EXPLANATORY STATEMENT for
ASIC Corporations (Repeal) Instrument 2016/379
Prepared by the Australian Securities and Investments Commission
Corporations Act 2001
The Australian Securities and Investments Commission (ASIC) makes ASIC Corporations (Repeal) Instrument 2016/379 (the Repeal Instrument).
The Repeal Instrument will have the effect of repealing the following ASIC Class Orders:
- [CO 02/1073] – Financial Services Guide – dealing in underlying investments by responsible entities ([CO 02/1073]);
- [CO 02/1074] – Financial Services Guide – dealing in underlying investments by superannuation trustees ([CO 02/1074]); and
- [CO 02/1161] – Limited relief from requirement for dealing authorisation for public offer superannuation entities ([CO 02/1161]).
The Repeal Instrument is made under paragraph 911A(2)(l) and subsection 951B(1) of the Corporations Act 2001 (the Act).
Paragraph 911A(2)(l) of the Act provides that a person is exempt from the requirement to hold an Australian financial services licence for a service that the person provides where the provision of the service is covered by an exemption specified by ASIC in writing and published in the Gazette.
Subsection 951B(1) of the Act provides that ASIC may:
(a) exempt a person or class of persons from all or specified provisions of Part 7.7 of the Act;
(b) exempt a financial product or a class of financial products from all or specified provisions of Part 7.7 of the Act; or
(c) 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 of Part 7.7 were omitted, modified or varied as specified in the declaration.
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
[CO 02/1073] provides relief to the responsible entity of a registered scheme from section 941A of the Act to the extent that it requires the responsible entity to provide a Financial Services Guide to a member of the registered scheme in relation to any dealing by the responsible entity in a financial product in the course of operating the scheme. Under the Legislation Act 2003 (the LA), [CO 02/1073] will expire, or sunset, on 1 April 2017.
[CO 02/1074] grants relief to the trustee of a superannuation entity from section 941A of the Act to the extent that it requires the trustee to provide a Financial Services Guide to a member of the superannuation entity in relation to any dealing by the trustee in a financial product in the course of the operation of the superannuation entity. Under the LA, [CO 02/1074] will sunset on 1 April 2017.
Under [CO 02/1161], a trustee of a public offer entity is granted an exemption from the requirement to hold an Australian financial services licence for the provision of a financial service consisting only of dealing by the trustee in a financial product (other than an interest in the public offer entity) in the course of the operation of the public offer entity. Under the LA, [CO 02/1161] will sunset on 1 April 2017.
After considering feedback received in response to ASIC Consultation Paper 244 – Remaking ASIC Class Orders on dealing in underlying investments (CP 244), ASIC will continue the substantive effect of the relief under [CO 02/1073], [CO 02/1074] and [CO 02/1161], subject to some minor and technical changes, in a single legislative instrument: ASIC Corporations (Superannuation and Schemes: Underlying Investments) Instrument 2016/378. Accordingly, the three Class Orders serve no purpose and ought to be repealed.
2. Purpose of the instrument
The purpose of the Repeal Instrument is to repeal [CO 02/1073], [CO 02/1074] and [CO 02/1161].
3. Operation of the instrument
Paragraph 1 of Schedule 1 of the instrument repeals [CO 02/1161].
Paragraph 2 of Schedule 1 of the instrument repeals [CO 02/1073].
Paragraph 3 of Schedule 1 of the instrument repeals [CO 02/1074].
4. Consultation
In December 2015, ASIC issued CP 244 in relation to [CO 02/1073], [CO 02/1074] and [CO 02/1161]. After considering the feedback received in response to CP 244, ASIC issued ASIC Corporations (Superannuation and Schemes: Underlying Investments) Instrument 2016/378, which will continue the substantive effect of [CO 02/1073], [CO 02/1074] and [CO 02/1161] in a single legislative instrument. As a result, [CO 02/1073], [CO 02/1074] and [CO 02/1161] no longer serve any purpose. The Repeal Instrument has been issued to cease the effect of the three Class Orders.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
ASIC Corporations (Repeal) Instrument 2016/379
ASIC Corporations (Repeal) Instrument 2016/379 (the Repeal 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 Repeal Instrument will repeal ASIC Class Order [CO 06/636] - Superannuation: Delivery of product disclosure for investment strategies ([CO 06/636]). [CO 06/636] grants relief to the trustee of a superannuation fund to allow the trustee to rely on a modified form of the Product Disclosure Statement (PDS) requirements in Part 7.9 of the Act. This relief operates when a superannuation fund gives a member a choice of investment strategy under which an accessible financial product may be acquired. Under the LIA, [CO 06/636] is due to lapse on 1 October 2016. The Repeal Instrument should repeal [CO 06/636] because ASIC will issue a legislative instrument in February 2016 that will continue the substantive effect of [CO 06/636], subject to non-substantive changes.
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.