Powered by MOMENTUM MEDIA
moneymanagement logo
 
 

ASIC mulls changes to ‘sunsetting’ class orders on managed funds

government-and-regulation/ASIC/AFSL/managed-funds/

6 March 2023
| By Charbel Kadib |
image
image image
expand image

The Australian Securities and Investments Commission (ASIC) has announced it is seeking feedback on proposals to “remake” class orders imposing financial resource requirements on the managed funds industry.   

Under the Corporations Act 2001, AFS licensees were required to hold “adequate resources”, including adequate financial resources. 

This included obligations to hold, at all times, minimum amounts of net tangible assets and (NTA) and cash or cash equivalents.

The class orders were subject to repeal, or ‘sunsetting’, following a set period (typically 10 years).

ASIC published a consultation paper detailing its proposals, which included changes to: 

  • financial requirements for custodial or depository service providers; and 
  • financial requirements for corporate directors of retail corporate collective investment vehicles.

“These class orders set out the financial resource requirements that responsible entities, IDPS operators, custodians and corporate directors must meet as an Australian financial services (AFS) licensee,” ASIC noted in a statement.

Under the Legislation Act 2003, two of the class orders were due to expire on 1 October 2023, with one sunsetting on 1 October 2024.

“ASIC considers that the class orders are operating effectively and efficiently and continue to form a necessary and useful part of the legislative framework,” the regulator added.

“The fundamental policy principles that underpin the class orders have not changed.”

Specifically, ASIC moved to issue a combined legislative instrument designed to prescribe the financial resource requirements for responsible entities, IDPS operators and corporate directors of retail CCIVs.

The regulator stressed, however, a separate legislative instrument would be retained to prescribe the financial resource requirements for custodians.

The new legislative instruments was expected to have an expiry date of 1 October 2028.

ASIC invited consultation on the proposed extension of the class orders, with submissions due on or before 31 March 2023. 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

1 week ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

2 weeks ago

So we are now underwriting criminal scams?...

6 months 2 weeks ago

After last month’s surprise hold, the Reserve Bank of Australia has announced its latest interest rate decision....

1 week 1 day ago

Libby Roy has been appointed as an independent non-executive director on the board of AZ NGA....

4 weeks 1 day ago

A professional year supervisor has been banned for five years after advice provided by his provisional relevant provider was deemed to be inappropriate, the first time th...

3 weeks ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
74.26 3 y p.a(%)
3