ASIC remakes 'sunsetting' class order about mortgage schemes

The Australian Securities and Investments Commission has remade Class Order Mortgage schemes – Chapter 5C and disclosure relief, which was due to expire on October 1.

The new instrument, ASIC Corporations (Mortgage Investment Schemes) Instrument 2017/857, continues to provide:

• scheme registration, licensing, disclosure, and hawking relief for certain small-scale schemes with no more than 20 members;
• scheme registration relief in relation to individual mortgages in a scheme; and
• withdrawal-related relief for individual mortgages in a scheme.

ASIC has temporarily extended the relief for small, industry-supervised schemes. The Legal Profession Uniform Law as it applies to the promotion and operation of managed investment schemes by law practices is due to come into force on 1 July 2018. 

The regulator said it will review the extension within 12 months of issue and assess whether it should be remade and, if so, whether it is operating effectively and efficiently.

ASIC has not continued the transitional 'run-out' relief as it was no longer necessary.

The relief was remade following public consultation in Consultation Paper 287 Remaking ASIC class order on mortgage schemes and proposed relief for multiple withdrawal periods (CP 287), issued in June 2017.

All respondents were supportive of the proposals in CP 287. ASIC has included material in the explanatory statement for the new instrument to provide clarity regarding:

• the status of the temporarily extended, industry-supervised scheme relief if section 258 of the Legal Profession Uniform Law comes into effect; and
• the scope of the withdrawal-related relief for individual mortgages in a scheme.

Under the Legislation Act 2003, all class orders are repealed automatically or 'sunset' after a period of time (mostly 10 years) unless we take action to preserve them. 

All government organisations are responsible for considering whether the legislative instruments they have made that are due to sunset will be relevant after their sunset date.