ASIC Amends COVID-19 Related Instruments

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ASIC has registered an amending instrument to specify an end date for the three instruments that were registered in response to the COVID-19 pandemic earlier this year. ASIC decided to amend the instruments to include an end date following feedback from the Senate Standing Committee for the Scrutiny of Delegated Legislation.

The ASIC Corporations (Amendment) Instrument 2020/565 amends the following instruments and specifies the end date being six (6) months after the instrument commenced:

InstrumentEnd date
ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/5472 October 2020
ASIC Corporations (Trading Suspensions Relief) Instrument 2020/2892 October 2020
ASIC Corporations (COVID-19 – Advice-related Relief) Instrument 2020/35515 October 2020

The ASIC Corporations (COVID-19 – Advice-related Relief) Instrument 2020/355 implemented three (3) temporary relief measures to facilitate retail clients receiving timely and affordable financial product advice as a result of the economic effects of the COVID-19 pandemic. The measures in this Instrument also reduce the burden on disclosure obligations for providing entities when giving financial product advice to their clients.

The ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/547 provides ASX-listed issuers of shares and interests under Purchase Plans relief from having to prepare a Product Disclosure Statement if certain conditions are met. The participation limit was also increased from $15,000 to $30,000 for each registered holder in any twelve (12) month period. This increase assists in the efficient functioning of capital markets.

The ASIC Corporations (Trading Suspensions Relief) Instrument 2020/289 temporarily increased total trading suspension from five (5) days to ten (10) days in relation to the ‘low doc’ capital raising regime and the Purchase Plan Instrument. The extended permissible suspension period is only available to listed entities in certain circumstances.

The COVID-19 related instruments were intended to be temporary relief measures due to the uncertain economic impacts of the pandemic. ASIC will continue to monitor the need for the temporary measures with regard to financial product advice and capital raisings. Sufficient notice will be provided should ASIC decide to repeal the instruments earlier than specified or to extend the relief. ASIC will consider the following when determining the appropriateness of the instrument:

Financial Product Advice:

  • whether adverse economic effects of COVID-19 on consumers has eased;
  • whether the Government’s early access to superannuation measures have concluded; and
  • whether there has been a reduction in the demand for urgent advice from consumers in relation to COVID-19.

Capital Raisings:

  • the volume of capital raising activities that were conducted whilst the legislative instrument was in force;
  • the length of the suspensions required in order to execute a capital raising in the current environment;
  • the level of market volatility; and
  • the extent and impact of both state and federal Government responses in relation to the pandemic.

If you would like more information on how this amendment will affect you, please contact us.

About The Author

Olivia Hua

Olivia assists with AFSL and ACL applications and the development and implementation of compliance policy documents. Olivia also supports senior staff with ongoing compliance and legal requirements of clients, the preparation of various legal agreements, and conducting legal research.

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