ASIC seeks to remake regulation for financial reporting by stapled entities
ASIC Class Order [CO 13/1050] addresses the financial reporting practices of stapled entities that qualify as disclosing entities. It enables these entities to present either combined financial statements or consolidated financial statements of the stapled group in cases where they have prepared such financial statements for a previous reporting period.
The Australian Securities and Investments Commission (ASIC) has put forth a proposal to remake the ASIC Class Order [CO 13/1050], which deals with financial reporting by stapled entities.
This move comes under the framework of the Legislation Act 2003, which mandates the automatic cessation, or ‘sunset,’ of legislative instruments after a period of 10 years unless they are remade before the sunset date. The objective of this process is to ensure that legislative instruments remain relevant, effective, and necessary.
Stakeholders have the option to provide feedback anonymously or using an alias
ASIC Class Order [CO 13/1050], which is set to sunset on October 1, 2023, has undergone assessment by ASIC. The conclusion of this evaluation is that the class order continues to operate effectively and efficiently and plays a pivotal role within the legislative framework.
The process of remaking legislative instruments is crucial to maintain the integrity and relevance of regulatory frameworks. Ensuring that instruments stay up-to-date and serve their intended purposes is vital in the ever-evolving landscape of financial regulation. By remaking this class order, ASIC is affirming its commitment to providing a legislative environment that is conducive to fair and transparent financial reporting.
ASIC welcomes feedback on its proposal, inviting stakeholders and interested parties to share their insights. This includes input on whether the instrument is functioning effectively and efficiently and whether any amendments are warranted. Feedback submissions should be directed to rri[email protected] and are open until September 13, 2023.
Stakeholders have the option to provide feedback anonymously or using an alias. However, it’s essential to note that if anonymity is chosen, ASIC may not be able to contact the contributor for further discussion or clarification if required. The regulatory body also emphasizes that feedback will not be treated as confidential unless explicitly requested by the respondent.
Stapled entities and ASIC Class Order [CO 13/1050]
Stapled entities are listed entities whose securities are traded together such that each investor has the same proportionate interest in each entity.
Consolidated or combined financial statements provide useful and meaning information on investors’ interest in the overall stapled arrangement, and may be necessary to give a true and fair view of the individual entity financial reports. Transactions between the entities are eliminated in preparing consolidated or combined financial statements.
ASIC Class Order [CO 13/1050] addresses the financial reporting practices of stapled entities that qualify as disclosing entities. It enables these entities to present either combined financial statements or consolidated financial statements of the stapled group in cases where they have prepared such financial statements for a previous reporting period.
This allowance is made despite the entities not meeting the requirement to prepare consolidated financial statements under Accounting Standard AASB 10 Consolidated Financial Statements. Additionally, Class Order [CO 13/1050] permits stapled entities to continue presenting their respective financial statements together in a single financial report.
In summary, ASIC’s proposal to remake this legislative instrument reflects the regulator’s commitment to maintaining a robust regulatory framework that aligns with evolving industry needs and best practices.
Interested parties are encouraged to provide their feedback to help shape the future of financial reporting for stapled entities in Australia.
