Federal Register of Legislation - Australian Government

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ASIC Class Order [CO 06/476]

Authoritative Version
  • - F2006L01862
  • No longer in force
CO 06/476 Orders/ASIC Class Orders as made
This Class Order varies Class Order [CO 05/681] to provide unconditional relief to issuers of deposit products from the requirement to include a termination value in the periodic statement for deposit products, and conditional relief to issuers of deposit products from the requirement to disclose interest rates in the Product Disclosure Statement for deposit products. This Class Order also varies Class Order [CO 05/683] to extend transitional relief for issuers of deposit products and general insurance products from the dollar disclosure requirements until 31 March 2007.
Administered by: Treasury
Registered 19 Jun 2006
Tabling HistoryDate
Tabled HR22-Jun-2006
Tabled Senate22-Jun-2006
Date of repeal 09 Aug 2013
Repealed by Treasury (Spent and Redundant Instruments) Repeal Regulation 2013
Table of contents.

ASIC CLASS ORDER [CO 06/476]

 

EXPLANATORY STATEMENT

 

Prepared by the Australian Securities and Investments Commission

 

Corporations Act 2001

 

Subparagraphs 1020F(1)(a) and 1020F(1)(c) – Variations

 

The Australian Securities and Investments Commission (ASIC) makes Class Order [C0 06/476] Variation of Class Orders [CO 05/681] and [CO 05/683] under s1020F(1)(a) and s1020F(1)(c) of the Corporations Act 2001 (the Act).

 

Section 1020F(1)(a) provides that ASIC may exempt a person or class of persons from all or specified provisions of Pt 7.9 of the Act.  Section 1020F(1)(c) provides that ASIC may declare that Pt 7.9 applies in relation to a person or a financial product, or a class of persons or financial products, as if specified provisions were omitted, modified or varied as specified in the declaration.

 

1.         Background

 

In June 2005, ASIC made Class Order [C0 05/681] Transitional relief for deposit product providers – PDSs and periodic statements.  [C0 05/681] granted transitional relief until 30 June 2006 from the requirement to disclose:

(a)     an interest rate in a Product Disclosure Statement (PDS) for a deposit product; and

(b)     a termination value in a periodic statement for a deposit product.

 

ASIC also made Class Order [CO 05/683] Dollar disclosure: further transitional relief in June 2005.  [CO 05/683] granted transitional relief for issuers of deposit products (and related non-cash payment facilities) and general insurance products from the dollar disclosure requirements until 1 July 2006.

 

2.         Purpose of the class order 

 

[CO 06/476] provides relief from the requirements to disclose an interest rate in a PDS for a deposit product and a termination value in a periodic statement for a deposit product, because the regulatory burden of complying with these disclosure requirements outweighs any benefit of these disclosure requirements.

 

[CO 06/476] also provides further relief from the commencement of the dollar disclosure regime for general insurance and deposit products.  The purpose of the relief for general insurance products is to allow the Government time to review the application of the PDS regime to general insurance products.  The purpose of the relief for deposit products is to allow an orderly transition to the new dollar disclosure regime for issuers of these products.

 


3.         Operation of the class order 

 

Interest rates in Product Disclosure Statement

 

[CO 06/476] removes the sunset provision from [CO 05/681] to provide relief to responsible persons for deposit products, exempting them from the obligation to disclose interest rates in a PDS for those deposit products referred to in the PDS, provided they takes reasonable steps to:

(a)     ensure that the relevant PDS clearly and prominently states how a person may find out the interest (the current interest rate) that applies to a deposit product at the time of an inquiry; and

(b)     have in place means by which a person may find out the current interest rate.  Those means must be simple, involve little inconvenience to the person and involve no charge (imposed by the responsible person or its associates).

 

Termination values in periodic statements

 

[CO 06/476] provides relief to issuers of deposit products from the requirement to include a termination value in a periodic statement.   Unlike the transitional relief in [CO 05/681], the relief in [CO 06/476] is unconditional.  Industry's experience with the conditions in the transitional relief was that they imposed an additional burden for issuers of deposit products without any significant benefits for investors. 

 

PDS dollar disclosure for deposit and general insurance products

 

[CO 06/476] provides unconditional relief until 31 March 2007 from the dollar disclosure regime for deposit product and general insurance product PDSs.

 

4.         Consultation

 

Prior to making [CO 06/476] ASIC undertook targeted consultation with industry and consumer groups.  ASIC also took into account comments made at regular industry liaison meetings and the fact that it did not receive any adverse comments about [CO 05/681].

 

ASIC did not undertake wider consultation because [CO 06/476] is of a minor and machinery nature.