ASIC today released two consultation papers proposing to remake eight class orders that are due to expire (‘sunset’) in 2016, 2017 and 2018.
One consultation paper covers class orders affecting the rounding of amounts in financial reports, the transfer of information from directors’ reports, reporting by disclosing entities, uncontactable members and synchronisation of financial years with a foreign parent.
The second consultation paper deals with class orders affecting financial reporting and record-keeping obligations of foreign entities which hold an Australian financial services (AFS) licence (foreign licensees).
Read more about sunsetting class orders
Consultation Paper CP 240
The class orders proposed to be remade are:
- Class Order [CO 98/100] Rounding in financial reports and directors’ reports
- Class Order [CO 98/101] Members of companies, registered schemes and disclosing entities who are uncontactable
- Class Order [CO 98/2395] Transfer of information from the directors’ report
- Class Order [CO 98/96] Synchronisation of financial year with foreign parent company
- Class Order [CO 98/2016] Entities which cease to be disclosing entities before their deadline
- Class Order [CO 08/15] Disclosing entities—half-year financial reporting relief.
As [CO 98/2016] and [CO 08/15] relate solely to disclosing entities it is proposed that they be remade as a single legislative instrument.
Consultation Paper CP 241
The class orders proposed to be remade are:
- Class Order [CO 03/823] Relief from licensing, accounting and audit requirements for foreign authorised deposit-taking institutions
- Class Order [06/68] Conditional relief for foreign licensees from financial reporting and record-keeping obligations.
Both class orders provide similar relief but to different classes of foreign licensee- authorised deposit-taking institutions (ADIs) and non-ADIs. It is proposed that both class orders be remade as a single legislative instrument. The current exemption for foreign ADIs from holding an AFS licence for the provision of financial services involving dealing in derivatives and/or foreign exchange contracts is preserved under the same conditions.
Consultation Paper 240 Remaking ASIC class orders on rounding, directors’ reports, disclosing entities and other matters (CP 240) and Consultation Paper 241 Remaking ASIC class orders on foreign licensees: [CO 06/68] and [CO 03/823] (CP 241) outline the class orders to be remade and our rationale for remaking them.
ASIC proposes to remake these class orders as in our view they are operating effectively and efficiently, and continue to form a necessary and useful part of the legislative framework. No significant changes are proposed.
Each class order has been redrafted using ASIC’s current style and format, while preserving the current effect of the instrument. The draft ASIC instruments, which reflect the minor amendments proposed in the consultation paper, are available on our website at www.asic.gov.au/cp under CP 240 and CP 241.
Submissions on CP 240 and CP 241 are due on 30 October 2015.
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Background
Under the Legislative Instruments Act 2003, all class orders are repealed automatically or ‘sunset’ after a specified period of time (mostly 10 years) unless we take action to exempt or 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 considered to be operating effectively and efficiently and still serves a regulatory purpose we will consult on remaking it even if there will be no significant changes.