{"id":"F2022L01686","name":"ASIC Corporations (Employee Share Schemes) Instrument 2022/1021","slug":"asic-corporations-employee-share-schemes-instrument-2022-1021","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":441661,"registerId":"F2022L01686-fast-fetch-1775956917643","compilationNumber":null,"startDate":"2026-04-12","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"ASIC Corporations (Employee Share Schemes) Instrument 2022/1021","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\nmeta-generator: Aspose.Words for .NET 22.10.0\ntitle: 20221122 - ESS - revised instrument - draft\n---\n\n![Commonwealth Coat of Arms and ASIC logo](image.001.png)\n\nASIC Corporations (Employee Share Schemes) Instrument 2022/1021\n\nI, Claire LaBouchardiere, delegate of the Australian Securities and Investments Commission, make the following legislative instrument.\n\n \n\nDate 16 December 2022\n\n \n\n \n\nClaire LaBouchardiere\n\n \n\nContents\n\nPart 1—Preliminary \n\n1 Name of legislative instrument.....................................\n\n2 Commencement................................................\n\n3 Authority.....................................................\n\n4 Definitions....................................................\n\nPart 2—Declaration \n\n5 Salary sacrifice arrangements......................................\n\n6 Issue Cap.....................................................\n\n7 Financial information prepared under a foreign standard................\n\n8 Period of disclosure.............................................\n\n9 Regulatory relief for certain subsequent sale offers of ESS interests........\n\nPart 3—Repeal\n\n10 Repeal........................................................\n\nPart 1—Preliminary\n\n1 Name of legislative instrument\n\nThis is the ASIC Corporations (Employee Share Schemes) Instrument 2022/1021.\n\n2 Commencement\n\nThis instrument commences on the day after it is registered on the Federal Register of Legislation.\n\nNote: The register may be accessed at [www.legislation.gov.au](http://www.legislation.gov.au)\n\n3 Authority\n\nThis instrument is made under subsection 1100ZK(2) of the Corporations Act 2001.\n\n4 Definitions\n\nIn this instrument:\n\nAct means the Corporations Act 2001.\n\nPart 2—Declaration\n\n5 Salary sacrifice arrangements\n\nDivision 1A of Part 7.12 of the Act applies in relation to all persons as if section 1100T were omitted and substituted with:\n\n“1100T Meaning of ESS contribution plan\n\n(1) An ESS contribution plan, for an offer for the issue or sale of ESS interests, means a plan with terms that:\n\n(a) allow an ESS participant to make regular contributions for the purpose of acquiring the ESS interests under the offer; and\n\n(b) provide that, before the participant acquires ESS interests under the offer, the contributions are held on trust in an account with an Australian ADI that is kept solely for that purpose; and\n\nNote: The contributions of more than one participant may be held in the same account.\n\n(c) allow the participant to elect to discontinue the contributions at any time; and\n\n(d) provide that, if the participant so elects:\n\n(i) any contributions will cease, and any contributions made after the election will be repaid to the participant, within 45 days of the election; and\n\n(ii) the amount of the contributions standing, at the time when the election is made, to the credit of the account for the participant, and any interest on that amount, will be repaid to the participant within 45 days of the election; and\n\n(e) require the participant to agree in writing to the terms of the plan before participating in the plan; and\n\n(f) meet any requirements prescribed in the regulations for the purposes of this paragraph.\n\n(2) For the purposes of this section, contribution means payments, deductions or other contributions from one or more of the following:\n\n(a) gross (before tax) wages or salary;\n\n(b) net (after tax) wages or salary;\n\n(c) other monies.\n\n(3) Paragraphs (1)(b) and (d) do not apply to:\n\n(a) future gross (before tax) wages or salary; or\n\n(b) contributions from a loan covered by section 1100U.\n\n6 Issue Cap\n\nDivision 1A of Part 7.12 of the Act applies in relation to all persons as if paragraph 1100V(1)(b) were modified or varied as follows:\n\n(a) omit “could have been issued”, insert “may be issued”;\n\n(b) after “under offers”, insert “that were both received in this jurisdiction and”;\n\n(c) omit “the employee share scheme”, substitute “an employee share scheme”.\n\n7 Financial information prepared under a foreign standard\n\nDivision 1A of Part 7.12 of the Act applies in relation to all persons as if section 1100X were modified or varied as follows:\n\n(a) omit paragraph 1100X(2)(c), substitute:\n\n“(c) otherwise:\n\n(i) in any case—a balance sheet and profit and loss statement prepared in compliance with either the accounting standards or the international accounting standards (within the meaning of the Australian Securities and Investments Commission Act 2001); or\n\n(ii) if the body corporate is a foreign company, but is not a registered foreign company—a balance sheet and profit and loss statement (together foreign financial statements) together with any additional information required by subsection (2A) and referred to in subsection (2B) where the body corporate reasonably believes:\n\n(A) the foreign financial statements are prepared in accordance with a standard (foreign standard) that is not covered by subparagraph (2)(c)(i)”; and\n\n(B) the body corporate provides the foreign financial statements under the foreign standard in its place of origin or in its principal place of business.”;\n\n(b) after subsection 1100X(2), insert:\n\n“(2A) The additional information referred to in subparagraph 1100X(2)(c)(ii) is required unless the body corporate reasonably believes that the financial information has been prepared in accordance with the standards and generally accepted accounting principles applied in the United States of America.\n\n(2B) For the purposes of subparagraph 1100X(2)(c)(ii), the additional information is either:\n\n(a) a confirmation that there is no material difference between the foreign financial statements and the information that would otherwise be required under subparagraph 1100X(2)(c)(i); or\n\n(b) a reconciliation of the material differences between the foreign financial statements and the information that would otherwise be required under paragraph 1100X(2)(c)(i).”;\n\n(c) after paragraph 1100X(3)(a), insert:\n\n“(aa) if the ESS interest is not an ordinary share in a company—a copy of a valuation of the ESS interest prepared by an expert;”.\n\n8 Period of disclosure\n\nDivision 1A of Part 7.12 of the Act applies in relation to all persons as if paragraph 1100Z(1)(b) were modified or varied by omitting “after becoming aware” and substituting “if, during the application period for the offer mentioned in paragraph 1100W(2)(e), the offeror becomes aware”.\n\n9 Regulatory relief for certain subsequent sale offers of ESS interests\n\nDivision 1A of Part 7.12 of the Act applies in relation to all persons as if section 1100ZD of the Act were omitted and substituted with:\n\n“1100ZD Regulatory relief for certain subsequent sale offers of ESS interests\n\n(1) The provisions of Part 6D.2, 6D.3 and 7.9 do not apply in relation to an offer of an ESS interest in a body corporate or a registered scheme for sale if:\n\n(a) the body corporate or scheme operates an employee share scheme; and\n\n(b) the ESS interest is not in a class of financial products that is able to be traded on a financial market covered by section 1100K; and\n\n(c) the person making the offer reasonably believes that:\n\n(i) the person acquired the ESS interest:\n\n(A) in connection with the employee share scheme; or\n\n(B) from an ESS participant in the employee share scheme; and\n\n(ii) the person is making the offer only to persons who are ESS participants in the employee share scheme.\n\n(2) The provisions of Part 6D.2, 6D.3 and 7.9 do not apply in relation to an offer of an ESS interest in a body corporate or a registered scheme for sale if:\n\n(a) the body corporate or scheme operates an employee share scheme; and\n\n(b) the ESS interest is in a class of financial products that is able to be traded on a financial market covered by section 1100K; and\n\n(c) the ESS interest was issued in connection with the employee share scheme; and\n\n(d) if the ESS interest was issued to the trustee of a trust that meets the requirements in section 1100S—the body corporate or responsible entity that issued the ESS interest did not do so with the purpose of a person to whom the trustee transfers the ESS interest:\n\n(i) selling or transferring the ESS interest; or\n\n(ii) granting, issuing or transferring interests in, or options or warrants over, the ESS interest; and\n\n(e) if the ESS interest was not issued to the trustee of a trust that meets the requirements in section 1100S—the body corporate or responsible entity that issued the ESS interest did not do so with the purpose of the person to whom the ESS interest was issued:\n\n(i) selling or transferring the ESS interest; or\n\n(ii) granting, issuing or transferring interests in, or options or warrants over, the ESS interest.”.\n\nPart 3—Repeal\n\n10 Repeal\n\nThis instrument is repealed at the start of the day that is 5 years after the day it commences.\n","sortOrder":0}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":6,"scope_assessment":{"changed":false,"description":"The instrument remains tightly focused on its original purpose of providing regulatory relief and technical modifications for Employee Share Schemes under Division 1A of Part 7.12 of the Corporations Act. The provisions address specific operational issues (salary sacrifice mechanics, foreign accounting standards, resale exemptions) that fall within the expected scope of ESS regulation."},"complexity_factors":["Extensive modification of existing Corporations Act provisions by substitution and omission (sections 5, 6, 7, 8, 9)","Nested conditional logic in section 9 with multiple sub-paragraphs and alternative pathways (traded vs non-traded, trustee vs non-trustee)","Cross-references to multiple Parts of the Corporations Act (6D.2, 6D.3, 7.9, 7.12) and external standards (accounting standards, international accounting standards, US GAAP)","Technical financial terminology requiring understanding of 'ADI' (Authorized Deposit-taking Institution), 'foreign financial statements', 'reconciliation', and 'registered scheme'","Temporal limitation clause with automatic repeal mechanism (section 10)","Dual pathway provisions for foreign financial reporting (US standards vs other foreign standards) with differing disclosure obligations"],"plain_english_summary":"This instrument updates Australia’s Employee Share Scheme rules, clarifying how salary‑sacrifice contributions are held and refunded, fixing the cap wording on share offers received in Australia, easing disclosure for foreign companies that use home accounting standards, tightening the timing for notifying employees of offer changes, and creating limited resale relief for intra‑scheme or certain market trades. It affects employees, employers (including overseas issuers) and trustees, reducing compliance hurdles while improving protections for participants’ contributions."},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":true,"description":"The instrument expressly applies Division 1A of Part 7.12 'in relation to all persons' as if specified sections were omitted and substituted, thereby altering the statutory reach and conditions for ESS offers (notably contributions handling, issue caps, foreign financial information, disclosure timing and resale relief). It is temporary (5‑year repeal) and so changes both the immediate regulatory scope and the medium‑term legal landscape for employers, participants and offerors."},"complexity_factors":["Instrument repeatedly applies modifications to Division 1A of Part 7.12 'in relation to all persons', creating multiple substituted or varied statutory texts rather than standalone new provisions (see instrument generally).","Section 5 replaces the statutory meaning of 'ESS contribution plan' to require contributions held on trust in an Australian ADI account, participant opt‑out rights and 45‑day repayment timing — operational banking, payroll and trustee processes required.","Section 5(3) creates carve‑outs (future gross wages; loans under s1100U), adding conditional complexity to plan design and compliance.","Section 6 alters issue‑cap wording to change tense and jurisdictional receipt tests and swaps 'the employee share scheme' for 'an employee share scheme', affecting how caps are calculated across offers.","Section 7 permits foreign financial statements in place of Australian or IAS standards for foreign companies, but requires additional information (confirmation or reconciling reconciliation) unless the issuer reasonably believes U.S. GAAP applies; non‑ordinary ESS interests require an expert valuation — adds accounting judgment and documentation burdens.","Section 8 narrows the disclosure trigger timing to 'during the application period' rather than after 'becoming aware', changing when disclosure obligations arise.","Section 9 substitutes a complex set of exemptions from Parts 6D.2, 6D.3 and 7.9 for certain subsequent sale offers, with multiple factual tests (ESS participant status; market‑tradeable class; trustee issuance purpose tests) and reliance on 'reasonably believes' standards — creates retrospective and subjective compliance risks for offerors.","The instrument is temporary (repealed after 5 years, s10), which affects long‑term predictability and may require transitional planning.","Multiple provisions rely on standards of 'reasonable belief' and issuer determinations, increasing legal interpretive risk and potential for inconsistent application across firms."],"plain_english_summary":"This ASIC instrument modifies how employee share schemes (ESS) operate under the Corporations Act: it defines salary‑sacrifice contribution plans with funds held on trust at an Australian ADI, modifies issue caps and disclosure timing, accepts certain foreign financial statements subject to reconciliation, and grants limited relief for some ESS resale offers. It starts after registration and expires in five years.\n\nEmployers, offerors and participating employees bear new compliance steps — trust accounts, written consents, valuations and disclosure checks — while ASIC or offerors use \"reasonable belief\" tests to determine relief."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"}},"importantCases":[],"_links":{"self":"/api/acts/asic-corporations-employee-share-schemes-instrument-2022-1021","history":"/api/acts/asic-corporations-employee-share-schemes-instrument-2022-1021/history","analysis":"/api/acts/asic-corporations-employee-share-schemes-instrument-2022-1021/analysis","conflicts":"/api/acts/asic-corporations-employee-share-schemes-instrument-2022-1021/conflicts","importantCases":"/api/acts/asic-corporations-employee-share-schemes-instrument-2022-1021/important-cases","documents":"/api/acts/asic-corporations-employee-share-schemes-instrument-2022-1021/documents"}}