ASIC Corporations (Periodic Statement Relief for Quoted Securities) Instrument 2024/14

The instrument operates within the existing framework of Part 7.9 of the Corporations Act, but several key concepts are either defined or given specific meanings for the relief it grants.

Periodic statement (s 1017D) is the statement that an issuer of a financial product must provide to a holder at least every six months, showing transactions during the period, opening and closing balances, and other prescribed information. The instrument modifies s 1017D for two categories of financial products: quoted ED securities and interests in ETFs.

Quoted ED security is not defined in the instrument but is a term used in the Corporations Act and regulations to refer to a security that is quoted on a financial market and for which enhanced disclosure provisions apply. The instrument relies on the existing meaning from the Act.

ETF (exchange traded fund) is defined in section 4 of the instrument. It means a registered scheme or a sub‑fund of a CCIV (corporate collective investment vehicle) where three conditions are satisfied: (a) interests are able to be traded on a financial market operated by ASX or Cboe, but the scheme or sub‑fund is not listed on either market (this distinguishes an ETF from a listed managed investment scheme); (b) the responsible entity or CCIV has the power and approval to issue interests on any trading day; and (c) the responsible entity or CCIV allows applications and redemptions on any trading day. The definition was amended in July 2024 to remove previous paragraphs (c) and (d) and re‑paragraph. The key effect is that only a true ETF (with continuous issuance and redemption) gets the relief; a closed‑end fund that merely trades on a market but does not allow daily creation/redemption is not an ETF for these purposes.

Interest in a sub‑fund of a CCIV means a share in the CCIV that is referable to the sub‑fund. This aligns with the CCIV regime in Part 8B.7 of the Corporations Act.

Stapled security is defined in the notional subsection (8D) inserted by the instrument. It means two or more financial products (which may include securities) that include at least one interest in a registered scheme or sub‑fund of a CCIV and where: under the constitution they must be transferred together; no financial product of the same class may be transferred separately; and if any component is a share of a body corporate, that body has issued no share that can be transferred separately, and if any component is an interest in a managed investment scheme or sub‑fund, no interests in that scheme or sub‑fund may be transferred separately. This definition is critical because the aggregation and relief provisions in subsection (8A) apply only to stapled securities as so defined.

Stapled security entity means, in relation to a stapled security, the registered scheme or sub‑fund and each other scheme, sub‑fund or body whose interest or security is a component of the stapled security. This concept is used to require that costs, fees and amounts be determined for the stapled security entities in aggregate.

Issuer not aware of the price triggers the relief in subsections (8B) and (8C). The issuer must not have knowledge of the actual transfer price. If the issuer later becomes aware, the relief is not available for that reporting period. This places the burden on the issuer to demonstrate lack of awareness, which in practice will require internal systems to verify that price data is not available from the market operator, the transfer agent, or any intermediary reporting to the issuer.

Website address is the new piece of information required by paragraph (fa). It must be a website where performance information relative to the investment objectives of the scheme or sub‑fund is available. The instrument does not specify the format, frequency of updating, or whether the information must be free to access. It leaves these details to the issuer’s discretion (subject to other legal obligations). This is a notable gap: an issuer could comply by posting a static webpage that meets the letter but not the spirit of the requirement, potentially undermining the purpose of helping holders make informed assessments.

The instrument directly affects the following classes of persons and entities.

Issuers of quoted ED securities must include the website address for performance relative to investment objectives in every periodic statement. This includes listed companies, trusts, and other entities that have issued quoted ED securities and are required to provide periodic statements under s 1017D. The relief from disclosing transfer‑price details under subsections (8B) and (8C) also applies to these issuers, but only for interests in registered schemes or sub‑funds of a CCIV; quoted ED securities that are not such interests will not get the transfer‑price relief. Therefore, a company that issues only ordinary shares (which are ED securities but not interests in a registered scheme) will have to comply with the new website requirement but cannot omit transfer prices.

Issuers of ETFs are directly covered because the instrument explicitly applies to an interest in an ETF as defined. The responsible entity of an ETF (or the CCIV for an ETF sub‑fund) must include the website address, handle stapled securities according to the aggregation rules, and may use the transfer‑price relief if the conditions are met. This affects approximately 200 ETFs listed on ASX and a smaller number on Cboe.

Responsible entities of registered schemes (including unit trusts and managed investment schemes) whose interests are quoted ED securities or ETFs are caught. The instrument imposes duties on them to ensure periodic statements comply with the modified s 1017D.

CCIVs and their sub‑funds are included because the instrument defines ETF to include sub‑funds of CCIVs and uses the CCIV framework (referencing s 1241 of the Act). The issuer for a CCIV sub‑fund is the CCIV itself.

Holders of the relevant financial products are the indirect beneficiaries of the performance‑website requirement (they get additional information) and potentially also the beneficiaries of the transfer‑price relief if that reduces the issuer’s cost of compliance and therefore the cost of the product. However, holders may also face confusion if the stapled‑security aggregation obscures individual component costs. The instrument does not require any action by holders; it is a disclosure‑obligation instrument.

Financial market operators (ASX and Cboe) are referenced in the ETF definition as the markets on which interests are traded. The instrument does not impose obligations on them directly, but their trading data may be relevant to whether an issuer is “aware” of transfer prices.

Transfer agents, registries, and intermediaries that handle off‑market transfers for the relevant products may affect whether the issuer is aware of the price. If a transfer is processed by a registry that reports the price to the issuer, then the conditions for relief under (8B) are not met.

Auditors and compliance professionals will need to verify that periodic statements comply with the modified s 1017D. The relief provisions introduce complexity, especially around stapled‑security aggregation and the “not aware” condition, which may require audit procedures to confirm management’s assertion about lack of price knowledge.

Legal and accounting advisers must understand the instrument to advise clients on compliance. Because the instrument is a legislative instrument that modifies primary legislation, misreading it could lead to inadvertent non‑compliance and exposure to penalties under s 1017D (which carries civil penalty provisions under the Corporations Act).

The instrument does not directly affect retail investors individually, but it changes the information they receive. The website requirement may improve comparability across products if issuers adopt a standardised format, but the instrument does not mandate any standard, leaving room for window‑dressing.

The instrument imposes duties on issuers of quoted ED securities and interests in ETFs (including sub‑funds of CCIVs) and grants them certain relief from otherwise applicable obligations.

Duty to include a website address. Under the new paragraph (fa) of s 1017D(5), the periodic statement must include the address of a website on which information about the performance of the scheme or sub‑fund relative to its investment objectives is available, sufficient to allow the holder to make an informed assessment of performance. This duty applies regardless of whether the issuer uses the transfer‑price relief. The website must actually exist and contain the relevant information; a dead link or a page with insufficient detail would likely breach the modified section. The duty runs continuously for each reporting period.

Duty to aggregate information for stapled securities. Subsection (8A) requires that for an interest that forms part of a stapled security, the periodic statement must include the information required by subsections (4), (5) and (5A) (as affected by various regulations) as if costs, fees, amounts were determined for the stapled security as a whole and for the stapled security entities in aggregate. Intra‑stapled entity costs must be ignored, and the assets of each body that is a stapled security entity are deemed held in a common fund for holders of the stapled security. This duty overrides the general rule in s 1010A that disclosure can be made for each product separately. The issuer must therefore redesign its periodic statement to present aggregated figures. The duty also requires that the dispute‑resolution statement under regulation 7.9.75(1)(c) only cover components of the stapled security for which a dispute resolution mechanism exists.

Duty to explain omissions when transfer price unknown. Subsection (8C) permits the issuer to omit the amount per interest (or per stapled security) paid under a transfer, the total amount, and any other dollar amounts relating to that transfer, provided the issuer is not aware of the price and the product is an interest in a registered scheme or sub‑fund of a CCIV. However, the issuer must still include the date, whether it was an acquisition or disposal, the number of interests or stapled securities transferred, and an explanation of why the price and total value are not included. If the issuer cannot calculate the return on investment for the period, it must also explain that and describe how the information can be obtained or calculated. This is a qualified duty: it does not allow outright silence; it requires a substitute explanation.

Right to rely on the relief. The instrument confers a legal right on issuers to provide periodic statements that deviate from the default requirements, provided they satisfy the conditions. For stapled securities, the issuer need not include the information in the manner, terminology or descriptions otherwise required by subregulations 7.9.16O(2) and 7.9.60B(7), except to the extent necessary to comply with the aggregation duty in (8A). This reduces compliance costs for issuers of complex stapled structures (such as property trusts or infrastructure funds with multiple entities).

Right to omit certain information for off‑market transfers. Where transfer price is unknown, the issuer has a right not to include dollar amounts, but this right is conditional and does not extend to suppressing all transaction details. The issuer must still itemise the transaction with some information.

No new rights for holders. The instrument does not confer any private right of action on holders. A holder cannot sue for breach of the website requirement directly under the instrument; enforcement is through ASIC under the general Corporations Act regime. However, a holder could potentially regard a defective periodic statement as misleading or deceptive under s 1041H, though the instrument modifies the standard of disclosure for the specific products.

The instrument itself does not create any penalties. It modifies the content obligations in s 1017D, and a failure to comply with s 1017D as modified is a breach of that section. The Corporations Act provides that a contravention of s 1017D attracts civil penalty provisions (see s 1317E and s 1017D(7) which states that an issuer must not fail to comply). Under the Act, a civil penalty order can be made against a person (including a corporation) for a contravention of a civil penalty provision. The maximum penalty for a body corporate is the greater of: 50,000 penalty units (currently $31,300,000 if units are $626 each) or three times the benefit obtained or detriment avoided (ss 1317G and 1317GAA). Individuals face up to 5,000 penalty units ($3,130,000) or the disgorgement amount. ASIC may also seek disqualification orders or infringement notices for minor breaches.

The instrument provides relief, so if an issuer properly relies on the relief, it is not in breach. For example, if an issuer omits transfer prices because it is unaware of them and provides the required explanation, it is deemed compliant with s 1017D. However, if the issuer claims unawareness when it actually knows the price, the relief is not available and the omission would be a breach, potentially leading to civil penalty proceedings.

Enforcement is the sole responsibility of ASIC, which may investigate complaints, conduct surveillance, or issue guidance. Because the instrument is relatively new (effective from 26 March 2024), there is no publicly known enforcement action specifically under this instrument. However, ASIC has a history of acting against issuers for deficient periodic statements, particularly for failing to include prescribed information.

The instrument also interacts with the general law on misleading conduct. Even if an issuer strictly complies with the modified s 1017D, the periodic statement must not be misleading or deceptive under s 1041H or the ASIC Act. For example, presenting aggregated costs for a stapled security may obscure the fact that one component of the stapled security has high fees. ASIC could take action if the overall impression is misleading.

The self‑repealing nature of the instrument means that from 1 April 2029, these modifications cease to apply unless ASIC renews or replaces the instrument. Issuers will then need to comply with the unmodified s 1017D (unless a new instrument is made). This sunset clause creates a timeline for compliance planning and may affect investment in systems that are designed to rely on this relief.

This instrument is a legislative instrument made under s 1020F(1)(c) of the Corporations Act. It does not amend the Act itself but declares that Part 7.9 applies as if s 1017D were modified or varied as set out. Therefore, it operates as a notional modification of the primary law.

It interacts specifically with:

Section 1010A of the Corporations Act. The instrument overrides s 1010A for stapled securities by requiring that the periodic statement must include the information as required by subsections (4), (5) and (5A) despite s 1010A. Section 1010A generally provides that disclosure can be made in a manner that reflects the nature of each product, but the instrument mandates aggregation for stapled securities.

Regulations 7.9.16O, 7.9.60B, 7.9.74A, and 7.9.75 of the Corporations Regulations 2001. These regulations prescribe additional content for periodic statements, including fee disclosure, performance reporting, and dispute resolution statements. The instrument modifies how those regulations apply. For example, subregulation 7.9.16O(2) and 7.9.60B(7) prescribe terminology and descriptions; the instrument exempts stapled securities from those requirements except as needed for the aggregated statement. Regulation 7.9.74A deals with information about return on investment; the transfer‑price relief in (8C) operates despite that regulation. Regulation 7.9.75(1)(c) requires a statement about dispute resolution; the instrument limits that to components with an actual mechanism.

Section 1241 of the Corporations Act. The note to the instrument’s Part 2 references s 1241, which applies Part 7.9 to CCIVs with modifications set out in Division 4 of Part 8B.7. This ensures that the instrument’s modifications work consistently with the CCIV regime. For example, an interest in a sub‑fund of a CCIV is treated as a financial product, and the responsible entity for disclosure purposes is the CCIV itself.

The ASIC Act 2001. The instrument does not amend the ASIC Act, but compliance with the modified s 1017D does not guarantee compliance with the prohibition against misleading or deceptive conduct in s 12DA of the ASIC Act (or s 1041H of the Corporations Act). An issuer relying on the relief must still ensure that any explanation (e.g., why price is omitted) is not misleading.

The Corporations (Fees) Act 2001 and other fee‑related instruments are not affected. The instrument only deals with content of periodic statements, not fees payable to ASIC or the market operator.

The general law of contract and trust law. For registered schemes and CCIVs, the constitution may require additional disclosures beyond the statutory minimum. The instrument does not override contractual obligations; it only modifies the statutory requirements. An issuer that complies with the instrument but omits information required by the scheme constitution may still be in breach of its fiduciary duties.

Foreign law considerations. For issuers that are also subject to US SEC or UK FCA periodic reporting, the instrument adds an Australia‑specific requirement (website address). This may create cost duplication for cross‑border issuers.

The instrument has had one amending instrument so far. It was originally made as ASIC Corporations (Periodic Statement Relief for Quoted Securities) Instrument 2024/14 and registered on 25 March 2024, commencing on 26 March 2024. The original version contained definitions and modifications that were then revised by ASIC Corporations (Amendment) Instrument 2024/630, registered on 31 July 2024, and commenced on 1 August 2024 (the compilation date of the text provided).

The amendments made by 2024/630 were:

• Section 4 (definitions): The definition of ETF was amended. Paragraph (c) of the definition was replaced (amended), and paragraph (d) was repealed. Under the original definition, the ETF had to have certain characteristics regarding the ability to trade on a financial market and the issuer’s power to issue interests. The amendment refined the formulation to remove possible ambiguity about whether the ETF itself (rather than the class of interests) must be able to be traded. The current definition now reads: interests in the scheme or sub‑fund are in a class that is able to be traded on a financial market operated by ASX or Cboe, but the scheme or sub‑fund is not listed on either market. The earlier version had additional paragraphs that may have caused confusion about what “able to be traded” meant.

• Paragraph 5(c) (the modification to s 1017D): This paragraph was replaced. The original paragraph inserted language into what became paragraph (fa) of s 1017D(5). The amendment refined the wording of the new disclosure requirement to clarify that the website address must be included in the periodic statement if the financial product is a quoted ED security or an interest in an ETF (in the instrument’s defined meaning). The earlier version may have been less precise.

• Notional definitions in s 1017D(8D): The original instrument had defined “first financial year”, “financial year” and “most recent financial year” in the notional subsection (8D). These were repealed by the amending instrument. This suggests that ASIC concluded those definitions were unnecessary or could lead to inconsistency with the Act. Their removal simplifies the operation of the relief.

• Notional subsection (8E): Was repealed entirely. The original s 1017D(8E) likely contained transitional provisions or additional restrictions that were considered problematic or redundant. The repeal eliminated that provision.

The amendment history indicates that ASIC acted quickly to correct perceived defects in the original instrument. Users of the instrument should rely on the compiled version as at 1 August 2024, which incorporates these amendments.

No other amendments have been made. The instrument is scheduled to be repealed at the start of 1 April 2029 under its own s 6. It remains subject to possible further amendment by ASIC before then.

As of the compilation date (1 August 2024), there is no reported litigation specifically concerning this instrument. Given its recent commencement (26 March 2024) and niche coverage, no court or tribunal has yet had occasion to interpret its provisions. The instrument is a legislative instrument, not a primary act, so it is typically challenged (if at all) under the Administrative Appeals Tribunal (AAT) or the Federal Court on grounds of jurisdictional error, unreasonableness, or procedural fairness, but such challenges are rare for ASIC instruments.

The absence of litigation does not mean the instrument is legally risk‑free. The principal area for future litigation is likely to be:

• Whether the “not aware of the price” condition is satisfied: An issuer may claim unawareness, but a holder or ASIC might dispute that the issuer had constructive knowledge (e.g., from market data, registry records, or third‑party reports). The court would need to interpret “aware” - it likely means actual knowledge, not constructive knowledge, but ASIC may argue that the issuer had a duty to inquire. The instrument does not impose a duty to inquire, but general law may do so.

• Stapled security definition: The four conditions in the definition of “stapled security” must all be satisfied for the aggregation relief. A dispute could arise if the constitution of one component allows transfer separately in exceptional circumstances. The definition requires that there be no financial products in the same class that may be transferred separately. If a single share can be detached in a corporate restructure, the stapled security ceases to exist, and the issuer loses the relief.

• What constitutes “an informed assessment of the performance of the scheme or sub‑fund”: The website requirement is open‑ended. If an issuer provides a link to a page with minimal data, a holder might argue that the statement is defective. The court would need to decide whether the information provided meets the statutory standard. This could turn on the issuer’s investment objectives and the nature of the product.

• Interaction with the ASIC Act 2001: A holder might claim that a periodic statement, even if compliant with the modified s 1017D, is misleading or deceptive because of omitted information (e.g., omitted performance data). The instrument’s modifications do not shield the issuer from liability under s 1041H.

No test cases are known. Litigation could take several years to emerge, as periodic statements are issued every six months and disputants would need to demonstrate loss. The instrument is temporary (until 2029), so any litigation might be moot before it reaches trial. Nonetheless, practitioners should monitor ASIC’s guidance and any Administrative Appeals Tribunal decisions on related instruments.

Several traps exist for issuers and advisers who apply this instrument without careful reading.

The website address requirement applies to all quoted ED securities and ETFs, but not to all financial products. If an issuer of a quoted ED security thinks the requirement is optional, it is not. The periodic statement must include the website address. Failure to do so is a breach of s 1017D. The instrument provides no transition period; it has been in force since 26 March 2024.

The transfer‑price relief does not apply to all quoted ED securities. It only applies to interests in a registered scheme or sub‑fund of a CCIV. A company that issues only ordinary shares (which are quoted ED securities) cannot omit transfer prices even if unaware, unless the shares are also an interest in a scheme (which they are not). The relief is limited to interests in managed investment schemes and CCIV sub‑funds.

The “not aware of the price” condition is fact‑specific. If the issuer’s registry automatically receives trade confirmation data from a settlement system or broker, the issuer may be aware. The relief does not require the issuer to take steps to avoid becoming aware, but once the issuer has knowledge (actual, not constructive), the relief is unavailable. An issuer that intends to rely on the relief should implement controls to ensure that price data for off‑market transfers is not passed to the department preparing periodic statements. This may create an internal barrier to information flow, which could cause compliance problems for other disclosures (e.g., for listed vehicles, where price is publicly known).

Stapled security aggregation may cause unintended over‑disclosure. For a stapled security comprising a trust and a company, the issuer must present aggregated fees and costs as if the entities were a single fund. This may inflate disclosed fees because intra‑stapled payments are ignored, making the total fee appear higher than the sum of external fees. Holders could be misled into thinking the product is more expensive than comparable non‑stapled products. The instrument does not require a reconciliation or explanation; the issuer must use its judgement to avoid a misleading impression.

The dispute‑resolution statement relief is partial. Subsection (8A)(b)(v) only requires the statement under regulation 7.9.75(1)(c) to be made for components with a dispute resolution mechanism. If one component (e.g., an unlisted trust) lacks an IDR scheme, no statement is needed for that component. But if a holder complains about that component, the issuer may still be obliged to handle the complaint under other rules. The instrument does not limit the issuer’s obligations under the ASIC Regulatory Guide 271 or the internal dispute resolution requirements of the Corporations Act (s 1017G and s 912A). The relief is only in relation to the periodic statement content, not the underlying complaint handling.

The self‑repealing date (1 April 2029) means that any long‑term products that rely on the relief (e.g., stapled property trusts) will need to adjust their periodic statement systems before that date. Issuers should plan a project to revert to the standard requirements or apply for a new instrument. The instrument does not provide grandfathering.

The definition of ETF explicitly requires that the scheme or sub‑fund is not listed on ASX or Cboe. A product that is listed on ASX (e.g., a listed investment company or listed trust) is not an ETF for these purposes, even if it trades like an ETF. Such products cannot rely on the relief and must comply with the standard s 1017D.

The definition of interest in a sub‑fund of a CCIV is limited to a share in the CCIV referable to the sub‑fund. If the CCIV issues a different class of shares that are not referable to a sub‑fund (e.g., common shares), they are not covered by the instrument’s modifications.

Compliance with this instrument requires a careful review of existing periodic statement production processes. The following steps are recommended.

Identify affected products. Determine whether the entity issues any quoted ED securities or interests in ETFs as defined. For each product, check whether it is a stapled security (i.e., bundled with other financial products that must be transferred together). Also identify any off‑market transfers where the issuer may be unaware of the price.

Update periodic statement templates. For all affected products, add the requirement under new paragraph (fa): include the address of a website where performance relative to investment objectives is available. The website must already be live and contain sufficient information to enable an informed assessment. Consider whether a static page or a dynamic portal meets the requirement. Document the decision.

For stapled securities, redesign the statement to present aggregated information. Develop a methodology for aggregating costs, fees and amounts across all stapled security entities. Ensure that intra‑stapled payments are excluded. Decide whether to present the aggregate figures alone or alongside a breakdown (the instrument permits but does not require a breakdown). Update the dispute resolution statement to only cover components with a mechanism. Ensure the terminology and descriptions otherwise required by regulations 7.9.16O(2) and 7.9.60B(7) are used only to the extent necessary for the aggregated statement - otherwise relief applies.

For products that are not stapled, no aggregation is needed, but the website requirement still applies.

Implement a process for identifying off‑market transfers where price is unknown. Create a system to record whether the issuer has actual knowledge of the transfer price. This may involve a questionnaire to the transfer agent or a review of registry data. If the issuer intends to rely on the relief, the periodic statement should omit dollar amounts but include the date, number of interests, whether acquisition or disposal, and an explanation. Also include an explanation if return on investment cannot be calculated, and describe how the holder can obtain or calculate it. Do not invoke the relief if the issuer has actual knowledge, even if it is inconvenient to include the amount.

Train staff on the new requirements, especially the transfer‑price relief conditions. The relief is optional; the issuer may choose to include dollar amounts even if not required. If the issuer regularly receives price data, it may be simpler to include the amounts rather than try to rely on the relief and risk non‑compliance if a later audit shows awareness.

Review the constitution and disclosure documents of any stapled security to ensure that the instrument’s modifications do not conflict with contractual commitments. The instrument does not override the constitution; if the constitution requires separate disclosure, the issuer must do both.

Prepare for the sunset. The instrument expires 1 April 2029. Monitor ASIC’s website for any replacement instrument or extension. Begin planning for reversion to standard s 1017D well before that date to avoid a scramble.

Consult with legal advisers on the interpretation of “aware” and the sufficiency of the website information. Obtain a documented opinion if the relief is relied upon heavily. Maintain records of the basis for each assertion that the issuer was not aware of transfer prices.

Test compliance through internal audits. Compare periodic statements with the requirements of s 1017D as modified. Check that the website address is present and the linked page actually contains the performance information. For stapled securities, test the aggregation calculation for a sample period.

Keep abreast of ASIC guidance. ASIC may issue a regulatory guide or information sheet on the instrument. Any such guidance should be followed unless it clearly conflicts with the instrument.

Consider the costs. Implementing these changes will require system updates, possible amendments to registry agreements, and training. The relief for transfer prices may reduce costs if it avoids the need to chase price data for off‑market trades, but the initial set‑up cost of identifying unknown transfers may be significant. A cost‑benefit analysis for each product line is advisable.