ASIC Corporations (Related Scheme Reports) Instrument 2015/839

Overview

The ASIC Corporations (Related Scheme Reports) Instrument 2015/839, made under the Corporations Act 2001, addresses the issue of duplication in financial reporting for registered schemes with a common responsible entity. This instrument allows responsible entities to include the financial statements of related registered schemes in adjacent columns in a single financial report, thereby streamlining the reporting process. The instrument is intended to reduce the burden on responsible entities without compromising the clarity and accessibility of financial information. The Australian Securities and Investments Commission (ASIC) developed this instrument to facilitate more efficient reporting while ensuring that financial statements remain distinct and attributable to each scheme. This approach was informed by stakeholder consultations and aims to enhance the effectiveness and efficiency of financial reporting practices.

Scope and Application

The ASIC Corporations (Related Scheme Reports) Instrument 2015/839 applies to responsible entities of registered schemes and their directors, permitting them to include the financial statements of related registered schemes in a single financial report under specific conditions. This instrument, made under subsection 341(1) of the Corporations Act 2001, provides relief from certain financial reporting requirements for specified classes of companies, registered schemes or disclosing entities. It primarily targets entities that operate multiple registered schemes with a common responsible entity or related responsible entities, allowing them to present the financial statements of these schemes in adjacent columns within a single report, thus reducing duplication and administrative burden. The instrument operates nationally, as it is a Commonwealth instrument, and applies to registered schemes that are audited by the same audit company, audit firm, or individual auditor, and whose financial years or half-years are closely aligned. This relief extends to annual, concise, and half-year financial reports, subject to certain conditions such as the presentation of specified statements and declarations to ensure clarity and accountability for each scheme.

Key Provisions

The ASIC Corporations (Related Scheme Reports) Instrument 2015/839 primarily operates under sections 341(1) of the Corporations Act 2001, allowing for relief from certain financial reporting requirements for specified classes of companies, registered schemes, or disclosing entities. Specifically, the instrument permits responsible entities to include the financial statements of related registered schemes with a common responsible entity in adjacent columns within a single financial report. This practice is permissible for annual, concise, and half-year financial reports (section 2). The instrument also repeals Class Order [CO 06/441], which was previously governing similar practices (Schedule 2 to the ASIC Corporations (Amendment and Repeal) Instrument 2015/843). Under the instrument, registered schemes and their directors can include the financial statements, notes, and directors’ declarations of related registered schemes in their own financial reports, provided the schemes share the same responsible entity or the responsible entities are wholly beneficially owned by the same entity (section 3). This relief extends to financial reports for the same financial year, the same half-year, or for periods ending no more than six months before or after the end of the financial year or half-year of the registered scheme taking relief. Additionally, the schemes must be audited by the same audit entity. The financial statements of the registered and included schemes must be presented in adjacent columns, each specifying the period covered. In concise reports, consolidated financial statements must be presented, but single entity financial statements need not be. The obligations imposed by this instrument require that the financial statements of the registered and included schemes be presented in a clear and identifiable manner. For instance, if an included scheme does not share the same responsible entity as the registered scheme, a prominent statement must indicate that the responsible entity of each scheme is solely responsible for its financial report. Each responsible entity must also provide separate directors’ declarations and directors’ reports for the schemes they operate. Furthermore, the financial report must detail any facilities for the proceeds of withdrawal to be invested in included schemes, the possibility of issuing further interests, and whether withdrawal proceeds from an included scheme can be applied to acquire an interest in the registered scheme. Failure to comply with the requirements of the ASIC Corporations (Related Scheme Reports) Instrument 2015/839 may result in civil or criminal penalties. The specific consequences depend on the nature and severity of the breach. Civil penalties can include fines and compensation orders, while criminal penalties may include fines and imprisonment. The exact penalties are determined by the Corporations Act 2001 and can vary widely based on the circumstances of the breach. For example, a significant or repeated failure to comply could lead to more severe penalties, including higher fines and longer imprisonment terms.