The Australian Securities and Investments Commission (ASIC) is seeking comment on the possible discontinuation of relief from disclosing certain information in the financial reports of authorised trustee corporations and their wholly owned subsidiaries.

The discontinuation of the relief currently provided under ASIC Class Order [CO 98/0105] Authorised trustee corporations - trust liabilities would mean that these entities would be required by accounting standards to disclose trust liabilities and the right of indemnity from trust assets in the notes to their financial reports.

The current class order does not provide any relief from recognising liabilities in relation to trust deficiencies. As such, this obligation will continue.

ASIC is considering discontinuing the relief for years commencing on or after 1 January 2005, at which time the Australian equivalents of International Financial Reporting Standards (IFRS) will apply.

Generally, it is unlikely that ASIC will grant relief from the requirements of the Australian equivalents of IFRS as this may undermine the objectives of international convergence. However, ASIC will accept submissions from interested parties as to whether there is a case for continuing the relief under [CO 98/0105] beyond years commencing 31 December 2004.

ASIC recognises that many other entities will be required to make major system changes with the adoption of new accounting standards, and will take this into account in deciding whether to continue the existing relief for authorised trustee corporations and their wholly owned subsidiaries.

Submissions should have regard to the pre-conditions for relief in s342(1) of the Corporations Act 2001 and ASIC Policy Statement 43: Accounts and audit relief.

ASIC is particularly interested in comments about to the extent of any burden on authorised trustee corporations and their wholly owned entities in obtaining the information, having regard to:

1. systems developments since relief was initially granted by the National Companies and Securities Commission in 1985, and
2. the impact of the introduction of the single responsible entity under the Managed Investments Act 1998, which means that relevant financial records are less likely to be maintained by third party managers.

Submissions should be sent to:

Mr Doug Niven
Deputy Chief Accountant
Australian Securities and Investments Commission
GPO Box 9827
Sydney NSW 2001

Submissions must be received no later than 15 September 2004.

The current class order has been updated for recent changes in accounting standards. Copies of the class order amendments (affected by Class Order [CO 04/0668]) are available from the ASIC website at www.asic.gov.au/co