ASIC has today released a consultation paper proposing to maintain relief previously provided under the Corporations Act 2001 (the Act) concerning the entities to which client moneys can be deposited under s981B of the Act. The consultation paper also proposes to repeal a class order that ASIC believes is no longer required.
The instrument ASIC proposes to remake is Class Order [CO 04/1063] Section 981B money in cash common funds due to sunset on 1 April 2017.
This instrument enables client money received by an Australian financial service licensee to be deposited into a cash common fund, provided the fund is also a registered scheme.
ASIC has reviewed this class order and considers that it is operating effectively and efficiently and continues to form a useful part of the legislative framework.
Consultation paper 256 proposes to remake the class order with minor changes. A draft of the proposed legislative instrument is attached to the consultation paper.
ASIC proposes to repeal class order [CO 00/199] Trustee companies' common funds because ASIC has formed the preliminary view that this class order is no longer required and is not a useful part of the regulatory framework.
Submissions on the CP close on 27 April 2016.
Read more about sunsetting class orders
Background
Under the Legislation Act 2003, all class orders are repealed automatically or 'sunset' after a specified period of time (mostly 10 years) unless we take action to exempt or preserve them. This ensures that legislative instruments like class orders are kept up to date and only remain in force while they are fit for purpose and relevant.
Where an instrument is considered to be operating effectively and efficiently and still serves a regulatory purpose we will consult on remaking it even if there will be no significant changes.
All government organisations are responsible for considering whether legislative instruments they have made that are due to sunset will be relevant after their sunset date.