Federal Register of Legislation - Australian Government

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ASIC Class Order [CO 07/88]

Authoritative Version
  • - F2007L00338
  • No longer in force
CO 07/88 Orders/ASIC Class Orders as made
This Class Order makes the following amendments to ASIC Class Order [02/315]: (a) replaces references that no longer apply to time-sharing interests; and (b) imposes a cooling-off period of 14 calendar days as a condition of relief under ASIC Class Order [CO 02/315].
Administered by: Treasury
Registered 13 Feb 2007
Tabling HistoryDate
Tabled HR14-Feb-2007
Tabled Senate26-Feb-2007
Date of repeal 09 Aug 2013
Repealed by Treasury (Spent and Redundant Instruments) Repeal Regulation 2013

ASIC CLASS ORDER 07/88

 

EXPLANATORY STATEMENT

 

Prepared by the Australian Securities and Investments Commission

 

Corporations Act 2001- Paragraphs 601QA(1)(b) and 741(1)(a) – variation

 

Paragraph 601QA(1)(b) of the Corporations Act 2001 (the Act) provides that ASIC may declare that Chapter 5C of the Act applies to a person as if specified provisions were omitted, modified or varied as specified in the declaration.

 

Paragraph 741(1)(a) of the Act provides that ASIC may exempt a person from a provision of Chapter 6D of the Act.

 

1.         Background

 

Paragraph 601GA(1)(a) of the Act requires that the constitution of a registered managed investment scheme makes adequate provision for the consideration that is to be paid to acquire an interest in the scheme.

 

Section 710 of the Act requires that a prospectus must contain all of the information that consumers would reasonably require to make an informed assessment about whether to acquire the product.

 

Section 711 of the Act requires that the prospectus must set out certain specified information.

 

ASIC Class Order 02/315 Time-sharing schemes – use of loose-leaf price list (CO 02/315):

 

(a)        modifies paragraph 601GA(1)(a) of the Act to allow promoters and operators of registered time-sharing schemes to specify the acquisition price of time-sharing interests in a prospectus, separate loose-leaf price list or product disclosure statement instead of requiring that the acquisition price be specified in the constitution of the registered time-sharing; and

 

(b)       exempts promoters and operators of registered time-sharing schemes from the requirements in sections 710 and 711 of the Act to specify the acquisition price of time-sharing interests in a prospectus.

 

ASIC granted relief from paragraph 601GA(1)(a) of the Act and sections 710 and 711 of the Act in [CO 02/315] because the acquisition price of a time-sharing interest is often negotiable and variable.  Allowing promoters and operators of registered time-sharing schemes to use a loose-leaf price list to specify the acquisition price facilitates prices being quickly and easily updated.

ASIC has imposed conditions on the relief in [CO 02/315] that are designed to:

 

(a)        protect consumers from the effects of pressure selling tactics; and

 

(b)       assist consumers make an information decision about the costs associated with the purchase of time-sharing interests.

 

2.         The Class Order

 

ASIC Class Order 07/88 (CO 07/88) effects amendments to [CO 02/315] which are intended to:

 

(a)        replace references to the disclosure regime in Chapter 6D of the Act and the transitional disclosure regime in Part 10.2 of the Act, which no longer apply to time-sharing interests, and replace them with references to the disclosure regime in Part 7.9 of the Act, which now applies to time-sharing interests; and

 

(b)       remove the requirement that operators of registered time-sharing schemes give a cooling-off period of not less than 10 business days, or if the operator is a member of the Australian Timeshare & Holiday Ownership Council Limited (ATHOC), not less than 5 business days and replace it with a requirement that operators of a scheme give a cooling-off period of not less than 14 calendar days. The changes have been made in light of ongoing concerns regarding cooling-off periods for time-sharing schemes and to harmonise the cooling-off period for these time-sharing schemes with the cooling-off period that applies to other products regulated under the Act.

 

3.         Consultation

 

ASIC has received and considered written submissions from various parties, including ATHOC, operators of time-sharing schemes and consumer groups, in relation to whether it should require that all operators of time-sharing schemes give purchasers of time-sharing interests 14 calendar days to exercise their cooling-off rights.  These submissions were taken into account in the development of [CO 07/88].

 

ASIC did not consult on the other amendments to [CO 02/315] in [CO 07/88], as they are only minor or machinery in nature.