ASIC Corporations (IDPS—Relevant Interests) Instrument 2015/1067
About this compilation
Compilation No. 1
This is a compilation of ASIC Corporations (IDPS—Relevant Interests) Instrument 2015/1067 as in force on 1 September 2023. It includes any commenced amendment affecting the legislative instrument to that date.
This compilation was prepared by the Australian Securities and Investments Commission.
The notes at the end of this compilation (the endnotes) include information
about amending instruments and the amendment history of each amended provision.
Contents
Part 1—Preliminary
1 Name of legislative instrument
3 Authority
4 Definitions
Part 2—Declaration
5 Relevant interests and operators of IDPSs
Endnotes
Endnote 1—Instrument history
Endnote 2—Amendment history
Part 1—Preliminary
1 Name of legislative instrument
This instrument is ASIC Corporations (IDPS—Relevant Interests) Instrument 2015/1067.
3 Authority
This instrument is made under subsections 655A(1) and 673(1) of the Corporations Act 2001.
4 Definitions
In this instrument:
Act means the Corporations Act 2001.
Part 2—Declaration
5 Relevant interests and operators of IDPSs
Chapters 6 and 6C of the Act apply to all persons as if section 609 of the Act were modified or varied by inserting the following subsections in the appropriate numerical position:
“IDPS operators
(17A) A person does not have a relevant interest in securities merely because the person:
(a) is the operator of an IDPS; or
(b) is involved in the operation of an IDPS and is a financial services licensee or a representative (within the meaning of section 910A) of a financial services licensee;
and under the terms of the IDPS:
(c) holds the securities; or
(d) has a discretion in relation to the disposal of the securities.
(17B) Subsection (17A) does not apply to a person if ASIC has given a notice in writing to the person stating that subsection (17A) does not apply to the person and has not withdrawn that notice.
(17C) In subsection (17A), IDPS and operator have the same meaning as in subsection 912AD(42).”.
Note: Notional subsection 912AD(42) of the Act is inserted by ASIC Corporations (Investor Directed Portfolio Services) Instrument 2023/669.
.
Endnotes
Endnote 1—Instrument history
Instrument number | Date of FRL registration | Date of commencement | Application, saving or transitional provisions |
2015/1067 | 14/12/2015 (see F2015L01990) | 15/12/2015 | |
2023/670 | 31/8/2023 (see F2023L01161) | 1/9/2023 | |
Endnote 2—Amendment history
ad. = added or inserted am. = amended LA = Legislation Act 2003 rep. = repealed rs. = repealed and substituted
Provision affected | How affected |
Section 2 | rep. s48D LA |
Section 5 (note) | am. 2023/670 |
Overview
The ASIC Corporations (IDPS—Relevant Interests) Instrument 2015/1067 was enacted to address a gap in the Corporations Act 2001 concerning the treatment of relevant interests in securities for operators of Investor Directed Portfolio Services (IDPS). This legislative instrument was made under subsections 655A(1) and 673(1) of the Corporations Act 2001 by the Australian Securities and Investments Commission (ASIC). Its primary policy objective is to ensure clarity and consistency in the application of the Act to IDPS operators by modifying the definition of relevant interests. This amendment helps to reduce regulatory uncertainty and potential conflicts for entities involved in the operation of IDPS. The instrument came into effect on 15 December 2015 and has been subject to subsequent amendments to align with evolving regulatory requirements and practices.
Scope and Application
The ASIC Corporations (IDPS—Relevant Interests) Instrument 2015/1067 applies to all individuals and entities operating within the scope of the Corporations Act 2001, specifically in relation to Investor Directed Portfolio Services (IDPS). This legislative instrument modifies the definition of 'relevant interest' in securities for operators and individuals involved in the operation of IDPS. It explicitly excludes certain roles from having a relevant interest in securities if they are merely operators or involved in the operation of an IDPS, hold securities, or have discretion over their disposal, unless specifically notified by the Australian Securities and Investments Commission (ASIC) that the exclusion does not apply. The instrument extends its application to cover national jurisdictions governed under the Commonwealth framework. Any amendments or further clarifications to this instrument are subject to subordinate instruments, with the most recent amendment being ASIC Corporations (Investor Directed Portfolio Services) Instrument 2023/669, which came into effect on 1 September 2023.
Key Provisions
The ASIC Corporations (IDPS—Relevant Interests) Instrument 2015/1067 (the "Instrument") modifies the Corporations Act 2001 (the "Act") to clarify certain aspects of relevant interests in securities in the context of Investor Directed Portfolio Services (IDPS) operations. Specifically, Section 5 of the Instrument modifies Chapter 6 and 6C of the Act by inserting new subsections (17A and 17B) into section 609 of the Act (subsection 17A). This aims to ensure that operators of IDPS, and those involved in their operation who are financial services licensees or representatives of such licensees, do not automatically hold a relevant interest in securities merely by virtue of their roles, provided they hold the securities or have discretion over their disposal under the terms of the IDPS. This clarification is intended to reduce ambiguity around the definition of relevant interests in the context of IDPS.
The Instrument imposes specific obligations on parties involved in the operation of IDPS. Operators of IDPS and those who are financial services licensees or representatives of such licensees must ensure they do not have a relevant interest in the securities they manage, as defined by the modified Act. This includes verifying that any discretion over the disposal of securities is explicitly granted under the terms of the IDPS. Furthermore, these parties must be aware of any written notices from ASIC that may nullify the protections provided by subsection 17A, thus re-establishing their relevant interest status.
Breaching the provisions of this Instrument can have significant legal consequences. The Act does not explicitly state penalties for non-compliance within the Instrument itself, but breaches of the Act's provisions related to relevant interests in securities can lead to civil penalties, including fines up to the greater of $222,200 or three times the benefit obtained from the breach. Additionally, criminal penalties may apply, including fines up to $275,000 and imprisonment for up to five years for individuals, and fines up to $1,375,000 for bodies corporate. These penalties underscore the importance of compliance with the Act's requirements regarding relevant interests in securities and the operations of IDPS.