The Australian Securities & Investments Commission (ASIC) has released a consultation paper proposing to maintain certain class orders (now called ‘legislative instruments’). Legislative instruments usually apply to a certain class of persons and often modify or clarify the operation of a provision of an Act. The consultation paper released by ASIC proposes to maintain relief provided by certain class orders due to expire on 1 October 2016 or 1 April 2017. These class orders are relevant to insurance products and include:
- Class order (CO 04/1431) which essentially relieves a responsible person for a Product Disclosure Statement (PDS) for a general insurance or life insurance product from having to state amounts (e.g. costs, other amounts payable) in dollars where the PDS specifies any significant factors that will affect the cost of acquiring the financial product and explains the impact of these factors on the cost.
- Class order (CO 04/1433) which essentially relieves a providing entity from having to state amounts in dollars in relation to non-monetary benefits or interests in a Statement of Advice or PDS where certain information is provided (e.g. the nature and extent of the non-monetary benefit or interest).
ASIC considers that these class orders are operating effectively and efficiently and are a necessary and useful part of the legislative framework. ASIC proposes to remake both these class orders (along with one other) into a single new legislative instrument so that the relief they provide will continue beyond the expiration of the class orders. This means insurers will be able to continue to rely on the relief from stating various costs, fees, charges, expenses and interests as amounts in dollars in certain disclosure documents. Further information can be found here.
DLA Piper graduate Ann-Marie Coleman.