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For the latest FSR news, see our Breaking News page.

Auditor notifications about AFS licensees (updated version of RG 34)
20 December 2007

ASIC has today released an updated version of Regulatory Guide 34 Auditor's obligations: reporting to ASIC (RG 34), which provides guidance to help auditors comply with their obligations to report relevant matters (including contraventions and suspected contraventions of the Corporations Act by their audit clients) to ASIC.

RG 34, which previously only provided guidance for auditors of companies and registered schemes on their reporting obligations under sections 311 and 601HG of the Corporations Act, has now been updated to include guidance for auditors of AFS licensees in relation to the requirement to report matters under section 990K of the Act.

For more information (and to access a copy of the updated RG 34), refer to ASIC's website.

ASIC releases its advertising guide for unlisted and unrated debentures
19 December 2007

ASIC has made further progress in implementing its 'Three Point Plan' for unlisted and unrated debentures today by releasing Regulatory Guide 156: Debenture advertising (RG 156), which provides new advertising standards for all issuers of debentures that are offered to retail investors. (RG 156 is based on Consultation Paper 94, which was released by ASIC in late October 2007.) ASIC says that while primary responsibility for advertising material rests with the organisation placing the advertisement, the publisher or other media conduit may also have some responsibility for the content. Accordingly, ASIC has included in RG 156 some guidance on the role of publishers and the media in promoting debenture products.

ASIC expects advertising by issuers to comply with the guide from late January 2008.

For further information (including to access a copy of RG 156), refer to the ASIC website. (For background information on other announcements made, and documents released, by ASIC in relation to its 'Three Point Plan' to deal with unlisted and unrated debentures (including Consultation Paper 94), refer to our Breaking News for 23 August 2007 and 1 November 2007.)       

ASIC releases class order on Singaporean collective investment schemes
4 December 2007

ASIC has today issued class order CO 07/753 Singaporean collective investment schemes, which provides operators of collective investment schemes authorised by the Monetary Authority of Singapore (MAS) with conditional relief from managed investment scheme registration requirements, Australian financial services license requirements, and some financial product disclosure requirements under the Corporations Act.

The new class order will enable Singaporean collective investment schemes authorised in Singapore by MAS to offer investments to retail clients in Australia. This relief is provided in accordance with ASIC's policy on recognition of foreign collective investments schemes, set out in Regulatory Guide 178 Foreign collective investment schemes.

For more information and to access a copy of the class order, please refer to ASIC's website.       

Update: On 10 December 2007, this class order was updated by class order CO 07/862 to correct minor inaccurate references to Singapore legislation in CO 07/753. The new class order was made on 10 December 2007, published in the ASIC Gazette on 18 December 2007 and registered in the FRLI on 4 January 2008 (which is the commencement date of the new class order). See a copy of CO 07/862 from COMLAW.

FPA releases simplified Statement of Advice for financial planners
29 November 2007

The Financial Planning Association (FPA) today released a Simplified Statement Of Advice (SOA), which aims to reduce the cost of advice for consumers. The Simplified SOA is part of a discussion document released by the FPA and the FPA is seeking member comments by 17 January 2008.

The proposed SOA template covers:

• the scope of the advice
• the client's personal details
• the client's objectives and requirements
• the proposed solution and plan of action
• benefits of the proposed solution
• risks and disadvantages of the proposed solution
• the cost of the financial service and advice
• other factors that may influence decision making.

For further information, refer to the FPA's website.      

ASIC sets up retail investor taskforce
29 November 2007

During a presentation today at the Financial Planners Association Conference (in Sydney), ASIC Chairman, Tony D'Aloisio, noted that ASIC is establishing a taskforce to address specific issues affecting retail investors in the financial services industry. The taskforce will address:

• disclosure documents – length and complexity and what changes might be needed (eg, PDSs);
• statements of advice – whether the 'one size fits all' approach is working;
• compensation arrangements for retail investors - are they adequate?
• lessons from Westpoint;
• remuneration arrangements and conflicts of interest; and
• whether fiduciary duties apply and, if so, what that means.

Mr D'Aloisio said the outcomes of the taskforce's work will be to set ASIC's agenda in the retail investor area for at least the next three years.

For more details, refer to Mr D'Aloisio's speech, Regulating financial advice – current opportunities and challenges.      

ASIC issues latest report on relief applications from financial services providers (June-August 2007)
23 November 2007

ASIC has today released a report, Overview of decisions on relief applications, outlining decisions on recent applications from the corporate finance, financial services and managed investment provisions of the Corporations Act 2001.

The report, which covers applications considered by ASIC between 1 June and 31 August 2007, provides an overview of the circumstances in which ASIC exercised, or refused to exercise, its discretionary powers to grant relief and also outlines limited instances where ASIC decided to take a no-action position in relation to non-compliance with provisions of the Corporations Act.

For further details, refer to the ASIC website. (For details of previous update reports issued by ASIC, refer to our Breaking News for 6 September 2007, which also contains references to earlier relief application reports issued by ASIC.)

ASIC updates its policy on training for financial product advisers
22 November 2007

ASIC has released today an updated version of Regulatory Guide 146: Licensing: Training of financial product advisers (RG 146), which sets out the minimum training standards for financial product advisers and explains how advisers can meet these training standards.

The revisions to RG 146 follow a review ASIC carried out in response to the Corporate and Financial Services Regulation Review – Proposals Paper (released by the Government in November 2006) and the consultation paper (CP 88, Reviewing and updating RG 146: Training of financial product advisers) released by ASIC in July 2007. As a result, ASIC has decided to:

• amend RG 146 to facilitate more tailored and flexible training requirements for some products that are relatively straightforward and do not involve an investment component (Tier 2 products);
• maintain the current requirements that advisers be trained across the range of products within existing specialist knowledge categories;
  maintain the existing policy on the recognition of prior study and training;
• amend RG 146 to clarify ASIC's capacity to deal with non-compliant courses;
• improve the currency of the information on the ASIC Training Register by requiring course providers to periodically re-register courses; and
• clarify some aspects of ASIC's policy and re-write it in the new regulatory guide format.

ASIC has also started work on changes to improve the functionality of the ASIC Training Register by:

• improving the search function;
• updating the layout of the information on the Register; and
• transferring courses no longer provided to a separate section of the Register.

For more information (including to access a copy of the updated policy), refer to ASIC's website. (For details on the Corporate and Financial Services Regulation Review – Proposals Paper, refer to our Breaking News for 16 November 2006. For information about the release of CP 88, refer to our Breaking News for 31 July 2007.)

ASIC seeks further comments on competition for market services
21 November 2007

ASIC has today released a second consultation paper, Consultation Paper 95 Competition for market services – response to CP 86 and further consultation (CP 95), in relation to competition for market services (trading in listed securities and market data). This follows on from the package of documents (which included an earlier consultation paper, CP 86 Competition for market services - trading in listed securities and related data) released by ASIC in July 2007 in relation to applications lodged by AXE ECN Pty Ltd (AXE) and Liquidnet Australia Pty Ltd (Liquidnet) for Australian market licences to operate competing venues for trading in ASX-listed securities.

ASIC has considered the feedback on CP 86 and related documents and now, in CP 95, sets out detailed proposals for mechanisms to allow competition but maintain market quality and integrity.

Comments on CP 95 must be made by 29 January 2008. ASIC will then finalise its advice to the Minister (who will ultimately decide whether to approve the market licence applications from AXE and Liquidnet).

For more information (and to access the relevant documents, including ASIC's 'overview' of the new market proposals), refer to the ASIC website. (For details on the earlier package of documents, see our Breaking News for 23 July 2007.)

ASIC outlines better disclosure requirements for the unlisted and unrated debentures market
1 November 2007

Following on from the release of consultation paper 89 Unlisted, unrated debentures - improving disclosure for retail investors in August 2007, ASIC has today released the following as part of its progress in implementing its 'Three Point Plan' for unlisted and unrated debentures.

• A new regulatory guide, Regulatory Guide 69 Debentures - improving disclosure for retail investors, which outlines ASIC's benchmarks (and reporting on an 'if not, why not' basis) to improve disclosure to retail investors in the $8billion unlisted and unrated debenture market.
• A new consultation paper, Consultation Paper 94 Debenture advertising, which includes a draft regulatory guide on debenture advertising for issuers and publishers in that market.

An update on investor research and education on unlisted and unrated debentures (REP 108).

For more details (including to access these documents), refer to the ASIC website. (For details of CP 89, refer to our Breaking News for 23 August 2007.)

ASIC releases guidance on independent expert reports
30 October 2007

ASIC has today released two regulatory guides updating its policy on independent expert reports:

• Regulatory Guide 111 Content of expert reports; and
• Regulatory Guide 112 Independence of experts.

These updated guides follow on from ASIC's earlier policy proposal paper released in February 2005. ASIC proposes to continue working with experts to improve the clarity of expert reports for retail investors.

For further details (including to access the guides), refer to ASIC's website. (For more information about the earlier policy proposal paper, refer to our Breaking News for 24 February 2005.) 

ASIC releases updated guidance on auditor registration
29 October 2007

ASIC has today issued an updated version of Regulatory Guide 180: Auditor Registration (RG 180), which includes in one document all ASIC guidance on the registration process for individuals and companies seeking registration as a company auditor or an authorised audit company. (RG 180 also includes guidance about how ASIC processes applications for registration and what supporting documents need to be lodged.)

ASIC has also amended the online registration system to better support the registration process. Individuals and companies can now do the following online:

• apply for registration as a company auditor/an authorised audit company
• submit changes to their registered details
• submit their annual statements.

While the changes set out in RG 180 come into effect immediately, ASIC notes that it will process applications under the previous guidelines for applicants who have:

• already lodged an application with ASIC but the application has not yet been decided; or
• completed and signed their application prior to the changes but have not yet lodged the application.

For further information about RG 180 (including to access a copy of the updated guide) and the amended online registration process, refer to the ASIC website. 

ASIC updates guidance on licensee obligations  
11 October 2007

ASIC has today released two regulatory guides about the general obligations of Australian financial services licensees under section 912A of the Corporations Act. Regulatory Guide 104 Licensing: Meeting the general obligations and Regulatory Guide 105 Licensing: Organisational competence are part of ASIC's 'Better Regulation' initiatives, which are designed to achieve better and more transparent regulation.

The regulatory guides aim to:

• communicate ASIC's policy on the general obligations of licensees and organisational competence using simpler language;
• clarify some aspects of the policy in light of ASIC's regulatory experience; and
• consolidate and harmonise ASIC's policy on these obligations.

Previously, ASIC's policy on these issues was covered in both Regulatory Guide 164 Licensing: Organisational capacities and Regulatory Guide 130 Managed investments: Licensing; those guides are now superseded.

For further details about the new guides (and to access copies of them), refer to ASIC's website.

New handbook released on reference checking of financial advisers
11 October 2007

ASIC Chairman Mr Tony D'Aloisio and the CEO of Standards Australia, Mr John Tucker, have today jointly launched a new handbook, Reference Checking in the Financial Services Industry, which provides employers with a reference-checking framework that can be applied to financial advisers. The handbook, developed jointly by ASIC in consultation with a panel of industry representatives and with assistance from Standards Australia, is designed to encourage industry to seek and, when requested, provide reference-checking information to help identify dishonest, incompetent or unethical financial advisers.

For more information (and to access a copy of the handbook), refer to ASIC's website.

APRA and ASIC release discussion paper on breach reporting by dual-regulated institutions  
4 October 2007

APRA and ASIC have today issued a discussion paper, Discussion Paper – Streamlining Breach Reporting (as well as draft online breach notification forms), which proposes an online breach reporting system for dual-regulated institutions.

The proposed system, which aims to simplify the process for regulated institutions to report breaches and reduce breach reporting duplication faced by those institutions regulated by both APRA and ASIC, will enable:

• all APRA-regulated institutions (ie, authorised deposit-taking institutions, general insurers, life insurance companies, friendly societies and superannuation licensees) to report breaches to APRA online; and
• those institutions regulated by both APRA and ASIC to report online breach notifications required to be lodged with both regulators through a single breach report to APRA, thereby eliminating the requirement for jointly regulated institutions to provide separate breach reports for the same incident to both regulators.

Comments are invited by 31 October 2007.

For further information, refer to the APRA/ASIC joint release.

ASIC proposes widening prospectus exemption for rights issue  
28 September 2007

ASIC has today released a consultation paper, CP 91 Non-traditional rights issues, and is seeking comments on its proposal to widen the disclosure exemption for rights issues, which was introduced by the Corporations Legislation Amendment (Simpler Regulatory System) Act 2007, to cover non-traditional features developed by issuers and their advisers to raise capital more effectively. For technical reasons, some rights issues do not qualify for the disclosure exemption without ASIC relief and ASIC has therefore proposed the widening of the exemption.

ASIC invites comments on the consultation paper by 7 November 2007.

For further details (including to access a copy of the consultation paper), refer to ASIC's website.

(For background details on the Government's 'simpler regulatory system' legislation, refer to our Breaking News for 28 June 2007.)

Amending regulations registered  
28 September 2007

The Corporations Amending Regulations 2007 (No 12) (Cth), which implement some of the measures that are part of the Corporate and Financial Services Regulation Review (and, in particular, aspects of the Corporations Legislation Amendment (Simpler Regulatory System) Act 2007 (Cth)), were made on 26 September 2007 and registered today in the Federal Register of Legislative Instruments.

For details of previous regulations made to implement Simpler Regulatory System requirements, refer to our Breaking News for 29 June 2007. (For background information on the Simpler Regulatory System package of laws, refer to our Breaking News for 28 June 2007.)

ASIC issues latest report on relief applications from financial services providers (January–May 2007)
6 September 2007

ASIC has today released a report, Overview of decisions on relief applications, outlining decisions on recent applications from the corporate finance, financial services and managed investment provisions of the Corporations Act 2001.

The report, which covers applications considered by ASIC between 1 January and 31 May 2007, provides an overview of the circumstances in which ASIC exercised, or refused to exercise, its discretionary powers to grant relief and also outlines limited instances where ASIC decided to take a no-action position in relation to non-compliance with provisions of the Corporations Act.

For further details, refer to the ASIC website. (For details of previous update reports issued by ASIC, refer to our Breaking News for 15 May 2007, which also contains references to earlier relief application reports issued by ASIC.)

Amending regulations registered
24 August 2007

The Corporations Amendment Regulations 2007 (No 10), which implement some of the measures contained in the draft regulations released for public consultation on 26 March 2007, were made on 22 August 2007 and registered today in the FRLI.

These new regulations, which will commence on 25 August 2007:

• provide that the provision of financial product advice by an actuary is, under some circumstances, exempted from the requirement to hold an Australian financial services licence;
• prescribe conditions under which information ordinarily included in a statement of advice does not have to be included in that document, but may be 'incorporated by reference';
• provide that a general insurer may comply with dollar disclosure provisions by giving the insured as soon as practicable a document containing the required information using alternative prescribed methods, and subject to other requirements;
• prescribe circumstances under which a 'responsible person' may decide not to include a statement or information ordinarily required in a product disclosure statement in that document but may incorporate the information by reference;
• prescribe record-keeping requirements for documents not required to be lodged with ASIC; and
• make other related and transitional amendments.

For details of the draft amending regulations, refer to our Breaking News for 26 March 2007.

ASIC outlines new and improved disclosure for the unlisted and unrated debentures market
23 August 2007

ASIC has today released a consultation paper, CP 89: Unlisted, unrated debentures - improving disclosure for retail investors, which sets out ASIC's proposals to improve disclosure to retail investors in the $8billion unlisted and unrated debenture market.

The proposed improved disclosure measures are based on an 'if not, why not' basis of reporting (ie, issuers would report to investors against specific principles and benchmarks, which they should follow or explain why they may not have followed them). This approach would apply both to prospectus disclosure and the ongoing disclosures issuers must make. The main objective is to provide retail investors, and their advisers, with more investor information to make their decisions before they invest and then on an ongoing basis. (ASIC also plans to produce an Investor Guide to help retail advisers understand disclosure documents and to conduct an education campaign.)

ASIC's consultation paper also proposes that advertising for these products should not use words such as 'secure' and 'safe' and should either:

• disclose a credit rating on repayment of principal; or
• state that no rating exists and there is risk an investor may lose some or all of their capital.

ASIC says that the consultation paper is the next major stage in ASIC's 'Three Point Plan' to deal with unlisted and unrated debentures, (which ASIC Chairman, Tony D'Aloisio announced at a hearing of the Senate Standing Committee on Economics on 30 May 2007).

For more information (including to access a copy of the consultation paper), refer to ASIC's website.

ASIC consults on updating its policy on training of financial advisers
31 July 2007

ASIC has today released a consultation paper, Reviewing and updating RG 146: Training of financial product advisers (CP 88), seeking industry and consumer feedback on its proposals to update Regulatory Guide 146: Licensing: Training of financial product advisers (RG 146).

The release of CP 88 follows on from feedback given to the Government in response to the Corporate and Financial Services Review Proposals Paper (released by the Government in November 2006), ASIC's regulatory experience and recent preliminary industry consultation conducted by ASIC (which ASIC noted in an update released in May this year). As a result, ASIC is now seeking feedback on proposals about:

• the appropriateness of current training standards;
• recognition of prior study and training; and
• the quality and currency of courses on the ASIC Training Register.

ASIC says that it does not intend to fundamentally rethink its policy on the training of financial product advisers. Rather, the main focus of this review is to examine changes to the administration of its policy to facilitate flexibility in the training requirements.

The closing date for submissions is 25 September 2007.

For further details and to access the relevant documents, refer to ASIC's website. (For background details about the Corporate and Financial Services Regulation Review Proposals Paper and the update issued by ASIC regarding the status of its review of financial adviser training standards, refer to our Breaking News for 16 November 2006 and 22 May 2007, respectively.)

ASIC consults on compensation and insurance requirements for AFS licensees
23 July 2007

ASIC has today released consultation paper 87: Compensation and insurance arrangements for AFS licensees, and is seeking feedback on its proposals for administering the new compensation and professional indemnity insurance requirements which apply to Australian financial services (AFS) licensees who provide financial services to retail clients.

The new requirements were introduced by regulation 7.6.02AAA (under the Corporations Amendment Regulations 2007 (No 6)) on 28 June 2007, which provides that the primary method of compliance with the statutory obligation is for licensees to obtain professional indemnity insurance. It also provides that some licensees may rely on alternative arrangements (with ASIC approval) or guarantees from a related company which is regulated by APRA. Under the requirements, licensees are responsible for assessing their business and ensuring they have adequate insurance cover.

To assist in developing its policy, ASIC commissioned a report into the market for professional indemnity insurance for AFS licensees, Compensation Arrangements for Financial Services Licensees – Research into the Professional Indemnity Insurance Market. ASIC is now seeking feedback on:

• its proposed policy on what is adequate professional indemnity insurance cover;
• some of the challenges to the regime and some practical options responding to those challenges;
• its proposed guidance on how licensees should approach the new requirements; and
• its policy for approving alternative arrangements to professional indemnity insurance.

ASIC invites comments on the proposals set out in the consultation paper by 14 September 2007.

For further information (including to access a copy of the consultation paper and other documents), refer to the ASIC website. 

ASIC seeks comments on competition for market services
23 July 2007

ASIC has today released a consultation package on competition for market services (trading in listed securities and market data).
The documents included in the package are:

• ASIC consultation paper 86 Competition for market services - trading in listed securities and related data
• Economic assessment of competition for market services (prepared by CRA International)
• Brief overview of the AXE and Liquidnet markets
• AXE operating rules
• Liquidnet operating rules

ASIC is considering separate applications from AXE ECN Pty Ltd (AXE) and Liquidnet Australia Pty Ltd (Liquidnet) for Australian market licences, which both propose to operate markets for trading in securities listed on Australian Securities Exchange (ASX), operated by ASX Limited. AXE and Liquidnet also propose to sell data relating to trading activity on their respective markets.

While the relevant Minister decides whether a licence will be granted, ASIC's role is to provide the Minister with appropriate advice. ASIC considers that these applications represent a significant development in Australian securities markets and that they raise policy issues that the Australian regulatory regime has not dealt with before. Accordingly, ASIC has decided to consult publicly on the implications of the operation of these markets as part of the process of developing its advice for the Minister.

The consultation period closes on 17 August 2007.

For further details (including an overview of the new market proposals), refer to the ASIC website.

ASIC's better regulation: new regulatory documents and road map
5 July 2007

Further to its announcement on 27 June 2007 (which outlined ASIC's proposed new approach to the type and presentation of its regulatory documents to make them easier to find and simpler to understand), ASIC has today launched:

• two new regulatory guides (RGs); and
• a road map,

as part of its 'Better Regulation' initiatives.

New regulatory documents

The new RGs are:

• RG 36, an updated and re-formatted version of the ASIC Guide Licensing: Financial Product Advice and Dealing (the Advice and Deal Guide)
  
  It provides guidance for those who may provide financial product advice or deal in a financial product (as defined in the Corporations Act) and for their professional advisers (such as lawyers). It:
   
  • gives guidance on the meaning of 'provide financial product advice'
  • gives guidance on the meaning of 'deal in a financial product'
  • gives guidance on the obligations that apply to providers of financial services
  • updates guidance previously included in the Advice and Deal Guide (to take account of recent legislative and regulatory changes and to include guidance previously in some ASIC FAQs)
  • will enable ASIC to remove several licensing-related FAQs from its website that cover information now dealt with in RG 36.
     
• RG 110, is an updated and re-formatted version of Policy Statement 110 Share buy-backs (PS 110)
  
  It provides guidance on how to comply with the buy-back provisions in the Corporations Act, in particular:
   
  • what information to disclose to shareholders
  • approval of future buy-backs
  • when ASIC may exempt a company from the requirement for shareholder approval for a selective buy-back.

Road map

This document, which was referred to in ASIC's 27 June announcement, is a web-based tool that helps people find class orders and regulatory documents on ASIC's website.

For further details (including to access copies of the RGs and the road map), refer to ASIC's website.  (For background details, refer to our Breaking News for 27 June 2007.)

ASIC consults on class order relief for share and unit sale facilities
3 July 2007

ASIC has today released a consultation paper, Share and unit sale facilities, outlining a proposal for class order relief to facilitate the provision of some share and unit sale facilities (ie, facilities that some companies and managed investment product issuers offer to their members, which generally provide an easy and cheap way for their members (especially those with small holdings) to dispose of their holdings at or about their current market value).

The proposed relief will:

• allow companies and product issuers to offer sale (and related) facilities for the purchase of shares or units;
• reduce costs for those companies and product issuers by removing the need for them to apply to ASIC for individual relief before offering such facilities to their members;
• apply to facilities that are made available to members who have small holdings (ie,. less than $5,000 worth of shares or units); and
• apply where the shares or units are sold in the ordinary course of trading on a licensed market or approved foreign market.

The proposed relief is also subject to other limitations and conditions (details of which are in the consultation paper).

ASIC has noted that this proposed class order relief is consistent with individual relief it has granted regularly on request over the past few years.

Comments on the consultation paper are due by 6 August 2007 and ASIC plans to publish the final policy by December 2007.

For more details (and to access a copy of the consultation paper), refer to ASIC's website. 

ASIC announces relief from consent to quote credit ratings, trading data and geological reports in prospectuses, PDS and takeover documents
3 July 2007

ASIC has today released an updated version of Practice Note 55 Disclosure documents and PDS: consent to quote (PN 55). PN 55 deals with the requirement in the Corporations Act for an issuer to obtain the consent of a person to quote them in a prospectus or PDS. Similar requirements apply to bidders' and targets' statements in takeovers.

ASIC has also given class order relief from the consent requirement:

• CO 07/428 Consent to quote: Citing credit ratings, trading data and geological reports in disclosure documents and PDS for prospectuses and PDS
• CO 07/429 Consent to quote: Citing credit ratings agencies, trading data and geological reports in takeovers for takeover documents.

The new class orders, which are in addition to existing ASIC class order relief to quote other sources/information (eg, public officials and books and journals), give relief to quote:

• credit ratings of debt or hybrid securities or equities of authorised deposit-taking institutions;
• trading data from financial markets or market data providers; and
• historical geological reports.

For further information (including to access the updated PN 55 and the new class orders), refer to the ASIC website.   

ASIC releases updated policy on foreign securities prospectus relief
3 July 2007

ASIC has today released an updated version of policy Statement 72: Foreign securities prospectus relief (PS 72). PS 72 describes how ASIC administers the prospectus provisions of the Corporations Act for offers of foreign securities and discusses prospectus relief for foreign companies making offers of securities in Australia. It has now been revised to update legislative references, remove references to outdated pro formas and update the list of 'approved foreign markets'.

For further information (including to access a copy of the updated policy statement), refer to ASIC's website. 

Amending regulations registered
29 June 2007

The following amending regulations, which implement measures that are part of the Corporate and Financial Services Regulation Review (and, in particular, aspects of the Corporations Legislation Amendment (Simpler Regulatory System) Act 2007 (Cth) and related laws, were made on 28 June 2007 and registered in the Federal Register of Legislative Instruments on 29 June 2007.

• Corporations Amendment Regulations 2007 (No 2), which move the disclosure requirements for director and executive remuneration in the accounting standards into regulation 2M.3.03.
• Corporations Amendment Regulations 2007 (No 3), which repeal regulation 2M.6.03 and schedule 5A thereby requiring bank and life insurance companies to comply with the accounting standards under Chapter 2M of the Corporations Act 2001 (rather than the financial reporting requirements in the Banking Act 1959 and the Life Insurance Act 1995).
• Corporations Amendment Regulations 2007 (No 4), which remove prescribed paper forms from the Corporations Regulations 2001 and allow ASIC to create approved forms for the registration of company charges that may be lodged electronically.
• Corporations Amendment Regulations 2007 (No 5), which remove the requirement for public companies and registered schemes to notify ASIC of their top 20 shareholders or interest holders.
• Corporations Amendment Regulations 2007 (No 7), which:
  • increase to $5,000 the amount up to which a financial benefit can be given to certain related parties without the need for member approval, for the purposes of section 213(1) of the Act; and
  • include a company's contact address and principal place of business as 'prescribed information' about the company on ASIC's register, allowing people searching the company's details to find out this information.
• Corporations (Review Fees) Amendment Regulations 2007 (No 1), which enable companies to pay their annual review fees as a single payment once every ten years.

In addition, the Corporations Amendment Regulations 2007 (No 6) were also made on 28 June and registered on 29 June 2007. They insert new compensation regulations to complement the operation of section 912B of the Corporations Act, which requires Australian financial services licensees providing a financial service to retail clients to have arrangements for compensating them in case of monetary losses suffered due to breaches of relevant obligations under the law.

For background information on the Simpler Regulatory System package of laws and the new compensation arrangements, refer to our Breaking News for 28 June and 29 June 2007, respectively.

Government announces regulations for financial services compensation arrangements
29 June 2007

The Government has today announced that regulations to complement section 912B of the Corporations Act 2001 (which requires Australian financial services licensees providing a financial service to retail clients to have arrangements for compensating them in case of monetary losses suffered due to breaches of relevant obligations under the law) have been made and will operate from 1 July 2007.

The new regulations provide that section 912B is satisfied if licensees have adequate professional indemnity insurance in place, subject to transitional periods (although some APRA-regulated bodies are exempt from the requirements). The transitional provisions allow time for licensees to put appropriate arrangements in place before the requirements apply. The regulations also deal with the return of the security bonds to licensees by ASIC.

Consultation on the regulations commenced in November 2006, when draft regulations were issued for public comment. Again in June 2007, following incorporation of those comments, further targeted consultation was undertaken.

The regulations will be supplemented by ASIC guidance which will be released by ASIC in draft form for public consultation shortly.
For background information, refer to our Breaking News for 2 November 2006 and 19 December 2006 and 18 May 2007.

Simpler Regulatory System Laws receive assent
28 June 2007

The Corporations Legislation Amendment (Simpler Regulatory System) Bill 2007 and accompanying Bills were given Royal Assent today. Most of the changes commence on either Royal Assent or 1 July 2007. Some parts still require supporting regulations to be made for their operation to be fully effective. For further details on the Simpler Regulatory System package of Bills, refer to our Breaking News for 24 May 2007. You may also be interested in our report Simpler regulatory system package receives go-ahead (which contains commencement details for each of the proposals in the legislation).

ASIC announces initiatives to provide better access to its decisions, policies and approaches
27 June 2007

ASIC has today announced the launch of new regulatory documents and a road map on its website, which will come into effect from 5 July 2007 and aim to make ASIC decisions, policies and approaches easier to find and simpler to understand.

Regulatory documents

From 5 July:

• ASIC will issue four types of regulatory documents only, being:
  • regulatory guides (which will replace a number of existing documents including policy statements, practice notes, guides, kits, information releases and frequently FAQs)
  • consultation papers
  • reports
  • information sheets.

Legal documents, such as class orders, instruments and forms, are unchanged.
This rationalisation is part of ASIC's Better Regulation Initiatives, which were announced on 3 May 2006.

• New and updated documents issued by ASIC will adopt a new layout which is intended to make it easier to find and understand information about ASIC's thinking on regulatory topics. The new document template features:
  • a short summary of what the document is about and who it is for on the front cover; and
  • a summary of key points at the beginning of each new section.

Larger documents will start with an overview that summarises the contents.

Road map

This is a subject matter index on ASIC's website which links to regulatory documents and class orders on both general and specific topics.

Further guidance

ASIC has also issued ASIC – A guide to our regulatory documents, which explains these initiatives in more detail and the impact of the changes on existing documents.

Treasury releases issues paper on product rationalisation
22 June 2007

Treasury has today released an issues paper, Product Rationalisation, for the purpose of consulting stakeholders about a product rationalisation mechanism in the managed funds sector. Treasury identifies product rationalisation as a mechanism for removing outdated managed funds products by transferring beneficiaries out of these products into new products with modern features. The paper covers managed investment schemes registered under Chapter 5C of the Corporations Act, superannuation funds and life policies.

The paper sets out, among other things, the main issues that are involved in the development of a product rationalisation mechanism. A description of each issue is provided, together with one or more questions to which responses are being sought. It also sets out for discussion purposes a number of possible product rationalisation mechanisms. Stakeholders are invited to submit comments on the options presented, or submit their own preferred options, by 21 September 2007. Treasury has indicated that based on the comments received in response to the Issues Paper, a specific product rationalisation mechanism will be developed. It is likely that a Proposals Paper (including a regulation impact statement) will be released, putting this mechanism forward for further, more detailed comment.

(Product rationalisation was one of the issues identified in the Banks Taskforce report and is one of the proposals being considered in the Government's Corporate and Financial Services Regulation Review. For further details on these aspects of the product rationalisation issue, refer to our Breaking News items dated 7 April 2006 and 12 April 2006 (in relation to the Banks Taskforce report) and 14 August 2006 in relation to the Corporate and Financial Services Regulation Review.) 

ASIC consults on proposals to review its policy on investor directed portfolio services
20 June 2007

ASIC has today issued a consultation paper, Review of ASIC policy on investor directed portfolio services (IDPSs), and is inviting the public to comment on its proposals about the regulation of those services.

ASIC's proposals, which will be relevant to all operators of IDPS and IDPS-like registered schemes and to advisers who recommend IDPS to clients (and also to trustees of superannuation funds in relation to the delivery of product disclosure), aim to:

• reduce complexity, barriers to entry and regulatory burden by removing regulation of IDPS operators beyond that applying to licensees performing dealing or custodial or depository services that do not involve an IDPS, where appropriate;
• adopt a more principles-based approach to the regulation of IDPS and IDPS-like schemes consistent with Chapter 7;
• treat the operation of IDPS and IDPS-like schemes similarly where there is no basis for different treatment; and
• maintain adequate consumer protection by ensuring good advice about using an IDPS, adequate disclosure about the IDPS and securities and financial products accessible via the IDPS, reliable client reporting, effective compliance controls and custodial and transactional integrity.

The proposals take into account submissions to the Government (in response to proposals about IDPSs raised in the Corporate and Financial Services Regulation Review Consultation Paper (released in April 2006)), ASIC's regulatory experience with IDPSs and some preliminary industry consultation conducted by ASIC.

ASIC will also be amending the following related class orders:

• CO 02/294 Investor directed portfolio services; and
• CO 02/296 Investor directed portfolio-like services provided through a registered managed investment scheme.

The closing date for submissions is 4 September 2007.

For further information (including to access a copy of the consultation paper, refer to ASIC's website. (For background information on the Corporation and Financial Services Regulation Review consultation paper, refer to our Breaking News for 7 April 2006.) 

ASIC issues class order relief to help time-critical superannuation advice
18 June 2007

ASIC has today issued a class order, CO 07/447 Temporary extension of time for SOA delivery, to help retail investors get financial advice (ie, 'urgent advice' relating to superannuation products) in the lead-up to the new superannuation arrangements that start on 1 July 2007 The class order relief is effective from today until 30 June 2007.

ASIC has changed the time by which a written SOA must be given in these circumstances from five days to 30 days. However, ASIC has noted that, apart from the time allowed to provide an SOA, all the rules about giving advice remain unchanged, including the adviser's obligation to provide quality advice that takes into account a client's needs and circumstances. Investors' rights to take action for losses resulting from non-complying advice are also unchanged.

The ASIC class order also requires advisers giving advice in these circumstances to give written disclosure to the client, noting that the client may not receive a written SOA in time to help with other decisions they may need to make, such as exercising cooling-off rights.

For more information and to access a copy of the class order, refer to ASIC's website. 

ASIC announces Interim relief for general insurers and actuaries until 31 August 2007
18 June 2007

ASIC has today announced the extension of existing transitional relief for general insurers and actuaries.

General insurance transitional disclosure relief

Pursuant to class order CO 07/409 General Insurance Disclosure: Extension of Transitional Period, ASIC has extended the transition period applying under Corporations Regulations 7.9.15D–7.9.15F (which modify the application of financial services disclosure provisions to general insurance products) from 20 June 2007 until 31 August 2007. During the transition period, general insurers can either comply with the modified disclosure requirements or continue to comply with the provisions as they stood before the modifications. Once the transition period has expired, general insurers will have to comply with the disclosure obligations under regulations 7.9.15D–7.9.15F (which are affected by new requirements in the Insurance Contracts Act 1984 and proposed new Corporations Amendment Regulations announced by the Parliamentary Secretary to the Treasurer on 26 March 2007).

Licensing relief for actuaries

Pursuant to class order CO 07/410 Actuaries: Further Extended Transitional Relief, ASIC has also issued an extension of the licensing relief that actuaries have from the requirement to hold an Australian Financial Services Licence (AFSL) from 30 June 2007 until 31 August 2007. ASIC has extended the transition period so that actuaries can continue to have the benefit of that relief until the commencement of a regulation later this year that should exclude actuaries from the licensing requirements under the Corporations Act 2001 when providing the usual professional services of an actuary.

For more details (including to access copies of the class orders), refer to the ASIC website. (For details of earlier class order relief, refer to our Breaking News for 19 December 2006. For information on the changes to be introduced by the Corporations Amendment Regulations, refer to our Breaking News for 26 March 2007.)  

ASIC releases enforceable undertaking templates
14 June 2007

ASIC has today released four templates, designed to assist entities considering offering an enforceable undertaking (EU) to ASIC.

The templates, which supplement the ASIC Guide on Enforceable Undertakings issued in March this year, cover:

• a standard template applicable to all EUs;
• sample terms for compliance program assessment;
• sample terms for compensation; and
• sample terms for corrective advertising on the Internet.

ASIC has said that the templates will be expanded and updated as necessary.

For further information (including to access a copy of the templates and the ASIC Guide), refer to ASIC's website. (For background information on the release of the ASIC Guide, refer to our Breaking News for 13 March 2007.)  

ASIC announces improvements to online help for people making a complaint
12 June 2007

ASIC has today announced improvements to its online services, which are aimed at making it easier for consumers and investors to make a complaint about a licensed financial services business. In particular, information contained in ASIC's public register of businesses licensed to conduct financial services will now include details of the external dispute resolution scheme(s) to which each licensee belongs. By making this information available in this form, ASIC hopes to make the system more accessible and transparent for the public.

For further details, refer to ASIC's website.  

ASIC reissues its policy on how to deliver product disclosure about super investment strategies (PS 184)
8 June 2007

ASIC has today reissued policy statement 184 Superannuation: Delivery of product disclosure strategies (PS 184) and associated relief under class order [CO 07/386] Superannuation: Delivery of product disclosure for investment strategies - amendment. 

PS 184 was originally issued on 3 August 2006 and provides guidance on how superannuation trustees can comply with section 1012IA of the Corporations Act and deliver product disclosure information about investment strategies to members. It takes into account practical concerns raised by industry about when section 1012IA applies and how trustees can comply with the policy with as much flexibility as possible.

The main refinement to PS 184 allows a trustee to include information about an investment strategy in relation to a specifically identified financial product to be contained in the same Product Disclosure Statement (PDS) for the superannuation product itself. This means that trustees now have three options for providing disclosure about investment strategies with specifically identified financial products (Accessible Financial Products) to members, by:

• preparing the information themselves in an accessible product PDS for one or more Accessible Financial Products (Option 1), or
• preparing the information themselves in an integrated PDS that combines information about the superannuation product with information about one or more Accessible Financial Products in the one PDS (Option 2); or
• giving a member an accessible product PDS prepared by the issuer of the particular Accessible Financial Product (Option 3).

(Other changes are summarised in the attachment to the information release issued today by ASIC.)

ASIC has also adjusted the transition period to comply with section 1012IA, so that:

• new trustees must comply with the new rules from 1 July 2007; and
• current trustees must comply when they next issue a new complete PDS after 1 July 2007 for the superannuation product or from 1 July 2008, whichever is the earlier.

For more details (including to access copies of the updated policy statement and associated class order relief), refer to ASIC's website. 

Government releases consultation paper on review of prudential decisions
31 May 2007

The Government has today released a consultation paper, Review of Prudential Decisions, which proposes introducing into APRA-administered legislation a court‑based disqualification process, modelled on the regime applying to ASIC.

The consultation paper also seeks further comments on proposals concerning removal of Ministerial consent from, and expanding the availability of merits review for, specific APRA decisions, and streamlining APRA's directions powers.

Submissions on the consultation paper are due by 29 June 2007.

(This consultation paper has arisen out of feedback sought by the Government on its discussion paper Streamlining Prudential Regulation: Response to 'Rethinking Regulation' (released on 4 December 2006) (the SPR Paper). Subsequently, on 16 April 2007, the Government announced that it had completed its initial consultation on the SPR Paper and that it would be consulting further with industry on the implementation various issues including options for removing Ministerial consent from, and expanding the availability of, merits review for APRA's decisions.)

For further information, refer to the Treasury website. (Also, for background information, refer to our Breaking News for 4 December 2006 and 16 April 2007.)

ASIC consults on policy on licensing relief for trustees of wholesale equity schemes
31 May 2007

ASIC has today released a consultation paper, Wholesale equity venture capital schemes; trustee licensing, outlining its proposed policy on licensing relief for trustees of wholesale equity schemes. The Corporations Act is likely to require these trustees to hold an Australian financial services (AFS) licence for providing dealing and custodial and depository services.

To facilitate consultation, ASIC has given interim conditional licensing relief to trustees in class order [CO 07/74] until 31 December 2008 if the manager, as an AFS licensee, accepts responsibility for financial services provided by the trustee as if the trustee were its representative by applying for a variation of its licence reflecting the relief.

ASIC invites comments on the proposals in the consultation paper by 15 August 2007.

Publication of the final policy is expected by June 2008.

For further details (including to access copies of the consultation paper and class order), refer to ASIC's website.

ASIC issues further updated fees and costs disclosure guide
30 May 2007

AAIC has today issued a further updated version Enhanced fee disclosure regulations: Questions and Answers – an ASIC Guide, which is intended to help product issuers comply with the Corporations Amendment Regulations 2005 (No 1) (the Enhanced Fee Disclosure Regulations).

The revised Guide answers commonly asked questions about compliance with the Enhanced Fee Disclosure Regulations. It also incorporates some questions and answers released during 2005. ASIC says it will continue to update this Guide periodically in response to new commonly asked questions or based on its regulatory experience.

For further details and to access a copy of the Guide, refer to ASIC's website. 

ASIC releases technical updates to financial services related policy statements, guidance and class orders
28 May 2007

ASIC has today released technical updates to three ASIC policy statements, a guidance paper, and a number of class orders relating to financial services providers to ensure users of its policy publications are working with the most current information. The policy statements and guides have been updated to take account of the Corporations Amendment Regulations made on 15 December 2005 which implement the Government's Refinements to Financial Services Regulation proposal paper issued on 2 May 2005. The amendments are of a minor and technical nature and do not raise new policy issues.

Policy statements

The updated policy statements are:

• [PS 168] Disclosure: Product disclosure statements (and other disclosure obligations)
• [PS 175] Licensing: Financial product advisers – Conduct and disclosure
• [PS 182] Dollar disclosure

Guidance paper

The updated guidance paper is Licensing: The Scope of the Licensing Regime: Financial Product Advice and Dealing – an ASIC Guide

Class orders

The following ASIC class orders have been varied by class order [CO 07/151] so that relief in these class orders applies to the Short-Form PDS:

• [CO 03/237] Updated information in product disclosure statements;
• [CO 02/260] Product Disclosure Statements — application forms created by a licensee;
• [CO 02/262] Applications to switch managed investment products;
• [CO 03/957] ASX managed investment warrants — disclosure and reporting exemptions; and
• [CO 03/1092] Further relief for joint product disclosure statements.

Also, class orders [CO 02/149], [CO 04/10], [CO 04/1571] and [CO 05/27] have been revoked by class order [ CO 07/150] because the relief they provide is no longer necessary as a result of subsequent legislative and regulatory amendments.

ASIC says it will continue to monitor the currency of its publications in light of legislative changes and developments to ASIC policy, and will update them as required (eg, further updating may be necessary to reflect the implementation of the Government's current Corporate and Financial Services Regulatory Review).

For more information (including more details about the changes announced today, which are included in the attachment to ASIC's information release), refer to the ASIC website. (Also, for more information about the Government's Refinements to Financial Services Regulation proposal paper, the Corporations Amendment Regulations and the Corporate and Financial Services Regulation Review, refer to our Breaking News for 2 May 2005, 20 December 2005 and 7 April 2006, respectively.)

Government introduces Simpler Regulatory System Bill
24 May 2007

The Government has today introduced into the House of Representatives the Corporations Legislation Amendment (Simpler Regulatory System) Bill (and supporting Bills - Corporations (Fees) Amendment Bill 2007 and Corporations (Review Fees) Amendment Bill 2007).

This package of Bills implements the bulk of the proposals in the Government's Corporate and Financial Services Regulation Review Proposals Paper, which was released for public comment on 16 November 2006 and dealt with a range of regulatory issues relating to financial services, financial reporting, takeovers, auditor independence, corporate governance and fundraising. It also contains:

• some additional initiatives that were developed during the consultation process (ie, proposed changes in relation to auditor independence requirements, body corporate names and constitutions of non-profit companies)
• the Government's response to a number of recommendations of the 'Rethinking Regulation' report of the Banks Regulation Taskforce of January 2006, including initiatives relating to the use of the internet for financial reporting; financial reporting thresholds for proprietary companies; reporting requirements for executive remuneration; and fundraising requirements for employee share schemes.

The Government intends that the Bill be passed during the Winter session of Parliament so that the benefits can be given effect to as soon as possible. In particular, this would enable reduced financial reporting burdens and electronic distribution of annual reports to take effect for the 2006-07 financial reporting year.

The Parliamentary Secretary's press release in relation to the Bill contains a table outlining the Simpler Regulatory System Bill's key initiatives and the relevant legislative action to be taken in relation to the initiatives.

For further details, refer to the Treasury website. (For information about the Proposals Paper, refer to our Breaking News for 16 November 2006.) 

IFSA releases its policy in relation to options to increase Australia's export of funds management services
24 May 2007

IFSA has today released its policy paper, 'Policy options to increase Australia's export of funds management services', which outlines future directions for the Australian financial services industry. IFSA says that the policy paper is a intended to be a 'road-map' and contains a number of objectives to facilitate the future export of Australian financial services. The policy paper outlines IFSA's long-term vision and also addresses: policy options in relation to, among others areas, regulation, taxation environment and economic impact; global trends in funds management; the benefits of managing global funds; and future direction.

For further details and to access a copy of the policy paper, refer to IFSA's website. 

ASIC issues an update on its review of financial adviser training standards (PS 146)
22 May 2007

ASIC has today issued an update on its current review of PS 146 Licensing: training of financial product advisers, which deals with training standards for retail financial advisers. (This review was raised as part of the Corporate and Financial Services Regulation Review – Proposals Paper released by the Government on 16 November 2006.)

At this stage, ASIC expects that the review will focus on:

• the appropriateness of current training standards for providers of general advice and providers of advice on general insurance products;
• the description of the knowledge and skills categories in Appendix A of the policy (eg, whether there should be a larger number categories with each having a narrower focus);
• the administration and ease-of-use of ASIC's training register (including how courses are placed onto the register);
• recognition of prior study and training; and
• the quality of some courses currently offered (an issue that has already been raised by some stakeholders with ASIC).

ASIC has already started to meet with relevant stakeholders and, at this stage, is only seeking feedback on the quality and currency of existing training courses. It expects to release a public consultation paper in July to seek broad input on the review.

For more information on the Corporate and Financial Services Regulation Review and the Proposals Paper, refer to our Breaking News for 7 April 2006 and 16 November 2006.

Government announces financial services compensation arrangements
18 May 2007

The Government has today announced that a regulation to complement section 912B of the Corporations Act 2001 (which requires AFS licensees that provide financial services to retail clients to have appropriate compensation arrangements) is expected to be made by 1 July 2007. The new regulation, which will take account of feedback received by the Government in response to the draft regulation released by the Government for public comment in November 2006, will:

• specify that section 912B is satisfied if AFS licensees have professional indemnity insurance in place (although APRA-regulated bodies will be exempt from this requirement);
• include transitional provisions and provisions relating to the return of the security bonds currently held by ASIC;
• be supplemented by ASIC guidance. The draft guidance note, which will assist licensees to put appropriate arrangements in place, will be released by ASIC for public consultation at the time the regulation is made.

For further details of today's announcement, refer to the Treasury website. (For background information, refer to our Breaking News for 2 November 2006.)

ASIC issues latest report on relief applications from financial services providers (October–December 2006)
15 May 2007

ASIC has today released a report, Overview of decisions on relief applications, outlining decisions on recent applications from the corporate finance, financial services and managed investment provisions of the Corporations Act 2001.

The report, which covers applications considered by ASIC between 1 October 2006 and 31 December 2006, provides an overview of the circumstances in which ASIC exercised, or refused to exercise, its discretionary powers to grant relief and also outlines limited instances where ASIC decided to take a no-action position in relation to non-compliance with provisions of the Corporations Act.

For further details, refer to the ASIC website. (For details of previous update reports issued by ASIC, refer to our Breaking News for 18 January 2007, which also contains references to earlier relief application reports issued by ASIC.)

ASIC consults on licensing and PDS relief for some arrangers of group insurance
7 May 2007

ASIC has today issued a consultation paper, Group insurance arrangements: ASIC consultation paper, seeking feedback on its proposals to offer exemptions from the licensing provisions in Chapters 7 and 5C of the Corporations Act for some bodies (such as sporting and community associations) that arrange group insurance policies. ASIC is also consulting on proposals for technical relief for insurers from the product disclosure statement provisions when a person to be covered under a group insurance product would have acquired the product as a wholesale client if they were the insured.

ASIC invites comments on the consultation paper by 25 June 2007.

For further information including to access a copy of the consultation paper, refer to ASIC's website. 

ASIC consults on proposals to modify requirements for management rights schemes (PS 140)
7 May 2007

ASIC has today released a consultation paper, Management rights schemes: ASIC consultation paper, inviting comment on its proposal to modify existing relief for management rights schemes (ie, managed investment schemes that involve holiday letting arrangements for strata units). (Currently, conditional relief from the licensing and managed investment scheme requirements under the Corporations Act is provided for management rights schemes under Class Order [CO 02/305] Management Rights Schemes and Class Order [CO 02/304] Management Rights Schemes.)

The consultation paper sets out ASIC's proposal to modify Policy Statement 140 Serviced strata schemes and includes proposals on:

• granting AFS licensing relief for some people giving financial product advice concerning participation in management rights schemes;
• how Part 7.9 Financial Product Disclosure and other provisions relating to issue, sale and purchase of financial products of the Corporations Act 2001 applies to management rights schemes;
• clarifying ASIC relief for the upfront acquisition of furniture, and when ASIC's relief applies where an operator provides a rental guarantee; and
• whether there is a case for reviewing the furniture and fittings expenditure fund limit.

ASIC invites comments on the proposals set out in the consultation paper by 9 July 2007.

For further information (including to access a copy of the consultation paper), refer to ASIC's website. 

Treasurer announces framework for reviewing administrative decisions by the Australian Prudential Regulation Authority (APRA)
16 April 2007

The Treasurer has today issued a media release confirming that the Government has completed its initial consultation on the discussion paper Streamlining Prudential Regulation: Response to 'Rethinking Regulation', which was released by the Government for public comment on 4 December 2006.

The discussion paper canvassed options to simplify and streamline prudential regulation in response to issues raised by the Taskforce on Reducing Regulatory Burdens. The Treasurer has reported that the submissions received were broadly supportive of the Government's approach in the discussion paper. However, some concerns were expressed about the Government's proposals in relation to reviewing APRA's administrative decisions. Accordingly, having regard to those concerns, the Government has decided to introduce a court-based process for decisions to disqualify individuals under APRA‑administered legislation, similar to the disqualification framework used by ASIC. The Government will consult further with industry on the implementation of this measure and on options for removing Ministerial consent from, and expanding the availability of, merits review for APRA's decisions.

The Government will continue to progress the other proposals canvassed in Response to 'Rethinking Regulation'. In relation to the current issue, the Government hopes to consult on draft legislation shortly.

(For background details on the discussion paper, refer to our Breaking News for 4 December 2006.)

Treasurer announces progress on Government initiatives to reduce red tape and the regulatory burden on business
12 April 2007

The Treasurer today issued a release providing details of the Government's progress over the past nine months in reducing regulatory burdens imposed on business by Commonwealth Government regulation, and in improving regulation‑making and review processes, in response to the Taskforce on Reducing Regulatory Burdens on Business (the Banks Taskforce).

In the area of financial and corporate regulation, the Treasurer referred to the extensive consultation that has occurred as part of the Corporate and Financial Services Regulation Review Consultation Paper (released in April 2006) and the continuing steps to implement the proposals in that Paper, including the draft Corporations Amendment Regulations released for comment on 26 March 2007. Further, the Treasurer noted that drafts of the Simpler Regulatory System Bill and the Simplifying Regulation and Review Bill will be released soon.

(For background details of the Banks Taskforce Report and the Corporate and Financial Services Regulation Review, refer to our Breaking News for 7 April 2006, 14 August 2006 and 16 November 2006. For details of the draft Corporations Amendment Regulations, refer to our Breaking News for 26 March 2007.)

ASIC releases a proposals paper on prospectus/PDS relief for foreign scrip takeovers and proposes associated licensing relief
28 March 2007

ASIC has today released a policy proposal paper (PPP), Disclosure relief for foreign scrip takeovers, on relief from the requirement to prepare a prospectus or PDS when securities are offered as consideration under a foreign regulated takeover. The proposed relief is subject to conditions, including that Australian residents hold no more than 10% of the target securities, and the target securities are quoted on an approved foreign market. The PPP also proposes licensing relief for the provision of general advice that is contained in a bid document for a foreign regulated takeover.

Comments on the PPP are due by Friday 4 May 2007. For further information (including to access a copy of the PPP), refer to ASIC's website. 

Government releases draft Corporations Amendment Regulations for public consultation
26 March 2007

The Government has today released draft Corporations Amendment Regulations for public consultation, to implement the first part of the Government's commitment to simplifying the corporate and financial services regulatory system. This follows on from the progress report issued by the Government on 14 August 2006 and addresses the proposed reforms identified in that report to be implemented by regulations.

The Government has said that the purpose of these regulations is to implement some of the more technical amendments to address issues that were identified during the Corporate and Financial Services Regulation Review which started in April 2006. In particular, they:

• will enable financial service providers to incorporate information by reference to other documents that have been given to the client, to produce more concise disclosure documents for consumers
• contain several other measures to streamline disclosure requirements which will reduce the regulatory burden on business.
  

Submissions on the draft regulations are due by 23 April 2007.

For more information (including to access the draft regulations and supporting materials), refer to the Treasury website.

(For background information on the Corporate and Financial Services Regulation Review, refer to our Breaking News for 7 April 2006, 14 August 2006 and 16 November 2006.)

ASIC extends disclosure relief for general insurance products 
21 March 2007

ASIC has today extended the current transitional class order relief from dollar disclosure requirements for general insurance products.

Class Order [CO 07/123] Variation of Class Order [CO 05/683] Dollar disclosure: further transitional relief extends current transitional relief for issuers of general insurance products from the dollar disclosure requirements in product disclosure statements from 1 April 2007 to 30 June 2008.

This extension follows on from feedback sought by the Government in the Corporate and Financial Services Regulation Review Consultation Paper issued on 7 April 2006 on whether specific dollar disclosure requirements should be prescribed for general insurance products. When the Government released a follow-up progress report on 14 August 2006, it announced that the proposal for specific dollar disclosure requirements for general insurance products would be implemented through regulation, which has yet to occur. In these circumstances and following consultation with industry, ASIC considers that requiring compliance with the dollar disclosure requirements at this time would impose an unreasonable burden on industry. ASIC has said that the current extension will allow time for the implementation of the Government's reform proposal.

For further details (including to access a copy of the class order), refer to ASIC's website. (For background details about the proposal, refer to our Breaking News for 7 April 2006 and 14 August 2006.)

ASIC releases enforceable undertakings guide 
13 March 2007

ASIC has today launched a new guide which clarifies its approach to accepting enforceable undertakings (EUs) under the Australian Securities and Investments Commission Act 2001 (Cth). The guide outlines:

• what an EU is;
• when ASIC will consider accepting an EU;
• what terms are or are not acceptable to ASIC; and
• what happens if an EU is not complied with.

ASIC plans to release example EU templates on its website in the near future as a supplement to the guide. These templates will be expanded and updated as necessary.

ASIC has said that while the policy underlying the new guide does not differ greatly from the previous guidelines contained in ASIC Practice Note 69, it aims to provide increased clarity and understanding of the processes ASIC undertakes in considering an EU.

For further details and to access a copy of the guide, refer to ASIC's website.

Treasurer announces reviews of sanctions in corporate law and infringement notice provisions 
5 March 2007

The Government today announced the release of discussion papers relating to review of the following areas of corporate regulation:

• sanctions contained in the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001. This review is being conducted as part of a broader strategy to reduce regulatory burden and achieve simpler and more effective regulation. The purpose of the review is to seek feedback from relevant parties about areas where they see complexity and inconsistency in the current system of sanctions in corporate law and to canvass possible options for reform.
• the use and effectiveness of infringement notices issued by ASIC for breaches of the continuous disclosure provisions in the Corporations Act 2001. This paper is also part of the Government's aim to improve the operation of corporate law and effective use of sanctions and asks specifically about experience with infringement notices, whether their issue has affected compliance generally and the usefulness and fairness of the mechanism.

Written comments on the issues raised in these papers need to be submitted to Treasury by 1 June 2007.

Treasurer announces Productivity Commission To Commence Annual Regulation Reviews 
28 February 2007

The Government today announced that it has asked the Productivity Commission to conduct ongoing annual reviews of the burdens on business arising current Government regulation. Following consultation with business, government agencies and community groups, the Commission will be required to report on those areas in which the regulatory burden on business should be removed or significantly reduced as a matter of priority and options for doing so.

Under the terms of reference, the Commission will be required to review all Australian Government regulation cyclically every five years. The cycle will commence with a review of regulatory burdens on businesses in Australia's primary sector, followed in subsequent years by reviews of the manufacturing sector and distributive trades, social and economic infrastructure services, business and consumer services and, in the fifth year, a review of economy-wide generic regulation, and regulation that has not been picked up earlier in the cycle. The Commission is required to report by the end of October 2007 in relation to the initial review, and the end of August each following year.

Today's announcement is part of the Australian Government's initiative to alleviate the burden on business from Australian Government regulation, which follows on from the appointment of the Banks Taskforce on Reducing Regulatory Burdens on Business (in October 2005) and its intention to introduce an annual red tape reduction agenda.

For further information regarding the Commission's terms of reference, refer to the Productivity Commission's website. (For background information on the Banks Taskforce report, refer to our Breaking News for 7 April 2006 and 15 August 2006.)

ASIC releases policy and associated class order relief on disclosure in reconstructions 
23 February 2007

ASIC has today released Policy Statement 188 Disclosure in reconstructions [PS 188], which deals with disclosure in reconstructions or capital reductions involving an issue of securities. The new policy confirms invitations to vote on an issue of securities constitute an 'offer' for the purposes of the prospectus provisions of the Corporations Act. This means a prospectus must accompany the notice of meeting.

PS 188 discusses prospectus relief for offers of securities under schemes of arrangement in some foreign jurisdictions, which is similar to the prospectus exemption for Australian schemes of arrangement under s708(17) of the Corporations Act. The policy also sets out the circumstances in which ASIC may grant case-by-case prospectus relief for other reconstructions and capital reductions.

PS 188 also provides the following relief:

• various technical relief for prospectuses that accompany a notice of meeting;
• relief from the unsolicited offers provisions for reconstructions (including foreign schemes in some jurisdictions); and
• product disclosure statement relief for Pt 5.1 schemes and foreign schemes in some jurisdictions.

ASIC has also granted licensing relief for schemes of arrangement in some foreign jurisdictions by adding foreign scheme documents to its list of exempt documents in Class Order CO 03/606 Financial product advice – exempt documents. Entities sending these documents to Australian residents do not need an Australian financial services licence for general product advice contained in them.

For further details (including to access the new policy statement and related class order relief), refer to the ASIC website.

ASIC provides example documents to reduce burden on business 
20 February 2007

ASIC has today issued an information sheet and practical example illustrating the type of information typically required in an application for relief. These documents, which form part of ASIC's 'Better Regulation Initiatives' announced in May 2006, supplement ASIC's Policy Statement 51 Applications for Relief, which was revised by ASIC in September 2006. ASIC has said that while their use is not mandatory, they are intended to provide practical guidance for applicants who request an exemption or modification under the Corporations Act.

For further details and to access the documents, refer to ASIC's website. (For information about the release of ASIC's Better Regulation Initiatives and the revised PS 51, refer to our Breaking News for 3 May 2006 and 14 September 2006, respectively.)

ASIC amends policy statement on time-sharing schemes 
8 February 2007

ASIC has today released an updated version of Policy Statement 160 Time-sharing schemes (PS 160), which has been revised to:

• reflect amendments to the law made by FSR; and
• take account of ASIC's regulatory experience in this area since the policy was first issued over six years ago.

In making changes to PS 160, ASIC also considered materials that formed part of a Parliamentary Joint Committee's recent consideration of the timeshare industry.

ASIC's key policy amendments in PS 160 focus on:

• allowing some time-sharing operators with ASIC relief to have internal dispute resolution arrangements that meet section 912A(2)(a) of the Corporations Act rather than external dispute resolution arrangements;
• ensuring the cooling-off period for purchases of time-sharing interests is consistent with the 14 day period set out in the Corporations Act;
• granting licensing relief for some time-sharing schemes for the resale of time-sharing interests; and
• removing the concept of an industry supervisory body from ASIC policy.

ASIC will also revise the relief instruments and pro formas issued under PS 160 to implement these policy changes.

ASIC will give time-sharing schemes, operators and promoters and member-controlled clubs until 30 September 2007 to comply with revised PS 160.

For more details, refer to the ASIC website. 

APRA and ASIC release working group status report 
5 February 2007

The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have today issued a status report outlining how they have worked, and continue to work, together to identify ways to reduce the regulatory burden on entities regulated by both of them. The report outlines a summary of their achievements during the last year, main proposals for law reform on which they have worked, and continue to work, with the Federal Treasury, and the next steps to be taken in relation to the Standard Business Reporting program on which they are working with Treasury.

To access a copy of the report, refer to the APRA website.

ASIC amends managed investments class order relief to permit discounted issues to associates 
19 January 2007

ASIC has today announced changes to Class Order [CO 05/26] Constitutional provisions about the consideration to acquire interests in response to feedback received following the class order's release in May 2005. The amending class order (CO 07/718) will allow the responsible entity of a listed managed investment scheme to issue discounted interests to an associate who is the underwriter of a placement or a rights issue of interests in the scheme in circumstances specified in the class order. It will also allow associates of the responsible entity to participate in placements where they acquire the interests in a non-beneficial capacity. (ASIC has also made some technical changes to the class order to improve its operation.)

For further details and to access copies of the class orders, refer to ASIC's website. (For further details regarding class order CO 05/26, refer to our Breaking News for 11 May 2005.)

ASIC issues latest report on relief applications from financial services providers 
18 January 2007

ASIC has today released a report, Overview of decisions on relief applications, outlining decisions on recent applications from the corporate finance, financial services and managed investment provisions of the Corporations Act 2001.

The report, which covers applications considered by ASIC between 1 July 2006 and 30 September 2006, provides an overview of the circumstances in which ASIC exercised, or refused to exercise, its discretionary powers to grant relief and also outlines limited instances where ASIC decided to take a no-action position in relation to non-compliance with provisions of the Corporations Act.

For further details, refer to the ASIC website. (For details of previous update reports issued by ASIC, refer to our Breaking News for 25 July 2006, which also contains references to earlier relief application reports issued by ASIC.) 

ASIC calls for submissions on Review of EFT Code of Conduct 
12 January 2007

ASIC has today released a consultation paper in relation to its review of the Electronic Funds Transfer Code of Conduct (EFT Code). (The EFT Code is a voluntary industry code of practice covering all forms of consumer electronic payments transactions which, among other things, complements and extends the protections of the financial services laws. ASIC is responsible for administration of the EFT Code and is also required to conduct periodic reviews of it, in consultation with other stakeholders.)

Key matters to be examined as part of the review include:

• liability issues arising from the growing sophistication of internet fraud;
• regulation of alternative payment facilities;
• coverage issues, including whether the protections of the EFT Code should extend to small business as well as consumer account holders;
• obligations relating to mistaken payments;
• administrative arrangements associated with the EFT Code, including compliance monitoring and ASIC's role as administrator; and
• other more specific issues raised by stakeholders in preliminary consultations.

The closing date for submissions on the consultation paper is 13 April 2007. A stakeholder working group, chaired by ASIC, will prepare a revised draft of the EFT Code based on the feedback, which will then be released for further public consultation.

For further details about the review process and to access a copy of the consultation paper and the current version of the EFT Code, refer to the ASIC website.   

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