ASIC has today released a consultation paper proposing to remake its class order relating to how debentures may be described. The class order is due to expire ('sunset') on 1 April 2022.
ASIC proposes to remake the class order, as it is operating effectively and efficiently and continues to form a necessary and useful part of the legislative framework. The fundamental policy principles that underpin the class order have not changed.
The new instrument would continue the relief currently given by [CO 12/1482] When debentures can be called secured notes without significant changes. This minimises disruption to the entities that use the instrument.
Consultation Paper 344 Remaking ASIC class order on when debentures can be called secured notes (CP 344) outlines ASIC's rationale for proposing to remake the instrument. CP 344 invites submissions as to:
- whether the class order is currently operating effectively and efficiently;
- whether the conditions of relief should remain unchanged; and
- whether the remade legislative instrument should remain in force for 10 years or for a shorter period of time.
Submissions on CP 344 are due on 29 July 2021.
Background
Under the Legislation Act 2003, legislative instruments cease automatically, or 'sunset' after a period of time unless action is taken to preserve them. This ensures that instruments are kept up-to-date and only remain in force while they are relevant and fit for purpose.
Where an instrument is operating effectively and efficiently and continues to serve a regulatory purpose, ASIC will consult on remaking it even if there are minimal changes.