ASIC has today released a consultation paper proposing to maintain relief that ASIC has previously provided in relation to certain horse racing and horse breeding schemes from obligations under the Corporations Act 2001 (the Act). This consultation paper is part of ASIC's response to the 'sunsetting' of legislative instruments.
Read more about sunsetting of legislative instruments
The instruments which ASIC proposes to remake are:
- Class Order [CO 02/319] Horse racing syndicates
- Class Order [CO 02/172] Horse breeding schemes: private broodmare syndication
- Class Order [CO 02/178] Horse breeding schemes: private stallion syndication
ASIC has reviewed these class orders and considers that they are operating effectively and efficiently, and continue to form a necessary and useful part of the legislative framework. The fundamental policy principles that underpin the three class orders have not changed.
In relation to horse racing syndicates, ASIC proposes to continue the relief provided by [CO 02/319] from the requirement to register a horse racing syndicate under Chapter 5C of the Act. However, ASIC proposes to make some substantive changes to the terms of the relief. In summary, the key changes consist of:
- raising the investment limit for a horse racing syndicate from $250,000 to $500,000
- increasing the maximum number of members for a horse racing syndicate from 20 to 50
- formalising the co-regulatory arrangements between ASIC and the lead regulators
- imposing additional content requirements for a product disclosure statement for a horse racing syndicate.
In relation to horse breeding schemes, ASIC proposes to continue the relief under [CO 02/172] and [CO 02/178] and to combine the two class orders in a single legislative instrument. No significant changes are proposed to the terms of the relief.
Consultation Paper 242 Remaking ASIC Class Orders on Horse Racing Syndicates and Horse Breeding Schemes (CP 242) outlines ASIC's proposals in more detail.
Each new legislative instrument has been drafted using ASIC’s current style and format. The draft ASIC instruments, which reflect the amendments proposed in the consultation paper, are available on our website at www.asic.gov.au/cp under CP 242.
ASIC also intends to update Regulatory Guide 91 Horse racing and breeding (RG 91) to reflect any changes made in remaking the legislative instruments.
Submissions on CP 242 are due on 18 December 2015.
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.