ASIC has today released a consultation paper proposing to repeal three class orders due to expire ('sunset') in 2017. These are:
- Class Order [CO 03/1110] Prime brokerage: Relief from holding client property on trust;
- Class Order [CO 03/1111] Prime brokerage: Relief from holding scheme property separately; and
- Class Order [CO 03/1112] Relief from obligation to hold client money on trust.
ASIC proposes to repeal these class orders as, in our view, they no longer serve any regulatory purpose.
Consultation Paper Repealing ASIC class orders on holding client assets (CP 273) outlines the class orders to be repealed and the rationale for repealing them. In short, the relief provided by the class orders is no longer necessary and, where relief may be required, it would be more appropriate to provide relief on a case-by-case basis. However, ASIC would welcome feedback in relation to this proposal, including whether repealing these class orders would itself impose a regulatory burden on businesses.
Submissions on CP 273 are due on Wednesday 21 December 2016.
Under the Legislation Act 2003, all class orders are repealed automatically or 'sunset' after a specified period of time (mostly 10 years) unless we take action to exempt or preserve them.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 deemed to no longer serve a regulatory purpose we will consult on repealing it. We will repeal instruments rather than allow them to sunset so that industry is certain of our intentions and confident that where instruments are removed, this was our intention.