The Australian Securities and Investments Commission (ASIC) today announced the release of a new class order, [CO 04/1063] Cash Common Funds, to allow Australian Financial Services licensees to pay clients’ money into a cash common fund.

In certain circumstances, section 981B of the Corporations Act 2001 (the Act) requires a licensee to pay clients’ money into an account with an Australian Authorised Deposit-taking Institution (ADI) or a cash management trust.

[CO 04/1063] provides relief to permit clients’ money to be paid into a cash common fund, provided the fund is also a registered scheme under Chapter 5C of the Act. Cash common funds operate similarly to cash management trusts regulated by ASIC, but are also subject to additional regulation by State governments.

Under the class order, clients’ money must be paid into an account that:

• is with an authorised trustee corporation;
• relates to an interest in a registered scheme operated by that corporation; and
• is commonly known as a cash common fund.

‘ASIC considers it appropriate providing licensees with greater flexibility to deal with clients’ money appropriately through our relief, while retaining the underlying consumer protection objectives of section 981B of the Act’, ASIC Director, FSR Legal and Technical Operations, Mr John Price, said.

A copy of the class order is available at the ASIC website www.asic.gov.au/co, or by calling ASIC’s Infoline on 1300 300 630.