ASIC Class Order [CO 14/1000]

This instrument turns on a small set of tightly defined concepts. The definitions and Table A determine which offers, products and persons are within scope.

• Employee incentive scheme: defined as an arrangement under which eligible products of a listed body are offered to eligible participants (para 29). The instrument covers offers and related conduct that are made in reliance on it (para 29(ca)).
• Eligible financial market: limited to the main board of the markets listed in column 1 of Table A. Column 1 expressly lists ASX and an approved foreign market (Table A and para 29). The text directs that, unless a contrary intention appears, the eligible financial market is limited to the main board of that market.
• Eligible products: enumerated in column 2 of Table A. They include fully paid shares in classes that are able to be traded on an eligible financial market, beneficial interests in such shares, fully paid stapled securities traded on ASX, interests in registered schemes traded on ASX, units in those products, options to acquire those products by issue or transfer, and incentive rights granted in relation to those products (Table A, column 2; para 29 definitions of overlying and underlying eligible products).
• Eligible participants: listed in column 3 of Table A and include full-time and part-time employees (including executive directors), non-executive directors, contractors, casual employees (as defined in para 29), and prospective participants (Table A; para 29 definitions). Specific definitions for contractor and casual employee set thresholds based on expected hours equivalent to 40% or more of comparable full-time work (para 29).
• Offer: the instrument adopts the Corporations Act meanings as affected by sections 700, 702 and 1010C and lists that it includes offers to issue, transfer, arrange issue/transfer, and related acts; it explicitly excludes an issue, grant or transfer of an underlying eligible product made by reason of the exercise or vesting of an overlying eligible product when a prior offer to issue or transfer the overlying product had been made (para 29).
• Offer document: a mandatory wrapper for offers under the instrument. The instrument specifies required content (para 18 and the detailed offer document definition in para 29): prominent statements about advice limitations and recommendation to seek licensed advice, the scheme terms (or a summary with promise to provide terms on request), risk information, trustee deed or summary where participants may have rights to exercise voting or receive income, contribution plan or loan terms if applicable, acquisition price information, and an explanation how to ascertain market price of the underlying eligible products at any time.
• Overlying vs underlying eligible products: the instrument distinguishes overlying eligible products (options, incentive rights) and underlying eligible products (shares, units etc). Special rules apply where overlying products are not tradable on an eligible market (para 18A).
• Limits and caps: two major caps operate. Paragraph 19 sets a 5% issue limit for underlying eligible products in a class of issued capital, measured by reference to the time of making the offer and counting issues under the instrument and relevant previous class orders in the preceding 3 years. Paragraph 20(e) limits trustee holdings (alone or with others) to not more than 5% of voting shares or interests in the listed body, calculated by reference to all employee incentive schemes or like schemes covered by this instrument or similar instruments.
• Conditions to replace statutory disclosure and licensing: the instrument replaces certain Corporations Act obligations (for example Part 6D.2, 6D.3, Part 7.9, s911A(1), s1018A, s992A, s601ED, s1012A) with its conditions when the conditions are met (paras 5-15, and definitions in para 29). The enabling subsections under which ASIC makes the instrument are listed at the front (s283GA(1), s601QA(1), s741(1), s926A(2), s992B(1) and s1020F(1) and para 911A(2)(l) of the Act).
• Transitional and individual relief: transitional paragraphs preserve and migrate relief previously given under ASIC Class Order [CO 03/184] and related individual instruments (paras 25-28). ASIC may also give relief via individual instruments on terms similar to the class order that are not legislative instruments; paras 28A-28E treat those instruments as delivering similar relief and clarify interpretation.

These concepts work together: the exemption removes specified statutory obligations for qualifying offers, but conditions (notice, offer document, caps, trustee/contribution/loan constraints) are the mechanism ASIC uses to replace some of the protections that full compliance with the Act would otherwise provide. The Table A and interpretative provisions determine the eligibility boundaries for markets, products and participants.

The instrument creates duties and relief that primarily affect three categories of actors, with secondary effects on others.

• Listed bodies and associated bodies corporate: they are the principal decision-makers who may make offers under employee incentive schemes and choose to rely on the class order relief (paras 5, 11-12, 16). Where a listed body operates a scheme that relies on the instrument, the listed body must give ASIC a notice of reliance (paras 16-17), prepare and make available an offer document (para 18 and para 29), and ensure compliance with the 5% issue limit (para 19), trust rules (para 20), contribution plan rules (para 21), and loan rules (para 22). If the listed body is a registered scheme, the relief is taken to be conferred on the responsible entity and requirements are treated as imposed on the responsible entity (para 29(b)(i)-(iii)).
• Trustees that hold or will hold underlying eligible products in connection with employee incentive schemes: trustees that make offers of units in underlying eligible products are similarly relieved from Parts 6D.2, 6D.3 and Part 7.9 if the scheme is covered and timing conditions met (para 6). Trustees are directly subject to trustee-specific conditions: limiting activities to employee incentive schemes (para 20(a)), maintaining written records including sub-registers for allocated holdings (para 20(b)), not levying fees payable directly by eligible participants or out of trust assets except reasonable disbursements (para 20(c)), and restrictions on exercising voting rights where the trustee is the listed body or an associate (para 20(d)). Trustees are also subject to the 5% holding cap across schemes (para 20(e)). Paragraphs 28A-28D extend similar relief and obligations to trustees under individual instruments.
• Eligible participants: employees, non-executive directors, contractors, casual employees and prospective participants are the class of persons to whom offers may be made under the relief (Table A, column 3; para 29 definitions). The instrument sets protections directed at eligible participants: content of the offer document (para 18 and para 29 offer document), rights over voting and income if underlying products are held on an allocated basis (para 21(d)), the right to discontinue participation in contribution plans and obtain prompt repayment of unused contributions (para 21(e)-(f)), and limits on loan terms (para 22).
• Financial advisers and licensees: a financial services licensee or authorised representative who gives product advice to an eligible participant recommending acquisition of an eligible product in connection with a covered scheme is exempted from the content obligations of s1012A if they have no reason to believe the scheme is not covered (para 9). That creates a compliance/consideration obligation on advisers to form a view about coverage.
• Financial services intermediaries and counterparties: where the listed body deals through a licensee or through a person authorised in another jurisdiction, dealing relief applies for acquisition/disposal via such intermediaries (para 11(b)(i)-(ii)). Custodians and depositaries providing services in good faith and with sufficient resources are covered by relief from s911A(1) (para 12).
• ASIC: ASIC is the regulator that determines who may rely on the instrument in practice by receiving notices of reliance (paras 16-17), requesting documents (para 23), excluding persons from reliance (para 24), and issuing individual instruments of relief on similar terms where appropriate (paras 28A-28E). The instrument is made under specific enabling provisions of the Corporations Act (front matter).

Who pays and who decides. Listed bodies (and associated bodies) incur the administrative and compliance costs required to comply with the instrument’s conditions: preparing offer documents, tracking the 5% issue and trustee caps across schemes and time, establishing ADI accounts for contribution plan monies (para 21(c)), maintaining records, setting loan terms compliant with para 22, and responding to ASIC document requests (para 23). Trustees must run the administrative and recordkeeping functions required by para 20 and may face governance constraints (for example, limiting voting rights where the trustee is the listed body). Participants bear the practical consequence of relaxed statutory disclosure, though the instrument tries to create substitute protections via prescribed offer document contents and contractual rights under contribution and trustee arrangements (paras 18, 21(d)-(f)).

The relief has distributional consequences: it reduces statutory compliance costs for issuers and trustees that satisfy the conditions while shifting some informational and monitoring responsibilities to participants and advisers (para 9 and para 29 offer document). ASIC retains supervisory discretion through notices, document requests and exclusions (paras 16-17, 23-24).

The instrument substitutes a set of specific duties and rights in return for the exemptions it grants. Below are the principal obligations that a body, trustee or adviser must observe to rely on the relief, and the principal rights the instrument preserves for eligible participants.

Principal duties placed on listed bodies and associated bodies corporate

• Give ASIC a notice of reliance for each particular employee incentive scheme before relying on the instrument (paras 16-17). The notice can be given any time before first reliance but must in any event be given no later than one month after first reliance (para 17). Bodies relying only on transitional paragraphs 25-28 need not give a notice of reliance (para 16 note).
• Ensure offers are made in, or accompanied by, an offer document that meets the content requirements listed in the offer document definition (para 18 and para 29). The required contents include: prominent statements about the limited nature of advice and recommendation to obtain licensed advice (para 29(a)); terms of the scheme or a summary with an unconditional promise to provide terms on request (para 29(b)); general risk information (para 29(c)); trust deed copy or summary if participants will have rights in trustee-held underlying products (para 29(d)); contribution plan or loan terms where applicable (para 29(e)-(f)); acquisition price disclosure or working formula (para 29(g)); and information on how to ascertain market price (para 29(h)).
• Have reasonable grounds at the time of making an offer to believe that aggregate underlying eligible products issued or that may be issued under specified circumstances will not exceed 5% of the class on issue (para 19). The 5% calculation counts underlying eligible products issued under the offer, and those issued in the previous 3 years under schemes covered by this instrument or specified prior class orders (para 19(b)(i)-(ii)).
• Where a trustee holds or will hold underlying eligible products, ensure trustee activities are limited to employee incentive schemes of the listed body (para 20(a)), maintain written records and sub-registers for allocated holdings (para 20(b)), not levy fees payable directly by participants or out of trust assets except reasonable disbursements (para 20(c)), and ensure trustee holdings do not exceed 5% of voting shares/interests across schemes (para 20(e)). If the trustee is the listed body or an associate, the trustee must not exercise voting rights attaching to underlying eligible products it holds on trust at its own discretion (para 20(d)).
• For contribution plans, ensure participants agree in writing to participation (para 21(a)); do not allow participation to acquire non-tradable overlying eligible products (para 21(b)); hold contributions (other than certain specified forms) in an account with an Australian ADI used solely for employee incentive schemes of the body or associated bodies, whether the account is in Australia or elsewhere (para 21(c)); ensure participants have rights to exercise voting and receive income deriving from underlying products acquired on an allocated basis (para 21(d)); allow participants to discontinue participation with effect within 45 days (para 21(e)) and repay unused contributions (para 21(f)).
• For loans made by the listed body or an associated body corporate to acquire eligible products, ensure the loan is not for the acquisition of options or incentive rights (para 22(a)), that no fees or interest are payable (para 22(b)(i)), and that either the lender has no recourse against the participant in relation to loan repayment, or recourse is limited to forfeiture of the eligible products (para 22(b)(ii)(A)-(B)).
• Make available to ASIC, on request and in accordance with the request, the offer document and accompanying information or documents given to eligible participants (para 23).

Duties applying to trustees and custodians

• Trustees must keep the specified administrative records, limit activities to employee schemes of the listed body, and comply with the trustee fee, voting and holding cap rules (para 20).
• Custodial or depository services provided in connection with a covered scheme are relieved from s911A(1) provided the body performs duties in good faith and has sufficient resources to perform those duties (para 12).

Adviser obligations and rights

• Financial services licensees and authorised representatives who give financial product advice to eligible participants recommending acquisition of eligible products in connection with a covered scheme are exempt from the s1012A disclosure obligations if the adviser has no reason to believe the scheme is not covered (para 9). The adviser therefore has a positive obligation to form and maintain the view that the scheme is within the class order coverage.

Rights preserved for eligible participants

• Access to a detailed offer document and, on request, to the full scheme terms, trust deed and contribution plan documents at no charge and within a reasonable time (para 29(b), (d), (e)).
• Where underlying eligible products are held for a specified eligible participant on an allocated basis, the participant has the right to exercise (or direct the trustee to exercise) voting rights and to receive income (dividends/distributions), subject to terms that may channel dividends to repay loans in connection with the scheme (para 21(d) and note).
• For contribution plans, the right to discontinue participation by notice with effect within 45 days and the right to have unused contributions repaid promptly (para 21(e)-(f)).
• For offers of overlying eligible products that are not tradable on an eligible financial market, the offer must be for nominal monetary consideration (para 18A), limiting payments required for non-tradable overlying products.

Conditions on the relief

• ASIC may exclude persons from relying on the instrument and may request documents (paras 23-24). The instrument does not permit reliance by persons to whom ASIC has given a written notice of exclusion (para 24).
• The instrument only relieves from specific Act obligations. It does not abolish other legal duties that may apply, nor does it itself create civil or criminal penalties; rather it provides conditional relief from specified statutory obligations where the instrument’s conditions are complied with (see front matter and paras 5-15 which specify where the class order replaces Act obligations).

The instrument therefore creates a set of operational duties that substitute for formal prospectus, disclosure and licensing obligations in carefully confined circumstances, and preserves participant rights through mandated documentation, trustee and contribution protections and a set of caps to limit dilution and trustee concentration.

The class order is an instrument that grants exemptions and imposes conditions; it does not itself set out bespoke penalty provisions. The enforcement-related mechanisms contained in the instrument are administrative and supervisory rather than punitive within the text of the instrument.

ASIC’s supervisory powers under the instrument

• Power to request documents: a body relying on the instrument must, if requested by ASIC and in accordance with the request, make available to ASIC the offer document and all accompanying information or documents given to eligible participants in connection with the offer (para 23). This is an express compliance and oversight mechanism that permits ASIC to verify that the conditions of the relief are being met.
• Power to exclude: the instrument does not apply to any person to whom ASIC has given, and not withdrawn, a written notice specifying that the person is excluded from relying on the instrument (para 24). That is an express power for ASIC to withdraw the ability to claim the exemptions where ASIC considers exclusion appropriate in a given case, thereby exposing that person thereafter to the full force of the Corporations Act requirements.
• Notices of reliance: the requirement that bodies give ASIC a notice of reliance (paras 16-17) creates an administrative trail; failure to give the notice in the required timeframe would place reliance outside the permitted conditional exemption (para 17 sets the outer time limit of one month after first reliance).
• Transitional and individual relief clauses: ASIC retains discretion to issue individual instruments of relief on terms similar to the class order and to treat existing instruments as migrated into the class order framework (paras 25-28 and 28A-28E). That discretion is a further supervisory lever.

What the instrument itself does not do, as expressed in the text

• The instrument does not itself create statutory penalties, fines or criminal offences. It contains exemptions and conditions, and sets supervisory arrangements, but does not list remedial sanctions or penalty amounts within its own text.
• The instrument does not remove ASIC’s powers under the Corporations Act generally to take enforcement action where the Act’s provisions are contravened, where exemptions do not apply or where conditions are not met. The instrument is made under specific enabling provisions of the Act (front matter), and the normal enforcement regime under the Act remains available to ASIC where relevant. The instrument’s paras 23-24 make explicit the administrative enforcement levers available to ASIC in the context of reliance on the class order.

Implications for enforcement practice

• Where a body or trustee purports to rely on the instrument but fails to comply with its conditions (for example, fails to prepare an offer document in the prescribed form, exceeds the 5% cap, or does not keep required trustee records), ASIC has the administrative pathway to require production of documents (para 23) and to exclude the person from the instrument (para 24). Exclusion would mean the person could not rely on the exemptions and would therefore have to comply with the Act’s full disclosure and licensing requirements going forward.
• The instrument thereby replaces some immediate statutory obligations with conditional administrative obligations that ASIC can monitor and enforce through information requests and exclusion. Bodies and trustees relying on the instrument should expect scrutiny and the possibility of being removed from the class order’s coverage where conditions are not satisfied or where ASIC considers exclusion appropriate.

All enforcement outcomes beyond the administrative tools in paras 23-24 are governed by the Corporations Act itself and ASIC’s wider enforcement powers; this class order describes the administrative check-and-balance mechanisms specifically attached to the relief it provides.

The class order operates as a conditional exemption from particular provisions of the Corporations Act 2001 and interacts with existing statutory definitions, prior ASIC class orders and the regulatory framework for financial services in Australia.

Interaction with the Corporations Act

• Enabling provisions and scope: ASIC makes the instrument under several Corporations Act powers, principally subsections 283GA(1), 601QA(1), 741(1), 926A(2), 992B(1) and 1020F(1) and paragraph 911A(2)(l) (front matter). Those are the statutory grants of power that permit ASIC to make class orders of this type.
• Exemptions from specific Act provisions: the instrument grants conditional relief from Parts 6D.2 and 6D.3, and Part 7.9 (paras 5-6), which cover certain disclosure and fundraising requirements; it relieves from s1012A disclosure obligations for advisers in specified circumstances (para 9); from s911A(1) for general advice and certain dealing activities by a listed body or associated body corporate (paras 10-12); from the hawking prohibition in s992A (para 13); from s1018A in relation to advertising (para 14); and from s601ED where a managed investment scheme arises only incidentally from a contribution plan (para 15).
• Definitions and statutory cross-references: the instrument relies on and modifies operation of certain Acts sections by reference. For example, the definition of "able to be traded" uses s761A of the Act (para 29(a)), the definition of offer refers to sections 700, 702 and 1010C of the Act (para 29), and "related body corporate" takes its meaning from s50 (para 29). The instrument further treats registered schemes and responsible entities in its application (para 29(b)).

Interaction with prior ASIC class orders and transitional instruments

• Transitional continuity: paragraphs 25-28 explicitly migrate and preserve exemptions and conditions that were given under ASIC Class Order [CO 03/184] and similar individual instruments, making those exemptions and conditions part of this class order from the date of revocation of the prior class order (paras 25-28). Paragraph 27 specifically continues declarations made under CO 04/671 as they applied to specified circumstances. The Table of Amendments records the amendment history and instruments that affected the class order (endnotes).
• Individual relief instruments: ASIC’s ability to give similar relief via individual instruments that are not legislative instruments is expressly preserved (paras 28A-28D). Paragraph 28E clarifies that an individual relief instrument is not dissimilar merely because it applies to different bodies, markets, participants or products from those in the class order.

Interaction with market and financial services regulation

• Eligible financial markets: the instrument limits eligible financial markets to ASX or an approved foreign market as defined in s9 of the Act (Table A and para 29). This ties the scope of relief to established trading venues.
• Dealing through licensed intermediaries or foreign-authorised persons: dealing relief in para 11(b) contemplates acquisitions or disposals carried out through an Australian financial services licensee or through a person licensed or authorised in another jurisdiction, which interacts with licensing regimes domestically and abroad.
• Managed investment scheme regulation: where a contribution plan gives rise to a managed investment scheme only incidentally, the instrument provides relief from s601ED (para 15), but otherwise, managed investment scheme rules continue to apply outside that narrow relief.
• Superannuation and SMSFs: paragraph 29(c)(iii) treats offers renounced in favour of a corporate trustee of a self-managed superannuation fund where the eligible participant is a director of the trustee as still an offer to the eligible participant. That tie-in identifies an interaction with superannuation law and the treatment of corporate trustees for SMSFs.

Practical cross-checks and compliance interfaces

• Offer definition and exercise/vesting exception: the instrument’s offer definition references specific Act provisions (para 29) and excludes underlying issues made by exercise or vesting where a prior offer of the overlying product had been made. Practitioners need to map grant, exercise, vesting and issue events against the Act’s offer definitions to determine when relief applies.
• Counting for caps and time-limits: the 5% issue cap (para 19) requires counting previous issues over a rolling three-year period and must include issues under this instrument and historically under specified class orders. This necessitates coordination with corporate securities registers and historical records of prior offers under prior class orders (paras 19 and 25-28).
• Corporate governance and trustee rules: where the trustee is the listed body or associate the instrument restrains discretionary exercise of voting rights (para 20(d)), which may intersect with directors’ duties, related-party transaction rules and the body’s constitution. The instrument treats registered schemes as if the responsible entity stands in the listed body’s place for some obligations (para 29(b)).

In sum, the instrument does not replace or displace the broader Corporations Act regime; rather, it provides conditional exemptions from particular requirements and ties those exemptions to specific substitute duties, documentation, caps and supervisory mechanisms that sit alongside existing law. Practitioners must therefore map scheme features to both the class order conditions and to the remaining, unreplaced provisions of the Act and other laws.

The compilation provided includes the instrument as in force on 20 December 2022 and records its original registration and subsequent amending instruments in the Table of Instruments, plus a Table of Amendments which identifies affected provisions. The key dates and changes recorded in the source are as follows.

• Original class order: ASIC Class Order [CO 14/1000] was registered 30 October 2014 and commenced on 30 October 2015 (Table of Instruments).
• Amending instruments and commencement dates recorded in the compilation:
  • Instrument 2015/943, registered 22 October 2015, commenced 11 November 2015 (Table of Instruments).
  • Instrument 2017/6, registered 4 September 2017, commenced 5 September 2017 (Table of Instruments).
  • Instrument 2017/1049, registered 5 December 2017, commenced 6 December 2017 (Table of Instruments).
  • Instrument 2021/799, registered 22 September 2021, commenced 5 October 2021 (Table of Instruments).
  • Instrument 2022/1022, registered 19 December 2022, commenced 20 December 2022 (Table of Instruments).
• The Table of Amendments itemises which paragraphs were added, amended or repealed by various instruments. Notable entries in the Table of Amendments include:
  • Para 3 repealed (ad. s48D LA) and Para 4 amended by 2015/943.
  • Paras 5 and 6 were amended by 2015/943 and Para 5 further amended by 2022/1022.
  • Para 6A was added by 2022/1022.
  • Paras 9-12, 15-19, 21 and various subparagraphs were amended by instrument 2015/943.
  • Para 13 amended by 2021/799.
  • Paragraphs 28A-28E were added by instrument 2017/1049.
  • Subparagraph 29(a) modified by 2015/943 and Table A, column 1 (eligible financial market) amended by 2017/6.
• Several amendments inserted new operational requirements or clarifications, for example:
  • The 5% issue limit in paragraph 19 and the related subparagraphs were amended (instrument 2015/943) to frame the dilution cap and to reference counts of previous offers under CO 03/184 or similar individual instruments.
  • The transitional migration of the earlier class order CO 03/184’s exemptions and conditions into this instrument was carried out via paragraphs 25-28, modified by 2015/943 (paras 25-28 recorded in Table of Amendments).
  • The addition of paragraph 18A (overlying eligible products offered for no more than nominal monetary consideration where not tradable) appears as added in 2015/943 (Table of Amendments).
  • The continuing-offer clarification in paragraph 6A was added by the 2022/1022 amendment.
• The compilation includes endnotes indicating the instrument number, dates of FRL registration and commencements for each amending instrument (Table of Instruments and endnote text). The Table of Amendments provides a granular map of which parts of the instrument were subject to amendment and by which instrument.

How to use this information in practice

• Any reading of the instrument must account for the amendments recorded. For example, the 2022 amendment (2022/1022) added paragraph 6A, which alters how continuing offers are dated for the purposes of the time-limited relief set out in paras 5-6. The 2017 and 2015 amendments adjusted substantive conditions (notice requirements, offer document content, caps and definitions), and instrument 2021/799 amended the hawking relief in para 13.
• Transitional paragraphs 25-28 mean that relief previously given under ASIC Class Order [CO 03/184] and individual instruments made on similar terms continues under this instrument, but practitioners must be aware which prior schemes and conduct are covered via those transitional clauses.
• The Table of Amendments identifies where earlier versions of the class order were replaced or where new paragraphs were added; when assessing historic offers or operational decisions, compare the date of the offer against the instrument’s versions as amended (the compilation lists exact commencement dates).

The compilation’s endnotes and Tables are the authoritative record of the instrument’s amendment history up to 20 December 2022 and should be the primary reference for determining the instrument’s operative content at any particular date within that range.

The class order text provided does not record any litigation history. The compilation contains the instrument as in force on 20 December 2022, lists amending instruments and amendment history, but the document itself does not cite or summarise any judicial or administrative decisions concerning the class order.

What the absence of recorded litigation in this compilation means for practitioners seeking precedent

• The instrument is an administrative regulatory instrument made by ASIC under specified provisions of the Corporations Act. The compilation includes amendment and registration history but does not include any notes of judicial interpretation or litigation arising from the class order’s operation.
• For issues of legal interpretation, reliance or enforcement where factual disputes or questions of statutory construction arise, practitioners will need to search case law databases and ASIC enforcement summaries outside of this instrument to discover any decisions that interpret or apply the class order. The instrument itself contains no case law citations or reported litigation summaries.
• The instrument does include mechanisms that could be the subject of dispute in future litigation or administrative review: for example, ASIC’s exercise of its exclusion power under paragraph 24; ASIC’s requests for documents under paragraph 23; or disputes about whether a given scheme satisfies the class order’s definitions or meets the 5% issue limit or trustee holding cap (paras 16-20). None of those enforcement outcomes or threshold definitions are adjudicated within the text provided.
• Given the administrative nature of the instrument and its conditional relief, factual determinations (e.g. whether a person has "no reason to believe" the scheme is not covered for the purposes of adviser relief in para 9, or whether offers and issues should be counted for the 5% cap under para 19) are likely to involve both evidentiary and legal questions. The instrument does not supply guidance on the standard of proof or decision criteria beyond the textual conditions; litigation or tribunal decisions would be the place to find how courts or tribunals have treated those questions, but none are recorded here.

In short, the provided compilation reports no litigation history; practitioners should look beyond the instrument for any judicial or tribunal decisions that address interpretation, enforcement or disputes arising from reliance on ASIC Class Order [CO 14/1000].

The instrument contains a number of practical traps for the unwary. These are concrete issues that can affect eligibility for relief, timing of offers, calculation of caps and administrative compliance.

Timing constraints and continuing offers

• Time-limited relief: the relief in paras 5 and 6 is constrained by dates stated in the instrument , offers must be made before 1 March 2023 and be only capable of acceptance until 1 April 2024 (paras 5-6). A reliance decision contingent on these dates requires precise calendar management. Paragraph 6A clarifies that for continuing offers the "date the offer is made" is the date the offer was first made; businesses that operate ongoing schemes must therefore note the initial offer date to determine eligibility (para 6A).
• Subsequent sale offers: paras 7-8 allow sale offers within 12 months after issue to be covered, but only where the product was issued to eligible participants under the scheme or to a trustee in connection with the scheme, and provided the seller has no reason to believe the scheme is not covered. Sellers must document their basis for believing the scheme is covered to rely on the exemption (paras 7-8).

Five per cent issue limit and counting

• Aggregation across schemes and historical instruments: para 19 requires bodies to have reasonable grounds to believe that aggregate underlying eligible products issued under the circumstances listed will not exceed 5% of the class on issue at the time of making the offer. Importantly, the count includes underlying eligible products issued in the previous 3 years under schemes covered by this instrument or under ASIC Class Order [CO 03/184] or similar individual instruments (para 19(b)). Practitioners must reconcile historical issuances under prior class orders and individual relief instruments when performing the calculation. Recordkeeping and historical data accuracy are essential.
• Reasonable grounds test: the instrument requires "reasonable grounds to believe" the 5% test is satisfied (para 19). That phrase is potentially fact-sensitive; bodies should keep contemporaneous records and calculations supporting the "reasonable grounds" assessment.

Trustee record-keeping, fees, voting and holdings

• Trustee fee prohibition: trustees must not levy fees or charges for administering the trust that are payable directly by eligible participants or out of trust assets, except for reasonable disbursements such as brokerage and tax (para 20(c)). Trustees must ensure fee arrangements remain within that scope , design of trustee remuneration and cost recovery must therefore be carefully documented.
• Voting rights constraint where trustee is listed body or associate: if the trustee is the listed body or an associate, the trustee must not, at its own discretion, exercise voting rights attaching to any underlying eligible products held on trust (para 20(d)). That condition may require corporate governance adjustments and controls to prevent the exercise of votes by the trustee.
• Trustee holding cap: trustees (alone or together with other trustees) must not hold more than 5% of voting shares or interests in the listed body calculated by reference to all employee incentive schemes covered by the instrument or similar instruments (para 20(e)). Trustees must track holdings across schemes and entities to ensure the cap is not exceeded.

Contribution plan mechanics

• ADI account requirement: contributions, other than specified exceptions, must be held in an account with an Australian ADI used solely in connection with employee incentive schemes of the listed body or associated bodies, whether the account is maintained in Australia or elsewhere (para 21(c)). Bodies must operationalise that segregation and may face banking and operational compliance costs.
• Right to discontinue and refunds: participants must be able to discontinue participation with effect no more than 45 days after notice, and unused contributions must be repaid promptly with accumulated interest less any tax (para 21(e)-(f)). Systems must be in place to process discontinuance notices and repayments.

Loan terms and recourse

• Loans not for options or incentive rights: para 22(a) prohibits loans to acquire options or incentive rights. Any scheme financing must therefore be designed so that loans are used to acquire underlying eligible products, not overlying instruments.
• Interest-free and limited/no recourse: loans must be interest-free and either no recourse or recourse limited to forfeiture of the eligible products (para 22(b)(i)-(ii)). Lenders must document loan terms accordingly and ensure such terms are compatible with other corporate policies and fiduciary duties.

Offer document content and accessibility

• Required content and disclosure expectations: the offer document must include prominent statements that advice given does not take into account an eligible participant’s objectives, financial situation and needs and that participants should consider getting licensed advice (para 29(a)). The offer document must either include scheme terms or a summary with a statement to provide the full terms free on request (para 29(b)). Bodies must adopt clear administrative processes to respond to document requests in a reasonable time and at no charge.
• Overlying products not tradable: if an overlying eligible product is not tradable on an eligible market, the offer must be for no more than nominal monetary consideration (para 18A). That requirement can limit payment structures where non-tradable overlying instruments are used as incentives.

Adviser relief , "no reason to believe" standard

• Adviser compliance risk: adviser relief under para 9 depends on the adviser having "no reason to believe" the employee incentive scheme is not covered by the instrument. Advisers must therefore undertake an inquiry and retain records demonstrating their basis for concluding the scheme is within scope. Failure to do so could mean the adviser cannot rely on the relief and normal s1012A obligations apply.

ASIC oversight and exclusion

• ASIC document requests and exclusion: ASIC can request the offer document and other materials (para 23) and has the power to exclude persons from relying on the instrument (para 24). Bodies must be prepared to provide documentation and to justify reliance. Exclusion exposes the person to normal Act requirements and could affect ongoing offers.

Transitional complexities

• Migration of prior class orders: transitional paragraphs 25-28 bring CO 03/184 and similar individual instruments into this class order’s framework. Parties relying on prior relief should verify whether transitional coverage applies and whether existing scheme terms remain compliant with the current instrument.

Operational complexity and cross-border dealings

• Dealing via foreign-authorised persons: para 11(b)(ii) permits dealing outside the jurisdiction through persons authorised in the relevant place. This raises cross-border compliance and execution considerations that must be coordinated with legal and market counsel in the relevant foreign jurisdiction.

These "gotchas" are concrete, text-based compliance hazards. Bodies, trustees, advisers and participants should document decisions, keep contemporaneous records and have operational processes for notice-giving, recordkeeping, ADI account segregation, repayment and loans, and for responding to ASIC information requests.

Practical steps for bodies, trustees, advisers and in-house counsel to rely on ASIC Class Order [CO 14/1000], grounded in the textual conditions of the instrument.

1. Confirm scheme and participant/product eligibility

   • Map the scheme’s products to Table A’s Column 2 eligible products and confirm the relevant market is ASX or an approved foreign market (Table A; para 29(a)). If the product is an overlying eligible product, ascertain whether it is able to be traded on an eligible financial market and if not, ensure the offer is for nominal monetary consideration (para 18A).
   • Confirm that intended recipients fall within Column 3 eligible participants (full-time/part-time employees, non-executive directors, contractors, casual employees and prospective participants) and ensure contractor/casual definitions (40% hours threshold) are applied correctly (para 29).

2. Decide whether to rely on the instrument and give ASIC the notice of reliance

   • Bodies must give ASIC a notice of reliance for each particular employee incentive scheme that they intend to rely on (para 16). The notice may be given any time before first reliance, and must be given no later than one month after first reliance (para 17). Keep a dated record of the notice and the date of first reliance.
   • If relying only on transitional paragraphs 25-28, note that no notice of reliance is required (para 16 note).

3. Prepare the mandatory offer document and disclosure materials

   • Draft an offer document that satisfies the detailed offer document requirements in para 29. Ensure that the following elements are included and presented clearly:
     • Prominent statements that any advice given does not take into account the participant’s objectives, financial situation or needs, and that they should consider obtaining licensed advice (para 29(a)(i)-(ii)).
     • A copy of the scheme terms or a summary together with an unequivocal promise to provide the full terms free on request and within a reasonable time (para 29(b)).
     • General information on the risks of acquiring and holding the eligible product (para 29(c)).
     • If trustee-held underlying products give participants rights, a copy of the trust deed or summary with a promise to provide the full deed on request (para 29(d)).
     • If a contribution plan or loan is involved, include the contribution plan or loan terms or a summary and the promise to provide full terms on request (para 29(e)-(f)).
     • Acquisition price information or a clear formula and worked example to enable calculation in Australian dollars (para 29(g)); and an explanation of how to ascertain market price (para 29(h)).
   • Ensure the offer document is made available to participants or accompanies the offer, and implement processes to respond to document requests promptly and at no charge.

4. Implement the 5% issue limit and trustee holding cap controls

   • Before making an offer, calculate whether the number of underlying eligible products that have been or may be issued in the circumstances in para 19 will exceed 5% of the issued class. The computation must include products issued under the offer and those issued in the prior 3 years under schemes covered by this instrument or under CO 03/184 or similar individual instruments (para 19).
   • Keep contemporaneous records demonstrating the "reasonable grounds" for the belief that the 5% cap is satisfied (para 19). Record the methodology and data sources used for the calculation.
   • For trustee holdings, ensure that the trustee, alone or with others, will not hold more than 5% of voting shares or interests across schemes (para 20(e)). Implement trustee holdings monitoring across schemes and updates to capital totals where capital events occur.

5. Set up trustee and contribution plan governance

   • Trustees should limit activities to employee incentive schemes of the listed body (para 20(a)), maintain written records and sub-registers for allocated holdings (para 20(b)), and ensure fee arrangements comply with para 20(c) (no participant fees or fees out of trust assets other than reasonable disbursements).
   • If a trustee is the listed body or an associate, implement controls to prevent discretionary exercise of