Australian Securities and Investments Commission proposes a single legislative instrument
The Australian Securities and Investments Commission (ASIC) is encouraging stakeholders to provide feedback on its proposal to remake relief for employee incentive schemes under two class orders, which are both set to expire on 1 April.
The current instruments – ASIC Class Order [CO 14/1000] for employee incentive schemes for listed bodies and ASIC Class Order [CO 14/1001] for employee incentive schemes for unlisted bodies – include exemptions seeking to support the continued issue of financial products, including relief for secondary sales, advertising, licensing, and contribution plans, the ASIC said in a news release.
The ASIC shared that it was planning to unify the two class orders in a single legislative instrument and to remake the exemptions for a five-year period.
The ASIC added that it intended to require some exemptions only for underlying ‘eligible’ products like shares, given that entities need not issue ‘overlying’ eligible products like options or incentive rights.
The ASIC urged stakeholders to share their thoughts on its proposal to remake the employee incentive scheme class orders. They can do so by emailing their submissions by 5pm on 22 February, said the ASIC’s news release.
The ASIC noted that it intended for most of the exemptions to remain generally the same. Employee share schemes now operate under Division 1A of Part 7.12 of the Corporations Act 2001, the ASIC also noted in its news release.
Entities have been unable to offer financial products to eligible participants, including employees, under the employee incentive scheme class orders since 1 March 2023, the ASIC said in its news release.
But these entities may have to keep issuing financial products due to employee incentive schemes created under the employee incentive scheme class orders, such as when an eligible participant is entitled to shares after an option has been exercised or an incentive right has been vested, the ASIC’s news release added.
