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Friday 9 June 2017

17-179MR ASIC extends deadline for transitional relief for charitable investment fundraisers

There have been important changes in the rules that apply to charities that offer investments to retail investors. These new rules take effect on 1 January 2018, and ASIC is working with these charities to ensure they are ready for the new rules. 

As the changes to the regulatory settings are significant, charities have been given all of 2017 to prepare. This transition period was created through ASIC legislative instrument (ASIC Corporations (Charitable Investment Fundraising) Instrument 2016/813) (refer: 16-329MR ASIC updates regulatory framework for charitable investment fundraisers)

ASIC has made a new legislative instrument, ASIC Corporations (Amendment) Instrument 2017/359, which amends ASIC Corporations (Charitable Investment Fundraising) Instrument 2016/813, to extend the 28 February 2017 deadline for transitional relief. This will assist charities to prepare for the transition by allowing those charities that failed to lodge an identification statement with ASIC by the deadline (28 February 2017) to lodge it late  and benefit from the relief from the date of lodgement until 31 December 2017.

The effect of the deadline extension is that eligible charitable investment fundraisers can continue to offer investment products subject to the requirements of ASIC Corporations (Charitable Investment Fundraising) Instrument 2016/813 (as amended by ASIC Corporations (Amendment) Instrument 2017/359) without being subject to the new requirements (such as holding an Australian financial services (AFS) licence) until 31 December 2017.

From 1 January 2018, charitable investment fundraisers that wish to issue investment products to retail investors who are not associated with the charity will be required to hold an AFS licence. Further, additional restrictions will apply which are designed to avoid the investment products being used for transactional facilities.

ASIC encourages charitable investment fundraisers to seek professional advice on the requirements of ASIC Corporations (Charitable Investment Fundraising) Instrument 2016/813 with regard to ASIC Corporations (Amendment) Instrument 2017/359 and, where relevant, to submit an identification statement for ASIC’s consideration as soon as possible.  ASIC also strongly encourages charitable investment fundraisers to apply for an AFS licence soon due to the time taken to process applications.

Background

ASIC Corporations (Charitable Investment Fundraising) Instrument 2016/813 allowed charitable investment fundraisers to continue to rely on previous relief provided by ASIC under Class Order [CO 02/184] from 1 January 2017 to 31 December 2017 (transitional relief). In order to qualify for transitional reliefunder ASIC Corporations (Charitable Investment Fundraising) Instrument 2016/813, charitable investment fundraisers were required to submit an identification statement by 28 February 2017.

The new legislative instrument allows transitional relief identification statements to be accepted by ASIC after 28 February 2017, with transitional relief being available to charitable investment fundraisers from the date of when its identification statement is accepted by ASIC until 31 December 2017.

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Last updated: 09/06/2017 11:01