- Following commencement of the Unfair Contract Terms (UCT) reforms on 9 November 2023, ASIC has granted a limited class no-action position for institutional markets.
- The Australian Financial Markets Association (AFMA) made an urgent application for no-action relief in advance of the changes to the UCT regime.
AFMA cited concerns on behalf of industry that the amended UCT regime would apply to certain sophisticated participants in financial markets who are not consumers or small businesses intended to be covered by the UCT regime.
Following consultation with Treasury, AFMA and industry participants, ASIC has granted a limited class no-action position.
ASIC does not intend to take action for a contravention of the relevant UCT provisions or related obligations in relation to the class of counterparties and standard form contracts outlined in the no-action letter.
The no-action letter does not prevent third parties (including the Director of Public Prosecutions) from taking legal action in relation to the conduct it outlines.
The Government plans to review the reforms in two years.
ASIC is Australia’s corporate, markets and financial services regulator.