ASIC Corporations (Amendment) Instrument 2024/276

Administered by Department of the Treasury

Legislation au F2024L00781 Not in force Legislative Instrument

Legislation content

 

 

Explanatory Statement

 

ASIC Corporations (Amendment) Instrument 2024/276

This is the Explanatory Statement for ASIC Corporations (Amendment) Instrument 2024/276

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

Summary

  1. This legislative instrument amends ASIC Class Order [CO 14/1262] (principal class order) to extend the interim conditional relief which allows term deposits of up to five years that are only breakable on 31 days’ notice (31-day notice term deposits) to be given concessional regulatory treatment as basic deposit products under the Corporations Act 2001 (the Act)

Purpose of the instrument

2.             The principal class order applies to

(a)          31-day notice term deposits entered into on or before 30 June 2024; and

(b)          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.

3.             The principal class order was originally made in 2014 for an interim period of 18 months to give Government the opportunity to consider legislative reform to clarify the meaning of basic deposit product under the Act, as it applies to 31-day notice term deposits. The principal class order was subsequently extended until 30 June 2024. There will not be an opportunity for Government to consider any legislative changes before the expiry of the relief under the principal class order.

4.             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 until 31 March 2025.

5.             The principal class order is due to sunset under section 50 of the Legislation Act 2003 on 1 April 2025. It will be reviewed by ASIC prior to sunset.

Consultation

6.             ASIC did not undertake a public consultation process on extending the operation of the principal class order as the extension is a transitional measure of a minor and machinery nature.

7.             Before the principal class order was made, ASIC consulted with the Australian Banking Association, the Customer Owned Banking Association, Australian Prudential Regulation Authority, individual authorised deposit-taking institutions (ADIs), consumer representative groups, and the Treasury.

Operation of the instrument

8.             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 amendment is to extend the operation of the relief given by the principal class order so that it applies to:

(a)          31-day notice term deposits entered into on or before 31 March 2025; and

(b)          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.

9.             The legislative instrument also amends the principal class order to deal with recent changes to section references resulting from the definitions amendments in the Treasury Laws Amendment (2023 Law Improvement Package No. 1) Act 2023.

Legislative instrument and primary legislation 

10.         The subject matter and policy implemented by this legislative instrument is more appropriate for a legislative instrument rather than primary legislation because the effect of the instrument is to extend the operation of the principal class order which is itself a legislative instrument.

Duration of the instrument

11.         The legislative instrument extends the operation of the principal class order to term deposits entered into between 1 July 2024 and 31 March 2025.

12.         The principal class order will automatically sunset on 1 April 2025 in accordance with section 50 of the Legislation Act 2003. The amendments made by the legislative instrument will cease to have effect when the principal class order sunsets.

Legislative authority

13.         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.

14.         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.

15.         Paragraph 994L(2)(c) of the Act provides that ASIC may declare that Part 7.8A of the Act applies in relation to a specified class or persons or a specified class of financial products as if specified provisions were omitted, modified or varied as specified in the declaration.

16.         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.

17.         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.

18.         The legislative instrument is a disallowable legislative instrument.

Statement of Compatibility with Human Rights 

19. 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.


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 2024/276

Overview

1. 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 (the Act), until 30 June 2024 (i.e. the relief applies to 31-day notice term deposits entered into on or before 30 June 2024, as well as 31-day notice term deposits entered into as a result of rolling over a term deposit that has the benefit of the relief).

2. In order to preserve the current treatment of 31-day notice term deposits, 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 31 March 2025. The principal class order will also continue to apply to 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.

Assessment of human rights implications

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

Conclusion

4. 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 2024/276, enacted to amend ASIC Class Order [CO 14/1262], extends the interim conditional relief for 31-day notice term deposits to be treated as basic deposit products under the Corporations Act 2001. Originally introduced in 2014, the relief was initially intended for a period of 18 months, allowing the government to consider legislative reform regarding the classification of these term deposits. Due to the lack of opportunity for legislative changes before the relief was set to expire on 30 June 2024, the instrument extends this relief until 31 March 2025. This extension is a transitional measure designed to maintain the current treatment of 31-day notice term deposits until further legislative action is taken. The instrument was approved by the Australian Securities and Investments Commission (ASIC) and will automatically sunset on 1 April 2025, in line with the provisions of the Legislation Act 2003.

Scope and Application

The ASIC Corporations (Amendment) Instrument 2024/276 amends ASIC Class Order [CO 14/1262], which provides conditional relief allowing term deposits of up to five years that can only be broken with 31 days’ notice to be treated as basic deposit products under the Corporations Act 2001. The purpose of the amendment is to extend the relief until 31 March 2025, rather than the original expiration date of 30 June 2024. This extension applies to 31-day notice term deposits entered into on or before 31 March 2025, as well as those entered into as a result of rolling over an existing term deposit that benefits from the relief. The legislative instrument does not extend to any other types of term deposits or financial products, and its geographic reach is limited to Australia, as it pertains specifically to the Corporations Act 2001. The principal class order will automatically sunset on 1 April 2025, in accordance with the Legislation Act 2003, and the amendments made by the legislative instrument will cease to have effect at that time. There are no exclusions or exemptions specified in the legislation, but the legislative instrument itself is a disallowable legislative instrument.

Key Provisions

The ASIC Corporations (Amendment) Instrument 2024/276 primarily amends ASIC Class Order [CO 14/1262] to extend the interim conditional relief for 31-day notice term deposits. This means that term deposits of up to five years that can only be broken on 31 days’ notice will continue to receive concessional regulatory treatment as basic deposit products under the Corporations Act 2001 (section 8). The extension allows these term deposits to benefit from the relief until 31 March 2025, rather than the original expiry date of 30 June 2024. This extension applies to term deposits entered into on or before 31 March 2025, as well as those entered into as a result of rolling over a term deposit that has the benefit of the relief. The legislative instrument also addresses recent changes to section references in the Act due to amendments in the Treasury Laws Amendment (2023 Law Improvement Package No. 1) Act 2023. The obligations imposed by this Act require authorised deposit-taking institutions (ADIs) to continue treating 31-day notice term deposits as basic deposit products, ensuring they adhere to the regulatory standards outlined in the Act. ADIs must maintain accurate records and reporting of these term deposits, ensuring compliance with the extended relief period. They are also required to provide customers with appropriate disclosure documents that detail the terms and conditions of these term deposits, ensuring transparency and customer understanding. Additionally, the Australian Securities and Investments Commission (ASIC) must continue to monitor and review the operation of the principal class order to ensure it remains effective and compliant with the legislative intent. The Act does not specify particular offences, penalties, or civil/criminal consequences for breach within its text. However, any non-compliance with the extended relief provisions could potentially result in regulatory action by ASIC. Such actions may include enforcement measures, fines, or other penalties as prescribed under the relevant sections of the Corporations Act 2001. For example, breaches of disclosure requirements could lead to penalties under section 12GA of the Act, which mandates civil penalty provisions for misleading or deceptive conduct. It is essential for ADIs to remain vigilant and ensure adherence to the extended relief provisions to avoid any regulatory repercussions.

Legal classification tags

Area of Law
Corporate Law & Governance
Instrument
Legislative Instrument
Concepts
Definitions & Interpretation
Regulatory Standards
Transitional Provisions

Interactions

Authorises

All Versions

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.