ASIC recently issued Class Order 09/552 (Class Order) providing relief to enable a responsible entity of a registered scheme to modify or repeal and replace the scheme's constitution without a special resolution where it is impossible or disproportionately burdensome to hold a meeting of members of the scheme.
The Class Order provides that a constitution of a registered scheme may be modified or repealed and replaced with a new constitution by the responsible entity if at least one of the following is satisfied:
- a meeting of members is unable to be held because a quorum is not capable of being satisfied due to the scheme having an insufficient number of members;
- every member of the scheme is not entitled to vote at a meeting of members because of section 253E (ie where the responsible entity or its associates are not permitted to vote on a resolution as a result of having an interest in the resolution other than as a member); or
- all interests in the scheme were issued:
- in situations that did not require a PDS;
- without disclosure to investors under Part 6D.2; and
- without a prospectus under Division 2 of Part 7.12 of the old Corporations Law.
The relief is conditional upon:
- the responsible entity providing the scheme's members, auditor and compliance plan auditor, all information that the responsible entity reasonably expects to be material to the decision of a member whether to consent to the amendment; and
- after receiving the above information, every member of the scheme provides their written consent to the modification or repeal and replacement.
Examples of situations where the relief might apply include:
- schemes with a limited number of seed investors who are wholesale clients; or
- infant schemes that require changes to their constitution before commencing operation, for example where the scheme has been registered but the scheme's final features have not been settled yet.