ASIC has repealed three class orders relating to prime broking and the holding of client assets, which were due to expire (‘sunset’) on 1 October 2017. These were:

• ASIC Class Order [CO 03/1110] Prime brokerage: Relief from holding client property on trust
• ASIC Class Order [CO 03/1111] Prime brokerage: Relief from holding scheme property separately
• ASIC Class Order [CO 03/1112] Relief from obligation to hold client money on trust

To permit adequate time for potentially affected stakeholders to consider making alternative arrangements, ASIC has extended the operation of Class Orders [CO 03/1110] and [CO 03/1112] by 12 months to 30 September 2018.

ASIC has also amended ASIC Class Orders [CO 13/1409] Holding assets: Standards for responsible entities and [CO 13/1410] Holding assets: Standards for providers of custodial and depository services because they contained references to the repealed Class Orders.

The relevant instrument is the ASIC (Amendment, Repeal and Transitional) Instrument 2017/839.

ASIC decided to repeal the Class Orders following public consultation through Consultation Paper 273 Repealing ASIC class orders on holding client assets (CP 273), issued in November 2016.

CP 273 sought feedback on ASIC’s proposal to discontinue the relief in [CO 03/1110], [CO 03/1111] and [CO 03/1112].

We received three submissions in response to the proposals outlined in CP 273, two of which were made confidentially. ASIC will shortly publish its feedback report on the submissions to CP 273.

Background

Under the Legislation Act 2003, legislative instruments such as class orders sunset after 10 years unless action is taken 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.

Editor's note

On 20 November ASIC published Report 552 Response to submissions on CP 273  Repealing ASIC class orders on holding client assets (REP 552).　

We received three submissions in response to the proposals outlined in CP 273, two of which were made confidentially. A copy of the non-confidential submission has been published on ASIC’s website. REP 552 discusses the issues raised and ASIC’s response to these issues.