ASIC is considering extending financial relief for employee redundancy funds.

The Australian Securities and Investments Commission (ASIC) has announced a proposal to extend the current relief provided to employee redundancy funds from the Australian Financial Services (AFS) licensing and managed investment provisions of the Corporations Act 2001. 

Employee redundancy funds are established to accept contributions from employers in the construction and allied industries on behalf of their employees. 

These contributions represent redundancy benefits that will be payable to employees upon termination or cessation of employment, excluding cases of misconduct.

According to ASIC, employee redundancy funds are likely to meet the definition of a managed investment scheme and a financial product under the Corporations Act 2001. As such, operators of these funds would typically be required to hold an AFS licence, register the funds as managed investment schemes, and comply with the associated managed investment provisions. 

Since 25 May 2000, ASIC has provided relief to operators of employee redundancy funds to mitigate the regulatory burdens associated with compliance. 

The current relief in ASIC Corporations (Employee Redundancy Funds Relief) Instrument 2015/1150 is set to expire on 1 October 2024.

ASIC plans to remake and extend the scheme for an additional five years, continuing support for what ASIC sees as a necessary component of the legislative framework supporting employee redundancy funds.

ASIC says that the instrument is operating as intended and remains beneficial. The ultimate decision on whether to enact standalone legislation or amend the Corporations Act to address the governance, financial reporting, and disclosure requirements for employee redundancy funds comprehensively will rest with the government.

Stakeholders are invited to provide feedback on this proposal by sending submissions to This email address is being protected from spambots. You need JavaScript enabled to view it. by 5pm on 23 August 2024.