ASIC remakes ‘sunsetting’ class orders on trustee company common funds

Following public consultation, ASIC has finalised an Instrument to maintain relief concerning the entities to which client money can be deposited under s981B of the Corporations Act.

The Instrument replaces ASIC Class Order [CO 04/1063] Section 981B money in cash common funds due to sunset on 1 April 2017. ASIC made [CO 04/1063] to address doubt as to whether s981B of the Corporations Act and reg 7.8.1 allowed client money to be paid into a registered cash common fund operated by a trustee company.

ASIC Corporations (Client money- Cash common funds) Instrument 2016/671 enables client money received by an Australian financial service licensee to be deposited into a cash common fund, provided the fund is also a registered scheme. It is intended to provide flexibility to licensees in dealing with client money while retaining the consumer protections provided by s981B of the Corporations Act.

ASIC has also repealed Class Order [CO 00/199] Trustee companies’ common funds which modified provisions of Ch 5C of the Corporations Act.

Read more about sunsetting class orders here.

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