ASIC today released a consultation paper proposing to remake its class order on differential fees for registered managed investment schemes, which is currently due to expire (‘sunset’) on 1 April 2017.
ASIC proposes to remake the class order as, in its view, the class order is operating effectively and efficiently and continues to form a necessary and useful part of the legislative framework. The fundamental policy principles that underpin the class order have not changed.
The new instrument would continue the relief currently given by [CO 03/217] Differential fees without significant changes, so that the ongoing effect will be preserved without any disruption to the entities that rely on it. However ASIC is proposing:
- to extend switching facility relief to a managed investment scheme operated by a related body corporate of the responsible entity; and
- to remove the unnecessary relief extended where members transact electronically.
ASIC also seeks feedback on whether it should review its policy in relation to relief for individual fee negotiation. This relief is currently restricted to wholesale clients only.
Consultation Paper 258 Remaking ASIC class order on differential fees: [CO 03/217] (CP 258) outlines ASIC's rationale for proposing to remake the instrument and details of the policy review feedback questions.
The draft ASIC instrument, which reflects the amendments proposed in the consultation paper, is available on our website under CP 258.
Submissions on CP 258 are due by 12 July 2016.
Background
Under the Legislative Instruments Act 2003, all class orders are repealed automatically or ‘sunset’ after a specified period of time (mostly 10 years) unless we take action to exempt or preserve them. This ensures that legislative instruments like class orders are kept up to date and only remain in force while they are fit for purpose and relevant.
Where an instrument is considered to be operating effectively and efficiently and still serves a regulatory purpose we will consult on remaking it even if there will be no significant changes.