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16-282MR ASIC releases new instrument for horse schemes
Following public consultation, ASIC has released a new legislative instrument on horse schemes, replacing three class orders on horse racing syndicates and horse breeding schemes that were due to expire (‘sunset’).
ASIC has replaced the following class orders with a new legislative instrument:
- Class Order [CO 02/319] Horse racing syndicates, which was due to sunset on 1 October 2016;
- Class Order [CO 02/172] Horse breeding schemes: private broodmare syndication, which was due to sunset on 1 October 2017; and
- Class Order [CO 02/178] Horse breeding schemes: private stallion syndication, which was due to sunset on 1 October 2017.
The relief provided under all three class orders has been combined into a single instrument. The horse scheme class orders have been remade without fundamental changes so that the effect of the relief provided by the class orders will be preserved without any disruption to those who rely on them. The class orders have been repealed.
The key changes made to the terms of the relief for horse racing syndicates are:
- 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; and
- imposing additional content requirements for a product disclosure statement for a horse racing syndicate.
In relation to horse breeding schemes, no significant changes were made to the terms of the relief.
We have also updated Regulatory Guide 91 Horse racing and breeding to reflect the terms of the new legislative instrument.
On 13 November 2015, ASIC released Consultation Paper 242 Remaking ASIC class orders on horse racing syndicates and horse breeding schemes, which publicly consulted on proposals to remake our class orders on horse racing syndicates and horse breeding schemes (refer 15-335MR). In CP 242, ASIC proposed to remake the class orders without fundamental changes.
The report on submissions is attached. This report highlights the key issues from the submissions and ASIC's responses. ASIC received seven submissions, which raised a range of issues. Submissions received were generally supportive of ASIC’s proposal to remake the class orders without fundamentals changes in the form of the draft instruments attached to the consultation paper.
Under the Legislation Act 2003, all class orders 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.
All government organisations are responsible for considering whether the legislative instruments they have made that are due to sunset will be relevant after their sunset date.