Consultation Statement 27 Proposed Remake of Relief Instrument for Managed Investment Product Consideration (CS 27)

Submission Date: 3 September 2025

This submission has been prepared by the Financial Services Committee and the Corporations Committee (the Committees) of the Business Law Section within the Law Council of Australia in response to CS 27, which was released by the Australian Securities and Investments Commission (ASIC) on 5 August 2025.

Background

ASIC Corporations (Managed Investment Product Consideration Instrument 2015/847 (the Instrument) modifies the application of certain provisions of the Corporations Act 2001 (Cth) for managed investment schemes that were registered with ASIC prior to 1 October 2013.

The Instrument succeeded ASIC Class Order [CO 05/26] Constitutional provisions about the consideration to acquire interests, which was formulated based upon ASIC’s interpretation of the meaning of “adequate provision” in sections 601GA(1)(a) and 601GA(4) with respect to constitutional provisions about the consideration to acquire an interest in a registered managed investment scheme and withdrawals, respectively. In the absence of such relief, based upon ASIC’s interpretation of “adequate provision”, responsible entities of registered schemes would be unable to lawfully exercise certain pricing discretions which are widely recognised as forming an important part of the day-to-day operation of registered schemes.

The Instrument applies to responsible entities of registered schemes, other than time-sharing schemes, which were registered with ASIC before 1 October 2013, and have not opted in to rely on ASIC Corporations (Discretions for Setting the Issue Price and Withdrawal Price of Interests in Managed Investment Schemes) Instrument 2023/693 (the 2023 Instrument) by meeting the relevant requirements of that legislative instrument.

ASIC estimates that there could be 1762 registered schemes in respect of which the responsible entity currently relies on the Instrument.

Schemes that were registered with ASIC after 30 September 2013 have the benefit of a different form of relief, which was initially made in Class Order [CO 13/655] Provisions about the amount of consideration to acquire interests and withdrawal amounts, which was succeeded by the 2023 Instrument.

In CS 27, ASIC states that it has assessed that the Instrument is operating effectively and efficiently and continues to form a necessary and useful part of the legislative framework. ASIC is therefore proposing to remake the instrument with minor changes, which are designed to:

1. simplify the requirements to document exercises of discretion affecting the pricing of interests;
2. reduce the level of prescription in those documentation provisions; and
3. ensure the instrument is in line with ASIC’s current drafting style.

Summary of submission

The Committees note that ASIC’s interpretation of “adequate provision” has been a longstanding source of contention with the managed funds industry. On the assumption that ASIC is not open to revisiting its interpretation, the Committees are supportive in principle of the proposal in CS 27.

However, the Committees are concerned about the lack of detail and transparency in ASIC’s consultation process and believes that ASIC should be consulting on the end result of its proposal rather than an expression of a high-level concept.

The Committees also invite ASIC to reconsider the obligation under the 2023 Instrument for responsible entities of schemes registered before 1 October 2013 seeking to rely on the 2023 Instrument to “publish and maintain” on their website a notice that they are relying on the 2023 Instrument. They do not believe this requirement produces a strong regulatory benefit.

Last Updated on 11/11/2025

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