Explanatory Statement
ASIC Corporations (Deposit Product Disclosure) Instrument 2025/509 and ASIC Corporations (Repeal) Instrument 2025/518
This is the Explanatory Statement for ASIC Corporations (Deposit Product Disclosure) Instrument 2025/509 and ASIC Corporations (Repeal) Instrument 2025/518.
The Explanatory Statement is approved by the Australian Securities and Investments Commission (ASIC).
Summary
- ASIC Corporations (Deposit Product Disclosure) Instrument 2025/509 (Instrument 2025/509) provides that:
- A regulated person does not need to comply with Division 2 of Part 7.9 of the Corporations Act 2001 (the Act) to the extent that those provisions require a Product Disclosure Statement (PDS) for a deposit product to include the interest rate (if certain conditions are met).
- An issuer of a deposit product does not need to comply with Section 1017D of the Act to the extent that it requires periodic statements to include the termination value.
2. Instrument 2025/509 continues the effect of the relief provided under ASIC Corporations (Deposit Product Disclosure) Instrument 2015/683 (Instrument 2015/683) and previously ASIC Class Order [CO 05/681] Transitional relief for deposit product providers — PDSs and periodic statements.
3. ASIC Corporations (Repeal) Instrument 2025/518 (Instrument 2025/518) repeals Instrument 2015/683. Instrument 2015/683 would otherwise sunset under section 50 of the Legislation Act 2003 on 1 October 2025.
Purpose of the instrument
4. Instrument 2025/509 removes the unnecessary burden of:
- disclosing interest rates in a PDS for a deposit product; and
- disclosing a termination value in a periodic statement for a deposit product.
5. Instrument 2025/518 repeals Instrument 2015/683.
Requirement to disclose interest rates in product disclosure statements
6. Generally, issuers of financial products (such as deposit products) must prepare a PDS that contains the information described under section 1013D of the Act.
7. Section 1013D of the Act requires product issuers to include information about significant benefits to which the person acquiring the product may or will become entitled. Section 1012J of the Act provides that information within the PDS must be up to date.
8. These obligations would normally require a PDS for a deposit product to include interest rates payable on deposits. Changes to applicable interest rates would then need to be reflected in updated information, either by replacing the PDS or issuing a supplementary PDS. This requirement is likely to:
- be burdensome, because the cost for product providers to update interest rate information on PDSs would be substantial; and
- act as a disincentive to product changes, such as interest rate increases, that would benefit consumers.
9. A PDS does not have to be prepared for many basic deposit products because of an exemption from the requirement to give a PDS for those products (subsection 1012D(7A), as inserted by regulation 7.9.07FA of the Corporations Regulations 2001).
Disclosure of termination values in periodic statements
10. Section 1017D of the Act requires issuers of deposit products to give their retail clients periodic statements that contain specified information. Periodic statements must include the termination value of the investment (in dollars) at the end of the statement period. A termination value is the amount that would be paid to the consumer if they closed their account at that time. The statement must also include the closing balance of the deposit account.
11. There has been uncertainty about whether a periodic statement for a deposit product must include both a closing balance and a termination value. In the context of this uncertainty, the requirement to include a termination value in periodic statements for deposit products would be unduly burdensome because:
- there is often no difference between the closing balance and the termination value and the additional disclosure may be confusing; and
- the PDS would include information about whether there are any restrictions on termination and if any early termination costs may apply.
Consultation
12. ASIC consulted publicly for 3 weeks on its proposal to remake the relief in Instrument 2015/683 without any changes. ASIC received one submission which was supportive of ASIC’s proposal to remake the instrument.
Operation of the instrument
13. Section 1 of Instrument 2025/509 provides a simplified outline for the instrument. Its purpose is to assist readers in understanding the substantive provisions. However, the outline is not intended to be comprehensive, and readers should rely on the substantive provisions when considering the instrument’s effect.
14. Section 6 of Instrument 2025/509 provides that a regulated person does not need to comply with Division 2 of Part 7.9 to the extent that those provisions require a PDS for a deposit product to include the interest rate that applies to that product.
15. Consumers will continue to receive clear, appropriate disclosure because the exemption is only available where the responsible person takes steps to ensure that:
- the PDS describes how a person may find out what interest rate applies to the product; and
- the person may find out the interest rate in a free, simple and convenient way.
16. Section 7 of Instrument 2025/509 provides that the issuer of a deposit product does not need to include a termination value as described in paragraph 1017D(5)(b) in the periodic statements it is required to give its retail clients under subsection 1017D(1).
17. Instrument 2025/518 repeals Instrument 2015/683.
Legislative instrument and primary legislation
18. The matters contained in Instrument 2025/509 are a specific amendment designed to ensure the application of primary legislation keeps pace with technological and market developments not contemplated at the time the law was originally made and applies in a way consistent with the intended policy and the enabling provisions in the primary legislation.
19. It will be a matter for the Government and for Parliament to consider whether the Act may need to be amended in the future to include the substance of Instrument 2025/509 in legislation.
Duration of the instrument 2025/509
20. The duration of Instrument 2025/509 is 5 years. This period is appropriate to provide certainty for industry while the Government and Parliament decide whether to amend the primary legislation.
Legislative authority
21. Both Instrument 2025/509 and Instrument 2025/518 are made under paragraph 1020F(1)(a) of the Act.
22. Paragraph 1020F(1)(a) provides that ASIC may exempt a person or class of persons from all or specified provisions of Part 7.9 of the Act.
23. Under subsection 33(3) of the Acts Interpretation Act 1901, 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.
24. The instruments are disallowable legislative instruments.
Statement of Compatibility with Human Rights
25. The Explanatory Statement for a disallowable legislative instrument must contain a Statement of Compatibility with Human Rights under subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011. A Statement of Compatibility with Human Rights is in the Attachment.
Attachment
Statement of Compatibility with Human Rights
This Statement of Compatibility with Human Rights is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
ASIC Corporations (Deposit Product Disclosure) Instrument 2025/509 and ASIC Corporations (Repeal) Instrument 2025/518
Overview
1. ASIC Corporations (Deposit Product Disclosure) Instrument 2025/509 (Instrument 2025/509) provides that a regulated person does not need to comply with Division 2 of Part 7.9 of the Corporations Act 2001 (the Act) to the extent that those provisions require a Product Disclosure Statement (PDS) for a deposit product to include the interest rate (if certain conditions are met). It also provides that a deposit product issuer does not need to comply with s1017D of the Act to the extent that it requires periodic statements to include the termination value. Instrument 2025/509 continues the effect of the relief provided under ASIC Corporations (Deposit Product Disclosure) Instrument 2015/683 (Instrument 2015/683) and previously ASIC Class Order [CO 05/681] Transitional relief for deposit product providers — PDSs and periodic statements.
- The relief provided by section 6 of Instrument 2025/509 is conditional upon a responsible person ensuring:
- that the Product Disclosure Statement clearly and prominently states how a person may find out the interest rate that currently applies to the deposit product (the current interest rate); and
- provides a simple and convenient means by which a person may find out the current interest rate at no cost.
- Instrument 2025/518 repeals Instrument 2015/683.
Assessment of human rights implications
4. Neither Instrument 2025/509 nor Instrument 2025/518 engages any of the applicable rights or freedoms.
Conclusion
5. Both instrument 2025/509 and Instrument 2025/518 are 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.