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23-072MR ASIC consults on ‘sunsetting’ class orders on changing responsible entities and equal treatment
ASIC is seeking feedback from responsible entities of managed investment schemes and corporate directors of corporate collective investment vehicles (CCIVs) on proposals to remake ‘sunsetting’ class orders.
Consultation Paper 368 (CP 368) Remaking ASIC class orders: [CO 13/519] and [CO 13/656] sets out ASIC’s proposals on:
- Class Order [CO 13/519] Changing the responsible entity; and
- Class Order [CO 13/656] Equality of treatment impacting on the acquisition of interests.
These class orders relate to changing the responsible entity of a listed scheme and equal treatment obligations of a responsible entity and corporate director. They will expire (‘sunset’) on 1 October 2023 if not remade.
ASIC considers the class orders 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 class orders have not changed.
ASIC invites submissions from stakeholders on our proposals to remake the class orders in substantially the same form for 5 years. Submissions on CP 368 are due on 11 April 2023.
Under the Legislation Act 2003, all class orders are repealed automatically or ‘sunset’ after a period (usually 10 years) unless ASIC takes action to preserve them.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 operating effectively and efficiently and still serves a regulatory purpose, ASIC may consult on remaking it even if only minor changes are proposed.
Class Order [CO 13/519] modifies the requirements for members to initiate a change of responsible entity of a listed scheme. It clarifies that members must pass ordinary resolutions to remove and replace a responsible entity. In the absence of this relief, the resolutions required to change the responsible entity are unclear.
Class Order [CO 13/656] provides an exemption for responsible entities and corporate directors from the duty to treat members equally in certain circumstances. This is because, in some situations, it may be appropriate to offer interests in a registered scheme or shares in a retail CCIV on the basis that some members are treated differently to other members.