NEED TO KNOW

On 5 June 2013, the Australian Securities and Investment Commission (ASIC) released an updated version of Regulatory Guide 134: Managed investments: Constitutions (RG 134) and issued the following new class orders containing the relief on which responsible entities can rely:

  • ASIC Class Order [CO 13/655] Provisions about the amount of consideration to acquire interests and withdrawal amounts not covered by [CO 05/26] ([CO 13/655]);
  • ASIC Class Order [CO 13/656] Equality of treatment impacting on the acquisition of interests ([CO 13/656]); and
  • ASIC Class Order [CO 13/657] Discretions affecting the amount of consideration to acquire interest and withdrawal amounts ([CO 13/657]). 

BACKGROUND

Sections 601GA and 601GB of the Corporations Act 2001 (Cth) (Corporations Act) require that a constitution of a registered managed investment scheme contain certain provisions.  RG 134, which was first published in 1998 and last revised in September 2000, sets out ASIC’s policy on the content requirements for a constitution of a registered managed investment scheme. 

On 18 September 2012, as part of ASIC’s review of its guidance in RG 134, ASIC released Consultation Paper 188: Managed Investments: Constitutions – Updates to RG 134 (CP 188).

CP 188 outlined various key proposals to update RG 134 to reflect ASIC’s views on how the content requirements set out in sections 601GA and 601GB of Corporations Act may be satisfied.  The proposals contained in CP 188 were generally welcomed by the industry due to the uncertainty surrounding the interpretation of those sections of the Corporations Act and the lack of guidance in RG 134.  There were also concerns that RG 134 referred to information that was out of date such as:

  • references to ASIC class orders that have been replaced; and
  • a complaints handling procedure that was different to the disputes resolution system required by section 912A(1)(g) of the Corporations Act for responsible entities operating schemes as Australian Financial Services licensees with retail clients.

Submissions on CP 188 closed on 13 November 2012 and ASIC refined the proposals in CP 188 in updating RG 134 based on the feedback in the submissions. 

SUMMARY

The key changes to RG 134 and the new ASIC Class Orders providing the relief on which responsible entities can rely are summarised below.

Click here to view table.

TIMING OF NEW REGIME

The revised guidance in RG 134 will apply for all schemes registered on or after 1 October 2013.

For any schemes registered before 1 October 2013, ASIC will not be requiring responsible entitles to amend their constitutions to comply with the updated RG 134 so long as the constitution for those existing schemes comply with the previous version of RG 134.