ASIC Class Order [CO 03/104]

Relief facilitating the acquisition and sale of forfeited interests in registered time-sharing schemes

This instrument has effect under s601QA(1)(a) of the Corporations Act 2001.

This compilation was prepared on 10 October 2007 taking into account amendments up to [CO 07/91]. See the table at the end of this class order.

Prepared by the Australian Securities and Investments Commission.

Australian Securities and Investments Commission
Corporations Act 2001 — Paragraph 601QA(1)(a) — Exemption

Under paragraph 601QA(1)(a) of the Corporations Act 2001 (“the Act”) the Australian Securities and Investments Commission hereby exempts each responsible entity of a registered managed investment scheme that is a time-sharing scheme (“Scheme”) from paragraph 601FG(1)(a) of the Act in the case described in Schedule A on the condition set out in Schedule B and for as long as it is met.

Schedule A

The acquisition and holding by the responsible entity of an interest in the Scheme (“forfeited interest”) that is forfeited to the responsible entity in the following manner and in accordance with provisions of the constitution of the Scheme which provide for the following matters:

1. The forfeiture occurs as a result of a member (“defaulting member”) not paying:

(a) amounts payable to the responsible entity as Scheme property, including, without limitation, amounts payable to acquire the forfeited interest or amounts payable for on-going periodic maintenance of Scheme property; or

(b) amounts payable to a financier with respect to financial accommodation provided by that financier in connection with the acquisition of the forfeited interest, where the constitution of the Scheme requires members to make on-going periodic payments for maintenance of Scheme property.

2. The responsible entity must use reasonable endeavours to sell the forfeited interest:

(a) if a Product Disclosure Statement has been given in accordance with Part 7.9 of the Act during the last 12 months for interests in the Scheme in the same class as the forfeited interest — at the price shown in the statement most  recently given; or

(b) if no such Product Disclosure Statement has been given during the last 12 months — at a fair market price obtained by the responsible entity using reasonable endeavours.

3. The responsible entity must apply any proceeds of sale or of other exploitation by it of the forfeited interest (including, without limitation, any proceeds of rental of the forfeited interest) in the following manner:

(a) first, in payment of reasonable costs of the sale or other exploitation;

(b) next, in payment of any reasonable administrative costs arising from the forfeiture;

(c) next, in payment of any outstanding amounts due from the defaulting member as Scheme property;

(d) next, in payment of any outstanding amounts due from the defaulting member to the responsible entity (other than as Scheme property) or any other person in relation to that member’s participation in the Scheme (other than amounts referred to in paragraph (e));

(e) next, in payment of any amounts payable by the defaulting member or the responsible entity to a financier in relation to a liability of the member to that financier for amounts with respect to financial accommodation provided by that financier in connection with the acquisition of the forfeited interest;

(f) next, by paying any remaining amount to the defaulting member.

Schedule B

The responsible entity must ensure that before any person acquires an interest in the Scheme, disclosure is made to them of the circumstances in which forfeiture of the interest may occur and of the procedures for dealing with forfeiture, with such disclosure to be made in the Product Disclosure Statement if there is one, or otherwise in writing if there is not.

Notes to ASIC Class Order [CO 03/104]

Note 1

ASIC Class Order [CO 03/104] (in force under s601QA(1)(a)  of the Corporations Act 2001) as shown in this compilation comprises that Class Order amended as indicated in the tables below.

Table of Instruments

Table of Amendments

ad. = added or inserted     am. = amended     rep. = repealed     rs. = repealed and substituted