In this Funds Update for 2 February 2024:
- Treasury releases exposure draft legislation on climate-related financial disclosure
- ASIC consults on 5 'sunsetting' managed investment scheme class orders
- HSF's global FSR outlook for 2024
Treasury releases exposure draft legislation on climate-related financial disclosure
On 12 January 2024, Treasury released the Treasury Laws Amendment Bill 2024: Climate-related financial disclosure (Exposure Draft Legislation), building on the second consultation paper published by Treasury in June 2023.
The Exposure Draft Legislation seeks to amend parts of the Corporations Act 2001(Cth) (Corporations Act) and the Australian Securities and Investment Commission Act 2001 to introduce mandatory requirements for large businesses and financial institutions (including large registered schemes) to disclose their climate-related risks and opportunities. The proposed requirements will be phased-in over the next three years.
Registered schemes that lodge financial reports under Chapter 2M of the Corporations Act, must comply with the sustainability reporting requirements for the financial years (FY) specified in this table when they meet two or more of the following three financial thresholds.
| Financial thresholds for a FY | Comply for FY commencing 1 July 2024 | Comply for FY commencing 1 July 2026 | Comply for FY commencing 1 July 2027 |
| consolidated revenue | $500 million or more | $200 million or more | $50 million or more |
| consolidated gross assets | $1 billion or more | $500 million or more | $25 million or more |
| number of employees (including controlled entities) | 500 or more | 250 or more | 100 or more |
Broadly speaking, a reporting entity's sustainability report
must include:
- its climate statements for the year;
- any notes to the climate statements;
- any statements related to matters concerning environmental sustainability as required by a legislative instrument issued by the Minister; and
- the directors' declaration about the statements and notes.
Submissions in relation to the Exposure Draft Legislation close on 9 February 2024.
ASIC consults on 5 'sunsetting' managed investment scheme class orders
On 19 January 2024, ASIC announced a consultation on 5 sunsetting class orders relating to managed investment schemes and most importantly the following class orders:
- [CO 13/1409] – Holding assets: Standards for responsible entities
- [CO 13/1410] – Holding assets: Standards for providers of custodial and depository services
Other class orders being consulted on are:
- [CO 13/1200] – Periodic statements relief for AQUA quoted and listed managed investment scheme manager
- [CO 13/1406] – Land holding for primary production schemes
- [CO 13/1621] – Exemption and declaration for the operation of mFund
All the class orders are scheduled to sunset on 1 April 2024 and ASIC is proposing to remake these class orders for a period of 5 years. Submissions close on 16 February 2024.
HSF's global FSR outlook for 2024
HSF has just released its annual global FSR outlook for 2024.
We predict that in 2024, the character of change will be more foundational – or fundamental – in nature than ever before and that from ESG to AI, the shape of the world we live in is changing in a radical way. In our 2024 global outlook, we look at the paths through the shifting landscape for firms seeking solid ground.
Without question the global FSR regulatory expectations are getting higher and an apparent focus on new risks – ESG, AI, cryptoassets – should not be understood as casting old friends aside: financial crime risk, for one, continues to evolve, presenting novel challenges for financial services providers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
