ASIC Corporations (Charitable Investment Fundraising) Instrument 2016/813

Definitions govern how the relief operates. The central defined terms are “charitable investment fundraiser”, “associate”, “retail client”, “retail, associated client”, “retail, non-associated client”, “retail charitable investment fundraiser”, “wholesale charitable investment fundraiser”, “short-term investment product”, “sponsor” and “identification statement” (s 4).

• “Charitable investment fundraiser” is a charity, or a trustee of a charity, that raises funds to support its charitable purposes through the issue of debentures or interests in a managed investment scheme (s 4). “Charity” and “charitable purpose” are cross-referenced to the Charities Act 2013 (s 4).

• “Associate” is a broad, enumerated concept: bodies constituted by the charity or controlled by it, founding persons or controllers, charities with related charitable purposes, trustees, clergy, employees and voluntary staff, and trainees who receive money or money’s worth from the charity or its associates (s 4, paragraphs (a)-(f)). That definition matters because several obligations distinguish between retail clients who are associates and retail clients who are not.

• “Retail client” for managed investment scheme interests adopts the Corporations Act definition (s 4(a)). For debentures, the instrument defines “retail client” by reference to whether disclosure under Part 6D.2 would be required, or an exemption under ss 708(1) or 708(14) or an exemption made under paragraph 741(1)(a) applies (s 4(b)). The instrument therefore sets a functional test for retail treatment of debenture holders (s 4(b)).

• “Retail charitable investment fundraiser” and “wholesale charitable investment fundraiser” are outcome-based categories. The latter is defined as a fundraiser in which no person holds an interest issued after 31 December 2016 as a retail, non-associated client (s 4). The distinction determines whether the licensing relief in s 5(2) applies.

• “Short-term investment product” is a time-limit definition that captures products with fixed terms under 31 days, or products repayable on short notice or automatically rolling short terms (s 4). The instrument progressively phases out the availability of short-term products to retail non-associated clients (see s 7(5)).

• “Sponsor” is an entity that has executed and given ASIC a deed poll in favour of holders of the products and under which it covenants to guarantee the fundraiser’s obligations under relevant products; ASIC must not have notified that it is no longer a sponsor (s 4 sponsor definition). Sponsors play a gatekeeper role for accepting identification statements in lieu of ASIC, subject to ASIC’s oversight and the requirement that sponsors have executed a deed poll (s 4).

Identifying mechanics: the “identification statement” is the administrative document that must be accepted by ASIC or by a sponsor on ASIC’s terms (s 5(3)(a), s 7(2)). Section 7 prescribes the minimum content and ongoing obligations tied to that statement (s 7(2)-(4)).

Substantive constraints: the instrument imposes product and distribution constraints (no short-term investment products to retail non-associated clients from 1 January 2017, and prohibition on holders holding such products from 1 January 2018 , s 7(5)); repayment and redemption constraints for retail fundraisers (s 7(6)-(7)); payment method restrictions (only to Australian ADI account transfers or cheques payable only to the person , s 7(8)); prohibition on describing the product as “at-call” or “on deposit” (s 7(9)); and promotional restrictions (no implication of ASIC approval , s 7(10)). For retail clients, there are mandatory additional disclosures and a requirement that the investor sign a separate statement acknowledging the disclosures (s 7(11)-(14)). Financial reporting and audit obligations are set out with timeframes and publication requirements (s 7(15)-(17)).

Taken together, the instrument creates a hybrid regulatory regime: exemptions from certain statutory protections are available if the fundraiser adopts detailed disclosure, record-keeping, repayment, payment and audit practices, and if an identification statement is accepted by ASIC or a sponsor (s 5(1)-(3), s 7).

Primary obliged persons

• Charities and trustees using debentures or managed investment schemes to fundraise, defined as “charitable investment fundraisers” (s 4). These entities are the primary subjects of both the exemptions and the conditions (s 5(1)-(3); Pt 2 generally).

• “Retail charitable investment fundraisers” (s 4) face additional constraints when their products are held by retail clients, including stricter repayment tests (s 7(6)), payment methods (s 7(8)), disclosure and signed acknowledgement duties (s 7(11)-(14)), and reporting and audit obligations (s 7(15)-(17)).

Third parties directly affected

• Investors: retail clients, split into “retail, associated clients” and “retail, non-associated clients” (s 4). The instrument treats retail, non-associated clients more protectively in certain respects (for example the signed acknowledgement and the additional disclosures required before a retail non-associated client can be issued a product , s 7(11)-(13)), while placing constraints on offers to retail, non-associated clients (s 7(2)(h)).

• Associates of the charity as defined (s 4) are affected both because the instrument allows offers to associated retail clients and because the associate definition determines whether enhanced retail protections must be triggered (s 7(2)(h), s 7(11)-(13)). The associate definition is broad and expressly includes voluntary staff and trainees (s 4(e)-(f)).

• Sponsors: entities that execute a deed poll guaranteeing performance and provide ASIC with that deed poll, and which can accept identification statements on behalf of fundraisers until ASIC revokes sponsor status (s 4 sponsor, s 5(3)(a)). Sponsors take on potential contingent obligations under their deed poll; ASIC retains power to notify that a sponsor is no longer a sponsor (s 4).

• Advisers and intermediaries: persons who are not charitable investment fundraisers but who recommend acquisition or arrange offers of scheme interests issued by a charitable investment fundraiser are given relief from ss 1012A and 1012B (the obligations regarding providing advice about financial products) provided they are not aware, or ought reasonably to be aware, that the requirements in s 5(3) are not satisfied (s 6(1)-(2)). That creates a conditional safe harbour for advisers when the fundraiser has the necessary administrative acceptance and reporting practices.

Regulatory actors and gatekeepers

• ASIC is the regulator that accepts identification statements, can revoke acceptance, and can notify that a sponsor is no longer a sponsor (s 5(3)(a); s 4 sponsor). ASIC can also issue written notifications to relax breach reporting in specified circumstances (s 5(3)(b)(ii)-(iii)).

• The Australian Charities and Not-for-profits Commission (ACNC) appears in the compliance chain: the identification statement must say whether the fundraiser will be required to lodge audited financial statements with the ACNC (s 7(2)(i)), and the instrument contemplates that audited financial statements must be given to ASIC unless they must be given to the ACNC (s 7(17)(b)).

• Registered company auditors and accounting standards gatekeep the financial reporting obligations; audits and auditor’s reports must be prepared and delivered within six months of the end of the fundraiser’s or scheme’s financial year (s 7(15)-(17)).

Other affected institutions

• Australian ADIs (authorised deposit-taking institutions) are implicated by the payment restriction: payment to retail, non-associated clients must be by transfer to an account with an Australian ADI or by cheque payable only to the person (s 7(8)(a)-(b)).

Sectors and market implications

• Charities that have historically used short-term, at-call style instruments to finance operations are directly affected by the staged restrictions on short-term investment products to retail, non-associated clients (s 7(5)). The instrument therefore impacts the design of charity-issued debt products, investor targeting strategies, and the use of associates and sponsorship structures to reach supporters.

The instrument sets out duties for charitable investment fundraisers, conditions for advisers and sponsors, and administrative rights for ASIC and sponsors.

Core exemption and condition duties

• Exemption framework: a fundraiser that wishes to rely on the exemptions in s 5(1) must have an identification statement accepted by ASIC or an accepted sponsor and must comply with ongoing conditions including breach reporting (s 5(3)(a)-(b)). If these requirements are satisfied, the fundraiser is relieved from particular Corporations Act provisions listed in s 5(1)(a)-(d).

• Licensing relief: a fundraiser that qualifies as a “wholesale charitable investment fundraiser” is exempt from the Australian financial services licensing obligation in s 911A(1) for specified services (s 5(2)). The scope is limited to issuing products, dealing in the course of scheme operation, providing custody/depository services in the course of scheme operation, and providing general advice in an offer document (s 5(2)(a)-(d)).

Identification statement duties (s 7(2)-(4))

• Minimum content: the identification statement must identify the fundraiser with full name, ABN if any, corporate status and incorporation particulars if applicable, address, and if a natural person, full name and date of birth (s 7(2)(a)(i)-(iv)). It must identify which exemptions the fundraiser intends to rely on and demonstrate how the fundraiser meets the conditions (s 7(2)(b)). It must specify the types of products (debentures and/or scheme interests), the applicable financial year, whether an AFSL is held and licence number, the charitable purpose and how the issue will promote that purpose, key terms of the products including how return/distributions and fees are determined, the intended offer population (retail/non-associated etc.) and criteria for voluntary staff being treated as associates, ACNC reporting requirements, any third-party guarantee, asset types and offshore holdings, and details of sponsor acceptance and the deed poll (s 7(2)(c)-(l)).

• Publication and maintenance: the identification statement as accepted by ASIC or a sponsor must be made readily publicly accessible on a website for five years after the last time the fundraiser relied on the acceptance (s 7(3)). The fundraiser must take all reasonable steps to ensure the identification statement remains up to date, complete and not misleading (s 7(4)).

Product and distribution duties

• Short-term product restriction: the fundraiser must not issue a short-term investment product to any retail, non-associated client on or after 1 January 2017, and no person may hold such a product if it would have been issued to them as a retail, non-associated client on or after 1 January 2018 (s 7(5)).

• Repayment terms for retail fundraisers: where the fundraiser is a retail charitable investment fundraiser, all products must be held on terms that they may only be repaid or redeemed if strict liquidity criteria are met (s 7(6)(a)), or for individual holders suffering financial hardship (s 7(6)(b)), or on winding up (s 7(6)(c)). Repayments/redemptions must only be made in accordance with those grounds (s 7(7)).

• Payment method restriction: entitlement to payment for retail, non-associated clients can only be discharged by transfer to an account with an Australian ADI or a cheque payable only to the person (s 7(8)).

Disclosure, promotional and investor protection duties

• No implication of ASIC approval: the fundraiser must ensure promotional material and offer documents do not state or imply that ASIC has approved or examined the fundraiser, the products, or the material itself (s 7(10)).

• Retail client additional disclosure and signed acknowledgement: a fundraiser must not issue a product to a person as a retail client, nor accept additional investments from an existing retail client, unless the fundraiser has provided certain disclosures in writing (how funds will be used for the charitable purpose; where the identification statement may be viewed; notice that the product and offering are not subject to the usual Corporations Act investor protections or ASIC regulation; and whether the fundraiser holds an AFSL) (s 7(11)(c)-(f)). Offer documents and promotional material provided to retail clients must contain a prominent statement that the investment is intended only for investors whose primary purpose is to support the charitable purpose, that investors may be unable to get some or all of their money back when expected or at all, and that the investment is not comparable to bank or fund manager investments (s 7(12)(c)-(e)). Non-associated retail clients must sign a separate statement confirming they understand these disclosures before being issued a product or making an additional investment (s 7(13)-(14)).

Reporting, audit and record-keeping duties

• Financial statements and audit: within six months after the end of the relevant financial year, the fundraiser (or the managed investment scheme) must prepare financial statements (s 7(15)). Those statements must comply with the accounting standards conditions based on whether the relevant entity is a reporting entity (s 7(16)). Within six months, a registered company auditor must audit the financial statements and provide an auditor’s report. The fundraiser must give the audited statements and auditor’s report to ASIC unless required by law to give them to the ACNC (s 7(17)(a)-(b)). The audited statements and auditor’s report must also be published and maintained for at least three years at a web address accessible by a direct link from the identification statement web page (s 7(17)(c)).

Breach reporting duties

• If the fundraiser becomes aware of matters giving reason to believe it has failed or is likely to fail to comply with a s 7 condition, it must give full particulars to ASIC in writing within 15 business days of becoming aware (s 5(3)(b)(i)). ASIC can notify that the exemptions continue to apply despite non-compliance or that such breaches need not be notified (s 5(3)(b)(ii)-(iii)).

Rights

• The primary “right” under the instrument is the entitlement to rely on the exemptions listed in s 5(1) where all conditions are met (s 5(1)-(3)). Sponsors, once they have delivered a deed poll and ASIC has not notified otherwise, have the right to accept identification statements for the purposes of the instrument (s 4 sponsor, s 5(3)(a)).

The instrument itself is an exemption instrument; it does not create new criminal offences or specify monetary penalties. Enforcement mechanics arise from three practical effects and from cross-reference to the Corporations Act.

Loss of exemption as enforcement lever

• The instrument conditions the availability of relief on continued compliance with the identification statement acceptance and the conditions in s 7. ASIC can revoke acceptance of an identification statement or notify that a sponsor is no longer a sponsor (s 5(3)(a); s 4 sponsor). Loss of acceptance or sponsorship will remove the exemption for the fundraiser, exposing it to the full suite of Corporations Act obligations (s 5(1)-(3)). That loss of exemption is the primary enforcement mechanism embedded in the instrument.

ASIC administrative powers and notifications

• ASIC may notify in writing that it has revoked acceptance, or that a sponsor is no longer a sponsor (s 5(3)(a); s 4 sponsor). ASIC may also notify that exemptions continue to apply despite a failure to provide particulars of breaches, or notify that certain types of breaches need not be reported (s 5(3)(b)(ii)-(iii)). These administrative notices regulate the ongoing availability of relief and create obligations for fundraisers to engage with ASIC.

Audit and public disclosure as regulatory pressure points

• The requirement to prepare audited financial statements within six months and publish audited statements and auditor’s reports for three years (s 7(15)-(17)) creates transparency that enables regulatory and market discipline. If a fundraiser fails to provide audited financial statements to ASIC or the ACNC as required, it may become subject to standard Corporations Act and ACNC compliance measures, including civil enforcement under the Corporations Act or ACNC regulatory powers.

Implied Corporations Act consequences

• Although the instrument does not itself specify penalties, non-compliance with the Corporations Act provisions from which relief has been taken will continue to attract statutory consequences if the exemptions do not apply. Where relief ceases to apply, the fundraiser may be exposed retrospectively or prospectively to obligations such as disclosure under Part 6D.2 (s 5(1)(b) referring to Parts 6D.2 and 6D.3), trustee or deed obligations (note to s 5(1)(b) referencing s 283AA), licensing obligations (s 911A) and civil/administrative consequences enforced by ASIC or courts as provided under the Corporations Act. The instrument therefore places material enforcement leverage on the ongoing availability of the exemptions.

Practical enforcement considerations

• The instrument’s immediate enforceable requirements are compliance with the substantive conditions (s 7), the breach reporting timeline (s 5(3)(b)), and maintaining sponsor or ASIC acceptance status (s 5(3)(a)). Practitioners should note that ASIC’s ability to revoke acceptance, or to notify that a sponsor is no longer a sponsor, is the operational point at which a fundraiser loses the relief and will need to pivot to full Corporations Act compliance. The instrument provides no alternative penalty schedule; instead compliance is policed by the conditionality of the relief and existing Corporations Act enforcement mechanisms that apply if the relief is not available.

This instrument operates as a class order-style relief instrument that interacts with multiple provisions of the Corporations Act, accounting standards and ACNC obligations, and it preserves aspects of older ASIC instruments.

Direct Corporations Act linkages

• The instrument is made under specified paragraphs of the Corporations Act (s 3), and it expressly exempts charities from particular provisions of that Act when conditions are met (s 5(1)). The exemptions remove the need to comply with parts of Chapter 6 (managed investments scheme operation , s 5(1)(a)), Parts 6D.2 and 6D.3 regarding offers of debentures (s 5(1)(b)), section 992A (s 5(1)(c)), and certain disclosure and promotional requirements in Chapter 7 (Divisions 2 and 4 of Part 7.9 and ss 1017B and 1017G) (s 5(1)(d)). The instrument therefore substitutes a charity-specific regulatory architecture for the general shareholder/investor protections in those parts of the Act.

• Licensing interactions: the instrument alters the application of the licensing rules under s 911A(1) for wholesale charitable investment fundraisers (s 5(2)). Where the fundraiser qualifies, it is exempt from holding an AFSL for the specified services. The instrument notes that ASIC Corporations (Miscellaneous Technical Relief) Instrument 2015/1115 provides relief to persons providing services on behalf of a person who does not need an AFSL because of an exemption made under section 926A (note under s 5(2)). The instrument moves some licences-effectively to be governed by s 926A exemptions rather than the previous paragraph 911A(2)(l) framing (s 8(1)(d), s 9(1)(c)).

Accounting and reporting interactions

• The instrument cross-references accounting standards. It requires financial statements to be prepared and to comply with accounting standards depending on reporting entity status (s 7(15)-(16)); in particular it references Accounting Standard AASB 1053 in the definition of “reporting entity” (s 4). The instrument also uses the terms “recognition requirement” and “measurement requirement” to import the relevant concepts from the accounting standards into the financial statement preparation obligations (s 4).

ACNC and audit interactions

• The instrument contemplates interactions with the ACNC. The identification statement must disclose whether the fundraiser will be required to lodge audited financial statements with the ACNC (s 7(2)(i)). The statutory filing obligation for audited financial statements is phrased conditionally: audited statements and auditor’s reports must be given to ASIC unless required by law to be given to the ACNC (s 7(17)(b)). Thus ACNC filing obligations can substitute for ASIC filing in practice.

Other statutes and instruments

• The instrument incorporates the Electronic Transactions Act 1999 by reference for signature equivalence: a person is taken to have signed the required statement in s 7(13) if they would be taken to sign under s 10 of the Electronic Transactions Act if it applied (s 7(14)). It also operationally preserves older ASIC instruments (ASIC Class Order [CO 02/184] and ASIC Instrument 04/0024) in transitional fashion to specified dates and subject to conditions (s 8-9).

• The “sponsor” mechanism depends on the existence of a deed poll and ASIC having received that deed poll (s 4 sponsor). The instrument therefore interacts with general contract law principles concerning guarantees and deeds where sponsors give undertakings to holders.

Overlap and substitution risks

• Because the instrument substitutes a bespoke regime for charities issuing debt-like products, there is a potential for overlap or substitution effects: when the relief applies, regulatory obligations under the referenced Corporations Act provisions do not apply to the fundraiser (s 5(1)). Conversely, the loss of relief converts that relationship so the Corporations Act obligations reapply. That creates an implementation risk for charities operating near the margins of the instrument’s definitions (for example, whether a holder is a retail client for debentures , s 4(b)).

The compilation provided is current as at 5 October 2021 and includes amendments to that date; the endnotes record the instrument history and amendment history (Endnotes 1 and 2).

Instrument history (Endnote 1)

• The original instrument is ASIC Corporations (Charitable Investment Fundraising) Instrument 2016/813, registered 28 September 2016 and commencing 29 September 2016 (Endnote 1 table).

• Subsequent amending instruments recorded in the compilation include 2017/65 (registered 23 March 2017, commenced 24 March 2017), 2017/359 (registered 8 June 2017, commenced 9 June 2017), 2017/580 (registered 3 July 2017, commenced 4 July 2017), and 2021/799 (registered 22 September 2021, commenced 5 October 2021) (Endnote 1 table).

Amendment specifics (Endnote 2)

• Endnote 2 lists the provisions affected by specific amendments (abbreviations noted in the compilation): among them, section 4 (definition of retail client, paragraph (b)) was repealed and substituted by instrument 2017/65 (Endnote 2). Paragraph 5(1)(c) was amended by 2021/799 (Endnote 2). Subsection 5(2) note was amended by 2017/580, and paragraph 8(1)(d) note was amended by 2017/580 (Endnote 2). Subsection 8(3) and 8(4) were amended by 2017/359. Paragraph 9(1)(c) note was amended by 2017/580.

• The effect of these listed amendments (as per the endnote entries) is reflected in the published text in the compilation at the stated compilation date. For example, the current definition of “retail client” for debentures appears as the result of the 2017 amendment to s 4(b) (Endnote 2). Paragraph 5(1)(c) now expressly refers to section 992A because of the 2021 amendment (Endnote 2).

Transitional amendments and continuations

• The instrument contains transitional provisions that preserve older ASIC class orders and instruments (Class Order [CO 02/184] and Instrument 04/0024) until specified dates and subject to supplementary conditions (ss 8-9). These transitional rules were themselves amended in 2017 (see s 8(3)-(4) amendments by 2017/359 and s 9(3) and (5) variations by the 2017 amending instruments). The compilation notes when those transitional continuations apply and the conditions under which they are available (s 8(2)-(4), s 9(2)-(5)).

Practical consequence of the amendment history

• The amendment history shows active post-2016 adjustments to definitions, references to sections of the Corporations Act, and transitional scaffolding for previously registered fundraisers and sponsors. That history matters operationally because the eligibility tests (notably the retail client test for debentures and the treatment of short-term products) have been adjusted, and because the instrument’s interaction with older ASIC instruments is time-limited and conditional (ss 8-9; Endnotes).

• For due diligence, practitioners should consult the specific amending instruments (listed in Endnote 1) to confirm the detailed changes that took effect on the dates stated in the table, and to confirm whether any later amendments post-dating the compilation have been made.

The instrument’s compilation and endnotes do not record any litigation concerning this instrument. The text itself contains no case citations or references to judicial decisions. The endnotes list only the instrument history and amendment history (Endnotes 1-2) and do not report judgments or litigation outcomes.

What this means for practice

• There is no litigation history recorded in this instrument’s compilation. That absence does not mean litigation is impossible or that there have been no disputes in the broader regulatory or court records about charity-issued debentures or investor disputes; it simply means that this instrument and its endnotes do not catalogue any decisions.

• Practitioners who require litigation precedents or enforcement history should search external repositories, including ASIC enforcement reports, ACNC determinations, the Federal Court and state courts databases, and tribunal decisions. Because the instrument operates by modifying the regulatory obligations of charities, potential areas of litigation could arise around the meaning of “associate”, the retail client test for debentures (s 4(b)), the sufficiency of the identification statement (s 7(2)), the content and prominence of required disclosures (s 7(11)-(13)), the adequacy of financial statements and audit evidence (s 7(15)-(17)), and disputes over whether relief applied at material times (s 5(3)(a)). Any of these themes would appear in court or tribunal records rather than in the instrument itself.

• If an adviser or a fundraiser needs to rely on precedent for novel fact patterns (for example, on whether a particular supporter is an associate or whether a product meets the short-term investment product test), primary-source searches of cases and ASIC decisions are required because the instrument does not provide adjudicative guidance.

The instrument contains multiple provisions where practical or legal pitfalls can arise. These are concrete, source-grounded operational risks and sources of compliance failure.

Broad associate definition

• The instrument’s “associate” definition is broad and includes voluntary staff and trainees who receive money or money’s worth (s 4(e)-(f)). Charities that rely on offers to “associates” to avoid retail protections must carefully document why particular persons are associates. The inclusion of voluntary staff as potential associates means many supporters and volunteers who make small donations may nonetheless be treated as associates for fundraising purposes, with implications for whether the more onerous retail, non-associated protections apply (s 7(2)(h), s 7(11)-(13)).

Retail client test for debentures

• The definition of “retail client” for debentures is functional and references whether disclosure would be required under Part 6D.2 or whether exemptions in ss 708(1), 708(14) or paragraph 741(1)(a) apply (s 4(b)). That test can be factually intricate and requires analysis of each offer and investor. Misclassification can trigger the disclosure and signed-acknowledgement obligations (s 7(11)-(13)) or cause the exemption not to apply.

Sponsor mechanics and deed poll obligations

• A “sponsor” must execute and give ASIC a deed poll covenanted to guarantee the fundraiser’s obligations under the identified products, and ASIC must not have notified the sponsor is no longer a sponsor (s 4 sponsor). Funds relying on sponsor acceptance must ensure the sponsor’s deed poll language matches the intended products and that ASIC’s administrative status for that sponsor remains current. Sponsors who fail to appreciate the contingent obligations in the deed poll may expose themselves to legal obligations to holders.

Website and record-keeping timelines

• Identification statements must be published and remain publicly accessible for five years after the last reliance (s 7(3)). Audited financial statements and auditor’s reports must be published and maintained for at least three years at a web address accessible by direct link from the identification statement page (s 7(17)(c)). Operationally, keeping web content live and ensuring direct links remain intact across website redesigns or domain changes is a practical complexity.

Short-term product phase-out and legacy holdings

• The instrument phases out short-term investment products to retail, non-associated clients starting 1 January 2017 and prohibits certain holders from holding such products after 1 January 2018 even if those products were issued earlier (s 7(5)). This retrospective reach requires fundraisers to identify existing holders who would be retail, non-associated clients if a product were issued to them after the date and to remove or restructure such holdings. That restructuring can be operationally difficult and may trigger rights or consent issues under existing product terms.

Repayment restrictions and liquidity test

• The repayment test for retail charitable investment fundraisers requires repayment or redemption to be limited unless the fundraiser has reasonable grounds that all holders could be repaid in accordance with entitlements on the day and for future days (s 7(6)(a)). This test imposes an ongoing liquidity assessment obligation. Misjudging liquidity or repaying outside permitted grounds risks breaching the instrument and losing the exemption.

Promotional language prohibition and investor understanding

• The prohibition on describing products as “at-call” or “on deposit” or equivalent for retail fundraisers (s 7(9)) requires careful drafting of marketing material. Simultaneously, promotional material must not state or suggest ASIC approval (s 7(10)). Yet the required prominent statement to retail clients (s 7(12)) must be included. That combination creates a communications design constraint: promotional material must be candid about limited protections while avoiding certain comparative or suggestive language.

Audit timing and accounting standard compliance

• Financial statements must be prepared within six months and audited within that period (s 7(15)-(17)). If the relevant entity is not a reporting entity, it must still apply the recognition and measurement requirements that apply to reporting entities (s 7(16)(b)). That is a significant compliance burden for small charities unfamiliar with full accounting standard application and may require early engagement with auditors.

Breach reporting timing and ASIC discretions

• The fundraiser must report breaches giving rise to likely failures to comply with the conditions within 15 business days (s 5(3)(b)(i)). ASIC may, however, notify that breaches need not be reported or that exemptions continue to apply despite non-reporting (s 5(3)(b)(ii)-(iii)). Reliance on ASIC discretion is inherently uncertain; fundraisers should not assume leniency.

Interplay with ACNC obligations

• The instrument allows ACNC filing obligations to substitute for ASIC filing of audited statements where the law requires filing to the ACNC (s 7(17)(b)). Charities must therefore map ACNC and ASIC reporting obligations and timing to ensure compliance with both regimes and to avoid late filings that could jeopardise exemption reliance.

This section is a practical compliance checklist aligned to the instrument’s provisions. It is task-oriented and cites the relevant sections to guide trustees, compliance officers and advisers.

1. Confirm entity status and product type (s 4; s 5(1))

   • Verify the organisation is a “charity” and the issue is a debenture or an interest in a managed investment scheme (s 4, charitable investment fundraiser definition).
   • If issuing both product types, ensure both are identified in the identification statement (s 7(2)(c)).

2. Prepare the identification statement (s 7(2))

   • Draft an identification statement that includes:
     • Full name, ABN (if any), incorporation details and address; natural person fundraiser’s date of birth if applicable (s 7(2)(a)).
     • The specific exemptions under s 5 (and any corresponding relief under older instruments) the fundraiser intends to rely on and demonstration of how conditions are or will be met (s 7(2)(b)).
     • Identification of product types and any managed investment scheme particulars (s 7(2)(c)).
     • Financial year for the fundraiser and for a scheme (s 7(2)(d)).
     • AFSL status and licence number if held (s 7(2)(e)).
     • Charitable purpose and how the issue will promote it (s 7(2)(f)).
     • Key product terms: how returns/distributions are determined, fees and costs, and scheme fees if applicable (s 7(2)(g)).
     • Intended offer population and how voluntary staff/associates will be identified (s 7(2)(h)).
     • Whether audited financial statements must be filed with the ACNC (s 7(2)(i)).
     • Any third-party guarantee identification (s 7(2)(j)).
     • Types of assets, including offshore holdings (s 7(2)(k)).
     • If accepting a sponsor’s acceptance, identify the sponsor and where the sponsor’s deed poll is available (s 7(2)(l)).

3. Obtain acceptance by ASIC or by a sponsor (s 5(3)(a))

   • Submit the identification statement to ASIC for acceptance per s 5(3)(a)(i), or arrange for an accepted sponsor to accept it (s 5(3)(a)(ii)).
   • If relying on a sponsor, confirm that the sponsor has executed and given ASIC a deed poll covenanted to guarantee the fundraiser’s obligations (s 4 sponsor) and monitor ASIC notifications that a sponsor remains recognised.

4. Publish and maintain the identification statement (s 7(3)-(4))

   • Publish the accepted identification statement on a public website and keep it readily accessible for five years after the last reliance on the acceptance (s 7(3)).
   • Implement a process to update the statement promptly to keep it true, complete and not misleading; if updated, give a replacement identification statement to ASIC or the sponsor as needed (s 7(4)).

5. Implement investor classification controls (s 4; s 7(2)(h))

   • Establish procedures to classify investors as retail/non-retail and as associates or non-associates, documenting criteria for volunteers and trainees to be treated as associates if applicable (s 7(2)(h); s 4(e)-(f)).
   • Keep records demonstrating the basis for each investor classification.

6. Prohibit issue of short-term products to retail non-associated clients and remediate legacy holdings (s 7(5))

   • Do not issue short-term investment products to retail, non-associated clients from 1 January 2017 (s 7(5)(a)).
   • Identify any existing holders who, if issued the product after 1 January 2018, would be retail, non-associated clients; ensure no such holders retain short-term products after 1 January 2018 (s 7(5)(b)).

7. Set repayment and redemption terms (s 7(6)-(7))

   • If a retail fundraiser, ensure product terms permit repayment or redemption only if the liquidity test in s 7(6)(a) is met, for individual financial hardship (s 7(6)(b)), or on winding up (s 7(6)(c)).
   • Build internal liquidity monitoring to assess the “reasonable grounds” test required for permitted repayments (s 7(6)(a)).

8. Control payment processing (s 7(8))

   • Configure payment systems so that payments to retail, non-associated clients are made only by transfer to an Australian ADI account or by cheque payable only to the named person (s 7(8)(a)-(b)).

9. Avoid prohibited terminology and promotional claims (s 7(9)-(10))

   • Remove language such as “at-call”, “on deposit” or equivalent from product descriptions for retail fundraisers (s 7(9)).
   • Ensure all promotional material and offer documents avoid stating or implying ASIC endorsement or approval of the fundraiser, the products, or promotional materials (s 7(10)).

10. Prepare retail client disclosures and obtain signed acknowledgements (s 7(11)-(14))

    • Before issuing a product to a retail client or accepting additional investments, provide in writing:
      • How investment funds will be used to support the charitable purpose (s 7(11)(c)).
      • Where the identification statement can be viewed (s 7(11)(d)).
      • Notification that the product and offering are not subject to usual Corporations Act investor protections or ASIC regulation (s 7(11)(e)).
      • Whether the fundraiser holds an AFSL (s 7(11)(f)).
    • Ensure each offer document and promotional material for retail clients contains the prominent statements required by s 7(12)(c)-(e).
    • Obtain a separate signed statement from each retail, non-associated client confirming understanding of the disclosures; confirm electronic signing arrangements are compliant with the Electronic Transactions Act treatment (s 7(13)-(14)).

11. Arrange timely financial reporting, audit and publication (s 7(15)-(17))

    • Within six months after the end of the relevant financial year, prepare financial statements for the relevant entity (s 7(15)).
    • Ensure statements comply with accounting standards and recognition/measurement rules depending on reporting entity status (s 7(16)).
    • Engage a registered company auditor to audit the financial statements and provide the auditor’s report within six months (s 7(17)(a)).
    • Submit audited financial statements and auditor’s report to ASIC unless filing to the ACNC is required (s 7(17)(b)).
    • Publish the audited financial statements and auditor’s report at a web address with a direct link from the identification statement page and maintain them for at least three years (s 7(17)(c)).

12. Implement breach reporting procedures (s 5(3)(b))

    • Put in place internal incident and compliance reporting so that if the fundraiser becomes aware of matters giving reason to believe it has failed or will fail to comply with a s 7 condition, full particulars are provided to ASIC within 15 business days (s 5(3)(b)(i)).
    • Track any ASIC written notifications that certain breaches need not be reported or that the exemptions continue despite non-reporting (s 5(3)(b)(ii)-(iii)).

13. Monitor sponsor status and ASIC notifications (s 4 sponsor; s 5(3)(a))

    • If relying on sponsor acceptance, monitor ASIC communications to confirm that the sponsor has not been notified as no longer a sponsor (s 4 sponsor).
    • Maintain a copy of the sponsor’s deed poll and make it available as required by the identification statement (s 7(2)(l)).

14. Review eligibility for licensing relief (s 5(2))

    • Determine whether the fundraiser qualifies as a wholesale charitable investment fundraiser; if so, confirm that the services being provided fall within the licensing relief in s 5(2).
    • If not wholesale, factor AFSL requirements into operational plans.

15. Document and retain records (s 7(3), s 7(17)(c))

    • Maintain retention policies for identification statements (five years), audited financial statements (three years online) and investor classification records, with clear indexing to show reliance dates.

16. Seek regulatory engagement early

    • Where questions arise about investor classification, sponsor status, or the adequacy of identification statement content, seek ASIC engagement and document correspondence to reduce the risk of a post-facto loss of exemption.

This checklist maps the instrument’s obligations to discrete operational steps. Each step references the relevant statutory clause to guide internal compliance, audit and legal sign-off.