ASIC has today released Consultation Paper 384 Employee redundancy funds (CP 384) to seek feedback on the requirements that should apply to employee redundancy funds under the Corporations Act 2001 once the transitional relief ASIC has granted expires on 1 April 2026.
ASIC considers it is an appropriate time to re-assess the relief afforded to employee redundancy funds and the requirements suitable for fund operators given the:
- significant growth in funds under management
- range of activities now undertaken by fund operators beyond redundancy entitlements, and
- feedback received during prior consultation in 2024.
CP 384 seeks feedback on changes to the definition of 'employee redundancy funds' for the purposes of guidance and any relief we grant, and three options for the regulation of employee redundancy funds going forward, which are:
- allow the relief to expire and require full compliance with the Corporations Act
- grant relief from specific obligations in the Corporations Act, and
- remake the existing relief with additional conditions.
ASIC intends to announce its final position on its approach to regulation of these funds under the Corporations Act by late 2025.
Providing feedback
ASIC welcomes feedback from industry and interested stakeholders on the issues raised in CP 384, particularly protections under the Corporations Act that would assist employees and employers and the cost and impact of regulation on fund operators.
