EXPLANATORY STATEMENT for
ASIC Corporations (Amendment No. 3) Instrument 2015
Prepared by the Australian Securities and Investments Commission
Corporations Act 2001
The Australian Securities and Investments Commission (ASIC) makes ASIC Corporations (Amendment No. 3) Instrument 2015 (the amending instrument) under paragraph 1020F(1)(c) of the Corporations Act 2001 (the Act). This paragraph 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.
The amending instrument amends ASIC Class Order [CO 10/630] Long-term superannuation returns (the principal class order). The principal class order was made under paragraph 1020F(1)(c) 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, 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
Regulation 7.9.20AA of the Corporations Regulations 2001 (the Regulations) requires regulated superannuation funds (other than self-managed superannuation funds) to disclose long term performance returns to assist members to understand the long term performance of their superannuation. These are referred to in this Explanatory Statement as the “long term performance reporting regime”.
On 19 February 2010, following discussions with the superannuation industry, the then Minister for Financial Services, Superannuation and Corporate Law announced refinement proposals to the long term performance reporting regime. This aligns with the current Government's de-regulation agenda.
Under the proposals:
(a) exit statements are to be excluded from the regime;
(b) industry were permitted to use inserts to provide five-year performance information until 30 June 2011;
(c) “traditional” funds of an insurance nature are to be exempted from the regime; and
(d) approved deposit funds and pooled superannuation trusts are to be permitted to provide annual reports online.
The principal class order provides relief from the operation of the current long term performance reporting regime that are proposed to be refined, by implementing the proposed refinements pending the making of amending regulations. This assists industry by providing greater certainty regarding their compliance obligations.
The principal class order also extended transitional disclosure requirements under subregulation 7.9.20AA(2) of the Regulations so that it also covered the period from 1 July 2010 to 30 June 2011.
ASIC subsequently made Class Orders [CO 11/554], [CO12/622], [CO13/752] and [CO 14/425] which varied the principal class order to extend the maximum period of operation of the principal class order to 19 July 2015. Class Orders [CO 11/554], [CO 12/622], [CO13/752] and [CO 14/425] did not extend the transitional disclosure requirements under subregulation 7.9.20AA(2) of the Regulations for a period beyond 30 June 2011.
2. Purpose of the instrument
The purpose of the amending instrument is to extend the maximum period of the operation of the principal class order to 31 December 2015 so as to allow additional time for the proposed amending regulations to be made to implement the refinements.
3. Operation of the instrument
The amending instrument extends the operation of the principal class order to the earlier of:
(a) the commencement of amendments to the Regulations which have the same or similar effect to the modifications or variations made by the principal class order; and
(b) 31 December 2015.
4. Consultation
Before making the amending instrument, ASIC consulted with the Department of the Treasury, but did not consult publicly with industry. The amendment made by the amending instrument is a transitional measure of a minor or machinery nature.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
ASIC Corporations (Amendment No. 3) Instrument 2015
ASIC Corporations (Amendment No. 3) Instrument 2015 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 of legislative instrument
The purpose of the amending instrument is to amend ASIC Class Order [CO 10/630] (the principal class order). The principal class order provides relief from the operation of the current long term superannuation performance reporting requirements that are proposed to be refined by amending regulation. The principal class order modifies or varies Regulations 7.9.20AA and 7.9.75BA of the Corporations Regulations 2001(Regulations) to:
(a) exclude exit statements from the regime;
(b) permit the use of inserts to provide five-year performance information until 30 June 2011;
(c) exempt “traditional” funds of an insurance nature from the regime; and
(d) permit approved deposit funds and pooled superannuation trusts to provide annual reports online.
The principal class order has effect until the earlier of commencement of any amendments to the Regulations which have the same or similar effect to the modifications or variations contained in the class order and 19 July 2015.
The amending instrument extends the maximum period of the operation of the principal class order until 31 December 2015.
Human rights implications
The amending instrument does not engage any of the applicable rights or freedoms.
Conclusion
The amending instrument is comparable with human rights as it does not raise any human rights issues.