 1 April 2022. 
  4. [CO 02/273] gave conditional relief from the fundraising, financial product disclosure, anti-hawking and advertising requirements in the Corporations Act 2001 (the Act) that would apply to a person making or calling attention to offers of securities or interests in a managed investment scheme through a business introduction service.

Purpose of the instrument

5.      The purpose of the Amendment Instrument is to extend the relief in [CO 02/273] as preserved by Instrument 2017/186 until 1 October 2022.

6.      The extension is subject to an additional requirement that the following persons provide notice to ASIC:

(a)   persons who were relying on the relief on 31 March 2022; and

(b)   persons who rely on the relief from 1 April 2022.

7.      The notification requirement will provide ASIC with important usage data.

8.      On 1 October 2022, ASIC intends to confer relief (October 2022 relief) that replaces [CO 02/273]  to:

(a)   extend the relief for interests in a managed investment scheme until
1 April 2025; and

(b)   clarify that the design and distribution obligations apply to persons who, but for the relief, would otherwise need to comply with these obligations. 

9.      ASIC plans to allow the [CO 02/273] relief in relation to Chapters 6D and 2L of the Act to expire on 1 October 2022 on the basis that the crowd-sourced funding (CSF) regime facilitates flexible and low-cost access to capital for small to medium sized unlisted companies. The CSF regime was introduced in September 2017 for eligible public companies and October 2018 for eligible proprietary companies.

10.  The Amendment Instrument is intended to extend the existing CO 02/273 relief for a six-month period to allow industry adequate time to prepare for compliance with impending changes to the relief. Further extending the relief for a six-month period will avoid disrupting current offers of Chapter 6D securities (including Chapter 2L debentures) to retail investors through a business introduction service that remain open beyond 1 April 2022.

11.  ASIC does not intend to extend the October 2022 relief when it expires on 1 April 2025.

Operation of the Instrument

12.  The Amendment Instrument amends Instrument 2017/186 to extend its effect until 1 October 2022.

13.  The Amendment Instrument commences on the day after it is registered on the Federal Register of Legislation.

14.  The Amendment Instrument provides that an exemption specified in [CO 02/273] applies to a person who is relying on the relief on 31 March 2022:

(a)   until 2 May 2022; and

(b)   after 2 May 2022 if the person has given ASIC a continuing reliance notice.

15.  A continuing reliance notice must set out in writing the following:

(a)   the name of the person;

(b)   each exemption of  [CO 02/273] relied upon by the person; and

(c)   the date the person first relied upon the exemption in [CO 02/273].

16.  The Amendment Instrument provides that an exemption specified in [CO 02/273] applies to a person who:

(a)   was not relying on the exemption in [CO 02/273] on 31 March 2022; and

(b)   has given ASIC an opt-in notice from the date specified in the opt-in notice.

17.  The opt-in notice must set out in writing the following:

(a)   the name of the person;

(b)   each exemption of [CO 02/273] relied upon by the person; and

(c)   the date the person will start to rely upon the exemption in [CO 02/273].

Consultation

18.  Before making the amending instrument, ASIC engaged in public consultation with respect to the proposal to remake the relief in Consultation Paper 357 Remaking relief for business introduction services: ASIC Instrument 2017/186 (CP 357).

19.  The Office of Best Practice Regulation has received ASIC’s certification that Instrument 2017/186 is operating effectively and efficiently and therefore a Regulation Impact Statement is not required for this instrument to be extended and remade on 1 October 2022.

Legislative authority

20.  ASIC makes this Amendment Instrument under paragraphs 283GA(1)(a), 741(1)(a), 992B(1)(a) and 10120F(10(a) of the Act.

21.  The Amendment Instrument is a disallowable legislative instrument.

Why the measure is in delegated legislation rather than primary legislation

22.  Business introduction services perform an important role in circulating information about investment opportunities about small to medium sized enterprises. The relief is intended to reduce the regulatory and cost burden associated with providing business introduction services.

23.  The Amendment Instrument amends Instrument 2017/186, which preserves the relief in [02/273], to extend its effect until 1 October 2022. This six-month extension is intended to give industry adequate time to prepare for compliance with impending changes to the relief.

24.  It would not be appropriate for primary legislation to amend Instrument 2017/186 for the purpose of merely introducing a six-month transition period before ASIC remakes the relief on 1 October 2022. It is more appropriate for a legislative instrument to extend an ASIC relief measure for a further six months.

The appropriate duration of the instrument

25.  The extended relief provided by Amendment Instrument has effect until 1 October 2022.

26.  ASIC considered a shorter duration for the Amendment Instrument but determined this would not provide adequate time to prepare for compliance with the impending changes to the relief.  

27.  ASIC understands that going forward the Government will consider the merits of making amendments to the Act as part of the review process before the relief sunsets in 2025.

Statement of Compatibility with Human Rights 

28.  The Explanatory Statement for a disallowable legislative instrument must contain a Statement of Compatibility with Human Rights under subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011. A Statement of Compatibility with Human Rights is in the Attachment.


Statement of Compatibility with Human Rights

 

This Statement of Compatibility with Human Rights is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.  

ASIC Corporations (Amendment) Instrument 2022/0077

Overview

  1. The ASIC Corporations (Amendment) Instrument 2022/0077 continues the relief for business introduction services in ASIC Corporations (Repeal and Transitional) Instrument 2017/186, with amendments until 1 October 2022.
  2. The Instrument facilitates business introduction services which circulates information about investment opportunities about small to medium sized enterprises.
  3. The relief has been amended to provide that those persons who rely on, or cease to rely on, the relief from 1 April 2022 must notify ASIC.

Assessment of human rights implications

4.      This instrument does not engage any of the applicable rights or freedoms.

Conclusion

5.      This 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 ASIC Corporations (Amendment) Instrument 2022/0077 is a legislative instrument enacted by the Australian Securities and Investments Commission (ASIC) to address a specific issue in the regulation of business introduction services. This instrument amends the ASIC Corporations (Repeal and Transitional) Instrument 2017/186, extending its effect until 1 October 2022. The original instrument had repealed ASIC Class Order [CO 02/273] but preserved its effect until 23 March 2019, with subsequent amendments extending this period to 1 April 2022. The purpose of the Amendment Instrument is to provide a further extension to allow industry time to adjust to changes in the relief, ensuring a smoother transition and avoiding disruptions to ongoing offers of securities through business introduction services. The extension is subject to notification requirements for entities relying on the relief, providing ASIC with necessary data on usage. The Amendment Instrument is designed as a legislative instrument rather than primary legislation, given its targeted nature and the need for a brief transitional period before the relief is remade on 1 October 2022.

Scope and Application

The ASIC Corporations (Amendment) Instrument 2022/0077 pertains to entities and individuals involved in business introduction services, specifically those facilitating offers of securities or interests in managed investment schemes. It applies to any person relying on the conditional relief from certain disclosure and fundraising requirements under the Corporations Act 2001 as preserved by ASIC Corporations (Repeal and Transitional) Instrument 2017/186. This relief was initially granted through ASIC Class Order [CO 02/273] and is now extended by the Amendment Instrument until 1 October 2022. The scope of the Instrument is national, affecting entities across Australia, as it amends the effect of Instrument 2017/186 which has a Commonwealth jurisdiction. Any person who was relying on the relief on 31 March 2022, or intends to rely on it from 1 April 2022, must provide a notification to ASIC, which includes details such as the name of the person, the exemptions relied upon, and the date of first reliance. The Instrument does not contain specific exclusions or thresholds but stipulates a notification requirement to gather usage data from those availing the relief. This legislative instrument extends the relief for a transitional period, allowing sufficient time for industry adaptation before new relief measures take effect on 1 October 2022.

Key Provisions

The ASIC Corporations (Amendment) Instrument 2022/0077 amends the ASIC Corporations (Repeal and Transitional) Instrument 2017/186 to extend its effect until 1 October 2022. This extension allows continued conditional relief for business introduction services from certain requirements under the Corporations Act 2001 (section 5). Specifically, it continues to exempt certain activities related to the offering of securities or interests in a managed investment scheme through these services from fundraising, financial product disclosure, anti-hawking, and advertising requirements (section 6). The Amendment Instrument imposes specific obligations on entities that rely on the relief provided by the ASIC Corporations (Repeal and Transitional) Instrument 2017/186. Firstly, entities that were relying on the relief as of 31 March 2022 must provide ASIC with a continuing reliance notice detailing the exemptions they are relying on and the date of first reliance (sections 14 and 15). Secondly, entities that were not relying on the relief as of 31 March 2022 but intend to start relying on it from a specified date must provide ASIC with an opt-in notice detailing their reliance (sections 16 and 17). These notifications are crucial for ASIC to gather usage data and ensure compliance. Breach of the obligations outlined in the Amendment Instrument does not explicitly detail specific penalties or consequences for non-compliance. However, given the regulatory nature of the relief and the requirement for notifications, non-compliance could potentially lead to scrutiny from ASIC and possible enforcement actions. The primary aim of the notice requirements is to ensure transparency and proper oversight, rather than to impose penalties directly. Nevertheless, any failure to comply with ASIC's requirements could indirectly result in the entity losing the conditional relief, thereby facing the full regulatory requirements of the Corporations Act 2001. The Amendment Instrument is designed to provide a smooth transition for entities currently relying on the relief, allowing them additional time to adjust to the impending changes set to take effect on 1 October 2022. The legislative instrument is made under specific subsections of the Corporations Act 2001, and it is a disallowable legislative instrument (section 20). This legislative approach is considered appropriate given the transitional nature of the relief and the need to avoid disruption in the market.

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Area of Law
Corporate Law & Governance
Instrument
Legislative Instrument
Concepts
Definitions & Interpretation
Repeal & Amendment
Transitional Provisions
Reporting & Disclosure Obligations
Consultation Requirements

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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.