FINANCIAL ACCOUNTABILITY REGIME BILL 2023

2022-2023

The Parliament of the

Commonwealth of Australia

HOUSE OF REPRESENTATIVES

Presented and read a first time

Financial Accountability Regime Bill

2023

No. , 2023

(Treasury)

A Bill for an Act to provide for a strengthened

accountability framework for financial entities in

the banking, insurance and superannuation

industries, and for related purposes

No. , 2023

Financial Accountability Regime Bill 2023

Contents

Chapter 1--Introduction

Part 1--Preliminary

Short title ........................................................................................... 2

Commencement ................................................................................. 2

Objects of this Act ............................................................................. 2

Simplified outline of this Act ............................................................ 3

Act binds the Crown .......................................................................... 4

Extension to external Territories ....................................................... 4

Extra-territorial application ............................................................... 4

Part 2--Interpretation

Definitions ......................................................................................... 5

Meaning of

accountable entity

.......................................................... 9

Meaning of

accountable person

...................................................... 10

When a person is not an

accountable person

................................... 13

Meaning of

significant related entity

............................................... 13

Meaning of

constitutionally covered body

....................................... 15

Chapter 2--Obligations under the Financial

Accountability Regime

Part 1--Introduction

Simplified outline of this Chapter .................................................... 17

Part 2--Obligations of accountable entities and accountable

persons

Division 1--Accountable entities

Obligations of accountable entities .................................................. 19

Minister may exempt accountable entities ....................................... 19

Inconsistency with corresponding foreign laws ............................... 20

Division 2--Accountable persons

Obligations of accountable persons ................................................. 22

Inconsistency with corresponding foreign laws ............................... 22

Part 3--Accountability obligations

The accountability obligations of an accountable entity .................. 24

The accountability obligations of an accountable person ................ 24

Taking reasonable steps ................................................................... 26

Financial Accountability Regime Bill 2023

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Part 4--Key personnel obligations

The key personnel obligations of an accountable entity .................. 27

People prohibited from being an accountable person ...................... 28

Part 5--Deferred remuneration obligations

The deferred remuneration obligations of an accountable

entity ................................................................................................ 30

Meaning of

variable remuneration

.................................................. 31

Minimum amount of variable remuneration to be deferred ............. 32

Minimum deferral period for variable remuneration ....................... 34

Exemption for small amounts of variable remuneration .................. 37

Exemption for variable remuneration payable for temporary

performance ..................................................................................... 37

Part 6--Notification obligations

The notification obligations of an accountable entity ...................... 38

Events for which the Regulator must be notified ............................. 40

Accountability statements ................................................................ 41

Accountability map ......................................................................... 41

Chapter 3--Administration

Part 1--Introduction

Simplified outline of this Chapter .................................................... 42

Part 2--The Regulator

Division 1--Arrangements for administration

Administration of this Act ............................................................... 43

Arrangement for administration ...................................................... 45

Agreement about exercise of powers ............................................... 45

Division 2--Information sharing

Disclosure of information and documents between APRA

and ASIC ......................................................................................... 47

Part 3--Registration and disqualification of accountable

persons

Division 1--Registration of accountable persons

Registration of a person as an accountable person........................... 50

Division 2--Disqualification of accountable persons

Regulator may disqualify an accountable person............................. 52

Regulator may vary or revoke a disqualification ............................. 53

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Financial Accountability Regime Bill 2023

iii

Allowing a person disqualified by the Regulator to act as an

accountable person .......................................................................... 54

Part 4--Regulatory powers and enforcement

Division 1--Investigations

Regulator may appoint an investigator ............................................ 55

Requirement to assist investigator ................................................... 56

Investigator may require production of books etc............................ 56

Concealing books, accounts or documents relevant to

investigation .................................................................................... 57

Division 2--Examinations

Notice requiring appearance for examination .................................. 58

Conduct of examinations ................................................................. 58

Who may be present at examinations .............................................. 59

Record of examination..................................................................... 60

Offences .......................................................................................... 60

Division 3--Evidentiary use of certain material

Statements made at an examination--proceedings against

examinee .......................................................................................... 61

Statements made at an examination--other proceedings ................. 62

Weight of evidence under section 55 ............................................... 63

Objection to admission of statements made at examination ............ 64

Copies of, or extracts from, certain books, accounts and

documents ........................................................................................ 65

Admissibility of investigation report ............................................... 66

Exceptions to admissibility of investigation report .......................... 66

Material otherwise admissible ......................................................... 67

Division 4--Requesting information

Regulator may request information ................................................. 68

Failing to give information .............................................................. 70

Division 5--Regulator's power to issue directions

Subdivision A--Kinds of directions

Direction dealing with non-compliance ........................................... 71

Direction to reallocate responsibilities............................................. 73

Subdivision B--Non-compliance with directions

Offence provision for non-compliance with a direction .................. 75

Subdivision C--Secrecy and disclosure provisions relating to

directions

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Regulator may determine that a direction is covered by

secrecy provision ............................................................................. 76

Secrecy relating to directions........................................................... 77

Disclosure of publicly available information ................................... 78

Disclosure allowed by the Regulator ............................................... 78

Disclosure for the purpose of seeking review or legal advice .......... 79

Disclosure under the APRA Act ...................................................... 80

Disclosure under the ASIC Act ....................................................... 81

Disclosure in circumstances set out in the Minister rules ................ 81

Disclosure for purpose ..................................................................... 82

Exceptions operate independently ................................................... 82

Subdivision D--Other provisions relating to directions

Direction not grounds for denial of obligations ............................... 82

Information to the Minister about certain directions........................ 84

Relationship with other laws ........................................................... 84

Division 6--Civil penalties

Civil penalty provision for non-compliance with obligations .......... 85

Ancillary contravention of civil penalty provisions ......................... 85

Civil penalty provisions--enforcement ........................................... 86

Civil penalty provisions--amount of penalty .................................. 87

Division 7--Enforceable undertakings

Enforceable undertakings ................................................................ 89

Division 8--Injunctions

Injunctions ....................................................................................... 91

Division 9--Miscellaneous

Physical elements of offences .......................................................... 92

Contravening an offence provision or a civil penalty

provision .......................................................................................... 92

Self-incrimination ............................................................................ 92

Legal professional privilege ............................................................ 93

Powers of Court relating to non-compliance with this Act .............. 94

Part 5--Review of decisions

Reviewable decisions ...................................................................... 95

Notice of decisions and review rights .............................................. 98

Affected person may request reconsideration of reviewable

decision............................................................................................ 99

Reconsideration of reviewable decision .......................................... 99

Review by the Administrative Appeals Tribunal ........................... 100

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Financial Accountability Regime Bill 2023

Part 6--Miscellaneous

102

Disclosure for the purpose of seeking review or legal advice ........ 102

Indemnifying accountable entities ................................................. 102

Causes of action not created .......................................................... 103

Compensation for acquisition of property ..................................... 103

100

Conduct of directors, employees and agents .................................. 103

101

Protection from liability--general ................................................. 105

102

Protection from liability--directions and secrecy ......................... 105

103

Protection from liability--provisions do not limit each other ....... 106

104

Minister rules ................................................................................. 106

105

Regulator rules .............................................................................. 107

Chapter 1

Introduction

Part 1

Preliminary

Section 1

Financial Accountability Regime Bill 2023

No. , 2023

Chapter 1--Introduction

Part 1--Preliminary

1 Short title

This Act is the

Financial Accountability Regime Act 2023

2 Commencement

(1) Each provision of this Act specified in column 1 of the table

commences, or is taken to have commenced, in accordance with

column 2 of the table. Any other statement in column 2 has effect

according to its terms.

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1. The whole of

this Act

The day after this Act receives the Royal

Assent.

Note:

This table relates only to the provisions of this Act as originally

enacted. It will not be amended to deal with any later amendments of

this Act.

(2) Any information in column 3 of the table is not part of this Act.

Information may be inserted in this column, or information in it

may be edited, in any published version of this Act.

3 Objects of this Act

The objects of this Act are:

(a) to provide for a strengthened accountability framework for:

(i) financial entities in the banking, insurance and

superannuation industries; and

Introduction

Chapter 1

Preliminary

Part 1

Section 4

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Financial Accountability Regime Bill 2023

(ii) persons who hold certain positions, or have certain

responsibilities, related to those financial entities; and

(b) to confer on APRA and ASIC functions and powers

(including information gathering, investigation and

enforcement powers) that:

(i) relate to obligations under that framework; and

(ii) can be performed and exercised in aid of their functions

and powers under other laws.

4 Simplified outline of this Act

This Act establishes a strengthened accountability framework for

financial entities in the banking, insurance and superannuation

industries that are regulated by Acts under which APRA is the

prudential or principal regulator. These entities are called

accountable entities.

The framework is intended to ensure that accountable entities take

reasonable steps:

(a)

to conduct their business with honesty and integrity, and

with due skill, care and diligence; and

(b)

to deal with APRA and ASIC in an open, constructive

and cooperative way; and

(c)

to prevent adverse effects on their prudential standing or

prudential reputation; and

(d)

to ensure that their senior executives and other key

personnel (called accountable persons) meet those same

standards of conduct, and take reasonable steps to ensure

compliance with applicable laws; and

(e)

to ensure that related entities whose business and

activities materially and substantially affect the

accountable entities (called significant related entities)

comply with the framework in the same way as the

accountable entities themselves.

Note:

Other entities that hold Australian financial services licences or

Australian credit licences are not covered by the framework in this Act.

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Introduction

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Preliminary

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Accountable entities are subject to a series of obligations that

enable oversight and enforcement by APRA and ASIC (together

called the Regulator). These are enforced mainly through civil

penalties for non-compliance.

Accountable persons are also subject to obligations, which can be

enforced by accountable entities through reduction of deferred

remuneration, or by the Regulator through disqualification.

A range of compliance and enforcement powers are provided for,

including by applying the

Regulatory Powers (Standard

Provisions) Act 2014

5 Act binds the Crown

(1) This Act binds the Crown in each of its capacities.

(2) This Act does not make the Crown liable to be prosecuted for an

offence.

6 Extension to external Territories

This Act extends to every external Territory.

7 Extra-territorial application

This Act extends to acts, omissions, matters and things outside

Australia.

Note:

The expression

this Act

includes the Regulatory Powers Act as it

applies in relation to this Act (see section 8).

Introduction

Chapter 1

Interpretation

Part 2

Section 8

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Financial Accountability Regime Bill 2023

Part 2--Interpretation

8 Definitions

In this Act:

accountability map

: see subsection 31(2).

accountability statement

: see subsection 31(2).

accountable entity

: see section 9.

accountable person

: see sections 10 and 11.

ADI

has the same meaning as in the

Banking Act 1959

Note:

ADI is short for authorised deposit-taking institution.

affected person

: see section 91.

annual turnover

, of an accountable entity during a 12-month

period, has the same meaning as in section 761A of the

Corporations Act 2001

APRA

means the Australian Prudential Regulation Authority.

APRA staff member

has the same meaning as in the

Australian

Prudential Regulation Authority Act 1998

ASIC

means the Australian Securities and Investments

Commission.

ASIC staff member

means a staff member within the meaning of

the

Australian Securities and Investments Commission Act 2001

Australia

, when used in a geographical sense, includes the external

Territories.

authorised NOHC

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Introduction

Part 2

Interpretation

Section 8

Financial Accountability Regime Bill 2023

No. , 2023

(a) of an ADI--means an authorised NOHC (within the meaning

of the

Banking Act 1959

) of the ADI; and

(b) of a general insurer--means an authorised NOHC (within the

meaning of the

Insurance Act 1973

) of the general insurer.

Note:

NOHC is short for non-operating holding company.

benefit derived and detriment avoided

has the same meaning as in

the

Corporations Act 2001

civil penalty order

has the same meaning as in the Regulatory

Powers Act.

civil penalty provision

has the same meaning as in the Regulatory

Powers Act.

connected entity

, in relation to an RSE licensee, means a

connected entity (within the meaning of the

Superannuation

Industry (Supervision) Act 1993

) of the RSE licensee.

constitutional corporation

means a corporation to which

paragraph 51(xx) of the Constitution applies.

constitutionally covered body

: see section 13.

decision-maker

for a reviewable decision means:

(a) if APRA made the reviewable decision--APRA; or

(b) if ASIC made the reviewable decision--ASIC.

enhanced notification threshold

: see subsection 31(3).

financial year

, in relation to an accountable entity or significant

related entity:

(a) if the accountable entity or significant related entity is a

company that is registered under the

Corporations Act

2001

--has the same meaning as in that Act; or

(b) if:

(i) the accountable entity or significant related entity is not

a company that is registered under the

Corporations Act

2001

; and

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Chapter 1

Interpretation

Part 2

Section 8

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Financial Accountability Regime Bill 2023

(ii) the accountable entity or significant related entity is

incorporated or registered under another law; and

(iii) a definition of

financial year

applies in relation to that

other law;

has the same meaning as in that other law; or

1 July.

foreign accountable entity

means:

(a) a foreign ADI (within the meaning of the

Banking Act 1959

);

(b) a foreign general insurer (within the meaning of the

Insurance Act 1973

); or

meaning of the

Life Insurance Act 1995

) that is registered

under section 21 of the

Life Insurance Act 1995.

general insurer

has the same meaning as in the

Insurance Act

1973

internal decision reviewer

: see subsection 94(1).

investigator

means a person the Regulator appoints under

subsection 45(1).

lawyer

means a duly qualified legal practitioner and, in relation to

a person, means such a practitioner acting for the person.

life company

means a body corporate that is registered under

section 21 of the

Life Insurance Act 1995

minimum deferral period

, for variable remuneration of an

accountable person, has the meaning given by subsection 28(1).

Minister rules

means the rules made under subsection 104(1).

officer

has the meaning given by section 9 of the

Corporations Act

2001

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Interpretation

Section 8

Financial Accountability Regime Bill 2023

No. , 2023

private health insurer

has the same meaning as in the

Private

Health Insurance (Prudential Supervision) Act 2015

reconsideration decision

means a decision made under

subsection 94(2).

registered NOHC

, of a life company, means a registered NOHC

(within the meaning of the

Life Insurance Act 1995

) of the life

company.

Note:

NOHC is short for non-operating holding company.

Regulator

means either APRA or ASIC, but, if the context requires

the reference to be particularly to one of those bodies, then

Regulator means that body.

Note:

However, ASIC is to perform functions and exercise powers under

this Act only in relation to certain persons: see subsection 36(2).

Regulator rules

means the rules made under subsection 105(1).

Regulatory Powers Act

means the

Regulatory Powers (Standard

Provisions) Act 2014

related

: the question whether 2 bodies corporate are

related

to each

other is to be determined for the purposes of this Act in the same

way as for the purposes of the

Corporations Act 2001

relevant group

of an accountable entity, means the accountable

entity and its significant related entities.

remuneration

, of an accountable person, has a meaning affected

by subsection 25(3).

reviewable decision

: see section 91.

RSE licensee

means a constitutional corporation, or a body

corporate, that:

(a) holds an RSE licence granted under section 29D of the

Superannuation Industry (Supervision) Act 1993

; and

(b) is not the trustee of a fund that is an exempt public sector

superannuation scheme (within the meaning of that Act).

Introduction

Chapter 1

Interpretation

Part 2

Section 9

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Financial Accountability Regime Bill 2023

significant related entity

has the meaning given by section 12.

subsidiary

: the question whether a body corporate is a

subsidiary

of another body corporate is to be determined for the purposes of

this Act in the same way as for the purposes of the

Corporations

Act 2001

this Act

includes:

(a) the Minister rules; and

(b) the Regulator rules; and

Act.

variable remuneration

has the meaning given by section 26.

9 Meaning of accountable entity

ADIs and authorised NOHCs of ADIs

(1) A body corporate is an

accountable entity

if both of the following

apply to the body corporate:

(a) it is an ADI or an authorised NOHC of an ADI;

(b) it is a constitutionally covered body.

Note:

For when a body corporate is a

constitutionally covered body

, see

section 13.

(2) The ADI or authorised NOHC is an

accountable entity

from the

start of the later of:

(a) the day that is 6 months after the commencement of this Act;

and

(b) the day on which it becomes an ADI or authorised NOHC, as

the case may be.

Other bodies corporate

(3) A body corporate is an

accountable entity

if both of the following

apply to the body corporate:

(a) it is:

Chapter 1

Introduction

Part 2

Interpretation

Section 10

Financial Accountability Regime Bill 2023

No. , 2023

(i) a general insurer; or

(ii) an authorised NOHC of a general insurer; or

(iii) a life company; or

(iv) a registered NOHC of a life company; or

(v) a private health insurer; or

(vi) an RSE licensee;

(b) it is a constitutionally covered body.

(4) The body corporate is an

accountable entity

from the start of the

later of:

(a) the day that is 18 months after the commencement of this

Act; and

(b) the day on which it becomes a body corporate covered by the

relevant subparagraph of paragraph (3)(a).

10 Meaning of accountable person

Accountable persons of accountable entities

(1) An individual is an

accountable person

of an accountable entity if:

(a) either of the following applies:

(i) in the case of an accountable entity other than an RSE

licensee--the person holds a position in the accountable

entity or in another body corporate of which the

accountable entity is a subsidiary;

(ii) in the case of an accountable entity that is an RSE

licensee--the person holds a position in the accountable

entity or in another body corporate of which the

accountable entity is a connected entity; and

(b) because of that position, the person has actual or effective

senior executive responsibility:

(i) for management or control of the accountable entity; or

(ii) for management or control of a significant or substantial

part or aspect of the operations of the accountable entity

or the accountable entity's relevant group.

Introduction

Chapter 1

Interpretation

Part 2

Section 10

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Financial Accountability Regime Bill 2023

Note 1:

For the definitions of

connected entity

relevant group

and

subsidiary

, see section 8.

Note 2:

This section is subject to section 11 (when a person is not an

accountable person).

Prescribed responsibilities and positions

(2) An individual is an

accountable person

of an accountable entity if

the person:

(a) holds a position in, or relating to, the accountable entity; and

(b) because of that position has a responsibility, relating to the

accountable entity, prescribed by the Minister rules for the

purposes of this paragraph

(3) If an individual holds a position in an accountable entity that is a

position prescribed by the Minister rules for the purposes of this

subsection, then:

(a) the individual is an

accountable person

of the accountable

entity; and

(b) for the purposes of this Act, the responsibilities associated

with that position are responsibilities that cause the

individual to be an accountable person of the accountable

entity.

(4) The Minister rules:

(a) may prescribe responsibilities relating to accountable entities

for the purposes of paragraph (2)(b); and

(b) may prescribe positions in accountable entities for the

purposes of subsection (3).

Note:

For example, the Minister rules could prescribe responsibilities

relating to accountable entities for the purposes of paragraph (2)(b) by

reference to one or more of the following:

(a) a level of responsibility;

(b) responsibility for a matter;

Chapter 1

Introduction

Part 2

Interpretation

Section 10

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Accountable persons of foreign accountable entities

(5) An individual is an

accountable person

of an accountable entity

that is a foreign accountable entity if the person:

(a) has a responsibility of a kind mentioned in subsection (1) or

(2); or

(b) holds a position of a kind mentioned in subsection (3);

in relation to a branch of the accountable entity that is operating in

Australia.

Accountable persons of significant related entities

(6) An individual is an

accountable person

of a significant related

entity of an accountable entity if:

(a) the person holds a position in the significant related entity;

and

(b) because of that position, the person has actual or effective

senior executive responsibility:

(i) for management or control of the accountable entity; or

(ii) for management or control of a significant or substantial

part or aspect of the operations of the accountable entity

or the accountable entity's relevant group.

Note:

For the definitions of

relevant group

and

significant related entity

see section 8.

Alternative tests

(7) An individual can be an

accountable person

of an accountable

entity (other than a foreign accountable entity) because of one or

more of subsections (1), (2) and (3). An individual can be an

accountable person

of a foreign accountable entity only because of

subsection (5).

Introduction

Chapter 1

Interpretation

Part 2

Section 11

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Financial Accountability Regime Bill 2023

11 When a person is not an accountable person

When persons are not accountable persons

(1) A person is not an

accountable person

of an accountable entity, or

of a significant related entity, if each of the person's

responsibilities that would (apart from this subsection) cause the

person to be an accountable person of the entity is either:

(a) a responsibility excluded under subsection (2) in relation to

the entity; or

(b) a responsibility excluded under subsection (3) in relation to a

class of accountable entities or significant related entities that

includes that accountable entity or significant related entity.

(2) For the purposes of paragraph (1)(a), the Regulator may, by written

notice given to an accountable entity or a significant related entity,

exclude specified responsibilities.

(3) For the purposes of paragraph (1)(b), the Regulator rules may

exclude specified responsibilities relating to:

(a) a specified class of accountable entities; or

(b) a specified class of significant related entities.

Relationship with other provisions

(4) This section has effect despite section 10.

Notice not a legislative instrument

(5) A notice under subsection (2) is not a legislative instrument.

12 Meaning of significant related entity

Significant related entities of accountable entities other than RSE

licensees

(1) Subject to subsection (2), a body corporate is a

significant related

entity

of an accountable entity that is not an RSE licensee if all of

the following apply to the body corporate:

Chapter 1

Introduction

Part 2

Interpretation

Section 12

Financial Accountability Regime Bill 2023

No. , 2023

(a) it is a subsidiary of the accountable entity;

(b) it, or its business or activities, has (or is likely to have) an

effect on the accountable entity, or the business or activities

of the accountable entity, that is material and substantial;

(d) it is not an accountable entity itself.

Note 1:

For the definition of

subsidiary

, see section 8.

Note 2:

For when a body corporate is a

constitutionally covered body

, see

section 13.

(2) A body corporate is not a

significant related entity

of an

accountable entity (the

first accountable entity

) if:

(a) the body corporate is also a subsidiary

of another accountable

entity; and

(b) that other accountable entity is a subsidiary of the first

accountable entity.

Example: Company A is a subsidiary of the authorised NOHC of an ADI, and

also a subsidiary of the ADI. Both the ADI and the authorised NOHC

are accountable entities. Under this subsection:

(a) if the business of Company A has a material and substantial

effect on both the ADI and the authorised NOHC--Company A

would be a significant related entity only in relation to the ADI;

but

(b) if the business of Company A did not have a material and

substantial effect on the ADI--Company A would not be a

significant related entity in relation to either the ADI or the

authorised NOHC.

Significant related entities of accountable entities that are RSE

licensees

(3) A body corporate is a

significant related entity

of an accountable

entity that is an RSE licensee if all of the following apply to the

body corporate:

(a) it is a connected entity of the accountable entity;

(b) it, or its business or activities, has (or is likely to have) an

effect on the accountable entity, or the business or activities

of the accountable entity, that is material and substantial;

Introduction

Chapter 1

Interpretation

Part 2

Section 13

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Financial Accountability Regime Bill 2023

(d) it is not an accountable entity itself.

Note:

For the definition of

connected entity

, see section 8.

Material and substantial effect

(4) For the purposes of paragraphs (1)(b) and (3)(b), in determining

whether a body corporate has (or is likely to have) an effect on an

accountable entity, or the business or activities of an accountable

entity, that is material and substantial, the following matters may

be taken into account:

(a) the nature of the body corporate's business or activities;

(b) the scale of the body corporate's business or activities;

body corporate and the accountable entity;

(d) any organisational, financial or administrative arrangements

between the body corporate and the accountable entity;

(e) any other relevant matter.

13 Meaning of constitutionally covered body

(1) A body corporate is a

constitutionally covered body

if any of the

following apply to the body corporate:

(a) it is a constitutional corporation;

(b) it carries on the business of banking (within the meaning of

paragraph 51(xiii) of the Constitution), other than State

banking not extending beyond the limits of the State

concerned;

paragraph 51(xiv) of the Constitution), other than State

insurance not extending beyond the limits of the State

concerned;

(d) it is the trustee of a superannuation fund (within the meaning

of the

Superannuation Industry (Supervision) Act 1993

) the

sole or primary purpose of which is the provision of old-age

pensions (within the meaning of paragraph 51(xxiii) of the

Constitution).

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Introduction

Part 2

Interpretation

Section 13

Financial Accountability Regime Bill 2023

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(2) A body corporate is also a

constitutionally covered body

if:

(a) the conduct of the body corporate affects (or is capable of

affecting) the activities, functions, relationships or business

of another body corporate; and

(b) the other body corporate is covered by paragraph (1)(a), (b),

Obligations under the Financial Accountability Regime

Chapter 2

Introduction

Part 1

Section 14

No. , 2023

Financial Accountability Regime Bill 2023

Chapter 2--Obligations under the Financial

Accountability Regime

Part 1--Introduction

14 Simplified outline of this Chapter

Entities of the following kinds are accountable entities:

(a)

an authorised deposit-taking institution (ADI);

(b)

an authorised non-operating holding company (NOHC)

of an ADI;

(c)

a general insurer;

(d)

an authorised NOHC of a general insurer;

(e)

a life company;

(f)

a registered NOHC of a life company;

(g)

a private health insurer;

(h)

an RSE licensee.

Note:

RSE is short for registrable superannuation entity.

An accountable person is primarily someone who has actual or

effective senior executive responsibility for management or control

of an accountable entity, or of a significant or substantial part or

aspect of the operations of the entity or its corporate group. Rules

made by the Minister can prescribe other responsibilities and

positions that cause a person to be an accountable person.

An accountable entity must comply with:

(a)

accountability obligations under Part 3; and

(b)

key personnel obligations under Part 4, including to

ensure that responsibilities covering all parts of its

business are appropriately allocated to accountable

persons who are registered with the Regulator and not

disqualified; and

Chapter 2

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Part 1

Introduction

Section 14

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(c)

obligations under Part 5 to defer a prescribed portion of

the variable remuneration of its accountable persons to

ensure compliance with their obligations; and

(d)

obligations under Part 6 to notify the Regulator of

matters relating to accountable persons and their

responsibilities.

An accountable entity that fails to comply with any of these

obligations is liable to a civil penalty.

Accountable persons also have accountability obligations under

Part 3. Failure by an accountable person to comply with any of

those obligations may lead to reduction of their variable

remuneration or disqualification by the Regulator.

A foreign accountable entity is subject to obligations only to the

extent that it operates a branch of the foreign accountable entity in

Australia.

Obligations under the Financial Accountability Regime

Chapter 2

Obligations of accountable entities and accountable persons

Part 2

Accountable entities

Division 1

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Part 2--Obligations of accountable entities and

accountable persons

Division 1--Accountable entities

15 Obligations of accountable entities

(1) An accountable entity must comply with each one of the following:

(a) its accountability obligations under Part 3;

(b) its key personnel obligations under Part 4;

(d) its notification obligations under Part 6.

Note:

Failure to comply with an obligation under this Chapter is a

contravention of a civil penalty provision (see section 80).

(2) Subsection (1) does not apply to:

(a) an accountable entity that:

(i) the Minister has exempted under section 16; or

(ii) is included in a class of accountable entities that the

Minister has exempted under section 16; or

(b) a foreign accountable entity, except to the extent that it

operates a branch of the foreign accountable entity in

Australia.

(3) Subsection (1) does not apply to an accountable entity and an

obligation to the extent that the accountable entity is not required

to comply with the obligation because of subsection 17(2).

16 Minister may exempt accountable entities

Exemption of particular accountable entities

(1) The Minister may, by notifiable instrument, exempt an accountable

entity from compliance with this Chapter.

Chapter 2

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Part 2

Obligations of accountable entities and accountable persons

Division 1

Accountable entities

Section 17

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(2) The Minister may only exempt an accountable entity under

subsection (1) if the Minister is satisfied that it would be

unreasonable for the accountable entity to be required to comply

with this Chapter.

(3) An exemption under subsection (1) must include a statement that

sets out the Minister's reasons for making the exemption.

Class exemptions

(4) The Minister may, by legislative instrument, exempt a class of

accountable entities from compliance with this Chapter.

(5) The Minister may only exempt a class of accountable entities under

subsection (4) if the Minister is satisfied that it would be

unreasonable for the class of accountable entities to be required to

comply with this Chapter.

17 Inconsistency with corresponding foreign laws

(1) If the Regulator is satisfied that an accountable entity would

contravene a law of a foreign country if the accountable entity

were to comply with a particular obligation under section 15, the

Regulator may:

(a) give a written notice specifying that obligation to the

accountable entity; and

(b) specify in the notice:

(i) the extent to which the accountable entity need not

comply with that obligation; and

(ii) conditions to which the notice is subject.

Note:

A decision not to specify an obligation, or to specify conditions, is a

reviewable decision (see Part 5 of Chapter 3).

(2) The accountable entity is not required to comply with that

obligation:

(a) to the extent compliance would result in the accountable

entity contravening that law of a foreign country; or

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(b) if the notice specifies the extent to which the accountable

entity need not comply with that obligation--to the extent so

specified;

if the conditions (if any) specified in the notice are complied with.

(3) A notice under subsection (1) is not a legislative instrument.

Chapter 2

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Part 2

Obligations of accountable entities and accountable persons

Division 2

Accountable persons

Section 18

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Division 2--Accountable persons

18 Obligations of accountable persons

(1) An accountable person must comply with each of the person's

accountability obligations under Part 3 in relation to each of the

responsibilities that cause the person to be an accountable person

of an accountable entity or a significant related entity.

(2) Subsection (1) does not apply to an accountable person of an

accountable entity

to which section 15 does not apply because of

paragraph 15(2)(a).

(3) Subsection (1) applies to an accountable person of a foreign

accountable entity only in relation to a branch of the accountable

entity that is operating in Australia.

(4) Subsection (1) does not apply to an accountable person and an

obligation to the extent that the accountable person is not required

to comply with the obligation because of subsection 19(2).

19 Inconsistency with corresponding foreign laws

(1) If the Regulator is satisfied that an accountable person of an

accountable entity, or of a significant related entity, would

contravene a law of a foreign country if the person were to comply

with a particular obligation under section 18, the Regulator may:

(a) give a written notice specifying that obligation to the

accountable person; and

(b) specify in the notice:

(i) the extent to which the accountable person need not

comply with that obligation; and

(ii) conditions to which the notice is subject.

Note:

A decision not to specify an obligation, or to specify conditions, is a

reviewable decision (see Part 5 of Chapter 3).

(2) The accountable person is not required to comply with that

obligation:

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Part 2

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(a) to the extent that compliance would result in the accountable

person contravening that law of a foreign country; or

(b) if the notice specifies the extent to which the accountable

person need not comply with that obligation--to the extent

so specified;

if the conditions (if any) specified in the notice are complied with.

(3) The Regulator must give a copy of the notice to the accountable

entity or significant related entity.

(4) A notice under subsection (1) is not a legislative instrument.

Chapter 2

Obligations under the Financial Accountability Regime

Part 3

Accountability obligations

Section 20

Financial Accountability Regime Bill 2023

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Part 3--Accountability obligations

20 The accountability obligations of an accountable entity

The accountability obligations of an accountable entity are:

(a) to take reasonable steps to conduct its business with honesty

and integrity, and with due skill, care and diligence; and

(b) to take reasonable steps to deal with the Regulator in an

open, constructive and cooperative way; and

matters from arising that would (or would be likely to)

adversely affect the accountable entity's prudential standing

or prudential reputation; and

(d) to take reasonable steps to ensure that each of its accountable

persons meets their accountability obligations under

section 21; and

(e) to take reasonable steps to ensure that each of its significant

related entities complies with each of paragraphs (a), (b), (c)

and (d) as if the significant related entity were an accountable

entity.

Note:

See also section 22 (taking reasonable steps).

21 The accountability obligations of an accountable person

(1) The accountability obligations of an accountable person of an

accountable entity, or of a significant related entity of an

accountable entity, are to conduct the responsibilities of their

position as an accountable person:

(a) by acting with honesty and integrity, and with due skill, care

and diligence; and

(b) by dealing with the Regulator in an open, constructive and

cooperative way; and

responsibilities to prevent matters from arising that would (or

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would be likely to) adversely affect the prudential standing or

prudential reputation of the accountable entity; and

(d) by taking reasonable steps in conducting those

responsibilities to prevent matters from arising that would (or

would be likely to) result in a material contravention by the

accountable entity of any of the following:

(i) this Act;

(ii) the

Banking Act 1959

;

(iii) the credit legislation (within the meaning of the

National Consumer Credit Protection Act 2009

);

(iv) the

Financial Sector (Collection of Data) Act 2001

;

(v) the financial services law (within the meaning of

section 761A of the

Corporations Act 2001

);

(vi) the

Insurance Act 1973

;

(vii) the

Life Insurance Act 1995

;

(viii) the

Private Health Insurance (Prudential Supervision)

Act 2015

;

(ix) the

Superannuation Industry (Supervision) Act 1993

;

(x) regulations, instruments, directions or orders made

under a law referred to in any of subparagraphs (i) to

(ix).

Example:

Cherie is an accountable person of an ADI and has senior executive

responsibility for management of the ADI's financial resources.

Cherie must take reasonable steps to ensure that the management of

those resources complies with the requirements of laws, instruments,

directions and orders referred to in subparagraphs (d)(i) to (x) that

apply in relation to financial resource management.

Note 1:

See also section 22 (taking reasonable steps).

Note 2:

For protection for whistleblowers, see Part 9.4AAA of the

Corporations Act 2001

(2) To the extent that 2 or more accountable persons of an accountable

entity or significant related entity have the same responsibility,

each of them has the accountability obligations under

subsection (1) in relation to that responsibility to the same extent as

if it were solely that person's responsibility.

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Note:

Under section 65, the Regulator may direct an accountable entity to

reallocate a responsibility of an accountable person.

22 Taking reasonable steps

Without limiting what constitutes the taking of reasonable steps in

relation to a matter for the purposes of this Part, the taking of

reasonable steps in relation to that matter includes:

(a) having appropriate governance, control and risk management

in relation to that matter; and

(b) having safeguards against inappropriate delegations of

responsibility in relation to that matter; and

remediating problems that arise or may arise in relation to

that matter; and

(d) taking appropriate action in response to non-compliance, or

suspected non-compliance, in relation to that matter.

Obligations under the Financial Accountability Regime

Chapter 2

Key personnel obligations

Part 4

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Part 4--Key personnel obligations

23 The key personnel obligations of an accountable entity

(1) The key personnel obligations of an accountable entity are:

(a) subject to subsections (2) and (3), to ensure that the

responsibilities of the accountable persons of the accountable

entity and its significant related entities cover:

(i) all parts or aspects of the operations of the accountable

entity's relevant group; and

(ii) each of the responsibilities to which subsection 10(2)

applies; and

(iii) each of the responsibilities to which subsection 10(3)

applies; and

(b) to ensure that no accountable person of the accountable entity

or any of its significant related entities is prohibited by

section 24 from being an accountable person of the

accountable entity or significant related entity; and

accountable entity under section 65; and

(d) to take reasonable steps to ensure that each of the

accountable entity's significant related entities complies with

each of paragraphs (b) and (c) as if the significant related

entity were an accountable entity.

Note:

For the definition of

relevant group

, see section 8.

(2) Paragraph (1)(a) does not apply in relation to a responsibility

excluded by the Regulator under subsection 11(2) or (3).

(3) If the accountable entity is a foreign accountable entity, the

accountable entity's obligation under paragraph (1)(a) is taken to

be an obligation to ensure that the responsibilities of the

accountable entity's accountable persons cover:

(a) all parts or aspects of the operations of each branch of the

accountable entity operating in Australia; and

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(b) for each such branch:

(i) each of the responsibilities to which subsection 10(2)

applies; and

(ii) each of the responsibilities to which subsection 10(3)

applies.

24 People prohibited from being an accountable person

(1) A person is prohibited from being an accountable person of an

accountable entity or significant related entity if the person:

(a) is not registered in respect of the accountable entity or

significant related entity on the register established under

section 40; or

(b) is disqualified under section 42 from being or acting as an

accountable person of the accountable entity or significant

related entity.

(2) If a person becomes an accountable person of an accountable entity

or significant related entity by filling a temporary or unforeseen

vacancy, paragraph (1)(a) does not apply to the person in respect of

the accountable entity or significant related entity until the person

has been an accountable person of the entity for:

(a) 90 days; or

(b) such other period as is determined under subsection (5) or

prescribed by the Regulator rules.

Note:

One example of a temporary vacancy is when the holder of a position

is absent from duty but is expected to return. Another is where a

position becomes vacant and there is an intention to fill it, but the new

holder has not yet been appointed.

(3) If a person becomes an accountable person of an accountable entity

by being appointed a director of a body corporate at a general

meeting of the body, paragraph (1)(a) does not apply to the person

in respect of the accountable entity until the person has been an

accountable person of the entity for:

(a) 30 days; or

(b) such other period as is determined under subsection (5) or

prescribed by the Regulator rules.

Obligations under the Financial Accountability Regime

Chapter 2

Key personnel obligations

Part 4

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(4) If, because a body corporate first becomes an ADI, an authorised

NOHC of an ADI, a general insurer, an authorised NOHC of a

general insurer, a life company, a registered NOHC of a life

company, a private health insurer or an RSE licensee:

(a) that or another body corporate becomes an accountable

entity; and

(b) a person becomes an accountable person of the accountable

entity, or of a significant related entity of the accountable

entity;

paragraph (1)(a) does not apply to the person in respect of the

accountable entity or significant related entity, as the case may be,

until the person has been an accountable person of the entity for:

(d) such other period as is determined under subsection (5) or

prescribed by the Regulator rules.

(5) The Regulator may, by written notice given to an accountable

entity or significant related entity, determine a period for the

purposes of paragraph (2)(b), (3)(b) or (4)(d).

(6) If a determination made under subsection (5) is inconsistent with

Regulator rules made for the purposes of paragraph (2)(b), (3)(b)

or (4)(d), the determination prevails and the Regulator rules, to the

extent of the inconsistency, do not have any effect.

(7) A determination made under subsection (5) is not a legislative

instrument.

Chapter 2

Obligations under the Financial Accountability Regime

Part 5

Deferred remuneration obligations

Section 25

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Part 5--Deferred remuneration obligations

25 The deferred remuneration obligations of an accountable entity

(1) The deferred remuneration obligations of an accountable entity are:

(a) to ensure that, in relation to the variable remuneration of an

accountable person of the accountable entity:

(i) the payment of a portion of that variable remuneration is

deferred for a period; and

(ii) the amount of that portion is at least the amount

required under subsection 27(1); and

(iii) that period is not shorter than the minimum deferral

period (see section 28); and

(b) to have a remuneration policy in force that requires that, if

the person has failed to comply with one or more of their

accountability obligations under section 21, the person's

variable remuneration is to be reduced by an amount that is

proportionate to the failure; and

remuneration to be reduced because of that failure, the

amount of the reduction is not paid or transferred to the

person; and

(d) to take reasonable steps to ensure that, if variable

remuneration may become payable to an accountable person

of a significant related entity of the accountable entity, the

significant related entity complies with each of

paragraphs (a), (b) and (c) as if the significant related entity

were an accountable entity.

(2) A reduction of variable remuneration:

(a) need not be a reduction of variable remuneration relating to a

period in which the failure occurred; and

(b) may be a reduction to zero.

(3)

Remuneration

, of an accountable person, includes:

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(a) in relation to an accountable person of an accountable

entity--any remuneration that:

(i) is an amount paid or payable, or property transferred or

transferrable, to the accountable person by a related

body corporate of the accountable entity; and

(ii) relates wholly or partly to the responsibilities that cause

the person to be an accountable person of the

accountable entity; or

(b) in relation to an accountable person of a significant related

entity--any remuneration that:

(i) is an amount paid or payable, or property transferred or

transferrable, to the accountable person by a related

body corporate of the significant related entity; and

(ii) relates wholly or partly to the responsibilities that cause

the person to be an accountable person of the significant

related entity.

Note:

For when bodies corporate are

related

, see section 8.

26 Meaning of variable remuneration

(1) The

variable remuneration

of an accountable person of an

accountable entity or a significant related entity is:

(a) so much (if any) of the accountable person's total

remuneration as:

(i) is conditional on the achievement of objectives; and

(ii) is not remuneration of a kind prescribed by the

Regulator rules for the purposes of this subparagraph;

and

(b) so much (if any) of the accountable person's total

remuneration as is remuneration of a kind determined under

paragraph (3)(a) or prescribed by the Regulator rules.

(2) However, remuneration of a kind determined under

paragraph (3)(b) is not

variable remuneration

of an accountable

person of an accountable entity or a significant related entity.

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(3) The Regulator may, by written notice given to an accountable

entity or a significant related entity, determine that:

(a) remuneration of a particular kind, of one or more accountable

persons, or of a class of accountable persons, of the

accountable entity or significant related entity, is variable

remuneration; or

(b) remuneration of a particular kind, of one or more accountable

persons, or of a class of accountable persons, of the

accountable entity or significant related entity, is not variable

remuneration.

Note:

A decision under this subsection is a reviewable decision (see Part 5

of Chapter 3).

(4) The Regulator must give a copy of a determination it makes under

subsection (3) to each person who, when the determination is

made, is an accountable person covered by the determination.

(5) If:

(a) after a determination is made under subsection (3), a person

becomes an accountable person of the accountable entity or

significant related entity; and

(b) the determination covers the person;

the accountable entity or significant related entity must give a copy

of the determination to the person.

(6) A notice under subsection (3) is not a legislative instrument.

(7) Regulator rules made for the purposes of paragraph (1)(b), or a

determination made for the purposes of paragraph (3)(a), may also

identify the day, or a way of working out the day, on which the

minimum deferral period for the variable remuneration starts.

27 Minimum amount of variable remuneration to be deferred

(1) The amount of an accountable person's variable remuneration that

is required to be deferred under subparagraph 25(1)(a)(ii) is 40% of

the accountable person's variable remuneration for the financial

Obligations under the Financial Accountability Regime

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year in which the minimum deferral period for the variable

remuneration starts.

Note 1:

For when the minimum deferral period starts, see section 28.

Note 2:

For the applicable financial year, see subsection (7) of this section.

Working out value of variable remuneration

(2) For the purposes of this section, the value of variable remuneration

of an accountable person that has been deferred is taken to be:

(a) if a written notice given under subsection (3) determines a

way to work out that value--the value worked out in that

way; or

(b) if paragraph (a) does not apply and the Regulator rules

prescribe a way to work out that value--the value worked out

in that way; or

been the value of that remuneration if it had instead been paid

or transferred to the person at the start of the minimum

deferral period for the variable remuneration.

(3) The Regulator may, by written notice given to an accountable

entity or a significant related entity, determine the way to work out,

for the purposes of this section, the value of variable remuneration

of accountable persons of the accountable entity or significant

related entity.

Note:

A decision under this subsection is a reviewable decision (see Part 5

of Chapter 3).

(4) The Regulator must give a copy of a determination it makes under

subsection (3) to each person who, when the determination is

made, is an accountable person covered by the determination.

(5) If:

(a) after a determination is made under subsection (3), a person

becomes an accountable person of the accountable entity or

significant related entity; and

(b) the determination covers the person;

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Part 5

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Section 28

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the accountable entity or significant related entity must give a copy

of the determination to the person.

Notice not a legislative instrument

(6) A notice under subsection (3) is not a legislative instrument.

Financial year

(7) In determining an amount of an accountable person's variable

remuneration for the purposes of this section, use the financial year

of the accountable entity or significant related entity of which the

person is an accountable person.

Note:

See section 8 for the definition of

financial year

28 Minimum deferral period for variable remuneration

(1) The

minimum deferral period

for the variable remuneration of an

accountable person of an accountable entity or a significant related

entity is the period:

(a) starting on the day determined under subsection (2) or (3);

and

(b) ending on the day determined under subsection (4).

When the deferral period starts

(2) The minimum deferral period for the variable remuneration of an

accountable person starts (subject to subsection (3)) on the later of

the following days:

(a) the day after the day on which the decision was first made

that the person's total remuneration would be wholly or

partly conditional on the achievement of objectives;

(b) if the achievement of those objectives (as first decided) is to

be measured by reference to a particular period--the day that

period starts.

(3) However, if:

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(a) the variable remuneration is remuneration of a kind

determined under paragraph 26(3)(a), or prescribed by the

Regulator rules for the purposes of paragraph 26(1)(b); and

(b) the determination provides, or the Regulator rules provide,

for when the minimum deferral period for the variable

remuneration starts;

then the minimum deferral period starts on the day so provided.

When the minimum deferral period ends

(4) The minimum deferral period for the variable remuneration of an

accountable person ends on the earliest day worked out under an

applicable item of the following table.

End of minimum deferral period

Item

Column 1

If ...

Column 2

the period ends on ...

it is the last day of the

period of 4 years after

the start of the

minimum deferral

period

(a) that last day, unless paragraph (b) applies; or

(b) if, on the day determined under paragraph (a),

the accountable entity or significant related

entity considers that the accountable person is

likely to have failed to comply with one or

more of their accountability obligations under

section 21--the later day on which the entity

determines whether or not the person has

failed to comply.

the accountable person

ceases to be an

accountable person

because of the person's

death, serious

incapacity, serious

disability or serious

illness

(a) the day on which the person so ceases, unless

paragraph (b) applies; or

(b) if, on the day determined under paragraph (a),

the accountable entity or significant related

entity is not yet satisfied on reasonable

grounds that the person has complied with the

person's accountability obligations under

section 21:

(i) the day on which the entity is so

satisfied (whether the compliance

occurred on or before the entity being

so satisfied); or

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End of minimum deferral period

Item

Column 1

If ...

Column 2

the period ends on ...

(ii) if the day mentioned in

subparagraph (i) does not occur--the

day determined under item 1.

a circumstance

determined under

subsection (5), or

prescribed by the

Regulator rules for the

purposes of this item,

exists or occurs in

relation to the

accountable person

(a) the day on which the circumstance occurs or

begins to exist, unless paragraph (b) applies;

(b) if, on the day determined under paragraph (a),

the accountable entity or significant related

entity is not yet satisfied on reasonable

grounds that the person has complied with the

person's accountability obligations under

section 21:

(i) the day on which the entity is so

satisfied (whether the compliance

occurred on or before the entity being

so satisfied); or

(ii) if the day mentioned in

subparagraph (i) does not occur--the

day determined under item 1.

Note:

In relation to item 1, if the accountable entity or significant related

entity determines that the person has failed to comply, the

remuneration policy must require the amount of variable remuneration

paid or transferred to the person to be reduced by an amount that is

proportionate to the failure: see paragraph 25(1)(b).

(5) The Regulator may, by written notice given to an accountable

entity, determine circumstances for the purposes of item 3 of the

table in subsection (4) in relation to either or both of the following:

(a) the accountable entity;

(b) one or more significant related entities of the accountable

entity.

Notice not a legislative instrument

(6) A notice under subsection (5) is not a legislative instrument.

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29 Exemption for small amounts of variable remuneration

(1) Paragraph 25(1)(a) does not apply in relation to the variable

remuneration of an accountable person for a financial year if the

amount of the person's variable remuneration that is required, or

would apart from this section be required, under

subparagraph 25(1)(a)(ii) to be deferred for that financial year is

less than:

(a) the amount (if any) prescribed by the Minister rules; or

(b) if no amount is prescribed for the purposes of

paragraph (a)--$50,000.

Financial year

(2) For the purposes of subsection (1), use the financial year of the

accountable entity or significant related entity of which the person

is an accountable person.

Note:

See section 8 for the definition of

financial year

30 Exemption for variable remuneration payable for temporary

performance

(1) This section applies if:

(a) a person becomes an accountable person of an accountable

entity or a significant related entity by filling a temporary or

unforeseen vacancy; and

(b) the person is not registered under Division 1 of Part 3 of

Chapter 3.

(2) Paragraph 25(1)(a) does not apply in relation to the variable

remuneration of the accountable person for the period during

which, because of subsection 24(2), the person is not prohibited

from being an accountable person of the accountable entity or

significant related entity.

Chapter 2

Obligations under the Financial Accountability Regime

Part 6

Notification obligations

Section 31

Financial Accountability Regime Bill 2023

No. , 2023

Part 6--Notification obligations

31 The notification obligations of an accountable entity

Core notification obligations

(1) The notification obligations of an accountable entity are:

(a) to notify the Regulator of an event mentioned in section 32:

(i) within the period, after the event, provided under

subsection (6) of this section; and

(ii) in accordance with the requirements under

subsection (7) of this section; and

(b) to take reasonable steps to ensure that each of its significant

related entities complies with paragraph (a) as if the

significant related entity were an accountable entity.

Enhanced notification obligations

(2) In addition to subsection (1), if the accountable entity meets the

enhanced notification threshold under subsection (3), then the

notification obligations of the accountable entity are:

(a) to give to the Regulator a document complying with

section 33 (an

accountability statement

) for each of its

accountable persons; and

(b) to ensure that the Regulator is notified of any material change

to the information contained in the accountability statement

for each of its accountable persons:

(i) within the period, after the change, provided under

subsection (6) of this section; and

(ii) in accordance with the requirements under

subsection (7) of this section; and

section 34 (an

accountability map

) within the period, after

the body corporate starts being an accountable entity in

Obligations under the Financial Accountability Regime

Chapter 2

Notification obligations

Part 6

Section 31

No. , 2023

Financial Accountability Regime Bill 2023

accordance with subsection 9(2) or (4), provided under

subsection (6) of this section; and

(d) to ensure that the Regulator is notified of any material change

to the information contained in the accountability map:

(i) within the period, after the change, provided under

subsection (6) of this section; and

(ii) in accordance with the requirements under

subsection (7) of this section; and

(e) to take reasonable steps to ensure that each of its significant

related entities complies with each of paragraphs (a) and (b)

as if the significant related entity were an accountable entity.

Enhanced notification threshold

(3) For the purposes of subsection (2), the Minister rules may set out

how to determine when an accountable entity meets the

enhanced

notification threshold

(4) Without limiting subsection (3), the Minister rules may do either or

both of the following:

(a) specify a method for working out the enhanced notification

threshold;

(b) specify different methods for working out the enhanced

notification threshold for different circumstances.

Incorporation by reference

(5) Despite subsection 14(2) of the

Legislation Act 2003

, Minister

rules made for the purposes of subsection (3) may provide for a

matter by applying, adopting or incorporating any matter contained

in an instrument or other writing, as in force or existing from time

to time, if the instrument or other writing is published on a website

maintained by the Regulator.

Period for compliance

(6) For the purposes of subparagraphs (1)(a)(i) and (2)(b)(i) and (d)(i)

and paragraph (2)(c), the period is:

Chapter 2

Obligations under the Financial Accountability Regime

Part 6

Notification obligations

Section 32

Financial Accountability Regime Bill 2023

No. , 2023

(a) 30 days; or

(b) such other period (if any) prescribed by the Regulator rules.

Requirements for notice

(7) For the purposes of subparagraphs (1)(a)(ii) and (2)(b)(ii) and

(d)(ii), the notice must:

(a) be in the form approved in writing by the Regulator; and

(b) contain the information that the form requires.

32 Events for which the Regulator must be notified

For the purposes of paragraph 31(1)(a), the following events must

be notified to the Regulator by an accountable entity:

(a) a person ceases to be an accountable person of the

accountable entity or of a significant related entity of the

accountable entity;

(b) an accountable person of the accountable entity, or of a

significant related entity of the accountable entity, is

dismissed or suspended because the person has failed to

comply with one or more of the person's accountability

obligations under section 21;

accountable entity, or of a significant related entity of the

accountable entity, is reduced because the person has failed

to comply with one or more of the person's accountability

obligations under section 21;

(d) the accountable entity has reasonable grounds to believe that:

(i) the accountable entity has failed to comply with one or

more of its accountability obligations under section 20

or of its key personnel obligations under section 23; or

(ii) an accountable person of the accountable entity, or of a

significant related entity of the accountable entity, has

failed to comply with one or more of the person's

accountability obligations under section 21;

(e) a material change occurs to information that relates to an

accountable person of the accountable entity, or of a

Obligations under the Financial Accountability Regime

Chapter 2

Notification obligations

Part 6

Section 33

No. , 2023

Financial Accountability Regime Bill 2023

significant related entity of the accountable entity, and is

contained in the register established under section 40.

33 Accountability statements

For the purposes of paragraph 31(2)(a), an accountability statement

for an accountable person of an accountable entity, or of a

significant related entity, must:

(a) contain a comprehensive statement of:

(i) the part or aspect of the operations of the accountable

entity, or of the significant related entity, for which the

accountable person has actual or effective responsibility

for management or control; and

(ii) the responsibilities of the accountable person, including

any responsibilities to which paragraph 23(1)(a) or

subsection 23(3) applies, as the case requires; and

(iii) the matters (if any) prescribed by the Regulator rules;

and

(b) include a statement by the accountable person declaring that:

(i) the content of the accountability statement is accurate;

and

(ii) the accountable person understands their accountability

obligations under section 21.

34 Accountability map

For the purposes of paragraph 31(2)(c), an accountability map of

an accountable entity must contain the following information:

(a) the names of all of the accountable persons of the

accountable entity and each of its significant related entities;

(b) details of the reporting lines and lines of responsibility of

those accountable persons;

each of the responsibilities to which paragraph 23(1)(a) or

subsection 23(3) applies, as the case requires;

(d) information (if any) prescribed by the Regulator rules.

Chapter 3

Administration

Part 1

Introduction

Section 35

Financial Accountability Regime Bill 2023

No. , 2023

Chapter 3--Administration

Part 1--Introduction

35 Simplified outline of this Chapter

APRA and ASIC jointly administer this Act, and must agree about

how to perform functions and exercise powers under it.

Accountable persons must be registered, and may be disqualified

for non-compliance with their obligations.

The Regulator may issue a direction to an accountable entity:

(a)

to address non-compliance, or the risk of

non-compliance, by the accountable entity or any of its

significant related entities or accountable persons; or

(b)

to reallocate responsibilities among accountable persons.

The Regulator has powers to ensure compliance with this Act, to

investigate non-compliance and to enforce this Act. Enforcement

mechanisms include civil and criminal penalties.

Administration

Chapter 3

The Regulator

Part 2

Arrangements for administration

Division 1

Section 36

No. , 2023

Financial Accountability Regime Bill 2023

Part 2--The Regulator

Division 1--Arrangements for administration

36 Administration of this Act

(1) Subject to this section, APRA and ASIC each have the general

administration of this Act.

Note:

See the definition of

Regulator

in section 8.

(2) ASIC is to perform functions, and exercise powers, under the

provisions specified in column 1 of the table, only in relation to the

following:

(a) accountable entities that hold an Australian financial services

licence (within the meaning of the

Corporations Act 2001

) or

an Australian credit licence (within the meaning of the

National Consumer Credit Protection Act 2009

);

(b) significant related entities of accountable entities covered by

paragraph (a);

paragraph (a) or of significant related entities covered by

paragraph (b).

However, a failure to comply with this subsection does not

invalidate the performance of a function, or the exercise of a

power, by ASIC.

Provisions under which ASIC has limited functions and powers

Item

Column 1

Provision

Column 2

Subject matter

Subsection 11(2)

Excluding responsibilities that would otherwise

cause someone to be an accountable person

Sections 17 and 19

Identifying obligations that are inconsistent with

foreign laws

Chapter 3

Administration

Part 2

The Regulator

Division 1

Arrangements for administration

Section 36

Financial Accountability Regime Bill 2023

No. , 2023

Provisions under which ASIC has limited functions and powers

Item

Column 1

Provision

Column 2

Subject matter

Subsection 24(5)

Determining the period during which, because of

subsection 24(2), (3) or (4), an unregistered

person is not prohibited from being an

accountable person of an accountable entity or

significant related entity

Subsection 26(3)

Determining what is or is not variable

remuneration

Subsection 27(3)

Determining how to work out the value of

variable remuneration

Subsection 28(5)

Determining circumstances that will end the

minimum deferral period for variable

remuneration

Subsection 41(3)

Requesting further information in relation to an

application to register an accountable person

Division 2 of Part 3 of

this Chapter

Disqualifying accountable persons

Part 4 of this Chapter

(other than

subsection 70(4) and

subsection 70(5) so far

as it relates to

subsection 70(4))

Regulatory powers and enforcement

Part 5 of this Chapter

Review of decisions

Provisions of the

Regulatory Powers

Act, as they apply for

the purposes of a

provision of Part 4 of

this Chapter

Regulatory powers and enforcement

(3) The Minister may, by legislative instrument, give APRA or ASIC

directions about the performance or exercise of its functions or

powers under this Act.

Administration

Chapter 3

The Regulator

Part 2

Arrangements for administration

Division 1

Section 37

No. , 2023

Financial Accountability Regime Bill 2023

37 Arrangement for administration

(1) APRA and ASIC must enter into an arrangement relating to the

administration of this Act.

(2) The arrangement must include provisions relating to the matters (if

any) specified in the Minister rules.

(3) APRA and ASIC must each publish the arrangement on its

website

(4) If the arrangement is not entered into within 6 months after the

commencement of this Act, the Minister may, by notifiable

instrument, determine arrangements between APRA and ASIC

relating to the administration of this Act.

(5) A failure to comply with this section does not invalidate the

performance or exercise of a function or power by APRA or ASIC.

38 Agreement about exercise of powers

(1) Subject to this section, neither APRA nor ASIC may perform a

function, or exercise a power, under this Act without the agreement

of the other.

(2) Subsection (1) does not apply in relation to performing a function,

or exercising a power, under:

(a) section 39 (which is about disclosure of information between

APRA and ASIC); or

(b) section 41 (which is about registering accountable persons);

enforcement) other than sections 64 and 65 (which are about

directions); or

(d) the Regulatory Powers Act as it applies in relation to this

Act.

(3) Subsection (1) does not apply to the extent that subsection 36(2)

prevents ASIC from performing a function or exercising a power.

Administration

Chapter 3

The Regulator

Part 2

Information sharing

Division 2

Section 39

No. , 2023

Financial Accountability Regime Bill 2023

Division 2--Information sharing

39 Disclosure of information and documents between APRA and

ASIC

(1) APRA and ASIC may share with each other information that is

disclosed or obtained, or a document that is given or produced,

under or for the purposes of this Act.

Note:

The expression

this Act

includes the Regulatory Powers Act as it

applies in relation to this Act (see section 8).

(2) However, information or a document may only be shared with

APRA or ASIC (

the recipient

) under subsection (1) for the

purposes of the recipient performing or exercising its functions or

powers.

(3) If either APRA or ASIC obtains information, or gives or produces

a document, that is covered by subsection (4), it must disclose the

information, or give a copy of the document, to the other.

(4) For the purposes of subsection (3), the information and documents

are the following:

(a) information provided under Part 6 of Chapter 2 (notification

obligations);

(b) information provided under Division 1 of Part 3 of this

Chapter (registration of accountable persons);

(d) information or a document (if any) prescribed by the Minister

rules.

(5) If either APRA or ASIC discloses information or gives a document

under subsection (1) or (3) to the other, it need not notify any other

person that it plans to disclose the information or give the

document, or that it has done so.

Note:

Disclosure under this section is authorised under section 56 of the

Australian Prudential Regulation Authority Act 1998

and section 127

of the

Australian Securities and Investments Commission Act 2001

(which are about secrecy obligations).

Administration

Chapter 3

Registration and disqualification of accountable persons

Part 3

Registration of accountable persons

Division 1

Section 40

No. , 2023

Financial Accountability Regime Bill 2023

Part 3--Registration and disqualification of

accountable persons

Division 1--Registration of accountable persons

40 Register of accountable persons

(1) The Regulator must establish and keep a register of accountable

persons.

(2) The register may be kept by electronic means.

(3) The register is not a legislative instrument.

(4) The register must contain, for each accountable person:

(a) the person's name; and

(b) the date of the person's registration as an accountable person;

and

(d) details of any disqualification of the person under section 42;

and

(e) details of any variation or revocation of disqualification

under section 43; and

(f) for each accountable entity, and each significant related

entity, in respect of which the person is registered as an

accountable person--details of the responsibilities that cause

the person to be an accountable person of the entity; and

(g) any information prescribed by the Regulator rules for the

purposes of this paragraph; and

(h) any other information that:

(i) the Regulator considers appropriate to include in the

(ii) is relevant to the person's registration as an accountable

person.

Chapter 3

Administration

Part 3

Registration and disqualification of accountable persons

Division 1

Registration of accountable persons

Section 41

Financial Accountability Regime Bill 2023

No. , 2023

(5) The Regulator may make any of the information contained in the

41 Registration of a person as an accountable person

(1) An accountable entity may apply to the Regulator to register a

person as an accountable person in respect of the accountable

entity or a significant related entity of the accountable entity.

(2) The application must:

(a) be in the form approved in writing by the Regulator; and

(b) contain the information that the form requires; and

satisfied the person is suitable to be an accountable person;

and

(d) if the accountable entity is required under section 31 to give

an accountability statement complying with section 33--

include the accountability statement for the person.

(3) The Regulator may, by written notice given to the accountable

entity, request the accountable entity to give to the Regulator

further information in relation to the application.

(4) The Regulator must, within the period provided under

subsection (5), register a person as an accountable person if:

(a) the application meets the requirements of subsection (2); and

(b) the accountable entity gives to the Regulator any further

information requested under subsection (3) in relation to the

application;

unless the accountable entity withdraws the application before the

day of registration.

(5) The period for registration under subsection (4) is the period of 21

days after the later of:

(a) the day the application is made; or

(b) if the Regulator requests the accountable entity to give

further information under subsection (3) in relation to the

Chapter 3

Administration

Part 3

Registration and disqualification of accountable persons

Division 2

Disqualification of accountable persons

Section 42

Financial Accountability Regime Bill 2023

No. , 2023

Division 2--Disqualification of accountable persons

42 Regulator may disqualify an accountable person

Disqualification by the Regulator

(1) The Regulator may disqualify a person from being or acting as an

accountable person, for a period that the Regulator considers

appropriate, if the Regulator is satisfied that:

(a) the

person has failed to comply with one or more of their

accountability obligations under section 21; and

(b) the disqualification is justified, having regard to the

seriousness of the failure to comply.

Note:

A decision to disqualify a person is a reviewable decision (see Part 5

of this Chapter).

(2) For the purposes of subsection (1), the Regulator may disqualify a

person from being or acting as an accountable person of one or

more of the following:

(a) a particular accountable entity;

(b) a particular significant related entity of an accountable entity;

(d) a class of significant related entities of accountable entities;

(e) any accountable entity;

(f) any significant related entity of an accountable entity.

Written notice

(3) The Regulator must give written notice of a disqualification to:

(a) the person; and

(b) each accountable entity of which the person is an accountable

person when the disqualification decision is made; and

accountable person when the disqualification decision is

made; and

Administration

Chapter 3

Registration and disqualification of accountable persons

Part 3

Disqualification of accountable persons

Division 2

Section 43

No. , 2023

Financial Accountability Regime Bill 2023

(d) each accountable entity of which an entity covered by

paragraph (c) is a significant related entity.

(4) A disqualification takes effect on the day specified in the notice

(which must be at least 7 days after it is given).

(5) Before disqualifying a person, the Regulator must give written

notice to each person mentioned in paragraphs (3)(a) to (d), giving

each of them an opportunity to make submissions on the matter.

(6) If a submission is made to the Regulator in response to the notice,

the Regulator must have regard to the submission and may discuss

any matter contained in the submission with such persons as it

considers appropriate for the purpose of making a decision under

this section.

(7) A notice given under subsection (5) must state that any

submissions made in response to the notice may be discussed by

the Regulator with any other persons as mentioned in

subsection (6).

Notice not a legislative instrument

(8) A notice under subsection (3) or (5) is not a legislative instrument.

43 Regulator may vary or revoke a disqualification

(1) The Regulator may vary or revoke a disqualification made under

section 42 on its own initiative or on application by the disqualified

person.

Note:

A decision to vary or revoke a disqualification, or to refuse to vary or

revoke a disqualification, is a reviewable decision (see Part 5 of this

Chapter).

(2) A variation or revocation of a disqualification takes effect on the

day on which it is made.

(3) The Regulator must give written notice of:

(a) a variation or revocation of a disqualification; or

(b) a refusal to vary or revoke the disqualification;

Chapter 3

Administration

Part 3

Registration and disqualification of accountable persons

Division 2

Disqualification of accountable persons

Section 44

Financial Accountability Regime Bill 2023

No. , 2023

to the disqualified person and to each person to whom the

Regulator was required by subsection 42(3) to given notice of the

disqualification.

(4) A notice under subsection (3) is not a legislative instrument.

44 Allowing a person disqualified by the Regulator to act as an

accountable person

(1) An accountable entity or significant related entity contravenes this

subsection if:

(a) a person is disqualified under section 42 from being, or

acting as, an accountable person of the accountable entity or

significant related entity; and

(b) the person is, or acts as, an accountable person of the

accountable entity or significant related entity; and

person to be, or act as, an accountable person.

Note:

An accountable entity may also contravene a civil penalty provision if

it fails to ensure that its accountable persons are not prohibited from

being accountable persons (see sections 24 and 80).

Fault-based offence

(2) An accountable entity or a significant related entity commits an

offence if it contravenes subsection (1).

Penalty: 250 penalty units.

Strict liability offence

(3) An accountable entity or a significant related entity commits an

offence of strict liability if it contravenes subsection (1).

Penalty: 60

penalty units.

Administration

Chapter 3

Regulatory powers and enforcement

Part 4

Investigations

Division 1

Section 45

No. , 2023

Financial Accountability Regime Bill 2023

Part 4--Regulatory powers and enforcement

Division 1--Investigations

45 Regulator may appoint an investigator

Appointment of investigator

(1) The Regulator may, in writing, appoint a person (the

investigator

)

to investigate and report in relation to an accountable entity or a

significant related entity if the Regulator has reasonable grounds to

believe that:

(a) the accountable entity or the significant related entity may

have contravened a provision of this Act; or

(b) an accountable person of the accountable entity, or of the

significant related entity, may have contravened a provision

of this Act.

Delegation by investigator

(2) The investigator may, in writing, delegate to an APRA staff

member or ASIC staff member any or all of the investigator's

functions and powers under this Part.

(3) A delegate must produce for inspection the instrument of

delegation, or a copy of the instrument, on the request of a person:

(a) in relation to whom any of the delegated functions and

powers may be performed or exercised; or

(b) who is affected by the performance or exercise of any of the

delegated functions and powers.

(4) A reference in this Act to an investigator includes a reference to a

delegate of an investigator.

Chapter 3

Administration

Part 4

Regulatory powers and enforcement

Division 1

Investigations

Section 46

Financial Accountability Regime Bill 2023

No. , 2023

46 Requirement to assist investigator

(1) If the Regulator appoints an investigator under section 45, the

accountable entity or significant related entity must give the

investigator:

(a) access to its books, accounts and documents; and

(b) such information and facilities as the investigator requires to

conduct the investigation and produce the report.

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1);

and

(b) the person fails to comply with the requirement.

Penalty: 50 penalty units.

Note:

Chapter 2 of the

Criminal Code

sets out the general principles of

criminal responsibility.

(3) If a person does, or fails to do, an act in circumstances that give

rise to the person committing an offence against subsection (2), the

person commits an offence against that subsection in respect of:

(a) the first day on which the offence is committed; and

(b) each subsequent day (if any) on which the circumstances that

gave rise to the person committing the offence continue

(including the day of conviction for any such offence or any

later day).

Note:

This subsection is not intended to imply that section 4K of the

Crimes

Act 1914

does not apply to offences against this Act.

(4) Nothing in this section is intended to limit the operation of any

other provision of this Act.

47 Investigator may require production of books etc.

(1) If an investigator has reasonable grounds to believe that a person

has custody or control of any books, accounts or documents

relevant to the investigator's investigation, the investigator may, by

Administration

Chapter 3

Regulatory powers and enforcement

Part 4

Investigations

Division 1

Section 48

No. , 2023

Financial Accountability Regime Bill 2023

written notice given to the person, require the person to produce

any or all of the books, accounts or documents to the investigator.

(2) The notice must specify the day by which the books, accounts or

documents are to be produced (which must be at least 14 days after

the day the notice is given to the person).

(3) A person commits an offence if:

(a) the person is required to produce books, accounts or

documents in accordance with a notice given to the person

under subsection (1); and

(b) the person fails to comply with the requirement.

Penalty: 30 penalty units.

48 Concealing books, accounts or documents relevant to

investigation

A person commits an offence if:

(a) the person knows that an investigator is investigating, or is

about to investigate, a matter; and

(b) the person:

(i) conceals, destroys, mutilates or alters a book, account or

document relating to the matter; or

(ii) if a book, account or document relating to the matter is

in a particular State or Territory--takes or sends the

book, account or document out of that State or

Territory; and

investigation would be delayed or obstructed as a result of

that conduct.

Penalty: Imprisonment for 2 years.

Chapter 3

Administration

Part 4

Regulatory powers and enforcement

Division 2

Examinations

Section 49

Financial Accountability Regime Bill 2023

No. , 2023

Division 2--Examinations

49 Notice requiring appearance for examination

If an investigator has reasonable grounds to believe that a person

(the

examinee

) can give information relevant to the investigator's

investigation, the investigator may, by written notice given to the

examinee, require the examinee:

(a) to give the investigator all reasonable assistance in

connection with the investigation; and

(b) to appear before the investigator for examination on a

specified day that is at least 14 days after the notice is given.

Note:

Failure to comply with a requirement made under this section is an

offence (see section 53).

50 Conduct of examinations

(1) The investigator may examine the examinee on oath or affirmation

and may, for that purpose:

(a) require the examinee to either take an oath or make an

affirmation; and

(b) administer an oath or affirmation to the examinee.

Note:

Failure to comply with a requirement made under this subsection is an

offence (see section 53).

(2) The oath or affirmation to be taken or made by the examinee for

the purposes of the examination is an oath or affirmation that the

statements that the examinee will make will be true.

(3) The investigator may require the examinee to answer a question

that is put to the examinee at the examination and is relevant to a

matter that the investigator is investigating, or is to investigate.

Note:

Failure to comply with a requirement made under this subsection is an

offence (see section 53).

(4) The examiner may make an audio, or audio visual, recording of all

or any part of the examination.

Administration

Chapter 3

Regulatory powers and enforcement

Part 4

Examinations

Division 2

Section 51

No. , 2023

Financial Accountability Regime Bill 2023

51 Who may be present at examinations

(1) The examination must take place in private.

(2) The following people may be present at the examination:

(a) the investigator;

(b) the examinee;

(d) either or both of the following:

(i) an APRA staff member approved by APRA to be

present;

(ii) an ASIC staff member approved by ASIC to be present;

(e) a person directed by the investigator to be present.

Note:

For the definitions of

APRA staff member

and

ASIC staff member

see section 8.

(3) A person commits an offence if the person:

(a) is present at an examination; and

(b) is not a person mentioned in subsection (2).

Penalty: 30 penalty units.

(4) The examinee's lawyer may, at such times during the examination

as the investigator determines, address the investigator and

examine the examinee about matters about which the investigator

has examined the examinee.

(5) The investigator may require a person to stop addressing the

investigator or examining the examinee if, in the investigator's

opinion, the person is trying to obstruct the examination by

exercising rights under subsection (4).

Note:

Failure to comply with a requirement made under this subsection is an

offence (see section 53).

Chapter 3

Administration

Part 4

Regulatory powers and enforcement

Division 2

Examinations

Section 52

Financial Accountability Regime Bill 2023

No. , 2023

52 Record of examination

Written record of statements

(1) The investigator must cause a written record (including a transcript

of an audio, or audio-visual, recording) to be made of statements

made at the examination.

(2) The investigator may require the examinee to read the written

record, or to have it read to the examinee, and may require the

examinee to sign it.

Note:

Failure to comply with a requirement made under this subsection is an

offence (see section 53).

Copies of record

(3) The investigator must give a copy of a written record to the

examinee, without charge, but subject to such conditions (if any) as

the investigator imposes.

Use of copies

(4) If the investigator gives a copy of a written record to a person

under subsection (3) subject to conditions, the person, or any other

person who has possession, custody or control of the copy or a

copy of it, must comply with the conditions.

Penalty: Imprisonment for 6 months.

53 Offences

A person commits an offence if:

(a) the person is subject to a requirement under this Division;

and

(b) the person refuses or fails to comply with the requirement.

Penalty: 30 penalty units.

Administration

Chapter 3

Regulatory powers and enforcement

Part 4

Evidentiary use of certain material

Division 3

Section 54

No. , 2023

Financial Accountability Regime Bill 2023

Division 3--Evidentiary use of certain material

54 Statements made at an examination--proceedings against

examinee

Admissibility of statements made at examination

(1) Subject to this section, a statement that a person makes at an

examination of the person is admissible in evidence against the

person in a proceeding.

Self-incrimination exception

(2) The statement is not admissible if the statement is not admissible in

evidence against the person under section 88.

Irrelevant statement exception

(3) The statement is not admissible if it is not relevant to the

proceeding and the person objects to the admission of evidence of

the statement.

Related statement exception

(4) The statement (the

subject statement

) is not admissible if:

(a) it is qualified or explained by some other statement made at

the examination; and

(b) evidence of the other statement is not tendered in the

proceeding; and

statement.

Legal professional privilege exception

(5) The statement is not admissible if:

(a) it discloses matter in respect of which the person could claim

legal professional privilege in the proceeding if

subsection (1) did not apply in relation to the statement; and

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(b) the person objects to the admission of evidence of the

statement.

Joint proceedings

(6) Subsection (1) applies in relation to a proceeding against a person

even if it is heard together with a proceeding against another

person.

Record is prima facie evidence

(7) If a written record of an examination of a person is signed by the

person under subsection 52(2)

or is authenticated in a manner (if

any) specified in the Minister rules, the record is admissible in a

proceeding as prima facie evidence of the statements it records.

Admissibility of other evidence

(8) This Division does not limit or affect the admissibility in the

proceeding of other evidence of statements made at the

examination.

55 Statements made at an examination--other proceedings

Admissibility of absent witness evidence

(1) If direct evidence by a person (the

absent witness

) of a matter

would be admissible in a proceeding, a statement that the absent

witness made at an examination of the absent witness and that

tends to establish that matter is admissible in the proceeding as

evidence of that matter in accordance with subsection (2).

Requirement for admissibility

(2) The statement is admissible:

(a) if it appears to the court or tribunal that:

(i) the absent witness is dead or is unfit, because of

physical or mental incapacity, to attend as a witness; or

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(ii) the absent witness is outside the State or Territory in

which the proceeding is being heard and it is not

reasonably practicable to secure their attendance; or

(iii) all reasonable steps have been taken to find the absent

witness but they cannot be found; or

(b) if it does not so appear to the court or tribunal--unless

another party to the proceeding requires the party tendering

evidence of the statement to call the absent witness as a

witness in the proceeding and the tendering party does not so

call the absent witness.

56 Weight of evidence under section 55

(1) If evidence of a statement made by a person at an examination of

the person is admitted under section 55 in a proceeding, in deciding

how much weight (if any) to give to the statement as evidence of a

matter, regard is to be had to:

(a) the length of period between the statement and the matter to

which the statement relates; and

(b) any reason the person may have had for concealing or

misrepresenting a material matter; and

an inference about the accuracy of the statement.

(2) If the person is not called as a witness in the proceeding:

(a) evidence that would, if the person had been so called, have

been admissible in the proceeding for the purpose of

destroying or supporting their credibility is so admissible;

and

(b) evidence is admissible to show that the statement is

inconsistent with another statement that the person has made

at any time.

(3) However, evidence of a matter is not admissible under this section

if, had the person been called as a witness in the proceeding and

denied the matter in cross-examination, evidence of the matter

would not have been admissible if adduced by the cross-examining

party.

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Section 57

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57 Objection to admission of statements made at examination

Notice of intention to apply to admit evidence and statements

(1) A party (the

adducing party

) to a proceeding may, not less than 14

days before the first day of the hearing of the proceeding, give to

another party to the proceeding written notice that the adducing

party:

(a) will apply to have admitted in evidence in the proceeding

specified statements made at an examination; and

(b) for that purpose, will apply to have evidence of those

statements admitted in the proceeding.

Notice to set out etc. statements

(2) A notice under subsection (1) must set out, or be accompanied by

writing that sets out, the specified statements.

Notice of objection

(3) Within 14 days after a notice is given under subsection (1), the

other party may give to the adducing party a written notice:

(a) stating that the other party objects to specified statements

being admitted in evidence in the proceeding; and

(b) specifies, in relation to each of those statements, the grounds

of objection.

Extension of objection period

(4) The period prescribed by subsection (3) may be extended by the

court or tribunal or by agreement between the parties concerned.

Notice etc. to be given to court or tribunal

(5) On receiving a notice given under subsection (3), the adducing

party must give to the court or tribunal a copy of:

(a) the notice under subsection (1) and any writing that

subsection (2) requires to accompany that notice; and

(b) the notice under subsection (3).

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Action by court or tribunal

(6) If subsection (5) is complied with, the court or tribunal may either:

(a) determine the objections as a preliminary point before the

hearing of the proceeding begins; or

(b) defer determination of the objections until the hearing.

Right to object to admission of statement

(7) If a notice has been given in accordance with subsections (1) and

(2), the other party is not entitled to object at the hearing of the

proceeding to a statement specified in the notice being admitted in

evidence in the proceedings, unless:

(a) the other party has, in accordance with subsection (3),

objected to the statement being so admitted; or

(b) the court or tribunal gives the other party leave to object to

the statement being so admitted.

58 Copies of, or extracts from, certain books, accounts and

documents

(1) A copy of, or an extract from, a book, account or document to

which subsection 46(1) or 47(1) or paragraph 62(5)(f) applies, is

admissible in evidence in a proceeding as if the copy were the

original book, account or document or the extract were the relevant

part of original book, account or document.

(2) A copy of, or an extract from, a book, account or document is not

admissible in evidence under subsection (1) unless it is proved that

the copy or extract is a true copy of the book, account or document,

or of the relevant part of the book, account or document.

(3) For the purposes of subsection (2), a person who has compared:

(a) a copy of a book, account or document with the book,

account or document; or

(b) an extract from a book, account or document, with the

relevant part of the book, account or document;

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may give evidence, either orally or by an affidavit or statutory

declaration, that the copy or extract is a true copy of the book,

account or document, or relevant part of the book, account or

document.

59 Admissibility of investigation report

Subject to section 60, if a copy of a report under subsection 45(1)

purports to be certified by the Regulator as a true copy of such a

report, the copy is admissible in a proceeding (other than a criminal

proceeding) as prima facie evidence of any facts or matters that the

report states an investigator to have found to exist.

60 Exceptions to admissibility of investigation report

(1) If a party to a proceeding tenders a copy of a report under

subsection 45(1) as evidence against another party, the copy is not

admissible under section 59 in the proceeding as evidence against

the other party unless the court or tribunal is satisfied that:

(a) a copy of the report has been given to the other party; and

(b) the other party, and the other party's lawyer, have had a

reasonable opportunity to examine that copy and to take its

contents into account in preparing the other party's case.

(2) Before or after the copy tendered in evidence is admitted in

evidence, the other party may apply to cross-examine, in relation to

the report, a specified person who, or 2 or more specified persons

each of whom:

(a) was concerned in preparing the report or making a finding

about a fact or matter that the report states the investigator to

have found to exist; or

(b) whether or not pursuant to a requirement made under this

Part, gave information, or produced a book, account or

document, on the basis of which, or on the basis of matters

including which, such a finding was made.

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(3) The court or tribunal must grant an application made under

subsection (2) unless it considers that, in all the circumstances, it is

not appropriate to do so.

(4) The court or tribunal must refuse to admit the copy, or must treat

the copy as not having been admitted, if:

(a) the court or tribunal grants the application or applications

made under subsection (2); and

(b) one or more persons to whom the application or any of the

applications relates:

(i) are unavailable; or

(ii) do not attend to be cross-examined in relation to the

report; and

under section 59 in the proceeding as evidence against the

other party without the other party having the opportunity to

cross-examine the other person or persons would unfairly

prejudice the other party.

61 Material otherwise admissible

Nothing in this Division renders evidence inadmissible in a

proceeding in circumstances where it would have been admissible

in that proceeding if this Division had not been enacted.

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Requesting information

Section 62

Financial Accountability Regime Bill 2023

No. , 2023

Division 4--Requesting information

62 Regulator may request information

Request for information from accountable entities

(1) The Regulator may request an accountable entity to give to the

Regulator information relating to any of the following:

(a) the accountable entity;

(b) a significant related entity of the accountable entity;

significant related entity of the accountable entity;

(d) a related body corporate of the accountable entity;

(e) a related body corporate of a significant related entity of the

accountable entity;

(f) if the accountable entity is an RSE licensee--a connected

entity of the accountable entity.

Note 1:

Failure to comply with the request is an offence (see section 63).

Note 2:

For when bodies corporate are

related

, see section 8.

Request for information from significant related entities

(2) The Regulator may request a significant related entity of an

accountable entity to give to the Regulator information relating to

any of the following:

(a) the accountable entity;

(b) the significant related entity;

(d) a related body corporate of the significant related entity.

Note 1:

Failure to comply with the request is an offence (see section 63).

Note 2:

For when bodies corporate are

related

, see section 8.

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Section 62

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Financial Accountability Regime Bill 2023

Request for information from accountable persons

(3) The Regulator may request an accountable person of an

accountable entity, or of a significant related entity, to give to the

Regulator information relating to:

(a) the accountable entity; or

(b) the significant related entity.

Note:

Failure to comply with the request is an offence (see section 63).

Purposes of request

(4) However, the Regulator may request information under this section

only if:

(a) the request is made for one or more of the following

purposes:

(i) performing a function or exercising a power of the

Regulator under this Act;

(ii) ensuring compliance with this Act;

(iii) taking action in relation to non-compliance, or

suspected non-compliance, with this Act; and

(b) the Regulator has reasonable grounds to believe that the

information is relevant to that purpose or those purposes.

Requirements of request

(5) The request:

(a) must be made in writing; and

(b) must state what information must be given to the Regulator;

and

declaration; and

(d) must specify a day on or before which the information must

be given; and

(e) must contain a statement to the effect that a failure to comply

with the request is an offence; and

(f) may include a requirement to produce books, accounts or

documents.

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Section 63

Financial Accountability Regime Bill 2023

No. , 2023

(6) The day specified under paragraph (5)(d) must be at least 14 days

after the day on which the request was made.

63 Failing to give information

A person commits an offence if:

(a) the person is given a request under section 62; and

(b) the person fails to comply with the request.

Note 1:

Chapter 2 of the

Criminal Code

sets out the general principles of

criminal responsibility.

Note 2:

See also subsection 4B(3) (body corporate multiplier) and section 4K

(continuing and multiple offences) of the

Crimes Act 1914

Note 3:

See also sections 88 (self-incrimination) and 89 (legal professional

privilege) of this Act.

Penalty: 200 penalty units.

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Regulator's power to issue directions

Division 5

Section 64

No. , 2023

Financial Accountability Regime Bill 2023

Division 5--Regulator's power to issue directions

Subdivision A--Kinds of directions

64 Direction dealing with non-compliance

Power of the Regulator to give direction

(1) The Regulator may give an accountable entity a direction of a kind

specified in subsection (2) if the Regulator has reasonable grounds

to believe that:

(a) the accountable entity has contravened a provision of this

Act; or

(b) the accountable entity is likely to contravene a provision of

this Act and the direction is reasonably necessary to ensure

compliance with the provision; or

significant related entity of the accountable entity, has

contravened a provision of this Act; or

(d) an accountable person of the accountable entity, or of a

significant related entity of the accountable entity, is likely to

contravene a provision of this Act and the direction is

reasonably necessary to ensure compliance with the

provision.

Note 1:

A decision to give a direction under this section is a reviewable

decision (see Part 5 of this Chapter).

Note 2:

For variation and revocation of a direction given under this section,

see subsection 33(3) of the

Acts Interpretation Act 1901

Kinds of direction

(2) The kinds of direction that the accountable entity may be given are

directions to do, or to cause a significant related entity of the

accountable entity to do, any one or more of the following:

(a) to take specified action to deal with the ground for giving the

direction;

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Section 64

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(b) to order an audit of the affairs of the accountable entity or

significant related entity, at the expense of the accountable

entity or significant related entity, by an auditor chosen by

the Regulator;

related entity's systems, business practices or operations;

(d) to reconstruct, amalgamate or otherwise alter all or part of:

(i) the business, structure or organisation of the

accountable entity or significant related entity; or

(ii) the business, structure or organisation of the

accountable entity's relevant group;

(e) to do, or to refrain from doing, anything else in relation to the

affairs of the accountable entity or significant related entity.

Note:

For the definition of

relevant group

, see section 8.

(3) The direction must:

(a) be given by notice in writing to the accountable entity; and

(b) specify the ground referred to in subsection (1) as a result of

which the direction is given; and

direction is to be complied with; and

(d) state that the accountable entity could commit an offence if

the accountable entity fails to comply with the direction.

Note:

See section 66 (offence for non-compliance with a direction).

(4) If the Regulator gives a direction under paragraph (1)(c) or (d), the

Regulator must give a copy of the direction:

(a) to the accountable person; and

(b) if the accountable person is an accountable person of a

significant related entity of the accountable entity--to the

significant related entity.

Power to comply

(5) The accountable entity has power to comply with the direction

despite anything in its constitution or any contract or arrangement

to which it is a party.

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Section 65

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(6) If the direction requires the accountable entity to cause a

significant related entity to do, or to refrain from doing, an act or

thing:

(a) the accountable entity has power to cause the significant

related entity to do, or to refrain from doing, the act or thing;

and

(b) the significant related entity has power to do, or to refrain

from doing, the act or thing;

despite anything in the significant related entity's constitution or

any contract or arrangement to which the significant related entity

is a party.

Direction not a legislative instrument

(7) A direction under subsection (1) is not a legislative instrument.

Note:

Under paragraph 11(2)(c) of the

Legislation Act 2003

, the Regulator

may register a direction under this section as a notifiable instrument.

65 Direction to reallocate responsibilities

Power to give direction

(1) The Regulator may give an accountable entity a direction to

reallocate a responsibility to which paragraph 23(1)(a) applies if

the Regulator has reasonable grounds to believe that the current

allocation of the responsibility has given rise to, or is likely to give

rise to:

(a) a prudential risk; or

(b) a risk of significant and systemic non-compliance with a law,

instrument, direction or order referred to in any of

subparagraphs 21(1)(d)(i) to (x).

Note 1:

A decision to give a direction under this section is a reviewable

decision (see Part 5 of this Chapter).

Note 2:

For variation and revocation of a direction given under this section,

see subsection 33(3) of the

Acts Interpretation Act 1901

(2) If:

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(a) the person who currently has the responsibility is an

accountable person of the accountable entity or of a

significant related entity of the accountable entity; and

(b) the accountable entity or significant related entity has given

an accountability statement for the accountable person under

section 31;

the Regulator must have regard to the responsibilities set out in the

accountability statement.

(3) The direction must:

(a) be given by notice in writing to the accountable entity; and

(b) specify the time by which, or period during which, the

direction is to be complied with; and

be liable to a civil penalty if the accountable entity fails to

comply with the direction.

Note:

See section 66 (offence for non-compliance with a direction) and

paragraph 23(1)(c) (key personnel obligations of accountable entities)

and section 80 (civil penalty provisions).

(4) The Regulator must give a copy of the direction to each of the

following:

(a) the person who currently has the responsibility;

(b) the person to whom the responsibility is to be reallocated;

accountable person of a significant related entity of the

accountable entity--the significant related entity.

(5) Subsections 64(5) and (6) apply to a direction under this section in

the same way as they apply to a direction under section 64.

Direction not a legislative instrument

(6) A direction under subsection (1) is not a legislative instrument.

Note:

Under paragraph 11(2)(c) of the

Legislation Act 2003

, the Regulator

may register a direction under this section as a notifiable instrument.

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Section 66

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Subdivision B--Non-compliance with directions

66 Offence provision for non-compliance with a direction

Accountable entity

(1) An accountable entity contravenes this subsection if:

(a) the accountable entity is given a direction under section 64 or

65; and

(b) the accountable entity fails to comply with the direction.

(2) An accountable entity commits an offence if the accountable entity

contravenes subsection (1).

Note 1:

Chapter 2 of the

Criminal Code

sets out the general principles of

criminal responsibility.

Note 2:

See also subsection 4B(3) (body corporate multiplier) and section 4K

(continuing and multiple offences) of the

Crimes Act 1914

Note 3:

An accountable entity may also contravene a civil penalty provision if

it fails to comply with a direction given under section 65 (see

paragraph 23(1)(c) and section 80).

Penalty: 50 penalty units.

Officer of accountable entity

(3) An officer of an accountable entity contravenes this subsection if:

(a) the accountable entity is given a direction under section 64 or

65; and

(b) the officer fails to take reasonable steps to ensure that the

accountable entity complies with the direction; and

entity complies with the direction; and

(d) the accountable entity fails to comply with the direction.

(4) An officer of an accountable entity commits an offence if the

officer contravenes subsection (3).

Note 1:

Chapter 2 of the

Criminal Code

sets out the general principles of

criminal responsibility.

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Section 67

Financial Accountability Regime Bill 2023

No. , 2023

Note 2:

See also subsection 4B(3) (body corporate multiplier) and section 4K

(continuing and multiple offences) of the

Crimes Act 1914

Penalty: 50 penalty units.

Subdivision C--Secrecy and disclosure provisions relating to

directions

67 Regulator may determine that a direction is covered by secrecy

provision

When this section applies

(1) This section applies if the Regulator has given an accountable

entity a direction under section 64 or 65.

Power of Regulator to make determination

(2) The Regulator may determine, in writing, that the direction is

covered by this subsection if the Regulator considers that the

determination is necessary:

(a) to protect the depositors (within the meaning of the

Banking

Act 1959

) of

any ADI; or

(b) to protect the policyholders (within the meaning of the

Insurance Act 1973

) of any general insurer; or

Life

Insurance Act 1995

) of any life company; or

(d) to protect the policy holders (within the meaning of the

Private Health Insurance (Prudential Supervision) Act 2015

)

of a health benefits fund (within the meaning of that Act) of

any private health insurer; or

(e) to protect the beneficiaries (within the meaning of the

Superannuation Industry (Supervision) Act 1993

) of a

registrable superannuation entity (within the meaning of that

Act) of any RSE licensee; or

(f) to promote financial system stability in Australia.

Note:

For repeal of a determination, see subsection 33(3) of the

Acts

Interpretation Act 1901

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(3) The Regulator must give the accountable entity a copy of the

determination as soon as practicable after making it.

Regulator must consider other determinations

(4) If the Regulator makes a determination under subsection (2), the

Regulator must consider whether it is appropriate in the

circumstances to also make a determination under either or both of

subsections 70(2) and 70(4).

Determination not a legislative instrument

(5) An instrument under subsection (2) is not a legislative instrument.

68 Secrecy relating to directions

(1) A person commits an offence if:

(a) the Regulator has given an accountable entity (the

directed

accountable entity

) a direction under section 64 or 65; and

(b) the direction is covered by a determination under

subsection 67(2); and

section in relation to the direction; and

(d) the person discloses information; and

(e) the information reveals the fact that the direction was given.

Penalty: Imprisonment for 2 years.

(2) A person is covered by this subsection in relation to the direction if

the person is:

(a) the directed accountable entity; or

(b) a significant related entity of the directed accountable entity;

officer, employee or contractor of the directed accountable

entity or of a significant related entity of the directed

accountable entity; or

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Section 69

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(d) any other person who, because of their employment, or in the

course of that employment, has acquired information that

reveals the fact that the direction was given.

Exception

(3) Subsection (1) does not apply if:

(a) the disclosure is authorised by section 69, 70, 71, 72, 73, 74,

or 75; or

(b) the disclosure is required by an order or direction of a court

or tribunal.

Note:

A defendant bears an evidential burden in relation to a matter in

subsection (3) (see subsection 13.3(3) of the

Criminal Code

69 Disclosure of publicly available information

A person covered by subsection 68(2) in relation to a direction may

disclose information that reveals the fact that the direction was

given, to the extent that the information has already been lawfully

made available to the public.

70 Disclosure allowed by the Regulator

(1) A person covered by subsection 68(2) in relation to a direction may

disclose information that reveals the fact that the direction was

given if:

(a) a determination under subsection (2) or (4) of this section

allows the disclosure by the person; and

(b) if the Regulator has included conditions in the

determination--those conditions are satisfied.

Determinations relating to specified person

(2) The Regulator may, in writing, make a determination allowing:

(a) a specified person covered by subsection 68(2) in relation to

a specified direction; or

(b) a specified person covered by subsection 68(2) in relation to

a direction that is in a specified class of directions;

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Section 71

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to disclose specified information in relation to the direction.

(3) The Regulator must give a copy of the determination, as soon as

practicable after making it, to:

(a) the directed accountable entity; and

(b) the person specified, or each person specified, in the

determination.

Determinations relating to specified class of persons

(4) The Regulator may, by legislative instrument, make a

determination allowing a specified class of persons covered by

subsection 68(2) in relation to a direction that is in a specified class

of directions to disclose:

(a) specified kinds of

information in relation to the direction; or

(b) any kind of information in relation to the direction.

Conditions in determinations

(5) The Regulator may include conditions in a determination under

subsection (2) or (4) that relate to any of the following:

(a) the kind of entities to which the disclosure may be made;

(b) the way in which the disclosure is to be made;

Determination not a legislative instrument

(6) An instrument under subsection (2) is not a legislative instrument.

71 Disclosure for the purpose of seeking review or legal advice

(1) A person covered by subsection 68(2) in relation to a direction may

disclose information that reveals the fact that the direction was

given if the disclosure is made for the purposes of seeking review,

under Part 5 of this Chapter or any other applicable law, of the

direction or of a decision made in relation to the direction.

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Section 72

Financial Accountability Regime Bill 2023

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(2) A person covered by subsection 68(2) in relation to a direction may

disclose information that reveals the fact that the direction was

given if:

(a) the disclosure is to the person's lawyer; and

(b) the purpose of the person making the disclosure is for the

lawyer to provide legal advice, or another legal service, in

relation to the direction.

72 Disclosure under the APRA Act

(1) A person covered by subsection 68(2) in relation to a direction may

disclose information that reveals the fact that the direction was

given if:

(a) the person is:

(i) an APRA member within the meaning of the

Australian

Prudential Regulation Authority Act 1998

; or

(ii) an APRA staff member; or

(iii) an entrusted person within the meaning of the

Financial

Regulator Assessment Authority Act 2021

; or

(iv) a Commonwealth officer, within the meaning of the

Crimes Act 1914

, who is covered by paragraph (c) of

the definition of

officer

in subsection 56(1) of the

Australian Prudential Regulation Authority Act 1998

;

and

(b) the information:

(i) is protected information, as defined in subsection 56(1)

of the

Australian Prudential Regulation Authority Act

1998

; or

(ii) is contained in a protected document, as defined in that

subsection; and

paragraph 56(2)(c) of the

Australian Prudential Regulation

Authority Act 1998

Note:

For the definition of

APRA staff member

, see section 8.

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Regulator's power to issue directions

Division 5

Section 73

No. , 2023

Financial Accountability Regime Bill 2023

Relationship to APRA Act secrecy provision

(2) Disclosure of information in relation to a direction is not an

offence under section 56 of the

Australian Prudential Regulation

Authority Act 1998

if the disclosure is authorised by section 69, 70,

71, 73, 74 or 75 of this Act.

Note:

A defendant bears an evidential burden in relation to the matters in

this subsection (see subsection 13.3(3) of the

Criminal Code

73 Disclosure under the ASIC Act

A person covered by subsection 68(2) in relation to a direction may

disclose information that reveals the fact that the direction was

given if:

(a) the person is:

(i) a member of ASIC; or

(ii) an ASIC staff member; or

(iii) a Commonwealth officer, within the meaning of the

Crimes Act 1914

, who, because of their employment, or

in the course of that employment, has acquired the

information (other than an employee of the body to

which the information relates); and

(b) the information is protected information as defined in

subsection 127(9) of the

Australian Securities and

Investments Commission Act 2001

; and

information for the purposes of subsection 127(1) of that Act.

Note 1:

For the definition of

ASIC staff member

, see section 8.

Note 2:

A disclosure of information permitted by section 69, 70, 71, 72, 74 or

75 of this Act is authorised use and disclosure because of

subsection 127(2) of the

Australian Securities and Investments

Commission Act 2001

74 Disclosure in circumstances set out in the Minister rules

A person covered by subsection 68(2) in relation to a direction may

disclose information that reveals the fact that the direction was

Chapter 3

Administration

Part 4

Regulatory powers and enforcement

Division 5

Regulator's power to issue directions

Section 75

Financial Accountability Regime Bill 2023

No. , 2023

given, if the disclosure is made in circumstances (if any) prescribed

by the Minister rules.

75 Disclosure for purpose

A person covered by subsection 68(2) (the

relevant person

) in

relation to a direction may disclose information that reveals the fact

that the direction was given if:

(a) another person covered by subsection 68(2) in relation to the

direction disclosed that information to the relevant person for

a particular purpose in accordance with section 70, 71, 72, 73

or 74, or in accordance with a previous operation of this

section; and

(b) the disclosure by the relevant person is for the same purpose.

76 Exceptions operate independently

Sections 69, 70, 71, 72, 73, 74 and 75 do not limit each other.

Subdivision D--Other provisions relating to directions

77 Direction not grounds for denial of obligations

When this section applies

(1) This section applies if an accountable entity, or a significant related

entity of an accountable entity, is party to a contract, whether the

proper law of the contract is:

(a) Australian law (including the law of a State or Territory); or

(b) law of a foreign country (including the law of part of a

foreign country).

Direction does not allow denial of obligations

(2) The fact that the accountable entity is given a direction under

section 64 does not allow the contract, or a party to the contract

(other than the accountable entity or a significant related entity of

the accountable entity), to do any of the following:

Administration

Chapter 3

Regulatory powers and enforcement

Part 4

Regulator's power to issue directions

Division 5

Section 77

No. , 2023

Financial Accountability Regime Bill 2023

(a) deny any obligations under the contract;

(b) accelerate any debt under the contract;

(d) enforce any security under the contract.

This subsection has effect subject to this section.

(3) If the accountable entity or the significant related entity is

prevented from fulfilling its obligations under the contract because

of a direction under section 64, the other party or parties to the

contract are, subject to any orders made under subsection (4) of

this section, relieved from obligations owed to the accountable

entity or significant related entity under the contract.

Application to the Federal Court

(4) A party to a contract to which subsection (3) applies may apply to

the Federal Court of Australia for an order relating to the effect on

the contract of a direction under section 64. The order may deal

with matters including (but not limited to):

(a) requiring a party to the contract to fulfil an obligation under

the contract despite subsection (3) of this section; or

(b) obliging a party to the contract to take some other action (for

example, paying money or transferring property) in view of

obligations that were fulfilled under the contract before the

direction was made.

The order must not require a person to take action that would

contravene the direction.

Covered bonds

(5) Subsection (2) does not prevent the exercise of a contractual right

in relation to an asset that secures liabilities to holders of covered

bonds (within the meaning of the

Banking Act 1959

), or their

representatives, if payments under the covered bonds to the holders

or representatives are not made.

Chapter 3

Administration

Part 4

Regulatory powers and enforcement

Division 5

Regulator's power to issue directions

Section 78

Financial Accountability Regime Bill 2023

No. , 2023

78 Information to the Minister about certain directions

(1) If the Minister requests the Regulator to provide information about:

(a) directions given under section 64 or 65 to a particular

accountable entity; or

(b) directions given under section 64 or 65 during a particular

period;

the Regulator must comply with the request.

(2) The Regulator may provide any information that it considers

appropriate to the Minister about:

(a) directions given under section 64 or 65; or

(b) revocations of such directions.

(3) If the Regulator provides the Minister with information about a

direction and later revokes the direction, the Regulator must notify

the Minister of the revocation as soon as practicable after the

revocation.

(4) Failure to comply with this section does not affect the validity of a

direction or revocation.

79 Relationship with other laws

If a direction given under section 64 or 65 is inconsistent with the

Minister rules or the Regulator rules, the direction prevails and the

rules, to the extent of the inconsistency, do not have any effect.

Administration

Chapter 3

Regulatory powers and enforcement

Part 4

Civil penalties

Division 6

Section 80

No. , 2023

Financial Accountability Regime Bill 2023

Division 6--Civil penalties

80 Civil penalty provision for non-compliance with obligations

(1) A person contravenes this subsection if:

(a) the person is an accountable entity; and

(b) the person is subject to an obligation under Chapter 2; and

Note:

It is generally not necessary to prove a person's state of mind in

proceedings for a contravention of a civil penalty provision (see

section 94 of the Regulatory Powers Act, which applies because of

section 82 of this Act).

(2) A person is liable to a civil penalty if the person contravenes

subsection (1).

81 Ancillary contravention of civil penalty provisions

(1) A person must not:

(a) attempt to contravene a civil penalty provision of this Act; or

(b) aid, abet, counsel or procure a contravention of a civil

penalty provision of this Act; or

a civil penalty provision of this Act; or

(d) be in any way, directly or indirectly, knowingly concerned in,

or party to, a contravention of a civil penalty provision of this

Act; or

(e) conspire with others to effect a contravention of a civil

penalty provision of this Act.

Civil penalty

(2) A person is liable to a civil penalty if the person contravenes

subsection (1).

Chapter 3

Administration

Part 4

Regulatory powers and enforcement

Division 6

Civil penalties

Section 82

Financial Accountability Regime Bill 2023

No. , 2023

(3) Section 92 of the Regulatory Powers Act (which deals with

ancillary contravention of civil penalty provisions) does not apply

in relation to a civil penalty provision of this Act.

(4) Section 94 of the Regulatory Powers Act (which deals with a

person's state of mind in relation to a contravention of a civil

penalty provision) does not apply in relation to a contravention of

subsection (1) of this section.

82 Civil penalty provisions--enforcement

Civil penalty provisions enforceable under Regulatory Powers Act

(1) Each civil penalty provision of this Act is enforceable under Part 4

of the Regulatory Powers Act.

Note:

Part 4 of the Regulatory Powers Act allows a civil penalty provision to

be enforced by obtaining an order for a person to pay a pecuniary

penalty for the contravention of the provision.

Authorised applicant

(2) For the purposes of Part 4 of the Regulatory Powers Act, the

Regulator is an authorised applicant in relation to the provisions

mentioned in subsection (1).

Relevant court

(3) For the purposes of Part 4 of the Regulatory Powers Act, the

Federal Court of Australia is a relevant court in relation to the

provisions mentioned in subsection (1).

Liability of Crown

(4) Part 4 of the Regulatory Powers Act, as that Part applies in relation

to the provisions mentioned in subsection (1), does not make the

Crown liable to a pecuniary penalty.

Administration

Chapter 3

Regulatory powers and enforcement

Part 4

Civil penalties

Division 6

Section 83

No. , 2023

Financial Accountability Regime Bill 2023

Extension to external Territories

(5) Part 4 of the Regulatory Powers Act, as it applies in relation to the

provisions mentioned in subsection (1), extends to every external

Territory.

83 Civil penalty provisions--amount of penalty

(1) Despite subsection 82(5) of the Regulatory Powers Act, the

pecuniary penalty payable:

(a) by a person; and

(b) under a civil penalty order under Part 4 of that Act (as that

Part applies because of section 82 of this Act);

must not be more than the maximum penalty amount worked out

under this section for a contravention by the person.

Maximum amount of civil penalty--bodies corporate

(2) For the purposes of subsection (1), the maximum penalty amount

for a contravention by a body corporate of a civil penalty provision

of this Act is the greatest of the following:

(a) 50,000 penalty units;

(b) if the court can determine the benefit derived and detriment

avoided because of the contravention--that amount

multiplied by 3;

(i) 10% of the annual turnover of the body corporate for the

12-month period ending at the end of the month in

which the body corporate contravened, or began to

contravene, the provision; or

(ii) if the amount worked out under subparagraph (i) is

greater than an amount equal to 2.5 million penalty

units--2.5 million penalty units.

Note:

For the meanings of

annual turnover

and

benefit derived and

detriment avoided

, see section 8.

Chapter 3

Administration

Part 4

Regulatory powers and enforcement

Division 6

Civil penalties

Section 83

Financial Accountability Regime Bill 2023

No. , 2023

Maximum amount of civil penalty--other persons

(3) For the purposes of subsection (1), the maximum penalty amount

for a contravention by a person other than a body corporate of a

civil penalty provision of this Act is the greater of the following:

(a) 5,000 penalty units;

(b) if the court can determine the benefit derived and detriment

avoided because of the contravention--that amount

multiplied by 3.

Note 1:

For the meaning of

benefit derived and detriment avoided

, see

section 8.

Note 2:

Section 81 is the only civil penalty provision of this Act that can be

contravened by a person other than a body corporate.

Additional relevant matter

(4) In addition to the matters a court must take into account under

subsection 82(6) of the Regulatory Powers Act in determining the

pecuniary penalty for a contravention of a civil penalty provision

by an RSE licensee, the court must take into account the impact

that the penalty under consideration would have on the

beneficiaries of any registrable superannuation entities of which

the RSE licensee is a trustee.

Administration

Chapter 3

Regulatory powers and enforcement

Part 4

Enforceable undertakings

Division 7

Section 84

No. , 2023

Financial Accountability Regime Bill 2023

Division 7--Enforceable undertakings

84 Enforceable undertakings

Enforceable provisions

(1) The provisions of this Act are enforceable under Part 6 of the

Regulatory Powers Act.

Note:

Part 6 of the Regulatory Powers Act creates a framework for

accepting and enforcing undertakings relating to compliance with

provisions.

Authorised person

(2) For the purposes of Part 6 of the Regulatory Powers Act, the

Regulator is an authorised person in relation to the provisions

mentioned in subsection (1).

Relevant court

(3) For the purposes of Part 6 of the Regulatory Powers Act, the

Federal Court of Australia is a relevant court in relation to the

provisions mentioned in subsection (1).

Other undertakings

(4) An authorised person may accept an undertaking in connection

with a matter in relation to which the Regulator has a power or

function under this Act. The undertaking must be expressed to be

an undertaking under this subsection.

(5) The power in subsection (4) is in addition to the power of an

authorised person under subsection 114(1) of the Regulatory

Powers Act.

(6) Part 6 of the Regulatory Powers Act, other than subsections 114(1)

and (2), applies to an undertaking accepted under subsection (4) of

this section as if it were an undertaking accepted under

subsection 114(1) of the Regulatory Powers Act.

Administration

Chapter 3

Regulatory powers and enforcement

Part 4

Injunctions

Division 8

Section 85

No. , 2023

Financial Accountability Regime Bill 2023

Division 8--Injunctions

85 Injunctions

Enforceable provisions

(1) The provisions of this Act are enforceable under Part 7 of the

Regulatory Powers Act.

Note:

Part 7 of the Regulatory Powers Act creates a framework for using

injunctions to enforce provisions.

Authorised person

(2) For the purposes of Part 7 of the Regulatory Powers Act, the

Regulator is an authorised person in relation to the provisions

mentioned in subsection (1).

Relevant court

(3) For the purposes of Part 7 of the Regulatory Powers Act, the

Federal Court of Australia is a relevant court in relation to the

provisions mentioned in subsection (1).

Consent injunctions

(4) A relevant court may grant an injunction under Part 7 of the

Regulatory Powers Act in relation to a provision mentioned in

subsection (1) of this section by consent of all the parties to

proceedings brought under that Part, whether or not the court is

satisfied that section 121 of that Act applies.

Extension to external Territories

(5) Part 7 of the Regulatory Powers Act, as it applies in relation to the

provisions mentioned in subsection (1), extends to every external

Territory.

Chapter 3

Administration

Part 4

Regulatory powers and enforcement

Division 9

Miscellaneous

Section 86

Financial Accountability Regime Bill 2023

No. , 2023

Division 9--Miscellaneous

86 Physical elements of offences

(1) This section applies if a provision of this Act provides that a person

contravening another provision of this Act (the

conduct provision

)

commits an offence.

(2) For the purposes of applying Chapter 2 of the

Criminal Code

to the

offence, the physical elements of the offence are set out in the

conduct provision.

Note:

Chapter 2 of the

Criminal Code

sets out general principles of criminal

responsibility.

87 Contravening an offence provision or a civil penalty provision

(1) This section applies if a provision of this Act provides that a person

contravening another provision of this Act (the

conduct provision

)

commits an offence or is liable to a civil penalty.

(2) For the purposes of this Act, a reference to a contravention of an

offence provision or a civil penalty provision includes a reference

to a contravention of the conduct provision.

Note:

The expression

this Act

includes the Regulatory Powers Act as it

applies in relation to this Act (see section 8).

88 Self-incrimination

(1) An individual is not excused from complying with a requirement

under this Act to give information, produce a book, account or

document or sign a record on the ground that doing so would tend

to incriminate the individual.

Note:

A body corporate is not entitled to claim the privilege against

self-incrimination.

(2) However, the information given, the record signed or the book,

account or document produced by the individual in compliance

with the requirement, is not admissible in evidence against the

Administration

Chapter 3

Regulatory powers and enforcement

Part 4

Miscellaneous

Division 9

Section 89

No. , 2023

Financial Accountability Regime Bill 2023

individual in criminal proceedings, other than proceedings in

respect of the falsity of the information, if:

(a) before complying with the requirement, the individual claims

that giving the information, signing the record or producing

the book, account or document might tend to incriminate the

individual; and

(b) giving the information, signing the record or producing the

book, account or document might in fact tend to incriminate

the individual.

(3) If, at general law, an individual would otherwise be able to claim

the privilege against self-exposure to a penalty (other than a

penalty for an offence) in relation to giving information, producing

a book, account or document, or signing a record under this Act,

the individual is not excused from giving the information,

producing the book, account or document, or signing the record,

under those provisions on that ground.

Note:

A body corporate is not entitled to claim the privilege against

self-exposure to a penalty.

89 Legal professional privilege

(1) This section applies if:

(a) under this Act, a person requires a lawyer;

(i) to give information; or

(ii) to produce a book, account or document; and

(b) either:

(i) giving the information would involve disclosing; or

(ii) the book, account or document contains;

a privileged communication made by, or on behalf of or to

the lawyer in their capacity as a lawyer.

(2) The lawyer is entitled to refuse to comply with the requirement

unless:

(a) if the person to whom, or by or on behalf of whom, the

communication was made is a body corporate that is under

Chapter 3

Administration

Part 4

Regulatory powers and enforcement

Division 9

Miscellaneous

Section 90

Financial Accountability Regime Bill 2023

No. , 2023

administration or is being wound up--the administrator or

the liquidator of the body; or

(b) otherwise--the person to whom, or by or on behalf of whom,

the communication was made;

consents to the lawyer complying with the requirement.

(3) If the lawyer so refuses, they must, as soon as practicable, give to

the person who made the requirement a written notice setting out:

(a) if the lawyer knows the name of the person to whom, or by or

on behalf of whom, the communication was made--that

name and address; and

(b) if subparagraph (1)(a)(i) applies and the communication was

made in writing--sufficient particulars to identify the

document containing the communication; and

identify the book, account or document, or the part of the

book, account or document, containing the communication.

(4) A person commits an offence if the person refuses or fails to

comply with a requirement under this section.

Penalty: 30 penalty units.

90 Powers of Court relating to non-compliance with this Act

(1) If the Regulator or an investigator is satisfied that a person has,

without reasonable excuse, failed to comply with a requirement

made under this Act, the Regulator or the investigator may by

writing certify the failure to the Federal Court of Australia.

(2) If the Regulator or the investigator certifies the failure under

subsection (1), the Federal Court of Australia may inquire into the

case and may order the person to comply with the requirement as

specified in the order.

Administration

Chapter 3

Review of decisions

Part 5

Section 91

No. , 2023

Financial Accountability Regime Bill 2023

Part 5--Review of decisions

91 Reviewable decisions

A decision by the Regulator referred to in column 1 of an item of

the following table is a

reviewable decision

. Each person referred

to in column 2 of the item is an

affected person

for the decision.

Reviewable decisions

Item

Column 1

Decision

Column 2

Affected person

A decision under subsection 17(1) not to

specify an obligation that an accountable

entity need not comply with

The accountable entity

A decision under subsection 17(1) to

specify conditions to which a notice

specifying an obligation that an

accountable entity need not comply with is

subject

The accountable entity

A decision under subsection 19(1) not to

specify an obligation that an accountable

person of an accountable entity, or of a

significant related entity of an accountable

entity, need not comply with

All of the following:

(a) the accountable person;

(b) the accountable entity;

entity

A decision under subsection 19(1) to

specify conditions to which a notice

specifying an obligation that an

accountable person of an accountable

entity, or of a significant related entity of

an accountable entity, need not comply

with is subject

All of the following:

(a) the accountable person;

(b) the accountable entity;

entity

Chapter 3

Administration

Part 5

Review of decisions

Section 91

Financial Accountability Regime Bill 2023

No. , 2023

Reviewable decisions

Item

Column 1

Decision

Column 2

Affected person

A decision under subsection 24(5) to

determine for the purposes of

paragraph 24(2)(b), (3)(b) or (4)(d) a

period that is shorter than the period that

would otherwise apply

Both of the following:

(a) the accountable entity;

(b) the significant related

entity

A decision under subsection 26(3) that

remuneration of an accountable person of

an accountable entity, or of a significant

related entity of an accountable entity, is,

or is not, variable remuneration

All of the following:

(a) the accountable person;

(b) the accountable entity;

entity

A decision under subsection 26(3) to vary

the remuneration of an accountable person

of an accountable entity, or of a significant

related entity of an accountable entity, that

is, or is not, variable remuneration

All of the following:

(a) the accountable person;

(b) the accountable entity;

entity

A decision under subsection 26(3) to

refuse to vary the remuneration of an

accountable person of an accountable

entity, or of a significant related entity of

an accountable entity, that is, or is not,

variable remuneration

All of the following:

(a) the accountable person;

(b) the accountable entity;

entity

A decision under subsection 27(3) that the

value of variable remuneration of an

accountable person of an accountable

entity, or of a significant related entity of

an accountable entity, is to be worked out

in a particular way

All of the following:

(a) the accountable person;

(b) the accountable entity;

entity

A decision under subsection 27(3) to vary

the way that the value of variable

remuneration of an accountable person of

an accountable entity, or of a significant

related entity of an accountable entity, is to

be worked out

All of the following:

(a) the accountable person;

(b) the accountable entity;

entity

Administration

Chapter 3

Review of decisions

Part 5

Section 91

No. , 2023

Financial Accountability Regime Bill 2023

Reviewable decisions

Item

Column 1

Decision

Column 2

Affected person

A decision under subsection 27(3) to

refuse to vary the way that the value of

variable remuneration of an accountable

person of an accountable entity, or of a

significant related entity of an accountable

entity, is to be worked out

All of the following:

(a) the accountable person;

(b) the accountable entity;

entity

A decision under subsection 42(1) to

disqualify a person from being or acting as

an accountable person

All of the following:

(a) the person;

(b) an accountable entity;

A decision under subsection 43(1) to vary

or revoke a disqualification of a person

from being or acting as an accountable

person

All of the following:

(a) the person;

(b) an accountable entity;

A decision under subsection 43(1) to

refuse to vary or revoke a disqualification

of a person from being or acting as an

accountable person

All of the following:

(a) the person;

(b) an accountable entity;

A decision under subsection 64(1) to give

a direction to an accountable entity to do

something, or to cause something to be

done

Both of the following:

(a) the accountable entity;

(b) if another person is subject

to the direction--that

person

A decision under subsection 64(1) to vary

or revoke a direction given to an

accountable entity to do something, or to

cause something to be done

Both of the following:

(a) the accountable entity;

(b) if another person is subject

to the direction--that

person

A decision under subsection 64(1) to

refuse to vary or revoke a direction given

to an accountable entity to do something,

or to cause something to be done

Both of the following:

(a) the accountable entity;

(b) if another person is subject

Chapter 3

Administration

Part 5

Review of decisions

Section 92

Financial Accountability Regime Bill 2023

No. , 2023

Reviewable decisions

Item

Column 1

Decision

Column 2

Affected person

to the direction--that

person

A decision under subsection 65(1) to give

a direction to an accountable entity to

reallocate a responsibility of a person

Both of the following:

(a) the accountable entity;

(b) the person

A decision under subsection 65(1) to vary

or revoke a direction given to an

accountable entity to reallocate a

responsibility of a person

Both of the following:

(a) the accountable entity;

(b) the person

A decision under subsection 65(1) to

refuse to vary or revoke a direction given

to an accountable entity to reallocate a

responsibility of a person

Both of the following:

(a) the accountable entity;

(b) the person

92 Notice of decisions and review rights

(1) If written notice of a reviewable decision is given to an affected

person, the notice:

(a) must include a statement setting out particulars of the

person's review rights; and

(b) if the reviewable decision is in relation to a direction under

section 64 or 65 that is covered by a determination under

subsection 67(2)--may impose conditions relating to the

disclosure of information contained in reasons for the

decision that are included in the notice.

(2) A person commits an offence if:

(a) the person is given a notice of a reviewable decision; and

(b) the notice includes a condition relating to the disclosure of

information; and

Penalty: Imprisonment for 2 years.

Administration

Chapter 3

Review of decisions

Part 5

Section 93

No. , 2023

Financial Accountability Regime Bill 2023

Note:

A person does not commit the offence if the disclosure is made for the

purpose of seeking review or legal advice: see section 96.

93 Affected person may request reconsideration of reviewable

decision

(1) An affected person for a reviewable decision may request the

decision-maker to reconsider the decision.

Note:

For the meaning of

decision-maker

, see section 8.

(2) The request must:

(a) be made in writing; and

(b) set out the reasons for the request; and

affected person is notified of the reviewable decision.

94 Reconsideration of reviewable decision

(1) If a request is made under section 93 by an affected person for a

reviewable decision, the decision-maker must:

(a) personally reconsider the decision to which the application

relates; or

(b) cause the decision to be reconsidered by a delegate of the

decision-maker who:

(i) was not involved in making the decision; and

(ii) occupies a position that is at least the same level as that

occupied by the person who made the decision.

The person who reconsiders the decision is the

internal decision

reviewer

(2) After reconsidering the reviewable decision, the internal decision

reviewer must:

(a) affirm the decision; or

(b) vary the decision; or

Chapter 3

Administration

Part 5

Review of decisions

Section 95

100

Financial Accountability Regime Bill 2023

No. , 2023

(3) After the internal decision reviewer makes the reconsideration

decision, the reviewer must give written notice of the following to

the applicant:

(a) the reconsideration decision;

(b) the date that decision takes effect;

Note:

Section 27A of the

Administrative Appeals Tribunal Act 1975

requires

the applicant to be notified of the applicant's review rights.

(4) If the reviewable decision is in relation to a direction under

section 64 or 65 that is covered by a determination under

subsection 67(2), the notice may impose conditions relating to the

disclosure of information contained in the reasons for the decision.

(5) A person commits an offence if:

(a) the person is given a notice under subsection (3); and

(b) the notice includes a condition relating to the disclosure of

information; and

Penalty: Imprisonment for 2 years.

Note:

A person does not commit the offence if the disclosure is made for the

purpose of seeking review or legal advice: see section 96.

(6) The internal decision reviewer is taken to have affirmed the

reviewable decision if the reviewer does not give notice of the

reconsideration decision to the applicant within 60 days after

receiving the application.

(7) The reconsideration decision is taken to have been made under the

provision under which the reviewable decision was made other

than for the purposes of section 93.

95 Review by the Administrative Appeals Tribunal

(1) Applications may be made to the Administrative Appeals Tribunal

for review of a reconsideration decision of an internal decision

reviewer.

Administration

Chapter 3

Review of decisions

Part 5

Section 95

No. , 2023

Financial Accountability Regime Bill 2023

101

Note:

For the definitions of

internal decision reviewer

and

reconsideration

decision

, see section 8.

(2) An application under subsection (1) may be made only by, or on

behalf of, an affected person for the reviewable decision.

Note:

For the definition of

affected person

, see section 8.

(3) Subsection (2) has effect despite subsection 27(1) of the

Administrative Appeals Tribunal Act 1975

Chapter 3

Administration

Part 6

Miscellaneous

Section 96

102

Financial Accountability Regime Bill 2023

No. , 2023

Part 6--Miscellaneous

96 Disclosure for the purpose of seeking review or legal advice

(1) A person does not commit an offence against subsection 92(2) or

94(5) by disclosing information if the disclosure is made for the

purposes of seeking review, under Part 5 of this Chapter or any

other applicable law, of:

(a) the direction referred to in paragraph 92(1)(b) or

subsection 94(4); or

(b) a decision made in relation to the direction.

(2) A person does not commit an offence against subsection 92(2) or

94(5) by disclosing information if:

(a) the disclosure is to the person's lawyer; and

(b) the purpose of the person making the disclosure is for the

lawyer to provide legal advice, or another legal service, in

relation to the direction referred to in paragraph 92(1)(b) or

subsection 94(4).

Note 1:

Subsections 92(2) and 94(5) create offences for disclosing information

that is contained in a notice and is subject to conditions relating to

disclosure.

Note 2:

A defendant bears an evidential burden in relation to the matters in

subsection (1) or (2) of this section (see subsection 13.3(3) of the

Criminal Code

97 Indemnifying accountable entities

(1) A significant related entity of an accountable entity must not

(whether by agreement or by making a payment, and whether

directly or through an interposed entity):

(a) indemnify the accountable entity against the consequences of

breaching an obligation under this Act; or

(b) pay, or agree to pay, a premium for a contract insuring the

accountable entity against the consequences of breaching an

obligation under this Act.

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(2) Subsection (1) does not apply to a liability for legal costs.

(3) Anything that purports to indemnify or insure a person against a

liability, or exempt them from a liability, is void to the extent that

it contravenes subsection (1).

(4) Without prejudice to their effect apart from this subsection:

(a) subsection (1) applies to a related body corporate (other than

a significant related entity) of an accountable entity in the

same way as it applies to a significant related entity of the

accountable entity; and

(b) subsections (2) and (3) have effect accordingly.

98 Causes of action not created

This Act does not have the effect of creating a cause of action that

would not have existed if this Act had not been enacted.

99 Compensation for acquisition of property

(1) If the operation of this Act would result in an acquisition of

property (within the meaning of paragraph 51(xxxi) of the

Constitution) from a person otherwise than on just terms (within

the meaning of that paragraph), the Commonwealth is liable to pay

a reasonable amount of compensation to the person.

(2) If the Commonwealth and the person do not agree on the amount

of the compensation, the person may institute proceedings in the

Federal Court of Australia or the Supreme Court of a State or

Territory for the recovery from the Commonwealth of such

reasonable amount of compensation as the court determines.

100 Conduct of directors, employees and agents

State of mind of an individual

(1) If, in proceedings for an offence against this Act, it is necessary to

establish the state of mind of an individual in relation to particular

conduct, it is sufficient to show:

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(a) that the conduct was engaged in by an employee or agent of

the individual within the scope of actual or apparent

authority; and

(b) that the employee or agent had the state of mind.

Conduct of an individual

(2) Any conduct engaged in on behalf of an individual by an employee

or agent of the individual within the scope of actual or apparent

authority is taken to have been engaged in also by the individual

unless the individual establishes that they took reasonable

precautions and exercised due diligence to avoid the conduct.

Note:

Part 2.5 of the

Criminal Code

and section 97 of the Regulatory

Powers Act deal with responsibility of bodies corporate for offences

and civil penalties.

Limitation on imprisonment

(3) If:

(a) an individual is convicted of an offence; and

(b) the individual would not have been convicted of the offence

if subsections (1) and (2) had not been enacted;

the individual is not liable to be punished by imprisonment for that

offence.

Extended meaning of state of mind

(4) A reference in subsection (1) to the state of mind of a person

includes a reference to:

(a) the person's knowledge, intention, opinion, belief or purpose;

and

(b) the person's reasons for the intention, opinion, belief or

purpose.

Engaging in conduct

(5) A reference in this section to engaging in conduct includes a

reference to failing or refusing to engage in conduct.

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101 Protection from liability--general

(1) A person is not subject to any liability to any person in respect of

anything done, or omitted to be done, in good faith and without

negligence in the exercise or performance, or the purported

exercise or performance, of powers, functions or duties under this

Act.

(2) Subsection (1) does not apply to a person referred to in section 58

of the

Australian Prudential Regulation Authority Act 1998

and, to

avoid doubt, does not affect the operation of that section.

Note:

Section 58 of the

Australian Prudential Regulation Authority Act 1998

deals with protection from liability for APRA, APRA members,

APRA staff members and their agents.

102 Protection from liability--directions and secrecy

(1) An action, suit or proceeding (whether criminal or civil) does not

lie against a person in relation to anything done, or omitted to be

done, in good faith by the person if:

(a) the person does the thing, or omits to do the thing, for the

purpose of any of the following:

(i) complying with a direction under this Act given by the

Regulator to an accountable entity;

(ii) complying with subsection 68(1), 92(2) or 94(5) in

relation to a direction under this Act given by the

Regulator to an accountable entity; and

(b) it is reasonable for the person to do the thing, or to omit to do

the thing, in order to achieve that purpose; and

(i) an officer or senior manager of the accountable entity,

or of a member of the accountable entity's relevant

group;

(ii) an employee or agent of the accountable entity, or of a

member of the accountable entity's relevant group;

(iii) the accountable entity or a member of the accountable

entity's relevant group.

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Note:

For the definition of

relevant group

, see section 8.

(2) For the purposes of paragraph (1)(b), treat it as reasonable for a

person to do a thing, or to omit to do a thing, in order to achieve a

purpose unless no reasonable person in that person's position

would do the thing, or omit to do the thing, in order to achieve that

purpose.

(3) In this section:

employee

of an accountable entity, or of a member of an

accountable entity's relevant group, includes a person engaged to

provide advice or services to the accountable entity or member.

103 Protection from liability--provisions do not limit each other

The following provisions do not limit the operation of each other:

(a) section 101 of this Act;

(b) section 102 of this Act;

Australian Prudential Regulation Authority

Act 1998

;

(d) section 246 of the

Australian Securities and Investments

Commission Act 2001

104 Minister rules

(1) The Minister may, by legislative instrument, make rules (the

Minister rules

) prescribing matters:

(a) required or permitted by this Act to be prescribed by the

Minister rules; or

(b) necessary or convenient to be prescribed for carrying out or

giving effect to this Act.

(2) To avoid doubt, the Minister rules may not do the following:

(a) create an offence or civil penalty;

(b) provide powers of:

(i) arrest or detention; or

(ii) entry, search or seizure;

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(d) set an amount to be appropriated from the Consolidated

Revenue Fund under an appropriation in this Act;

(e) directly amend the text of this Act.

(3) In this section, a reference to this Act does not include a reference

to the Minister rules, the Regulator rules or the Regulatory Powers

Act.

105 Regulator rules

(1) APRA and ASIC may jointly, by legislative instrument, make rules

(the

Regulator rules

) prescribing matters:

(a) required or permitted by this Act to be prescribed by the

Regulator rules; or

(b) necessary or convenient to be prescribed for carrying out or

giving effect to this Act.

(2) To avoid doubt, the Regulator rules may not do the following:

(a) create an offence or civil penalty;

(b) provide powers of:

(i) arrest or detention; or

(ii) entry, search or seizure;

(d) set an amount to be appropriated from the Consolidated

Revenue Fund under an appropriation in this Act;

(e) directly amend the text of this Act.

(3) Regulator rules that are inconsistent with the Minister rules have

no effect to the extent of the inconsistency, but the Regulator rules

are taken to be consistent with the Minister rules to the extent that

the Regulator rules are capable of operating concurrently with the

Minister rules.

(4) In this section, a reference to this Act does not include a reference

to the Regulator rules, the Minister rules or the Regulatory Powers

Act.

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