Australian businesses operating in regulated industries are subject to numerous rules and regulations that must be adhered to in order to maintain compliance with the Australian Securities and Investments Commission (ASIC). While these rules and regulations are designed to protect investors and consumers, they can sometimes be overly burdensome or present an undue hardship for businesses facing unique or exceptional circumstances. This is where ASIC relief comes in.
Whether you are a small business owner or a CEO of a large corporation, understanding ASIC relief is an important part of staying compliant with regulatory requirements and ensuring the ongoing success of your business. This article provides an overview of ASIC relief and answers some of the most commonly asked questions about this topic. We will explain what ASIC relief is, the types of relief available and the circumstances under which relief may be necessary.
What Is ASIC Relief?
In situations where compliance is not feasible or presents significant hardship, ASIC relief provides a mechanism for businesses to seek exemptions or modifications to certain ASIC regulatory requirements under the:
- Insurance Act 1973 (Insurance Act)
- Corporations Act 2001 (Corporations Act)
- National Consumer Credit Protection Act 2009
- Superannuation Industry (Supervision) (SIS) Act 1993
- Australian Securities and Investments Commission Act 2001 (ASIC Act).
By granting exemptions or declarations, which may involve omitting, varying or modifying certain ASIC regulatory requirements, ASIC aims to provide businesses with greater flexibility and support when they need it most.
Exemptions allow businesses to be exempt from certain ASIC rules or regulations This means that they will not be required to comply with certain requirements that would otherwise apply to them. For example, ASIC may grant an exemption to a business that cannot meet certain financial reporting requirements due to extenuating circumstances.
With modifications, businesses can adopt alternative methods of compliance that are better suited to their particular circumstances. For instance, ASIC may allow a business to modify its financial reporting practices to better reflect the unique nature of its operations.
ASIC may also waive certain ASIC requirements altogether for businesses. As a result, they will not be required to comply with certain requirements that would otherwise apply to them.
No-action letters provide businesses with the assurance that ASIC will not take enforcement action against them for engaging in certain activities. Therefore, businesses can engage in activities that may otherwise be prohibited without fear of regulatory action.
Types of Applications for Relief
There are three distinct categories of relief applications that businesses can make to ASIC:
- Standard applications: These are applications that seek relief from regulatory requirements by following the specific guidelines and conditions laid out in published ASIC policies and pro forma instruments.
- Minor and technical applications: These types of applications are made when businesses need to apply existing policies to new or unique situations that were not originally covered by the policy. Such applications may pertain to the following matters:
- Seeking exemption or modification from the regulatory requirements of the Corporations Act, SIS Act, National Credit Act, ASIC Act or Insurance Act;
- Requesting minor modifications to previously granted relief, provided there have been no significant changes in circumstances or existing policies;
- Seeking relief or modifications to relief due to changes in existing policies, including but not limited to published ASIC policy.
- New policy applications: Any application that does not fall under the standard or minor and technical category would be considered a new policy application. New policy applications refer to those applications that necessitate ASIC to create new, substantive policies as they:
- introduce entirely new policy considerations;
- involve modifications to existing ASIC policy that are more than minor or technical in nature;
- entail a significant change to or a complete reversal of existing ASIC policy.
It is important to understand the various forms of relief available to them and to work closely with your legal advisors or financial services lawyers to prepare a strong application for relief if necessary and avoid compliance issues in financial services.
When Is ASIC Relief Necessary?
ASIC relief may be necessary for a variety of situations, including:
- Where regulatory requirements are too onerous: Businesses may seek relief from certain requirements if they are too difficult or costly to comply with, or if they pose an unreasonable burden on the business.
- Where requirements do not apply: Some requirements may not apply to certain businesses, but they are still required to seek relief from ASIC to be exempted from the regulatory obligation.
- Where compliance would be impractical or unnecessary: In some cases, it may not be practical or necessary for a business to comply with certain regulatory requirements, and they may need to seek relief from ASIC to be exempted.
- Where unforeseen circumstances arise: Businesses may need relief from ASIC if unforeseen circumstances arise, such as changes in the business environment, industry or technology.
In each of these circumstances, ASIC relief may be needed to remain compliant with regulatory requirements while avoiding undue burden. As a business owner, you need to understand when and how to seek relief from ASIC to ensure you can continue to operate effectively and within the bounds of the law. Consulting with financial lawyers or financial services lawyers would be beneficial.
How Can Businesses Apply for ASIC Relief?
To apply for ASIC relief, you must use the ASIC Regulatory Portal and pay the requisite fees. The portal is designed to simplify the application process by providing structured online transactions with mandatory fields and questions that ensure all necessary information is provided upfront. For more information on how to apply through this portal, click here.
Before submitting an application, it is advised that you read all the relevant published policies. Also, check out this information sheet on how to apply for relief to identify and address various issues so you can better prepare for the application.
How Madison Marcus Can Help You
ASIC relief can be a complex and technical process that requires a thorough understanding of regulatory and legal requirements. If you are a business owner, you may find it beneficial to seek the assistance of a finance lawyer or financial lawyer when applying for ASIC relief.
At Madison Marcus, we can provide you with valuable guidance on the application process and help ensure that all necessary information and documentation are included in the application. We can also give you advice on any potential risks or issues that may arise. Ultimately, working with a finance lawyer or financial lawyer can help you navigate the ASIC relief process more effectively and increase the likelihood of a successful outcome.
For all enquiries, contact us here.