media release (17-092MR)

ASIC repeals ‘sunsetting’ class order on FSG exemption for market-making services on a licensed market and makes other minor amendments

Published

ASIC has made a new legislative instrument, ASIC Corporations (Amendment and Repeal) Instrument 2017/65, which repeals Class Order [CO 03/578] Financial Services Guide exemption for market-making services on a licensed market and makes minor amendments to other ASIC instruments..

CO 03/578 was due to expire (’sunset’) on 1 April 2017. We have reconsidered the basis for the relief provided by CO 03/578 and whether the Corporations Act requires a market maker on a licensed market to be given an FSG in the absence of relief. ASIC has repealed CO 03/578 because we have come to the view that the class order is no longer legally necessary.

ASIC consulted on its proposal to repeal [CO 03/578] in Consultation Paper 275 Repealing ASIC class order on FSG exemption for market-making services on a licensed market (CP 275). We received one submission to CP 275, which was supportive of our proposal.

The new legislative instrument also makes a minor amendment to ASIC Corporations (Charitable Investment Fundraising) Instrument 2016/813to correctly reflect the policy intention of the Instrument and Regulatory Guide 87 Charitable scheme and school enrolment deposits. The definition of 'retail client' in relation to debentures is now consistent with the position under the Corporations Act, that is

Retail client in relation to:

(b)    a debenture means a person to whom the an offer of the debenture:

(i)      would not need disclosure needs disclosure to investors under Part 6D.2 of the Act; or

(ii)     other than does not need disclosure to investors because of subsection 708(1) or 708(14) of the Act; or

(iii)    does not need disclosure to investors because of an exemption made under paragraph 741(1)(a) of the Act.

Note:    For example, a person will be a retail client if an offer of debentures to the person would need disclosure to investors under Part 6D.2 of the Act but for the exemption in paragraph 5(1)(b).

In addition, the new legislative instrument makes minor amendments to a number of other ASIC instruments, namely to correct drafting errors and ensure that the principal instruments operate as intended.

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Background

Under the Legislation Act 2003, all class orders are repealed automatically or ‘sunset’ after a period of time (mostly 10 years) unless we take action to preserve them.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 deemed to no longer serve a regulatory purpose we will consult on repealing it. We will repeal instruments rather than allow them to sunset so that industry is certain of our intentions and confident that where instruments are removed, this was our intention.

We have also taken the opportunity to make minor amendments and corrections to the other class orders and ASIC instruments referred to in this Media Release.

Media enquiries: Contact ASIC Media Unit