ASIC today released a consultation paper proposing to remake its class order on nominee and custody services, which is currently due to expire (‘sunset’) on 1 April 2017, and proposed changes to platforms policy.
ASIC proposes to remake the class order with changes. In ASIC's view, generally the class order is operating effectively and efficiently and an amended version of the class order would continue to form a necessary and useful part of the legislative framework. The fundamental policy principles that underpin the class order have not changed.
The new instrument would continue the relief currently given by Class Order [CO 02/295] Nominee and custody services with changes, so that the ongoing effect will be preserved without any disruption to the entities that rely on it. ASIC is proposing:
- to remove unnecessary Chapter 5C relief as a nominee and custody service is generally not considered to be a registered managed investment scheme;
- to make it clear that relief applies to AFS licensees; and
- to align the relief for nominee and custody services with the equivalent requirements for platforms.
ASIC also seeks feedback on its proposed changes to the relief currently given in Class Order [CO 13/763] Investor directed portfolio services and Class Order [CO 13/762] Investor directed portfolio services provided through a registered managed investment scheme. ASIC is proposing:
- for issues or sales after 30 June 2017—to require that clients of platform and nominee and custody services have access to a product issuer’s internal and external dispute resolution system when they have concerns about investments made through the platform or nominee and custody service, as if they were a direct investor in the product; and
- to update the definition of an 'IDPS' and an 'IDPS-like scheme' to clarify what is covered by these definitions.
Consultation Paper 264 Remaking ASIC class order on nominee and custody services and proposed changes to platforms policy (CP 264) outlines ASIC's rationale for proposing to remake the instrument for proposing changes to ASIC's platforms policy.
The draft ASIC instruments, which reflect the amendments proposed in the consultation paper, are available on our website under CP 264.
Submissions on CP 264 are due by 1 September 2016.
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Background
Under the Legislative Instruments Act 2003, all class orders are repealed automatically or ‘sunset’ after a specified period of time (mostly 10 years) unless we take action to exempt or preserve them.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.
Read more about sunsetting class orders