ASIC Corporations (Amendment and Repeal) Instrument 2015/363
Explanatory Statement
Prepared by the Australian Securities and Investments Commission
Corporations Act 2001
The Australian Securities and Investments Commission (ASIC) makes ASIC Corporations (Amendment and Repeal) Instrument 2015/363 under section 741, 992B and 1020F of the Corporations Act 2001 (the Act).
Operation of the Instrument
Repeal of class orders
ASIC Corporations (Amendment and Repeal) Instrument 2015/363 repeals 12 class orders primarily relating to offers of foreign securities and our policy in Regulatory Guide 72 Foreign securities: Disclosure relief. These class orders were due to sunset over the period 2016 to 2019 under the Legislative Instruments Act 2003.
Most of the class orders repealed by ASIC Corporations (Amendment and Repeal) Instrument 2015/363 were remade following Consultation Paper 225 Remaking ASIC class orders on offers of foreign securities (CP 225), with the exception of [CO 00/181] and [CO 00/185], which were considered to be unnecessary. CP 225 was published in December 2014 and is available on ASIC's website.
Amendment of class orders
ASIC Corporations (Amendment and Repeal) Instrument 2015/363 amends two class orders relating to the remake of instruments providing relief for offers of foreign securities.
Class Order [CO 02/246] needed to be amended because of the repeal of [CO 02/150], which is to be replaced by ASIC Corporations (Foreign Securities - Incidental Advertising) Instrument 2015/360.
Class Order [CO 07/10] needed to be amended because of the repeal of [CO 07/9], which is to be replaced by ASIC Corporations (Compromises or Arrangements) Instrument 2015/358.
Class Order [CO 04/671] (secondary sales relief) has not been amended, even though that class order makes reference to [CO 07/9] and [CO 09/68] in Categories 4 and 6. The successors to those class orders have secondary sales relief directly built into them. Despite the repeal of [CO 07/9] and [CO 09/68], we will need to retain references to these class orders in [CO 04/671] for the time being to accommodate situation where persons were relying on [CO 07/9] or [CO 09/68] at the time of issue of the securities / products.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
ASIC Corporations (Amendment and Repeal) Instrument 2015/363
This legislative 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 of the legislative instrument
The purpose of this legislative instrument is to amend two class orders and repeal 12 class orders.
Human rights implications
This legislative instrument does not engage any of the applicable rights or freedoms.
Conclusion
This legislative instrument is compatible with human rights as it does not raise any human rights issues.
Overview
The ASIC Corporations (Amendment and Repeal) Instrument 2015/363 was enacted by the Australian Securities and Investments Commission (ASIC) under the authority granted by sections 741, 992B, and 1020F of the Corporations Act 2001. This legislative instrument primarily addresses the repeal of 12 class orders that were set to sunset between 2016 and 2019, as well as the amendment of two other class orders, all of which pertain to offers of foreign securities and related disclosures. These changes were implemented to streamline regulatory requirements and align them with current policies outlined in ASIC's Regulatory Guide 72. The policy objective behind these amendments and repeals is to ensure that the regulatory framework remains current and effective, particularly in the context of offers of foreign securities and associated advertising practices.
Scope and Application
The ASIC Corporations (Amendment and Repeal) Instrument 2015/363 applies to entities involved in the offer of foreign securities, as well as to the Australian Securities and Investments Commission (ASIC) itself, which administers the Corporations Act 2001. This legislative instrument primarily affects entities that make offers of foreign securities and provides relief from certain disclosure requirements. It operates on a national level, given that ASIC is a Commonwealth authority, and its effects are felt across Australia. The repealed and amended class orders pertain to specific provisions within the Corporations Act, targeting the offer of foreign securities and related conduct. There are no specific exclusions or exemptions outlined in the instrument; however, the repeal and amendment of class orders reflect a refinement of regulatory requirements, focusing on streamlining processes and ensuring that the most relevant and necessary provisions remain in place. The instrument also extends its application through subordinate instruments, which replace the repealed class orders with new ones that integrate secondary sales relief directly into their provisions.
Key Provisions
The ASIC Corporations (Amendment and Repeal) Instrument 2015/363 (the Instrument) amends and repeals certain class orders under the Corporations Act 2001 (the Act). Specifically, the Instrument repeals twelve class orders (sections 1 to 12) primarily related to offers of foreign securities, and amends two others (section 13 and 14). These changes align with the Australian Securities and Investments Commission's (ASIC) policy outlined in Regulatory Guide 72, Foreign securities: Disclosure relief. The repealed class orders were due to sunset between 2016 and 2019 under the Legislative Instruments Act 2003.
The Instrument imposes obligations on entities involved in the offer of foreign securities to ensure compliance with the updated class orders. For instance, entities must adhere to the new relief provisions set out in the ASIC Corporations (Foreign Securities - Incidental Advertising) Instrument 2015/360 and the ASIC Corporations (Compromises or Arrangements) Instrument 2015/358, replacing the repealed class orders [CO 02/150] and [CO 07/9], respectively. Additionally, references to repealed class orders in [CO 04/671] (secondary sales relief) are retained to accommodate ongoing reliance on those orders for existing securities and products.
Failure to comply with the requirements of the amended or repealed class orders may result in regulatory action by ASIC. The Act provides for both civil and criminal penalties for breaches. Civil penalties can include fines of up to $210,000 for individuals and $1,050,000 for bodies corporate, depending on the severity and intent of the breach. Criminal penalties may apply for more serious violations, with potential fines and imprisonment terms also outlined in the Act. These penalties underscore the importance of adhering to the updated regulatory framework.