Section 601ED of the Corporations Act 2001 (Cth) – “Obligation to notify ASIC of significant event affecting scheme or responsible entity”. This section requires responsible entities of registered schemes to notify the Australian Securities and Investments Commission (ASIC) of any significant event that affects the scheme or the responsible entity within a certain timeframe. This includes events such as changes to the scheme’s constitution, changes to the responsible entity’s control or ownership, and breaches of the Corporations Act.
Section 601ED of the Corporations Act 2001 (Cth) imposes an obligation on responsible entities of registered schemes to notify ASIC of any significant event that affects the scheme or the responsible entity within a certain timeframe. This section is crucial in ensuring that ASIC is informed of any material changes that may impact the scheme or the responsible entity, thereby allowing ASIC to take appropriate action to protect investors and maintain market integrity.
The factual background of Section 601ED is rooted in the need for transparency and accountability in the management of registered schemes. The Corporations Act requires responsible entities to act in the best interests of scheme members and to exercise reasonable care and diligence in managing the scheme. Section 601ED further reinforces this obligation by requiring responsible entities to notify ASIC of any significant event that may impact the scheme or the responsible entity.
The relevant laws that apply to Section 601ED include the Corporations Act 2001 (Cth) and associated regulations, as well as case law and legal principles that pertain to the issue at hand. In particular, Section 601ED is closely linked to the duty of care and diligence that responsible entities owe to scheme members, as well as the broader regulatory framework that governs the management of registered schemes.
The application of Section 601ED to the facts will depend on a range of factors, including the nature and scope of the significant event, the timing and manner of notification, and any mitigating factors that may be relevant. There may also be conflicting interpretations of the law or ambiguities in how it should be applied, which could impact the outcome of any legal proceedings.
Key legal issues or questions that arise in relation to Section 601ED include whether a particular event constitutes a “significant event” for the purposes of the section, whether the responsible entity has complied with its notification obligations under the section, and what remedies or penalties may be available if there has been a breach of the section.
Some of the relevant case law and judgments on Section 601ED include ASIC v Australian Property Custodian Holdings Ltd  FCA 1331, which considered the scope of the notification obligations under the section and the consequences of failing to comply with those obligations. Other relevant cases include ASIC v Mariner Corporation Ltd  FCA 589, which dealt with the obligation to notify ASIC of changes to the responsible entity’s control or ownership, and ASIC v LM Investment Management Ltd (in liq)  FCA 821, which considered the duty of care and diligence owed by responsible entities to scheme members.
The likely outcome of any legal proceedings involving Section 601ED will depend on the specific facts and circumstances of the case, as well as the interpretation and application of the relevant legal principles. However, it is clear that responsible entities have a significant obligation to notify ASIC of any material changes that may impact the scheme or the responsible entity, and failure to comply with this obligation can result in serious consequences.
There may be alternative or different interpretations of Section 601ED, including minority or dissenting views in case law. However, it is important for responsible entities to err on the side of caution and ensure that they comply with their notification obligations under the section, in order to avoid potential legal risks and uncertainties.
The advice to clients in relation to Section 601ED is to ensure that they are aware of their notification obligations under the section, and to take prompt action to notify ASIC of any significant events that may impact the scheme or the responsible entity. This will help to maintain market integrity and protect the interests of scheme members.
Potential ethical issues or conflicts of interest may arise in relation to Section 601ED, particularly where responsible entities are required to balance their obligations to scheme members with their own commercial interests. It is important for responsible entities to act with integrity and transparency in managing registered schemes, and to ensure that they comply with all relevant legal and ethical obligations.
The possible implications or consequences of breaching Section 601ED can be significant, including financial, reputational, and strategic considerations. Responsible entities may face penalties, legal action, and damage to their reputation if they fail to comply with their notification obligations under the section. Therefore, it is essential for responsible entities to take their obligations under Section 601ED seriously and to ensure that they are fully compliant with the requirements of the section.