Our latest edition of Financial Services Thinking showcases important news from the corporate regulators.
We also share a ‘hot tip’ about a recent change to section 127 of the Corporations Act which relates to single office holder companies.
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ASIC has extended relief from certain dollar disclosures in PDSs for litigation funding schemes to 1 October 2026. Responsible entities of registered litigation schemes are not required to disclose certain sensitive information in dollar terms in the scheme’s PDS. The relief is in line with the current practice of Australian courts that class action claimants are permitted to not disclose certain information to the opposing party which could provide a tactical advantage to the opposing party and be adverse to the interests of scheme members.
ASIC has extended the existing relief for business introduction services until 1 October 2022. However, this is subject to a new requirement that persons who rely on the relief from 1 April 2022 must notify ASIC.
The original ASIC Class Order [CO 02/273] gave conditional relief from the fundraising, financial product disclosure, anti-hawking, and advertising requirements in the Corporations Act that would apply to a person making or calling attention to offers of securities or interests in a registered scheme through a business introduction service.
From 1 October 2022 the relief will be amended to—
Contact a member of our Funds Management team for help with understanding what these changes mean for you.
On 1 April 2022, the Corporations Amendment (Meeting and Documents) Act 2022 commenced making the following changes permanent:
Contact our team if you have any queries and read more about the background to these changes in our recent article.
On 30 March 2022, ASIC released the final mandatory requirements for the internal dispute resolution (IDR) data reporting framework. The new data reporting framework is intended to assist firms to identify and address systemic issues that arise from complaints.
Following the introduction of Regulatory Guide 271 Internal dispute resolution on 5 October 2021, financial firms have been required to record all complaints received and implement an effective system for recording information about complaints. A group of 11 large financial firms will implement the data reporting framework by 28 February 2023 ahead of the remaining 10,500 financial firms which are required to report by 31 August 2023. The requirements for firms to report IDR data are outlined in the IDR data reporting handbook.
ASIC will commence publishing the IDR data after 31 August 2022, with the first report covering all complaints received by financial firms between 1 January 2023 and 30 June 2023.
Reach out to our Funds Management lawyers if you need to understand more about your data reporting requirements.
The ASX has released a consultation paper seeking submissions on several proposed changes to the ASX Listing Rules.
The proposed changes include enhancements to the rules surrounding the following, amongst others—
Submissions are required in writing to the ASX by 27 May 2022. The ASX then intends to finalise the proposed amendments with ASIC to move forward with an expected commencement of 1 December 2022.
The Legal and Constitutional Affairs References Committee of the Senate has recently released its report into the adequacy of Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime. The Committee focused on emerging issues in the AML sector, the effectiveness of Australia’s regime, and the regulatory and commercial costs among others. The Committee released four recommendations:
The report is currently under consideration.
Partner Elliott Stumm and our Funds Management team focus on all facets of financial services compliance, including the AFS licensing and AML/CTF regimes, and can help with your queries.
A proprietary company only requires one office holder – that person has to be a director, but does not need to be appointed as the secretary. Even though this is the case, section 127 of the Corporations Act has always only contemplated the execution of a document by a 'single officer company' where the sole director is also the sole secretary of the company.
A welcome change to section 127 makes it clear a 'single officer company' can execute a document in accordance with that section if it is signed by the sole director – even if they are not appointed as the secretary. This change was made by the Corporations Amendment (Meeting and Documents) Act 2022.