ASIC today issued Class Order (CO 08/1) Group purchasing bodies.
CO 08/1 provides conditional exemptions for group purchasing bodies that arrange cover under insurance or facilities for managing financial risk (excluding certain foreign insurance) from the Australian financial services (AFS) licensing and managed investment scheme registration requirements.
ASIC has given the relief to provide certainty and remove unnecessary regulatory burdens that may impede the provision of cover through group purchasing bodies.
CO 08/01 is accompanied by Regulatory Guide 195 Group purchasing bodies for insurance and risk products (RG195), which sets out ASIC’s policy on the relief in CO 08/1.
Group purchasing bodies may be eligible for the relief if they are independent or are acting incidentally to their not-for-profit activities.
Conditions apply to the relief to ensure that the risk to people provided with financial services by group purchasing bodies are minimised.
Background
Group purchasing bodies arrange or hold cover under risk management products for others but do not issue risk management products or provide any financial product advice other than as a result of providing certain general information.
As group purchasing bodies generally do not just obtain cover for members on a one-off basis, they may be carrying on a financial services business and therefore require an AFS licence. Some group purchasing bodies may enter into arrangements that constitute a managed investment scheme that requires registration under the Corporations Act.
ASIC considers that requiring group purchasing bodies to hold an AFS licence and comply with the management investment scheme registration requirements would impose a disproportionate cost burden on group purchasing bodies. The relief will ensure group purchasing bodies can continue to enter group purchasing arrangements for the benefit of their members or clients.
The class order will commence after it has been gazetted and recorded on the Federal Register of Legislative Instruments (FRLI) in electronic form. The FRLI may be accessed at: http://www.frli.gov.au/
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