The Australian Securities and Investment Commission has repealed a class order on the subject of managed investment schemes rather than allowing it to expire naturally on 1 April 2017.

ASIC has stated that class order CO 02/226 on managed investment schemes is no longer required and does not form a necessary and useful part of 'the legislative framework.' This class order will expire in accordance with a 'sunset clause' in the Legislation Act 2003. Automatic repeal does not undo the past effect of the instrument.

ASIC, however, has a policy of not waiting for orders it does not like to go out of force in this way. It prefers to repeal instruments itself wherever it has the power, the better to underline the fact that it definitely wants them to go. It always consults interested parties about whether it should repeal this-or-that order; in this case there were no replies.

It explained in its consultative document in May: "This should be repealed because it has limited operation. In most cases, by the time all retail members withdraw from the managed investment scheme, the scheme is probably already registered and so the relief is unnecessary. There is also little scope for the operation of this class order in light of s601PA(2)(b) Corporations Act, which permits the responsible entity of a registered managed investment scheme to apply to ASIC to deregister the scheme if the scheme is not required to be registered because of s601ED(2) and all the members agree that the scheme should be deregistered. This provision would almost certainly cover situations that would fall within the relief under CO 02/226.