ASIC has today released a consultation paper seeking feedback on proposed changes to the relief for business introduction services.
The original Class Order, [CO 02/273] Business introduction and matching services, gave conditional relief from the fundraising, financial product disclosure, hawking and advertising requirements in the Corporations Act 2001 that would apply to a person making or calling attention to offers of securities or interests in a registered managed investment scheme through a business introduction service.
The relief provided under ASIC Corporations (Repeal and Transitional) Instrument 2017/186, which preserves the effect of CO 02/273, is due to expire on 1 April 2022.
Consultation Paper 357 Remaking relief for business introduction services: ASIC Instrument 2017/186 (CP 357) includes proposals to:
- extend the relief for interests in managed investment schemes to 1 April 2025
- amend the relief to update and clarify that the design and distribution obligations apply to business introduction services
- allow the relief for Ch 6D securities to expire, and
- require persons who rely or cease to rely on the relief from 1 April 2022 to provide notice to ASIC.
ASIC is proposing that the relief in relation to Ch 6D securities should sunset because of the overlap with the crowd-sourced funding (CSF) regime, which came into effect in September 2017 for eligible public companies and October 2018 for eligible proprietary companies. The CSF regime also facilitates flexible and low-cost access to capital for small to medium sized unlisted companies and provides adequate protections for retail investors.
ASIC is of the view that the relief for scheme interests continues to form a necessary and useful part of the legislative framework for managed investment schemes, particularly as these entities recover from the impact of the COVID-19 pandemic.
ASIC is seeking feedback on CP 357 from all interested stakeholders including industry and consumers. Submissions are due by 15 February 2022.