ASIC has today released a consultation paper proposing to repeal Class Order [CO 03/578] Financial Services Guide exemption for market-making services on a licensed market, due to expire (‘sunset’) in 2017.
A reconsideration of the legal basis of [CO 03/578] determined that it was no longer necessary. Regardless of the existence of [CO 03/578], ASIC does not consider that market makers on licensed markets are required to provide an FSG.
Therefore, ASIC proposes to repeal this class order as it no longer serves a regulatory purpose.
Consultation Paper 275 Repealing ASIC class order on FSG exemption for market-making services on a licensed market: [CO 03/578] (CP 275) provides further details of the class order to be repealed and the rationale for repealing it. CP 000 invites specific feedback on the proposal to repeal the class order.
Submissions on CP 275 are due on 31 January 2017.
Under the Legislation Act 2003, all class orders are repealed automatically or ‘sunset’ after a specified period of time (mostly 10 years) unless we take action to exempt or preserve them.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.
Read more about sunsetting class orders here.