23-072MR ASIC consults on ‘sunsetting’ class orders on changing responsible entities and equal treatment

The ASIC has released Consultation Paper 368 (CP 368), seeking feedback on proposals to remake two class orders that are set to expire on 1 October 2023. The class orders in question are Class Order [CO 13/519], which deals with changing the responsible entity of a listed scheme, and Class Order [CO 13/656], which provides an exemption for responsible entities and corporate directors from the duty to treat members equally in certain circumstances.
Under the Legislation Act 2003, all class orders have a sunset period of usually 10 years and are automatically repealed unless ASIC takes action to preserve them. ASIC may consult on remaking an instrument, even if only minor changes are proposed, if it is operating effectively and efficiently and still serves a regulatory purpose.
Class Order [CO 13/519] modifies the requirements for members to initiate a change of responsible entity of a listed scheme, clarifying that members must pass ordinary resolutions to remove and replace a responsible entity. Without this relief, the resolutions required to change the responsible entity are unclear.
Class Order [CO 13/656] provides an exemption for responsible entities and corporate directors from the duty to treat members equally in certain circumstances, as it may be appropriate to offer interests in a registered scheme or shares in a retail CCIV on the basis that some members are treated differently to others.
The ASIC considers the above class orders to be operating effectively and efficiently, and that they continue to form a necessary and useful part of the legislative framework. The fundamental policy principles that underpin the class orders have not changed. ASIC invites submissions from stakeholders on its proposals to remake the class orders in substantially the same form for a further 5 years. Submissions on CP 368 are due on 11 April 2023.