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This is a Bill, not an Act. For current law, see the Acts databases.
1998-1999-2000-2001
The
Parliament of the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Financial
Services Reform Bill 2001
No. ,
2001
(Treasury)
A Bill
for an Act to amend the law relating to financial services and markets, and for
other purposes
ISBN: 0642 468281
Contents
Part 1—Main
amendments 3
Corporations Act
2001 3
Part 2—Consequential
amendments 445
Australian Securities and Investments Commission Act
2001 445
Corporations Act
2001 473
Corporations Act
2001 527
Part 1—Technical and other minor
amendments 537
Australian Securities and Investments Commission Act
2001 537
Corporations Act
2001 537
Part 2—Telephone monitoring during
takeovers 542
Corporations Act
2001 542
A Bill for an Act to amend the law relating to financial
services and markets, and for other purposes
The Parliament of Australia enacts:
This Act may be cited as the Financial Services
Reform Act 2001.
(1) The following provisions:
(a) this section and section 1;
(b) Part 1 of Schedule 3;
commence:
(c) unless paragraph (d) applies—on the day on which this Act
receives the Royal Assent; or
(d) if that day is the day on which the Corporations Act 2001
commences or an earlier day—immediately after the commencement of that
Act.
(2) Subject to subsections (3) to (7), the remaining provisions of
this Act commence on a day or days to be fixed by Proclamation.
(3) A day fixed by a Proclamation under subsection (2) cannot be a
day before the day on which the Corporations Act 2001
commences.
(4) If a day fixed by a Proclamation under subsection (2) is the same
day as the day on which the Corporations Act 2001 commences, the
provisions of this Act to which that Proclamation applies are taken to commence
immediately after the commencement of the Corporations Act
2001.
(5) The following provisions must commence on the same day:
(a) all the provisions of Schedule 1;
(b) all the provisions of Schedule 2.
(6) If a provision of this Act to which subsection (2) applies does
not commence under that subsection within the period of 12 months beginning on
the day on which the Corporations Act 2001 commences, it commences on the
first day after the end of that period.
(7) Despite anything in subsections (2) to (6), the item in
Part 2 of Schedule 1 that amends section 9 of the Corporations
Act 2001 to insert a definition of offence based on does not
commence if, at or before the time it would otherwise have commenced,
item 1 of Schedule 1 to the Treasury Legislation Amendment
(Application of Criminal Code) Act (No. 3) 2001 has
commenced.
Subject to section 2, each Act that is specified in a Schedule to
this Act is amended or repealed as set out in the applicable items in the
Schedule concerned, and any other item in a Schedule to this Act has effect
according to its terms.
1 Chapters 7 and 8
Repeal the Chapters, substitute:
The main object of this Chapter is to promote:
(a) confident and informed decision making by consumers of financial
products and services while facilitating efficiency, flexibility and innovation
in the provision of those products and services; and
(b) fairness, honesty and professionalism by those who provide financial
services; and
(c) fair, orderly and transparent markets for financial products;
and
(d) the reduction of systemic risk and the provision of fair and effective
services by clearing and settlement facilities.
An outline of this Chapter is set out in the table below.
|
Part-by-Part outline of Chapter 7 |
||
|---|---|---|
|
|
Part... |
Covers... |
|
1 |
7.1 |
definitions of key concepts and of commonly occurring expressions |
|
2 |
7.2 |
licensing of financial markets other matters relating to financial markets |
|
3 |
7.3 |
licensing of clearing and settlement facilities other matters relating to clearing and settlement facilities |
|
4 |
7.4 |
limitation on ownership of certain licensees individuals who are disqualified from being involved in certain
licensees |
|
5 |
7.5 |
compensation regimes for financial markets |
|
6 |
7.6 |
licensing of providers of financial services other related matters (e.g. restrictions on use of terminology; agreements
with unlicensed persons relating to provision of financial services) |
|
7 |
7.7 |
disclosure requirements for financial services licensees and their
authorised representatives disclosure requirements for certain people who are not required to be
licensed |
|
8 |
7.8 |
other conduct requirements for financial services licensees (e.g. dealing
with client money and property; financial records, statements and
audit) special provisions relating to insurance |
|
9 |
7.9 |
financial product disclosure requirements other requirements relating to issue and sale of financial
products |
|
10 |
7.10 |
market misconduct and other prohibited conduct relating to financial
products and services |
|
11 |
7.11 |
title to, and transfer of, certain securities and other financial
products |
|
12 |
7.12 |
qualified privilege in certain situations other miscellaneous matters |
In this Chapter:
able to be traded, in relation to a market,
includes (but is not limited to) admitted to quotation on the
market.
acquire, in relation to a financial product, has a meaning
affected by section 761E.
arrangement means, subject to section 761B, a contract,
agreement, understanding, scheme or other arrangement (as existing from time to
time):
(a) whether formal or informal, or partly formal and partly informal;
and
(b) whether written or oral, or partly written and partly oral;
and
(c) whether or not enforceable, or intended to be enforceable, by legal
proceedings and whether or not based on legal or equitable rights.
Australian CS facility licence means a licence under
section 824B that authorises a person to operate a clearing and settlement
facility.
Australian financial services licence means a licence under
section 913B that authorises a person who carries on a financial services
business to provide financial services.
Australian market licence means a licence under
section 795B that authorises a person to operate a financial
market.
authorised representative of a financial services licensee
means a person authorised in accordance with section 916A or 916B to
provide a financial service or financial services on behalf of the
licensee.
basic deposit product means a deposit product that is a
facility in relation to which the following conditions are satisfied:
(a) the terms applicable to the facility (the governing
terms) do not permit the amount from time to time standing to the credit
of the facility to be reduced otherwise than in consequence of one or more of
the following:
(i) a withdrawal, transfer or debit on the instruction of, or by authority
of, the depositor, not being on account of entry fees, exit fees or charges for
the management of the funds (but this does not exclude charges for the
maintenance of the facility itself);
(ii) a payment of charges or duties on deposits into, or withdrawals from,
the facility that are payable under a law of the Commonwealth or of a State or
Territory;
(iii) a payment that a law of the Commonwealth, or of a State or
Territory, requires to be made out of the facility;
(iv) a payment that an order of a court requires to be made out of the
facility;
(v) the exercise of a right to combine accounts;
(vi) the correction of an error;
(vii) any other circumstances specified in regulations made for the
purposes of this subparagraph; and
(b) any return to be generated for the depositor on the amount from time
to time standing to the credit of the facility is an amount that is set out in,
or that is calculated by reference to a rate or rates that are set out in, the
governing terms; and
(c) either:
(i) there is no minimum period before which funds cannot be withdrawn or
transferred from the facility without a reduction in the return generated
for the depositor; or
(ii) if there is such a period, it expires on or before the end of the
period of 2 years starting on the day on which funds were first deposited in the
facility; and
(d) funds are able to be withdrawn or transferred from the facility on the
instruction of, or by authority of, the depositor (whether or not a withdrawal
or transfer will attract a reduction in the return generated for the
depositor as mentioned in subparagraph (c)(i)); and
(e) any other conditions specified in regulations made for the purposes of
this paragraph.
binder means an authorisation given to a person by a
financial services licensee who is an insurer to do either or both of the
following:
(a) enter into contracts that are risk insurance products on behalf of the
insurer as insurer; or
(b) deal with and settle, on behalf of the insurer, claims relating to
risk insurance products against the insurer as insurer;
but does not include an authorisation of a kind referred to in
paragraph (a) that is limited to effecting contracts of insurance by way of
interim cover unless there is also in existence an authority given by the
insurer to the person to enter into, on behalf of the insurer and otherwise than
by way of interim cover, contracts of insurance.
body regulated by APRA has the meaning given by subsection
3(2) of the Australian Prudential Regulation Authority Act
1998.
carried on in this jurisdiction, in relation to a financial
services business, has a meaning affected by section 911D.
certificate cancellation provisions, in relation to a
prescribed CS facility, means the provisions of the facility’s operating
rules that deal with:
(a) the cancellation of documents of title to financial products
transferred through the facility; and
(b) matters incidental to the cancellation of those documents.
clearing and settlement facility has the meaning given by
Division 6.
CS facility licensee means a person who holds an Australian
CS facility licence.
custodial or depository service that a person provides has
the meaning given by section 766E.
dealing in a financial product has the meaning given by
section 766C (and deal has a corresponding
meaning).
declared professional body means a body, or the part of a
body, in relation to which a declaration under subsection 918B(1) is in
force.
deposit product means a financial product described in
paragraph 764A(1)(i).
derivative has the meaning given by
section 761D.
dispose, in relation to a financial product, includes
terminate or close out the legal relationship that constitutes the financial
product.
disqualified individual means an individual who is
disqualified within the meaning given by section 853A.
financial market has the meaning given by
Division 5.
financial product has the meaning given by
Division 3.
Note: References in this Chapter to financial products have
effect subject to particular express exclusions for particular
purposes—see e.g. sections 1010A and 1074A.
financial product advice has the meaning given by subsection
766B(1).
financial service has the meaning given by
Division 4.
financial services business means a business of providing
financial services.
Note: The meaning of carry on a financial
services business is affected by section 761C.
Financial Services Guide means a Financial Services Guide
required by section 941A or 941B to be given in accordance with
Division 2 of Part 7.7.
financial services licensee means a person who holds an
Australian financial services licence.
foreign exchange contract means a contract:
(a) to buy or sell currency (whether Australian or not); or
(b) to exchange one currency (whether Australian or not) for another
(whether Australian or not).
funeral benefit means a benefit that consists of:
(a) the provision of funeral, burial or cremation services, with or
without the supply of goods connected with such services; or
(b) the payment of money, on the death of a person, for the purpose of
meeting the whole or a part of the expenses of and incidental to the funeral,
burial or cremation of the person.
general advice has the meaning given by subsection
766B(4).
general insurance product means a financial product described
in paragraph 764A(1)(d).
insurance product means a financial product described in
paragraph 764A(1)(d), (e) or (f).
investment life insurance product means a financial product
described in paragraph 764A(1)(f).
involved in a market licensee or CS facility licensee, or in
an applicant for such a licence, has the meaning given by
section 853B.
issue, in relation to a financial product, has a meaning
affected by section 761E.
issuer, in relation to a financial product, has a meaning
affected by section 761E.
licensed CS facility means a clearing and settlement facility
the operation of which is authorised by an Australian CS facility
licence.
licensed market means a financial market the operation of
which is authorised by an Australian market licence.
life risk insurance product means a financial product
described in paragraph 764A(1)(e).
listing rules of a financial market, or proposed financial
market, means any rules (however described) that are made by the operator of the
market, or contained in the operator’s constitution, and that deal
with:
(a) admitting entities to, or removing entities from, the market’s
official list, whether for the purpose of enabling financial products of those
entities to be traded on the market or for other purposes; or
(b) the activities or conduct of entities that are included on that
list.
lodge with ASIC, when used in a provision of this Chapter in
relation to which regulations made for the purposes of this definition state
that the lodgment is to be in a prescribed form, means lodge with ASIC in a
prescribed form.
Note: See section 350 for the meaning of lodge in
a prescribed form.
makes a market for a financial product has the
meaning given by section 766D.
managed investment product means a financial product
described in paragraph 764A(1)(b) or (l).
market licensee means a person who holds an Australian market
licence.
operated in this jurisdiction:
(a) in relation to a financial market, has a meaning affected by
section 791D; and
(b) in relation to a clearing and settlement facility, has a meaning
affected by section 820D.
operating rules:
(a) of a clearing and settlement facility, or proposed clearing and
settlement facility, means any rules (however described) made by the operator of
the facility, or contained in the operator’s constitution, that deal
with:
(i) the activities or conduct of the facility; or
(ii) the activities or conduct of persons in relation to the
facility;
but does not include any such rules that deal with matters in respect of
which licensed CS facilities must have written procedures under regulations made
for the purposes of subsection 822A(2); or
(b) of a financial market, or proposed financial market, means any rules
(however described), including the market’s listing rules (if any), that
are made by the operator of the market, or contained in the operator’s
constitution, and that deal with:
(i) the activities or conduct of the market; or
(ii) the activities or conduct of persons in relation to the
market;
but does not include:
(iii) any such rules that deal with matters in respect of which licensed
markets must have written procedures under regulations made for the purposes of
subsection 793A(2); or
(iv) compensation rules within the meaning of Part 7.5.
participant means:
(a) in relation to a clearing and settlement facility—a person who
is allowed to directly participate in the facility under the facility’s
operating rules; and
(b) in relation to a financial market—a person who is allowed to
directly participate in the market under the market’s operating
rules.
person has a meaning affected by section 761F (which
deals with partnerships).
personal advice has the meaning given by subsection
766B(3).
prescribed CS facility means a licensed CS facility that is
prescribed by regulations made for the purposes of this definition.
Product Disclosure Statement means a Product Disclosure
Statement:
(a) required by section 1012A, 1012B, 1012C or 1012I to be given in
accordance with Division 2 of Part 7.9; or
(b) that section 1012H requires an issuer of a financial product to
take reasonable steps to ensure is given to a new group member in accordance
with Division 2 of Part 7.9.
provide, in relation to a financial product, has a meaning
affected by section 761E.
retail client has the meaning given by
section 761G.
risk insurance product means a financial product described in
paragraph 764A(1)(d) or (e).
RSA product means a financial product described in paragraph
764A(1)(h).
security means:
(a) a share in a body; or
(b) a debenture of a body; or
(c) a legal or equitable right or interest in a security covered by
paragraph (a) or (b); or
(d) an option to acquire, by way of issue, a security covered by
paragraph (a), (b) or (c);
but does not include an excluded security. In Part 7.11, it also
includes a managed investment product.
Statement of Advice means a Statement of Advice required by
section 946A to be given in accordance with Subdivisions C and D of
Division 3 of Part 7.7.
superannuation product means a financial product described in
paragraph 764A(1)(g).
Supplementary Financial Services Guide has the meaning given
by section 943A.
Supplementary Product Disclosure Statement has the meaning
given by section 1014A.
title document, for a financial product, means a certificate
or other document evidencing ownership of the financial product.
wholesale client has the meaning given by
section 761G.
If:
(a) an arrangement, when considered by itself, does not constitute a
derivative, or some other kind of financial product; and
(b) that arrangement, and one or more other arrangements, if they had
instead been a single arrangement, would have constituted a derivative or other
financial product; and
(c) it is reasonable to assume that the parties to the arrangements regard
them as constituting a single scheme;
the arrangements are, for the purposes of this Part, to be treated as if
they together constituted a single arrangement.
In working out whether someone carries on a financial services business,
Division 3 of Part 1.2 needs to be taken into account. However,
paragraph 21(3)(e) does not apply for the purposes of this Chapter.
(1) For the purposes of this Chapter, subject to subsections (2), (3)
and (4), a derivative is an arrangement in relation to which the
following conditions are satisfied:
(a) under the arrangement, a party to the arrangement must, or may be
required to, provide at some future time consideration of a particular
kind or kinds to someone; and
(b) that future time is not less than the number of days, prescribed by
regulations made for the purposes of this paragraph, after the day on which the
arrangement is entered into; and
(c) the amount of the consideration, or the value of the arrangement, is
ultimately determined, derived from or varies by reference to (wholly or in
part) the value or amount of something else (of any nature whatsoever and
whether or not deliverable), including, for example, one or more of the
following:
(i) an asset;
(ii) a rate (including an interest rate or exchange rate);
(iii) an index;
(iv) a commodity.
(2) Without limiting subsection (1), anything declared by the
regulations to be a derivative for the purposes of this section is a derivative
for the purposes of this Chapter. A thing so declared is a derivative despite
anything in subsections (3) and (4).
(3) Subject to subsection (2), the following are not derivatives for
the purposes of this Chapter even if they are covered by the definition in
subsection (1):
(a) an arrangement in relation to which subparagraphs (i), (ii) and
(iii) are satisfied:
(i) a party has, or may have, an obligation to buy, and another party has,
or may have, an obligation to sell, tangible property (other than Australian or
foreign currency) at a price and on a date in the future; and
(ii) the arrangement does not permit the seller’s obligations to be
wholly settled by cash, or by set-off between the parties, rather than by
delivery of the property; and
(iii) neither usual market practice, nor the rules of a licensed market or
a licensed CS facility, permits the seller’s obligations to be closed out
by the matching up of the arrangement with another arrangement of the same kind
under which the seller has offsetting obligations to buy;
but only to the extent that the arrangement deals with that purchase and
sale;
(b) a contract for the future provision of services;
(c) anything that is covered by a paragraph of subsection 764A(1), other
than paragraph (c) of that subsection;
(d) anything declared by the regulations not to be a derivative for the
purposes of this Chapter.
(4) Subject to subsection (2), an arrangement under which one party
has an obligation to buy, and the other has an obligation to sell, property is
not a derivative for the purposes of this Chapter merely because the arrangement
provides for the consideration to be varied by reference to a general inflation
index such as the Consumer Price Index.
General
(1) This section defines when a financial product is issued
to a person. It also defines who the issuer of a financial product
is. If a financial product is issued to a person:
(a) the person acquires the product from the issuer;
and
(b) the issuer provides the product to the person.
Note: Some financial products can also be acquired from, or
provided by, someone other than the issuer (e.g. on secondary trading in
financial products).
Issuing a financial product
(2) Subject to this section, a financial product is issued
to a person when it is first issued, granted or otherwise made available
to a person.
(3) Subject to this section, a financial product specified in the table is
issued to a person when the event specified for that product occurs:
|
When particular financial products are issued |
||
|---|---|---|
|
Item |
Financial product |
Event |
|
1 |
superannuation product |
the person becomes a member of the fund concerned |
|
2 |
RSA product |
the account concerned is opened in the person’s name |
|
3 |
derivative |
the person enters into the legal relationship that constitutes the
financial product |
Issuer of a financial product
(4) Subject to this section, the issuer, in relation to a
financial product issued to a person (the client), is the person
responsible for the obligations owed, under the terms of the facility that is
the product:
(a) to, or to a person nominated by, the client; or
(b) if the product has been transferred from the client to another person
and is now held by that person or another person to whom it has subsequently
been transferred—to, or to a person nominated by, that person or that
other person.
Note: For example, the issuer of a direct debit facility is
the financial institution with which the account to be debited is held, rather
than the persons to whom payments can be made using the
facility.
(5) Subject to subsection (7), each person who is a party to a
financial product that:
(a) is a derivative; and
(b) is not entered into, or acquired, on a financial market;
is taken to be an issuer of the product.
Note 1: Under paragraph (1)(a), each person who is a
party to the derivative will also acquire the financial product at the time of
its issue as specified in subsection (3).
Note 2: Although each party to the derivative is an issuer,
whether any particular party has disclosure or other obligations under this
Chapter will depend on the circumstances (e.g. whether the issue occurs in the
course of a business of issuing financial products and whether any of the other
parties is a retail client).
(6) Subject to subsection (7), the issuer of a financial product
that:
(a) is a derivative; and
(b) is entered into, or acquired, on a financial market;
is taken to be:
(c) if the product is entered into, or acquired, on the market through an
arrangement made by a financial services licensee acting on behalf of another
person—the financial services licensee; or
(d) if the product is entered into, or acquired, on the market through an
arrangement made by an authorised representative of a financial services
licensee acting on behalf of another person (not being the licensee)—the
financial services licensee; or
(e) if neither paragraph (c) nor (d) applies—the market
operator.
(7) The regulations may make provision determining all or any of the
following for the purposes of this Chapter:
(a) the meaning of issue (and/or related parts of speech,
including issuer) in relation to a class of financial
products;
(b) the meaning of acquire (and/or related parts of
speech) in relation to a class of financial products;
(c) the meaning of provide (and/or related parts of speech)
in relation to a class of financial products.
Regulations made for the purposes of this subsection have effect despite
anything else in this section.
(1) This Chapter applies to a partnership as if the partnership were a
person, but it applies with the following changes:
(a) obligations that would be imposed on the partnership are imposed
instead on each partner, but may be discharged by any of the partners;
(b) any contravention of a provision of this Chapter, or a provision of
this Act that relates to a requirement in a provision of this Chapter, that
would otherwise be a contravention by the partnership is taken (whether for the
purposes of criminal or civil liability) to have been a contravention by each
partner who:
(i) aided, abetted, counselled or procured the relevant act or omission;
or
(ii) was in any way knowingly concerned in, or party to, the relevant act
or omission (whether directly or indirectly and whether by any act or omission
of the partner).
(2) For the purposes of this Chapter, a change in the composition of a
partnership does not affect the continuity of the partnership.
(3) Subsections (1) and (2) have effect subject to:
(a) an express or implied contrary intention in a provision or provisions
of this Chapter; and
(b) the regulations, which may exclude or modify the effect of those
subsections in relation to specified provisions.
Providing a financial product or financial service to a person as a
retail client
(1) For the purposes of this Chapter, a financial product or a financial
service is provided to a person as a retail client unless
subsection (5) or (7) provides otherwise.
Note: The references in this section to providing a
financial product to a person are not to be taken to imply that the provision of
a financial product is not also the provision of a financial service (see the
meaning of dealing in section 766C).
Acquiring a financial product or financial service as a retail
client
(2) For the purposes of this Chapter, a person to whom a financial product
or financial service is provided as a retail client is taken to acquire the
product or service as a retail client.
Disposing of a financial product as a retail client
(3) If a financial product is provided to a person as a retail client, any
subsequent disposal of all or part of that product by the person is, for the
purposes of this Chapter, a disposal by the person as a retail client.
Wholesale clients
(4) For the purposes of this Chapter, a financial product or a financial
service is provided to, or acquired by, a person as a wholesale client
if it is not provided to, or acquired by, the person as a retail
client.
General insurance products
(5) For the purposes of this Chapter, if a financial product is, or a
financial service provided to a person relates to, a general insurance product,
the product or service is provided to the person as a retail client
if:
(a) either:
(i) the person is an individual; or
(ii) the insurance product is or would be for use in connection with a
small business (see subsection (12)); and
(b) the general insurance product is:
(i) a motor vehicle insurance product (as defined in the regulations);
or
(ii) a home building insurance product (as defined in the regulations);
or
(iii) a home contents insurance product (as defined in the regulations);
or
(iv) a sickness and accident insurance product (as defined in the
regulations); or
(v) a consumer credit insurance product (as defined in the regulations);
or
(vi) a travel insurance product (as defined in the regulations);
or
(vii) a personal and domestic property insurance product (as defined in
the regulations); or
(viii) a kind of general insurance product prescribed by
regulations made for the purposes of this subparagraph.
In any other cases, the provision to a person of a financial product that
is, or a financial service that relates to, a general insurance product does not
constitute the provision of a financial product or financial service to the
person as a retail client.
Superannuation products and RSA products are always retail
(6) For the purposes of this Chapter, if a financial product is, or a
financial service provided to a person relates to, a superannuation product or
an RSA product, the product or service is provided to the person as a retail
client (regardless of the circumstances in which it is provided, and regardless
of the provider’s and the person’s circumstances).
Other kinds of financial product
(7) For the purposes of this Chapter, if a financial product is not, or a
financial service provided to a person does not relate to, a general insurance
product, a superannuation product or an RSA product, the product or service is
provided to the person as a retail client unless one or more of the following
paragraphs apply:
(a) the price for the provision of the financial product, or the value of
the financial product to which the financial service relates, equals or exceeds
the amount specified in regulations made for the purposes of this paragraph as
being applicable in the circumstances (but see also subsection (10));
or
(b) the financial product, or the financial service, is provided for use
in connection with a business that is not a small business (see
subsection (12));
(c) the financial product, or the financial service, is not provided for
use in connection with a business, and the person who acquires the product or
service gives the provider of the product or service, before the provision of
the product or service, a copy of a certificate given within the preceding 6
months by a qualified accountant (as defined in section 9) that states that
the person:
(i) has net assets of at least $2.5 million; or
(ii) has a gross income for each of the last 2 financial years of at least
$250,000 a year;
(d) the person is a professional investor.
Offence proceedings—defendant bears evidential burden in relation
to matters referred to in paragraphs (7)(a) to (d)
(8) In a prosecution for an offence based on a provision of this Chapter,
a defendant bears an evidential burden in relation to the matters in
paragraphs (7)(a) to (d) as if those matters were exceptions for the
purposes of subsection 13.3(3) of the Criminal Code.
Other proceedings relating to subsection (7)
products—presumption in non-criminal proceedings of retail client unless
contrary established
(9) If:
(a) it is alleged in a proceeding under this Chapter (not being a
prosecution for an offence), or in any other proceeding (not being a prosecution
for an offence) in respect of a matter arising under this Chapter, that a
particular financial product or financial service was provided to a person as a
retail client; and
(b) the product or the service is one to which subsection (7)
applies;
it is presumed that the product or service was provided to the person as a
retail client unless the contrary is established.
Note 1: There is no such presumption in relation to the
provision of a product or service that is or relates to a general insurance
product. The matter is to be resolved as set out in
subsection (5).
Note 2: The provision of a product or service that is or
relates to a superannuation product or an RSA product will always be a provision
to a person as a retail client—see subsection (6).
Note 3: In criminal proceedings, a defendant bears an
evidential burden in relation to the matters in paragraphs (7)(a) to (d)
(see subsection (8)).
Regulations and paragraph (7)(a)
(10) In addition to specifying an amount or amounts for the purposes of
paragraph (7)(a), the regulations may do either or both of the
following:
(a) deal with how a price or value referred to in that paragraph is to be
calculated, either generally or in relation to a specified class of financial
products;
(b) modify the way in which that paragraph applies in particular
circumstances.
What happens if a package of general insurance products and other kinds
of financial products is provided?
(11) If:
(a) either:
(i) in a single transaction, 2 or more financial products are provided to
a person; or
(ii) a single financial service provided to a person relates to 2 or more
financial products; and
(b) one or more, but not all, of the financial products are general
insurance products;
subsection (5) applies to the transaction or service so far as it
relates to the general insurance products, and subsection (6) or (7), as
the case requires, applies to the transaction or service so far as it relates to
other financial products.
Definition
(12) In this section:
small business means a business employing less
than:
(a) if the business is or includes the manufacture of goods—100
people; or
(b) otherwise—20 people.
A reference in a provision of this Chapter to this Chapter, or to a
particular provision or group of provisions of this Chapter, includes (unless a
contrary intention appears) a reference to regulations made for the purposes of
this Chapter, or for the purposes of that provision or any of those provisions,
as the case requires.
General definition
(1) Subdivision B sets out a general definition of financial
product. Subject to subsections (2) and (3), a facility is a
financial product if it falls within that definition.
Specific inclusions
(2) Subdivision C identifies, or provides for the identification of, kinds
of facilities that, subject to subsection (3), are financial products
(whether or not they are within the general definition).
Overriding exclusions
(3) Subdivision D identifies, or provides for the identification of, kinds
of facilities that are not financial products. These facilities are not
financial products:
(a) even if they are within the general definition; and
(b) even if they are within a class of facilities identified as mentioned
in subsection (2).
If a financial product is a component of a facility that also has other
components, this Chapter, in applying to the financial product, only applies in
relation to the facility to the extent it consists of the component that is the
financial product.
Note: So, e.g., Part 7.9 does not require disclosures
to be made in relation to those other components.
In this Division:
facility includes:
(a) intangible property; or
(b) an arrangement or a term of an arrangement (including a term that is
implied by law or that is required by law to be included); or
(c) a combination of intangible property and an arrangement or term of an
arrangement.
Note: 2 or more arrangements may be taken to constitute a
single arrangement—see section 761B.
(1) For the purposes of this Chapter, a financial product is
a facility through which, or through the acquisition of which, a person does one
or more of the following:
(a) makes a financial investment (see section 763B);
(b) manages financial risk (see section 763C);
(c) makes non-cash payments (see section 763D).
This has effect subject to section 763E.
(2) For the purposes of this Chapter, a particular facility that is of a
kind through which people commonly make financial investments, manage financial
risks or make non-cash payments is a financial product even if
that facility is acquired by a particular person for some other
purpose.
(3) A facility does not cease to be a financial product merely
because:
(a) the facility has been acquired by a person other than the person to
whom it was originally issued; and
(b) that person, in acquiring the product, was not making a financial
investment or managing a financial risk.
For the purposes of this Chapter, a person (the investor)
makes a financial investment if:
(a) the investor gives money or money’s worth (the
contribution) to another person and any of the following
apply:
(i) the other person uses the contribution to generate a financial return,
or other benefit, for the investor;
(ii) the investor intends that the other person will use the contribution
to generate a financial return, or other benefit, for the investor (even if no
return or benefit is in fact generated);
(iii) the other person intends that the contribution will be used to
generate a financial return, or other benefit, for the investor (even if no
return or benefit is in fact generated); and
(b) the investor has no day-to-day control over the use of the
contribution to generate the return or benefit.
Note 1: Examples of actions that constitute making a
financial investment under this subsection are:
(a) a person paying money to a company for the issue to the
person of shares in the company (the company uses the money to generate
dividends for the person and the person, as a shareholder, does not have control
over the day-to-day affairs of the company); or
(b) a person contributing money to acquire interests in a
registered scheme from the responsible entity of the scheme (the scheme uses the
money to generate financial or other benefits for the person and the person, as
a member of the scheme, does not have day-to-day control over the operation of
the scheme).
Note 2: Examples of actions that do not constitute making a
financial investment under this subsection are:
(a) a person purchasing real property or bullion (while the
property or bullion may generate a return for the person, it is not a return
generated by the use of the purchase money by another person);
or
(b) a person giving money to a financial services
licensee who is to use it to purchase shares for the person (while the
purchase of the shares will be a financial investment made by the person, the
mere act of giving the money to the licensee will not of itself constitute
making a financial investment).
For the purposes of this Chapter, a person manages financial
risk if they:
(a) manage the financial consequences to them of particular circumstances
happening; or
(b) avoid or limit the financial consequences of fluctuations in, or in
the value of, receipts or costs (including prices and interest rates).
Note 1: Examples of actions that constitute managing a
financial risk are:
(a) taking out insurance; or
(b) hedging a liability by acquiring a futures contract or
entering into a currency swap.
Note 2: An example of an action that does not constitute
managing a financial risk is employing a security firm (while that is a way of
managing the risk that thefts will happen, it is not a way of managing the
financial consequences if thefts do occur).
(1) For the purposes of this Chapter, a person makes non-cash
payments if they make payments, or cause payments to be made, otherwise
than by the physical delivery of Australian or foreign currency in the
form of notes and/or coins.
Note: Examples of actions that constitute making non-cash
payments are:
(a) making payments by means of a facility for direct debit
of a deposit account; or
(b) making payments by means of a facility for the use of
cheques; or
(c) making payments by means of a purchased payment
facility within the meaning of the Payment Systems (Regulation) Act 1998,
such as a smart card; or
(d) making payments by means of traveller’s cheques
(whether denominated in Australian or foreign currency).
(2) For the purposes of this Chapter, the following are not making
non-cash payments, even if they might otherwise be covered by
subsection (1):
(a) making payments by means of a facility in relation to which one of the
following applies:
(i) there is only one person to whom payments can be made by means of the
facility;
(ii) the facility is, or is of a kind, specified in the regulations
as being a facility that is not to be covered by this section because of
restrictions relating to the number of people to whom payments can be made by
means of the facility, or relating to the number of persons who can use the
facility to make payments;
(b) making payments by means of:
(i) a letter of credit from a financial institution; or
(ii) a cheque drawn by a financial institution on itself; or
(iii) a guarantee given by a financial institution.
(1) If:
(a) something (the incidental product) that, but for this
section, would be a financial product because of this Subdivision is:
(i) an incidental component of a facility that also has other components;
or
(ii) a facility that is incidental to one or more other facilities;
and
(b) it is reasonable to assume that the main purpose of:
(i) if subparagraph (a)(i) applies—the facility referred to in
that subparagraph, when considered as a whole; or
(ii) if subparagraph (a)(ii) applies—the incidental product,
and the other facilities referred to in that subparagraph, when considered as a
whole;
is not a financial product purpose;
the incidental product is not a financial product because of this
Subdivision (however, it may be still be a financial product because of
Subdivision C).
(2) In this section:
financial product purpose means a purpose of:
(a) making a financial investment; or
(b) managing financial risk; or
(c) making non-cash payments.
(1) Subject to Subdivision D, the following are financial
products for the purposes of this Chapter:
(a) a security;
(b) any of the following in relation to a registered scheme:
(i) an interest in the scheme;
(ii) a legal or equitable right or interest in an interest covered by
subparagraph (i);
(iii) an option to acquire, by way of issue, an interest or right covered
by subparagraph (i) or (ii);
(c) a derivative;
(d) a contract of insurance that is not a life policy, or a sinking fund
policy, within the meaning of the Life Insurance Act 1995, but not
including such a contract of insurance:
(i) to the extent that it provides for a benefit to be provided by an
association of employees that is an organisation within the meaning of the
Workplace Relations Act 1996 for a member of the organisation or a
dependant of a member; or
(ii) to the extent that it provides for benefits, pensions or payments
described in paragraph 11(3)(c) of the Life Insurance Act 1995;
or
(iii) to the extent that it provides for the provision of a funeral
benefit; or
(iv) issued by an employer to an employee of the employer;
(e) a life policy, or a sinking fund policy, within the meaning of the
Life Insurance Act 1995, that is a contract of insurance, but not
including such a policy:
(i) to the extent that it provides for a benefit to be provided by an
association of employees that is an organisation within the meaning of the
Workplace Relations Act 1996 for a member of the organisation or a
dependant of a member; or
(ii) to the extent that it provides for benefits, pensions or payments
described in paragraph 11(3)(c) of the Life Insurance Act 1995;
or
(iii) to the extent that it provides for the provision of a funeral
benefit; or
(iv) issued by an employer to an employee of the employer;
(f) a life policy, or a sinking fund policy, within the meaning of the
Life Insurance Act 1995, that is not a contract of insurance, but not
including such a policy:
(i) to the extent that it provides for a benefit to be provided by an
association of employees that is an organisation within the meaning of the
Workplace Relations Act 1996 for a member of the organisation or a
dependant of a member; or
(ii) to the extent that it provides for benefits, pensions or payments
described in paragraph 11(3)(c) of the Life Insurance Act 1995;
or
(iii) to the extent that it provides for the provision of a funeral
benefit; or
(iv) issued by an employer to an employee of the employer;
(g) a superannuation interest within the meaning of the Superannuation
Industry (Supervision) Act 1993;
(h) an RSA (retirement savings account) within the meaning of the
Retirement Savings Accounts Act 1997;
(i) any deposit-taking facility made available by an ADI (within the
meaning of the Banking Act 1959) in the course of its banking
business (within the meaning of that Act), other than an RSA (RSAs are covered
by paragraph (h));
(j) a debenture, stock or bond issued or proposed to be issued by a
government;
(k) a foreign exchange contract that is not:
(i) a derivative (derivatives are covered by paragraph (c));
or
(ii) a contract to exchange one currency (whether Australian or not) for
another (the second currency) that is to be settled immediately by
the physical delivery of notes and/or coins in the second currency;
(l) any of the following:
(i) an interest in a managed investment scheme operated outside this
jurisdiction that section 601ED would require to be registered if it was
operated in this jurisdiction;
(ii) a legal or equitable right or interest in an interest covered by
subparagraph (i);
(iii) an option to acquire, by way of issue, an interest or right covered
by subparagraph (i) or (ii);
(m) anything declared by the regulations to be a financial product for the
purposes of this section.
Note: Even though something is expressly excluded from one
of these paragraphs, it may still be a financial product (subject to Subdivision
D) either because:
(a) it is covered by another of these paragraphs;
or
(b) it is covered by the general definition in Subdivision
B.
(2) For the purpose of paragraphs (1)(d), (e) and (f), contract
of insurance includes:
(a) a contract that would ordinarily be regarded as a contract of
insurance even if some of its provisions are not by way of insurance;
and
(b) a contract that includes provisions of insurance in so far as those
provisions are concerned, even if the contract would not ordinarily be regarded
as a contract of insurance.
(1) Despite anything in Subdivision B or Subdivision C, the following are
not financial products for the purposes of this Chapter:
(a) an excluded security;
(b) an undertaking by a body corporate to pay money to a related body
corporate;
(c) health insurance provided as part of a health insurance business (as
defined in subsection 67(4) of the National Health Act 1953);
(d) insurance provided by the Commonwealth;
(e) State insurance or Northern Territory insurance, including insurance
entered into by:
(i) a State or the Northern Territory; and
(ii) some other insurer;
as joint insurers;
(f) insurance entered into by the Export Finance and Insurance
Corporation, other than a short-term insurance contract within the meaning of
the Export Finance and Insurance Corporation Act 1991;
(g) reinsurance;
(h) any of the following:
(i) a credit facility within the meaning of the regulations;
(ii) a facility for making non-cash payments (see section 763D), if
payments made using the facility will all be debited to a credit facility
covered by subparagraph (i);
(i) a facility:
(i) that is an approved RTGS system within the meaning of the Payment
Systems and Netting Act 1998; or
(ii) for the transmission and reconciliation of non-cash payments (see
section 763D), and the establishment of final positions, for settlement
through an approved RTGS system within the meaning of the Payment Systems and
Netting Act 1998;
(j) a facility that is a designated payment system for the purposes of the
Payment Systems (Regulation) Act 1998;
(k) a facility for the exchange and settlement of non-cash payments (see
section 763D) between providers of non-cash payment facilities;
(l) a facility that is:
(i) a financial market; or
(ii) a clearing and settlement facility; or
(iii) a payment system operated as part of a clearing and settlement
facility;
(m) a contract to exchange one currency (whether Australian or not) for
another (the second currency) that is to be settled immediately by
the physical delivery of notes and/or coins in the second currency;
(n) so much of an arrangement as is not a derivative because of paragraph
761D(3)(a);
(o) an arrangement that is not a derivative because of paragraph
761D(3)(b);
(p) an arrangement that is not a derivative because of subsection
761D(4);
(q) an interest in a superannuation fund of a kind prescribed by
regulations made for the purposes of this paragraph;
(r) any of the following:
(i) an interest in something that is not a managed investment scheme
because of paragraph (c), (e), (f), (k), (l) or (m) of the definition of
managed investment scheme in section 9;
(ii) a legal or equitable right or interest in an interest covered by
subparagraph (i);
(iii) an option to acquire, by way of issue, an interest or right covered
by subparagraph (i) or (ii);
(s) any of the following:
(i) an interest in a managed investment scheme operated outside this
jurisdiction that section 601ED would not require to be registered if it
was operated in this jurisdiction;
(ii) a legal or equitable right or interest in an interest covered by
subparagraph (i);
(iii) an option to acquire, by way of issue, an interest or right covered
by subparagraph (i) or (ii);
(t) a deposit-taking facility that is, or is used for, State
banking;
(u) a benefit provided by an association of employees that is an
organisation within the meaning of the Workplace Relations Act 1996 for a
member of the organisation or a dependant of a member;
(v) either of the following:
(i) a contract of insurance; or
(ii) a life policy or a sinking fund policy, within the meaning of the
Life Insurance Act 1995, that is not a contract of insurance;
issued by an employer to an employee of the employer;
(w) a funeral benefit;
(x) equipment or infrastructure by which something else that is a
financial product is provided;
(y) a facility, interest or other thing declared by regulations made for
the purposes of this subsection not to be a financial product;
(z) a facility, interest or other thing declared by ASIC under
subsection (2) not to be a financial product.
(2) ASIC may declare that a specified facility, interest or other thing is
not a financial product for the purposes of this Chapter. The declaration must
be in writing and ASIC must publish notice of it in the
Gazette.
(1) For the purposes of this Chapter, subject to paragraph (2)(b), a
person provides a financial service if they:
(a) provide financial product advice (see section 766B); or
(b) deal in a financial product (see section 766C); or
(c) make a market for a financial product (see section 766D);
or
(d) operate a registered scheme; or
(e) provide a custodial or depository service (see section 766E);
or
(f) engage in conduct of a kind prescribed by regulations made for the
purposes of this paragraph.
(2) The regulations may set out:
(a) the circumstances in which persons facilitating the provision of a
financial service (for example, by publishing information) are taken also to
provide that service; or
(b) the circumstances in which persons are taken to provide, or are taken
not to provide, a financial service.
(3) To avoid doubt, a person’s conduct is not the provision of a
financial service if it is done in the course of work of a kind
ordinarily done by clerks or cashiers.
(4) For the purposes of this section, a person is not operating a
registered scheme merely because:
(a) they are acting as an agent or employee of another person;
or
(b) they are taking steps to wind up the scheme.
(1) For the purposes of this Chapter, financial
product advice means a recommendation or a statement of opinion, or a
report of either of those things, that:
(a) is intended to influence a person or persons in making a decision in
relation to a particular financial product or class of financial products, or an
interest in a particular financial product or class of financial products;
or
(b) could reasonably be regarded as being intended to have such an
influence;
but does not include anything in an exempt document.
(2) There are 2 types of financial product advice: personal advice and
general advice.
(3) For the purposes of this Chapter, personal advice is
financial product advice that is given or directed to a person (including by
electronic means) in circumstances where:
(a) the provider of the advice has considered the objectives, financial
situation and needs of the person; or
(b) a reasonable person might expect the provider to have considered those
matters.
(4) For the purposes of this Chapter, general advice
is financial product advice that is not personal advice.
(5) Advice given by a lawyer in his or her professional capacity about
matters of law, legal interpretation or the application of the law to any facts
is not financial product advice.
(6) In this section:
exempt document means:
(a) a document prepared in accordance with requirements of this
Chapter, other than:
(i) a Statement of Advice; or
(ii) a document of a kind prescribed by regulations made for the purposes
of this subparagraph; or
(b) any other document of a kind prescribed by regulations made for the
purposes of this paragraph.
(1) For the purposes of this Chapter, the following conduct constitutes
dealing in a financial product:
(a) applying for or acquiring a financial product;
(b) issuing a financial product;
(c) in relation to securities or managed investment
interests—underwriting the securities or interests;
(d) varying a financial product;
(e) disposing of a financial product.
(2) Arranging for a person to engage in conduct referred to in
subsection (1) is also dealing in a financial product, unless
the actions concerned amount to providing financial product advice.
(3) A person is taken not to deal in a financial product if
the person deals in the product on their own behalf, unless:
(a) the person is an issuer of financial products; and
(b) the dealing is in relation to one or more of those products.
(4) Also, a transaction entered into by a person who is, or who
encompasses or constitutes in whole or in part, any of the following
entities:
(a) a government or local government authority;
(b) a public authority or instrumentality or agency of the
Crown;
(c) a body corporate or an unincorporated body;
is taken not to be dealing in a financial product by that
person if the transaction relates only to:
(d) securities of that entity; or
(e) if the entity is a government—debentures, stocks or bonds issued
or proposed to be issued by that government.
(5) Paragraph (4)(c) does not apply if the entity:
(a) carries on a business of investment in securities, interests in land
or other investments; and
(b) in the course of carrying on that business, invests funds subscribed,
whether directly or indirectly, after an offer or invitation to the public
(within the meaning of section 82) made on terms that the funds subscribed
would be invested.
(6) A transaction entered into by a sub-underwriter of an issue of
securities that relates only to the sub-underwriting is taken not to be
dealing in a financial product.
(7) The regulations may prescribe conduct that is taken not to be
dealing in a financial product.
For the purposes of this Chapter, a person makes a market
for a financial product if:
(a) either through a facility, at a place or otherwise, the person
regularly states the prices at which they propose to acquire or dispose of
financial products on their own behalf; and
(b) other persons have a reasonable expectation that they will be able to
regularly effect transactions at the stated prices; and
(c) the actions of the person do not, or would not if they happened
through a facility or at a place, constitute operating a financial market
because of the effect of paragraph 767A(2)(a).
(1) For the purposes of this Chapter, a person provides a custodial
or depository service if:
(a) under an arrangement with a person (the client), they
have possession or control of assets of the client in connection with the person
providing a financial product to the client; and
(b) they carry out one or more of the following functions:
(i) settling a transaction relating to the assets;
(ii) collecting or distributing dividends or other pecuniary benefits
derived from the assets;
(iii) paying tax or other costs associated with the assets;
(iv) exercising rights (for example, voting rights) attached to or derived
from the assets;
(v) any other function necessary or incidental to the safeguard or
administration of the assets.
(2) A person also provides a custodial or depository service
if:
(a) they agree, or undertake, to provide a custodial or depository service
as mentioned in subsection (1); or
(b) they arrange for someone else to provide a client with a custodial or
depository service as mentioned in subsection (1).
(3) However, the following conduct does not constitute providing a
custodial or depository service:
(a) the operation of a clearing and settlement facility;
(b) the operation of a registered scheme;
(c) the operation of a regulated superannuation fund, an approved deposit
fund or a pooled superannuation trust (within the meaning of the
Superannuation Industry (Supervision) Act 1993);
(d) the provision of services to a related body corporate;
(e) any other conduct of a kind prescribed by regulations made for the
purposes of this paragraph.
(1) For the purposes of this Chapter, a financial market is
a facility through which:
(a) offers to acquire or dispose of financial products are regularly made
or accepted; or
(b) offers or invitations are regularly made to acquire or dispose of
financial products that are intended to result or may reasonably be expected to
result, directly or indirectly, in:
(i) the making of offers to acquire or dispose of financial products;
or
(ii) the acceptance of such offers.
(2) However, the following conduct does not constitute operating a
financial market for the purposes of this Chapter:
(a) a person making or accepting offers or invitations to acquire or
dispose of financial products on the person’s own behalf, or on behalf of
one party to the transaction only, unless the regulations specify circumstances
in which such conduct does constitute operating a financial market and the
person’s conduct occurs in circumstances so specified;
(b) conducting treasury operations between related bodies
corporate;
(c) conducting an auction of forfeited shares;
(d) any other conduct of a kind prescribed by regulations made for the
purposes of this paragraph.
(1) For the purposes of this Chapter, a clearing and settlement
facility is a facility that provides a regular mechanism for the parties
to transactions relating to financial products to meet obligations to each other
that:
(a) arise from entering into the transactions; and
(b) are of a kind prescribed by regulations made for the purposes of this
paragraph.
Example 1: A facility that provides a regular mechanism for
stockbrokers to pay for the shares they buy and to be paid for the shares they
sell, and for records of those transactions to be processed to facilitate
registration of the new ownership of the shares, would be a clearing and
settlement facility (assuming that the relevant obligations are of a
kind prescribed by regulations made for the purposes of this
section).
Example 2: A facility that provides a regular mechanism for
registering trade in derivatives on a futures market and that enables the
calculation of payments that market participants owe by way of margins would
also be a clearing and settlement facility (assuming that the
relevant obligations are of a kind prescribed by regulations made for the
purposes of this section).
(2) However, the following conduct does not constitute operating a
clearing and settlement facility for the purposes of this
Chapter:
(a) an ADI (within the meaning of the Banking Act 1959) acting in
the ordinary course of its banking business;
(b) a person acting on their own behalf, or on behalf of one party to a
transaction only;
(c) a person who provides financial services to another person dealing
with the other person’s accounts in the ordinary course of the first
person’s business activities;
(d) the actions of a participant in a clearing and settlement facility who
has taken on the delivery or payment obligations, in relation to a particular
financial product, of another person who is a party to a transaction relating to
a financial product;
(e) conducting treasury operations between related bodies
corporate;
(f) operating a facility:
(i) that is an approved RTGS system within the meaning of the Payment
Systems and Netting Act 1998; or
(ii) for the transmission and reconciliation of non-cash payments (see
section 763D), and the establishment of final positions, for settlement
through an approved RTGS system within the meaning of the Payment Systems and
Netting Act 1998;
(g) operating a facility that is a designated payment system for the
purposes of the Payment Systems (Regulation) Act 1998;
(h) operating a facility for the exchange and settlement of non-cash
payments (see section 763D) between providers of non-cash payment
facilities;
(i) any other conduct of a kind prescribed by regulations made for the
purposes of this paragraph.
The Criminal Code (except Part 2.5) applies to all offences
based on the provisions of this Chapter.
Note 1: Chapter 2 of the Criminal Code sets out
the general principles of criminal responsibility.
Note 2: For the meaning of offence based on a
provision, see the definition in section 9.
(1) Subject to subsections (7) and (8), conduct engaged in on behalf
of a body corporate:
(a) by a director, employee or agent of the body, within the scope of the
person’s actual or apparent authority; or
(b) by any other person at the direction or with the consent or agreement
(whether express or implied) of a director, employee or agent of the body, where
the giving of the direction, consent or agreement is within the scope of the
actual or apparent authority of the director, employee or agent;
is taken, for the purposes of a provision of this Chapter, or a proceeding
under this Chapter, to have been engaged in also by the body
corporate.
(2) Conduct engaged in by a person (for example, the giving of money or
property) in relation to:
(a) a director, employee or agent of a body corporate, acting within the
scope of their actual or apparent authority; or
(b) any other person acting at the direction or with the consent or
agreement (whether express or implied) of a director, employee or agent of a
body corporate, where the giving of the direction, consent or agreement is
within the scope of the actual or apparent authority of the director, employee
or agent;
is taken, for the purposes of a provision of this Chapter, or a proceeding
under this Chapter, to have been engaged in also in relation to the body
corporate.
(3) If, in a proceeding under this Chapter in respect of conduct engaged
in by a body corporate, it is necessary to establish the state of mind of the
body, it is sufficient to show that a director, employee or agent of the body,
being a director, employee or agent by whom the conduct was engaged in within
the scope of the person’s actual or apparent authority, had that state of
mind. For this purpose, a person acting as mentioned in paragraph (1)(b) is
taken to be an agent of the body corporate concerned.
(4) Subject to subsections (7) and (8), conduct engaged in on behalf
of a person other than a body corporate:
(a) by an employee or agent of the person, acting within the scope of the
actual or apparent authority of the employee or agent; or
(b) by any other person acting at the direction or with the consent or
agreement (whether express or implied) of an employee or agent of the
first-mentioned person, where the giving of the direction, consent or agreement
is within the scope of the actual or apparent authority of the employee or
agent;
is taken, for the purposes of a provision of this Chapter, or of a
proceeding under this Chapter, to have been engaged in also by the
first-mentioned person.
(5) Conduct engaged in by a person (for example, the giving of money or
property) in relation to:
(a) an employee or agent of a person (the principal) other
than a body corporate, acting within the scope of their actual or apparent
authority; or
(b) any other person acting at the direction or with the consent or
agreement (whether express or implied) of an employee or agent of a person (the
principal) other than a body corporate, where the giving of the
direction, consent or agreement is within the scope of the actual or apparent
authority of the employee or agent;
is taken, for the purposes of a provision of this Chapter, or of a
proceeding under this Chapter, to have been engaged in also in relation to the
principal.
(6) If, in a proceeding under this Chapter in respect of conduct engaged
in by a person other than a body corporate, it is necessary to establish the
state of mind of the person, it is sufficient to show that an employee or agent
of the person, being an employee or agent by whom the conduct was engaged in
within the scope of the employee’s or agent’s actual or apparent
authority, had that state of mind. For this purpose, a person acting as
mentioned in paragraph (4)(b) is taken to be an agent of the person first
referred to in subsection (4).
(7) Nothing in this section, or in any other law (including the common
law), has the effect that, for the purposes of a provision of Part 7.7, or
a proceeding under this Chapter that relates to a provision of Part 7.7, a
financial service provided by person in their capacity as an authorised
representative of a financial services licensee is taken, or taken also, to have
been provided by that financial services licensee.
(8) Nothing in this section, or in any other law (including the common
law), has the effect that, for the purposes of a provision of Division 2 of
Part 7.9, or a proceeding under this Chapter that relates to a provision of
Division 2 of Part 7.9, conduct engaged in by a person in their
capacity as a regulated person (within the meaning of section 1011B) is
taken, or taken also, to have been engaged in by another such regulated
person.
(9) The regulations may provide that this section, or a particular
provision of this section, has effect for specified purposes subject to
modifications specified in the regulations. The regulations have effect
accordingly.
(10) In this section:
(a) a reference to a proceeding under this Chapter includes
a reference to:
(i) a prosecution for an offence based on a provision of this Chapter;
and
(ii) a proceeding under a provision of Part 9.4B that relates to a
provision of this Chapter; and
(iii) any other proceeding under any other provision of Chapter 9
that relates to a provision of this Chapter; and
(b) a reference to conduct is a reference to an act, an
omission to perform an act, or a state of affairs; and
(c) a reference to the state of mind of a person includes a
reference to the knowledge, intention, opinion, belief or purpose of the person
and the person’s reasons for the person’s intention, opinion, belief
or purpose.
Note: For the meaning of offence based on a
provision, see the definition in section 9.
(1) For the purposes of this Chapter, or of a proceeding under this
Chapter, if:
(a) a person makes a representation with respect to any future matter
(including the doing of, or refusing to do, any act); and
(b) the person does not have reasonable grounds for making the
representation;
the representation is taken to be misleading.
(2) Subsection (1) does not limit the circumstances in which a
representation may be misleading.
(3) In this section:
proceeding under this Chapter has the same meaning as it has
in section 769B.
In this Part:
clearing and settlement arrangements, for transactions
effected through a financial market, means arrangements with the operator of a
clearing and settlement facility for the operator to provide the
facility’s services for those transactions. It does not matter whether the
facility is operated by the market licensee or someone else.
(1) A person must only operate, or hold out that the person operates, a
financial market in this jurisdiction if:
(a) the person has an Australian market licence that authorises the person
to operate the market in this jurisdiction; or
(b) the market is exempt from the operation of this Part.
Note 1: A market licensee may also provide financial
services incidental to the operation of the market: see paragraph
911A(2)(d).
Note 2: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) For the purposes of an offence based on subsection (1), strict
liability applies to paragraph (1)(b).
Note: For strict liability, see
section 6.1 of the Criminal Code.
A person must not hold out:
(a) that the person has an Australian market licence; or
(b) that the operation of a financial market by the person in this
jurisdiction is authorised by an Australian market licence; or
(c) that a financial market is exempt from the operation of this Part;
or
(d) that the person is a participant in a licensed market;
if that is not the case.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) The Minister may, by publishing a notice in the Gazette, exempt
from the operation of this Part a particular financial market or type of
financial market.
(2) The Minister may, at any time, by publishing a notice in the
Gazette:
(a) impose conditions, or additional conditions, on an exemption;
or
(b) vary or revoke the conditions on an exemption; or
(c) revoke an exemption.
(3) However, the Minister may only take action under subsection (2)
after:
(a) giving notice, and an opportunity to make submissions on the proposed
action, to the operator of each financial market known by the Minister to be
covered by the exemption; and
(b) if the exemption covers a type of financial market—causing a
notice to be published in a newspaper or newspapers circulating generally in
each State and internal Territory allowing a reasonable time within which the
operator of each financial market covered by the exemption may make submissions
on the proposed action.
This subsection does not apply to the Minister imposing conditions when an
exemption is made.
(1) For the purposes of this Chapter, a financial market is taken to be
operated in this jurisdiction if it is operated by a body
corporate that is registered under Chapter 2A.
(2) Subsection (1) does not limit the circumstances in which a
financial market is operated in this jurisdiction for the purposes
of this Chapter.
A market licensee must:
(a) do all things necessary to ensure that the market operates in a way
that promotes the objectives of fairness, orderliness and transparency, to the
extent that it is reasonably practicable to do so (and in particular to the
extent that those objectives are consistent with one another); and
(b) comply with the conditions on the licence; and
(c) have adequate arrangements (whether they involve a self-regulatory
structure or the appointment of an independent person or related entity) for
supervising the market, including arrangements for:
(i) handling conflicts between the commercial interests of the licensee
and the need for the licensee to ensure that the market operates in the way
mentioned in paragraph (a); and
(ii) monitoring the conduct of participants in the market; and
(iii) enforcing compliance with the market’s operating rules;
and
(d) have sufficient resources (including financial, technological and
human resources) to operate the market properly and for the required supervisory
arrangements to be provided; and
(e) if section 881A requires there to be compensation arrangements in
relation to the market that are approved in accordance with Division 3 of
Part 7.5—ensure that there are such approved compensation
arrangements in relation to the market; and
(f) if the licensee is a foreign body corporate—be registered under
Division 2 of Part 5B.2; and
(g) if the licence was granted under subsection 795B(2) (overseas
markets)—both:
(i) remain authorised to operate a financial market in the foreign country
in which the licensee’s principal place of business is located;
and
(ii) get the Minister’s approval under section 792H before that
principal place of business becomes located in any other foreign country;
and
(h) if the licensee, or a holding company of the licensee, is a widely
held market body (within the meaning of Division 1 of
Part 7.4)—take all reasonable steps to ensure that an unacceptable
control situation (within the meaning of that Division) does not exist in
relation to the body; and
(i) take all reasonable steps to ensure that no disqualified individual
becomes, or remains, involved in the licensee (see Division 2 of
Part 7.4).
(1) A market licensee must give written notice to ASIC, as soon as
practicable, if it becomes aware that it may no longer be able to meet, or has
breached, an obligation under section 792A. If ASIC considers it
appropriate to do so, ASIC may give the Minister advice about the
matter.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) A market licensee must give written notice to ASIC, as soon as
practicable, as required by the following paragraphs:
(a) if the licensee provides a new class of financial service incidental
to the operation of the market, the licensee must give notice that includes
details of the new class;
(b) if the licensee takes any kind of disciplinary action against a
participant in the market, the licensee must give notice that
includes:
(i) the participant’s name; and
(ii) the reason for and nature of the action taken;
(c) if the licensee has reason to suspect that a person has committed, is
committing, or is about to commit a significant contravention of the
market’s operating rules or this Act, the licensee must give notice that
includes:
(i) the person’s name; and
(ii) details of the contravention or impending contravention;
and
(iii) the licensee’s reasons for that belief.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) If a market licensee becomes aware of:
(a) a matter that the licensee considers has adversely affected, is
adversely affecting, or may adversely affect the ability of a participant in the
market, who is a financial services licensee, to meet the participant’s
obligations as a financial services licensee; or
(b) a matter, concerning a participant in the market who is a financial
services licensee, that is of a kind prescribed by regulations made for the
purposes of this paragraph;
the market licensee must give a written report to ASIC on the matter and
send a copy of it to the participant.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) A market licensee whose licence was granted under subsection 795B(2)
(overseas markets) must, as soon as practicable, give written notice to ASIC
if:
(a) the licensee ceases to be authorised to operate a financial market in
the foreign country in which the licensee’s principal place of business is
located; or
(b) there is a significant change to the regulatory regime applying in
relation to the market in the foreign country in which the licensee’s
principal place of business is located.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(5) As soon as practicable after:
(a) a person becomes or ceases to be a director, secretary or executive
officer of a market licensee or of a holding company of a market licensee
(including when a person changes from one of those positions to another);
or
(b) a market licensee becomes aware that an individual has come to have,
or has ceased to have, more than 15% of the voting power in the licensee or in a
holding company of the licensee;
the licensee must give written notice of this to ASIC. The notice must
include such other information about the matter as is prescribed by regulations
made for the purposes of this subsection.
Note 1: To the extent that the licensee is required to give
the notice and information under any other provision of this Act, the licensee
may comply with this subsection by doing so. It need not provide the same
information twice.
Note 2: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) If a market licensee makes information about a listed disclosing
entity available to participants in the market (whether or not the licensee also
makes the information available to anyone else), the licensee must give ASIC the
same information as soon as practicable.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) However, the licensee is not required to give ASIC any information of
a kind that is excluded by the regulations.
(3) ASIC may require the information to be given in a particular
form.
(1) A market licensee must give such assistance to ASIC, or a person
authorised by ASIC, as ASIC or the authorised person reasonably requests in
relation to the performance of ASIC’s functions.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) Such assistance may include showing ASIC the licensee’s books or
giving ASIC other information.
A market licensee must give a person authorised by ASIC such reasonable
access to the market’s facilities as the person requests for any of the
purposes of this Chapter.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
(1) A market licensee must, within 3 months after the end of its financial
year, give ASIC an annual report on the extent to which the licensee complied
with its obligations as a market licensee under this Chapter.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The licensee must ensure that the annual report is accompanied by any
information and statements prescribed by regulations made for the purposes of
this subsection.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) The licensee must also ensure that the annual report is accompanied by
any audit report that the Minister requires under subsection (4).
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) The Minister may, by giving written notice to a market licensee,
require the licensee to obtain an audit report on the annual report and on any
information or statements accompanying it. The Minister must nominate to prepare
the audit report:
(a) ASIC; or
(b) a specified person or body that is suitably qualified.
(5) ASIC must give the annual report and accompanying material to the
Minister.
(1) A market licensee that does not have clearing and settlement
arrangements for transactions effected through the market must advise a person
in writing, before the person becomes a participant in the market,
that:
(a) the licensee does not have those arrangements; and
(b) it is the responsibility of the parties to those transactions to make
their own arrangements for clearing and settlement.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) Within a reasonable time before a market licensee ceases to have
clearing and settlement arrangements for transactions effected through the
market, the licensee must advise participants in the market in writing
that:
(a) the licensee will no longer have those arrangements; and
(b) it will be the responsibility of the parties to those transactions to
make their own arrangements for clearing and settlement.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) In the case of a licence granted under subsection 795B(2), the
Minister may approve the location of the licensee’s principal place of
business in a new country only if:
(a) the new country is not Australia; and
(b) the operation of the market in that country will be subject to
requirements and supervision that are sufficiently equivalent, in relation to
the degree of investor protection and market integrity they achieve, to the
requirements and supervision to which financial markets are subject under this
Act in relation to those matters.
(2) If, in relation to a licence granted under subsection 795B(2), the
licensee’s principal place of business changes to become a place in
Australia:
(a) the licence ceases to be in force from the time of the change;
and
(b) if the licensee wishes the market to continue to be licensed, the
licensee may apply for the grant of a new licence under subsection 795B(1);
and
(c) the application must be assessed in accordance with Subdivision A of
Division 4, subject to such modifications (if any) of that Subdivision as
are set out in regulations made for the purposes of this paragraph.
(3) An application referred to in paragraph (2)(b) may be made in
advance of the change of location of the principal place of business, and a
decision on the application may be made before that time. However, any licence
granted pursuant to the application does not come into force until the change
occurs.
A market licensee must take reasonable steps to ensure that information
about the compensation arrangements that are in place under Part 7.5 is
available to the public free of charge.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
(1) The operating rules of a licensed market must deal with the matters
prescribed by regulations made for the purposes of this subsection.
(2) The regulations may also prescribe matters in respect of which a
licensed market must have written procedures.
(3) However, subsections (1) and (2) do not apply if the licensee is
also authorised to operate the market in the foreign country in which its
principal place of business is located and the licence was granted under
subsection 795B(2) (overseas markets).
(4) In a subsection (3) case, ASIC may determine, by giving written
notice to the licensee, matters in respect of which the licensed market must
have written procedures.
The operating rules (other than listing rules) of a licensed market have
effect as a contract under seal:
(a) between the licensee and each participant in the market; and
(b) between a participant and each other participant;
under which each of those persons agrees to observe the operating rules to
the extent that they apply to the person and to engage in conduct that the
person is required by the operating rules to engage in.
(1) If a person who is under an obligation to comply with or enforce any
of a licensed market’s operating rules fails to meet that obligation, an
application to the Court may be made by:
(a) ASIC; or
(b) the licensee; or
(c) the operator of a clearing and settlement facility with which the
licensee has clearing and settlement arrangements; or
(d) a person aggrieved by the failure.
(2) After giving an opportunity to be heard to the applicant and the
person against whom the order is sought, the Court may make an order giving
directions to:
(a) the person against whom the order is sought; or
(b) if that person is a body corporate—the directors of the body
corporate;
about compliance with, or enforcement of, the operating rules.
(3) For the purposes of this section, a body corporate that is, with its
acquiescence, included in the official list of a licensed market, or an
associate of such a body corporate, is taken to be under an obligation to comply
with the operating rules of that market to the extent to which those rules
purport to apply to the body corporate or associate.
(4) For the purposes of this section, if a disclosing entity that is an
undertaking to which interests in a registered scheme relate is, with the
responsible entity’s acquiescence, included in the official list of a
licensed market, the responsible entity, or an associate of the responsible
entity, is taken to be under an obligation to comply with the operating rules of
that market to the extent to which those rules purport to apply to the
responsible entity or associate.
(5) For the purposes of this section, if a body corporate fails to comply
with or enforce provisions of the operating rules of a licensed market, a person
who holds financial products of the body corporate that are able to be traded on
the market is taken to be a person aggrieved by the failure.
(6) There may be other circumstances in which a person may be aggrieved by
a failure for the purposes of this section.
Licensed markets other than subsection 795B(2) markets
(1) As soon as practicable after a change is made to the operating rules
of a licensed market, other than a market licensed under subsection 795B(2)
(overseas markets), the licensee must lodge with ASIC written notice of the
change. The notice must:
(a) set out the text of the change; and
(b) specify the date on which the change was made; and
(c) contain an explanation of the purpose of the change.
(2) If no notice is lodged as required by subsection (1) with ASIC
within 21 days after the change is made, the change ceases to have effect at the
end of that period.
Subsection 795B(2) markets
(3) As soon as practicable after a change is made to the operating rules
of a market the operation of which is licensed under subsection 795B(2)
(overseas markets), the licensee must lodge with ASIC written notice of the
change. The notice must:
(a) set out the text of the change; and
(b) specify the date on which the change was made; and
(c) contain an explanation of the purpose of the change.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) This section does not apply in respect of an Australian market licence
granted under subsection 795B(2) (overseas markets).
(2) As soon as practicable after receiving a notice under
section 793D from a market licensee, ASIC must send a copy of the notice to
the Minister.
(3) Within 28 days after ASIC receives the notice from the licensee, the
Minister may disallow all or a specified part of the change to the operating
rules.
(4) In deciding whether to do so, the Minister must have regard to the
consistency of the change with the licensee’s obligations under this Part
(including in particular the obligation mentioned in paragraph
792A(a)).
Note: The Minister must also have regard to the matters in
section 798A.
(5) As soon as practicable after all or a part of a change is disallowed,
ASIC must give notice of the disallowance to the licensee. The change ceases to
have effect, to the extent of the disallowance, when the licensee receives the
notice.
(1) If the Minister considers that a market licensee is not complying with
its obligations as a market licensee under this Chapter, the Minister may give
the licensee a written direction to do specified things that the Minister
believes will promote compliance by the licensee with those
obligations.
(2) The licensee must comply with the direction.
(3) If the licensee fails to comply with the direction, ASIC may apply to
the Court for, and the Court may make, an order that the licensee comply with
the direction.
(4) The Minister may vary or revoke a direction at any time by giving
written notice to the licensee.
(1) The Minister may give a market licensee a written notice requiring the
licensee to give ASIC a special report on specified matters. ASIC must give the
report to the Minister.
(2) The notice may also require the licensee to give ASIC an audit report
on the special report. The Minister must nominate to prepare the audit
report:
(a) ASIC; or
(b) a specified person or body that is suitably qualified.
(3) The licensee must give the special report, and audit report (if any),
to ASIC within the time required by the notice.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) ASIC may do an assessment of how well a market licensee is complying
with any or all of its obligations as a market licensee under this Chapter. In
doing the assessment, ASIC may take account of any information and reports that
it thinks appropriate, including information and reports from an overseas
regulatory authority.
(2) In respect of the obligation in paragraph 792A(c), ASIC must do such
an assessment at least once a year for each market licensee.
(3) As soon as practicable after doing an assessment under this section,
ASIC must give a written report on the assessment to the licensee and to the
Minister.
(4) If an assessment, or part of an assessment, relates to any other
person’s affairs to a material extent, ASIC may, at the person’s
request or of its own motion, give the person a copy of the written report on
the assessment or the relevant part of the report.
(5) If an assessment, or part of an assessment, relates to a serious
contravention of a law of the Commonwealth or of a State or Territory, ASIC may
give a copy of the written report on the assessment, or the relevant part of the
report, to:
(a) the Australian Federal Police; or
(b) the National Crime Authority; or
(c) the Director of Public Prosecutions; or
(d) an agency prescribed by regulations made for the purposes of this
paragraph.
(6) Either the Minister or ASIC may cause the written report on an
assessment, or part of the report on an assessment, to be printed and
published.
(1) If ASIC is of the opinion that it is necessary, or in the public
interest, to protect people dealing in a financial product or class of financial
products by:
(a) giving a direction to a market licensee to suspend dealings in the
financial product or class of financial products; or
(b) giving some other direction in relation to those dealings;
ASIC may give written advice to the licensee of that opinion and the
reasons for it.
Example: Under paragraph (b), ASIC could give a
direction to limit the kinds of dealings that are allowed in the financial
product or class of financial products or to require a participant in the market
to act in a specified manner in relation to dealings in the financial product or
class of financial products.
(2) If, after receiving ASIC’s advice and reasons, the licensee does
not take:
(a) in the case of a proposed direction to suspend dealings in the
financial products—action to prevent such dealings; or
(b) in any other case—such other action as in ASIC’s view is
adequate to address the situation raised in the advice;
and ASIC still considers that it is appropriate to give the direction to
the licensee, ASIC may give the licensee the written direction with a statement
setting out its reasons for making the direction.
(3) The direction has effect for the period specified in it (which may be
up to 21 days). During that period, the licensee must comply with the direction
and must not allow any dealings to take place contrary to it.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) If the licensee fails to comply with the direction, ASIC may apply to
the Court for, and the Court may make, an order that the licensee comply with
the direction.
(5) As soon as practicable after making or varying (see
subsection (7)) a direction, ASIC must:
(a) give a copy of the direction or variation to the operator of each
clearing and settlement facility with which the market licensee has clearing and
settlement arrangements for transactions effected through the market;
and
(b) give a written report to the Minister setting out ASIC’s reasons
for making the direction or variation; and
(c) give a copy of the report to the licensee.
(6) If, at any time after the licensee receives ASIC’s advice under
subsection (1), the licensee requests in writing that ASIC refer the matter
to the Minister, ASIC must do so immediately. In that event, the Minister may,
if he or she considers it appropriate, require ASIC not to make, or to revoke,
the direction. ASIC must immediately comply with such a requirement.
(7) ASIC may vary a direction by giving written notice to the licensee if
ASIC is of the opinion that the variation is necessary, or in the public
interest, to protect people dealing in a financial product or class of financial
products.
(8) ASIC may revoke a direction by giving written notice to the licensee.
ASIC must also give written notice of the revocation to the operator of each
clearing and settlement facility with which the market licensee has clearing and
settlement arrangements for transactions effected through the market.
(1) If ASIC gives a direction under section 794D, it may also give a
written direction to the operator of each clearing and settlement facility with
which the market licensee has clearing and settlement arrangements for
transactions effected through the market:
(a) prohibiting the operator from acting in a manner inconsistent with the
section 794D direction; and
(b) requiring the operator to do all that the operator is reasonably
capable of doing to give effect to the section 794D direction.
(2) The operator must comply with the direction given to it under this
section.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) If the operator fails to comply with the direction, ASIC may apply to
the Court for, and the Court may make, an order that the operator comply with
the direction.
(1) A body corporate may apply for an Australian market licence by lodging
with ASIC an application that:
(a) includes the information required by regulations made for the purposes
of this paragraph; and
(b) is accompanied by the documents (if any) required by regulations made
for the purposes of this paragraph; and
(c) complies with the requirements of section 881B (relating to
compensation arrangements).
Note: For fees in respect of lodging applications, see
Part 9.10.
(2) ASIC must, within a reasonable time, give the application to the
Minister with advice about the application.
General
(1) The Minister may grant an applicant an Australian market licence if
the Minister is satisfied that:
(a) the application was made in accordance with section 795A;
and
(b) the applicant will comply with the obligations that will apply if the
licence is granted; and
(c) the applicant has adequate operating rules, and procedures, (see
Subdivision B of Division 3) to ensure, as far as is reasonably
practicable, that the market will operate as mentioned in paragraph 792A(a);
and
(d) the applicant has adequate arrangements (whether they involve a
self-regulatory structure or the appointment of an independent person or related
entity) for supervising the market, including arrangements for:
(i) handling conflicts between the commercial interests of the licensee
and the need for the licensee to ensure that the market operates in the way
mentioned in paragraph 792A(a); and
(ii) monitoring the conduct of participants in the market; and
(iii) enforcing compliance with the market’s operating rules;
and
(e) the applicant has adequate clearing and settlement arrangements for
transactions effected through the market, if the Minister considers that the
applicant should have such arrangements; and
(f) neither subsection 881D(2) nor 882A(2) (relating to compensation
arrangements) requires the Minister to reject the application; and
(g) no unacceptable control situation (see Division 1 of
Part 7.4) is likely to result if the licence is granted; and
(h) no disqualified individual appears to be involved in the applicant
(see Division 2 of Part 7.4).
This subsection has effect subject to subsections (3) and
(4).
Note: The Minister must also have regard to the matters in
section 798A in deciding whether to grant a licence.
Alternative criteria for granting licence for overseas
market
(2) If an applicant is authorised to operate a financial market in the
foreign country in which its principal place of business is located, the
Minister may grant the applicant an Australian market licence authorising the
applicant to operate the same market in this jurisdiction. The Minister must be
satisfied that:
(a) the application was made in accordance with section 795A;
and
(b) the applicant will comply with the obligations that will apply if the
licence is granted; and
(c) the operation of the market in that country is subject to requirements
and supervision that are sufficiently equivalent, in relation to the degree of
investor protection and market integrity they achieve, to the requirements and
supervision to which financial markets are subject under this Act in relation to
those matters; and
(d) the applicant undertakes to cooperate with ASIC by sharing information
and in other appropriate ways; and
(e) no unacceptable control situation (see Division 1 of
Part 7.4) is likely to result if the licence is granted; and
(f) no disqualified individual appears to be involved in the applicant
(see Division 2 of Part 7.4); and
(g) any other requirements that are prescribed by regulations made for the
purposes of this paragraph are satisfied.
This subsection has effect subject to subsections (3) and
(4).
Note: The Minister must also have regard to the matters in
section 798A in deciding whether to grant a licence.
Foreign bodies
(3) If the applicant is a foreign body corporate, the Minister:
(a) must not grant the applicant a licence unless the applicant is
registered under Division 2 of Part 5B.2; and
(b) may otherwise grant a licence under either subsection (1) or (2)
(if the relevant criteria are satisfied).
Disqualified individuals
(4) The Minister must not grant the applicant a licence unless:
(a) ASIC has notified the Minister that, as far as ASIC is aware, no
disqualified individual is involved in the applicant (see Division 2 of
Part 7.4); or
(b) 42 days have passed since the application was made and ASIC has not
given a notice under subsection 853D(2) to the applicant within that 42
days.
If the Minister grants an Australian market licence, the Minister must
publish a notice in the Gazette stating:
(a) the name of the licensee; and
(b) when the licence was granted; and
(c) the conditions on the licence.
If the Minister grants a person 2 or more of the following:
(a) an Australian market licence;
(b) an Australian CS facility licence;
they may be included in the same document.
(1) The same Australian market licence may authorise the licensee to
operate 2 or more financial markets.
(2) In that case, a reference in this Chapter to the market to which an
Australian market licence relates is taken instead to be a reference to each of
those financial markets severally.
(3) Before varying the conditions on an Australian market licence so as to
add another market that the licensee is authorised to operate, the Minister must
be satisfied of the matters listed in subsection 795B(1) or (2) (as appropriate)
in relation to the market.
(4) An Australian market licence that authorises the licensee to operate 2
or more financial markets may be suspended or cancelled under Subdivision C in
respect of one or some of those markets only, as if the licensee held a separate
licence for each of the markets.
(1) The Minister may, at any time:
(a) impose conditions, or additional conditions, on an Australian market
licence; or
(b) vary or revoke conditions imposed on such a licence;
by giving written notice to the licensee. The Minister must also publish a
notice in the Gazette with details of the action and when it took
effect.
Note: As well as the requirements in this section, the
Minister must also have regard to the matters in
section 798A.
(2) The Minister may do so:
(a) on his or her own initiative, subject to subsection (3);
or
(b) if the licensee lodges with ASIC an application for the Minister to do
so, which is accompanied by the prescribed documents, if any.
Note: For fees in respect of lodging applications, see
Part 9.10.
(3) The Minister may only impose conditions or additional conditions, or
vary the conditions, on the licence on his or her own initiative if:
(a) he or she considers it appropriate to do so having regard
to:
(i) the licensee’s obligations as a market licensee under this
Chapter; and
(ii) any change in market operations or the conditions in which the market
is operating; and
(b) the Minister gives the licensee written notice of the proposed action
and an opportunity to make a submission before it takes effect.
This subsection does not apply to the Minister imposing conditions when a
licence is granted.
(4) The Minister must ensure that each Australian market licence is
subject to conditions that specify:
(a) the particular market that the licensee is authorised to operate;
and
(b) the class or classes of financial products that can be dealt with on
the market; and
(c) if the Minister considers that the licensee should have clearing and
settlement arrangements for transactions effected through the market—the
type of clearing and settlement arrangements that are adequate.
(5) If there are compensation arrangements in relation to the market that
are approved under Division 3 of Part 7.5, the Minister must ensure,
in the conditions, that the minimum amount of cover required in relation to the
compensation arrangements is dealt with in a manner that the Minister thinks
appropriate.
(6) ASIC must give the Minister any application and documents lodged under
subsection (2).
(1) The Minister may vary an Australian market licence to take account of
a change in the licensee’s name if the licensee lodges with ASIC an
application for the variation, accompanied by the prescribed documents, if
any.
Note 1: The conditions on the licence can be varied under
section 796A.
Note 2: For fees in respect of lodging applications, see
Part 9.10.
(2) The Minister must give written notice of the variation to the
licensee.
(3) ASIC must give the Minister any application and documents lodged under
subsection (1).
The Minister may, by giving written notice to a market licensee, suspend
the licence for a specified period, or cancel it, if:
(a) the licensee ceases to carry on the business of operating the market;
or
(b) the licensee becomes an externally-administered body corporate;
or
(c) the licensee asks the Minister to do so; or
(d) in the case of a licence granted under subsection 795B(2) (overseas
markets):
(i) the licensee ceases to be authorised to operate a financial market in
the foreign country in which the licensee’s principal place of business is
located; or
(ii) there is a change to the regulatory regime applying in relation to
the market to which the licence relates in the country in which the
licensee’s principal place of business is located, and, because of that
change, the Minister is no longer satisfied as mentioned in paragraph
795B(2)(c).
(1) If the Minister considers that a market licensee has breached, or is
in breach of, one or more of its obligations as a market licensee under this
Chapter, the Minister may give the licensee a written notice that requires the
licensee to show cause, at a hearing before a specified person, why the licence
should not be suspended or cancelled.
(2) The notice must specify:
(a) the grounds on which it is proposed to suspend or cancel the licence;
and
(b) a reasonable time and place at which the hearing is to be
held.
However, if the licensee consents, the person conducting the hearing may
fix a different time or place.
(3) The person conducting the hearing must:
(a) give the licensee an opportunity to be heard at the hearing;
and
(b) give the Minister:
(i) a report about the hearing; and
(ii) a recommendation about the grounds in the notice on which it is
proposed to suspend or cancel the licence.
(4) After considering the report and recommendation, the Minister
may:
(a) decide to take no further action in relation to the matter and give
written advice of that decision to the licensee; or
(b) suspend the licence for a specified period, or cancel the licence, by
giving written notice to the licensee.
Note: The Minister must also have regard to the matters in
section 798A.
(1) A person whose Australian market licence is suspended is taken not to
hold that licence while it is suspended.
(2) However, the Minister may specify in the written notice to the
licensee that subsection (1) does not apply for specified
purposes.
The Minister may at any time vary or revoke a suspension of an Australian
market licence by giving written notice to the licensee.
(1) If the Minister:
(a) suspends, or varies or revokes a suspension of, an Australian market
licence; or
(b) cancels an Australian market licence;
the Minister must publish a notice in the Gazette to that
effect.
(2) The notice must state when the action took effect.
An Australian market licence cannot be varied, suspended or cancelled
otherwise than in accordance with this Subdivision.
Note: The conditions on the licence can be varied under
section 796A.
(1) The Minister must have regard to certain matters in deciding whether
to:
(a) grant an applicant an Australian market licence under
section 795B; or
(b) impose, vary or revoke conditions on such a licence under
section 796A; or
(c) suspend or cancel such a licence under section 797C; or
(d) disallow a change to the operating rules of a licensed market under
section 793E.
(2) These are the matters the Minister must have regard to:
(a) the structure, or proposed structure, of the market;
(b) the nature of the activities conducted, or proposed to be conducted,
on the market;
(c) the size, or proposed size, of the market;
(d) the nature of the financial products dealt with, or proposed to be
dealt with, on the market;
(e) the participants, or proposed participants, in the market
and:
(i) whether those participants, in effecting transactions through the
market, are, or will be, providing financial services to other persons;
and
(ii) whether those participants acquire or dispose, or will acquire or
dispose, of financial products through the market as retail clients or as
wholesale clients; and
(iii) whether those participants are also, or will also be, participants
in any other financial markets;
(f) the technology used, or proposed to be used, in the operation of the
market;
(g) whether it would be in the public interest to take the action referred
to in subsection (1);
(h) any relevant advice received from ASIC.
The Minister may also have regard to any other matter that the Minister
considers relevant.
(3) If the Minister is deciding whether to take the action referred to in
paragraph (1)(a), (b) or (c) in respect of an Australian market licence
granted under subsection 795B(2) (overseas markets), the Minister must also have
regard to:
(a) the criteria that the licensee or applicant satisfied to obtain an
authorisation to operate the same market in the foreign country in which their
principal place of business is located; and
(b) the obligations they must continue to satisfy to keep the
authorisation; and
(c) the level of supervision to which the operation of the market in that
country is subject; and
(d) whether adequate arrangements exist for cooperation between ASIC and
the authority that is responsible for that supervision.
ASIC may give advice to the Minister in relation to:
(a) any matter in respect of which the Minister has a discretion under
this Part; or
(b) any other matter concerning financial markets.
Note: In some cases, the Minister must have regard to
ASIC’s advice: see paragraph 798A(2)(h).
(1) A market licensee may be included in the market’s official
list.
Note: There are certain matters that must be included in the
market’s listing rules before the licensee is included in the official
list: see subsection (4).
(2) In such a case, the financial products of the licensee may be traded
on the market, if the licensee has entered into such arrangements as ASIC
requires:
(a) for dealing with possible conflicts of interest that might arise from
the licensee’s financial products being able to be traded on the market;
and
(b) for the purposes of ensuring the integrity of trading in the
licensee’s financial products.
(3) The licensee must comply with the arrangements.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) Before, and at all times while, the licensee is included in the
market’s official list, the market’s listing rules must provide for
ASIC, instead of the licensee, to make decisions and to take action (or to
require the licensee to take action on ASIC’s behalf) in relation to these
matters, and matters related to these matters:
(a) the admission of the licensee to the market’s official
list;
(b) the removal of the licensee from that list;
(c) allowing, stopping or suspending the trading on the market of the
licensee’s financial products.
Note: For fees in respect of ASIC performing this function,
see Part 9.10.
(5) ASIC has the powers and functions that are provided for it in any
listing rules or arrangements made for the purposes of this section.
(6) An Australian market licensee’s products must not be traded on
the licensee’s own market otherwise than as allowed by this
section.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(7) This section does not apply if the licence concerned was granted under
subsection 795B(2) (overseas markets). Instead, the law of the country in which
the market licensee’s principal place of business is located applies for
all purposes connected with the inclusion of the licensee in the market’s
official list.
(1) ASIC may:
(a) exempt a market licensee whose financial products are able to be
traded on the market from a modifiable provision (see subsection (7));
or
(b) declare that a modifiable provision applies to a market licensee whose
financial products are able to be traded on the market as if specified
provisions were omitted, modified or varied as specified in the
declaration.
(2) An exemption or declaration must be in writing and ASIC must publish
notice of it in the Gazette.
(3) An exemption may apply unconditionally or subject to specified
conditions.
(4) If an exemption is granted subject to specified conditions, the market
licensee must comply with those conditions.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(5) If an exemption is granted subject to specified conditions, the Court
may, on ASIC’s application, order the licensee to comply with one or more
of those conditions in a specified way.
(6) If conduct (including an omission) of a person would not have
constituted an offence if:
(a) a particular condition had not been imposed on an exemption under
paragraph (1)(a); or
(b) a particular declaration under paragraph (1)(b) had not been
made;
that conduct does not constitute an offence unless, before the conduct
occurred (in addition to complying with the gazettal requirement of
subsection (2)), ASIC gave written notice setting out the text of the
condition or the declaration to the person. In a prosecution for an offence to
which this subsection applies, the prosecution must prove that this additional
notification requirement was complied with before the conduct
occurred.
(7) In this section:
modifiable provision means:
(a) section 205G and any of the provisions of Chapter 6, 6A, 6B,
6C, 6CA or 7; or
(b) regulations made for the purposes of that section or any of those
provisions.
(1) The regulations may make provision in relation to the rules and
procedures that are to apply in the case of conflicts, or potential conflicts,
between the commercial interests of the licensee and the need for the licensee
to ensure that the market operates in the way mentioned in paragraph
792A(a).
(2) In particular, such regulations may deal with the following:
(a) identifying when such a conflict, or potential conflict, is taken to
arise;
(b) empowering ASIC, instead of the licensee, to make decisions and to
take action under the market’s operating rules in relation to such a
conflict or potential conflict;
(c) empowering ASIC to require the licensee to take action under the
market’s operating rules (whether or not on ASIC’s behalf) in
relation to such a conflict or potential conflict.
Note: For fees in respect of ASIC performing this function,
see Part 9.10.
(3) Subsection (2) does not limit the generality of
subsection (1).
(1) A person must only operate, or hold out that the person operates, a
clearing and settlement facility in this jurisdiction if:
(a) the person has an Australian CS facility licence that authorises the
person to operate the facility in this jurisdiction; or
(b) the facility is exempt from the operation of this Part.
Note 1: A CS facility licensee may also provide financial
services incidental to the operation of the facility: see paragraph
911A(2)(d).
Note 2: Failure to comply with this subsection is an
offence: see subsection 1311(1).
(2) For the purposes of an offence based on subsection (1), strict
liability applies to paragraph (1)(b).
Note: For strict liability, see
section 6.1 of the Criminal Code.
A person must not hold out:
(a) that the person has an Australian CS facility licence; or
(b) that the operation of a clearing and settlement facility by the person
in this jurisdiction is authorised by an Australian CS facility licence;
or
(c) that a clearing and settlement facility is exempt from the operation
of this Part;
if that is not the case.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) The Minister may, by publishing a notice in the Gazette, exempt
from the operation of this Part a particular clearing and settlement facility or
type of clearing and settlement facility.
(2) The Minister may, at any time, by publishing a notice in the
Gazette:
(a) impose conditions, or additional conditions, on an exemption;
or
(b) vary or revoke the conditions on an exemption; or
(c) revoke an exemption.
(3) However, the Minister may only take action under subsection (2)
after:
(a) giving notice, and an opportunity to make submissions on the proposed
action, to the operator of each clearing and settlement facility known by the
Minister to be covered by the exemption; and
(b) if the exemption covers a type of clearing and settlement
facility—causing a notice to be published in a newspaper or newspapers
circulating generally in each State and internal Territory allowing a reasonable
time within which the operator of each facility covered by the exemption may
make submissions on the proposed action.
This subsection does not apply to the Minister imposing conditions when an
exemption is made.
(1) For the purposes of this Chapter, a clearing and settlement facility
is taken to be operated in this jurisdiction if it is operated by
a body corporate that is registered under Chapter 2A.
(2) Subsection (1) does not limit the circumstances in which a
clearing and settlement facility is operated in this jurisdiction
for the purposes of this Chapter.
A CS facility licensee must:
(a) to the extent that it is reasonably practicable to do so, do all
things necessary to reduce systemic risk and to ensure that the facility’s
services are provided in a fair and effective way; and
(b) comply with the conditions on the licence; and
(c) have adequate arrangements (whether they involve a self-regulatory
structure or the appointment of an independent person or related entity) for
supervising the facility, including arrangements for:
(i) handling conflicts between the commercial interests of the licensee
and the need for the licensee to ensure that the facility’s services are
provided in a fair and effective way; and
(ii) enforcing compliance with the facility’s operating rules;
and
(d) have sufficient resources (including financial, technological and
human resources) to operate the facility properly and for the required
supervisory arrangements to be provided; and
(e) if the licensee is a foreign body corporate—be registered under
Division 2 of Part 5B.2; and
(f) if the licence was granted under subsection 824B(2) (overseas clearing
and settlement facilities)—both:
(i) remain authorised to operate a clearing and settlement facility in the
foreign country in which the licensee’s principal place of business is
located; and
(ii) get the Minister’s approval under section 821F before that
principal place of business becomes located in any other foreign country;
and
(g) if the licensee, or a holding company of the licensee, is a widely
held market body (within the meaning of Division 1 of
Part 7.4)—take all reasonable steps to ensure that an unacceptable
control situation (within the meaning of that Division) does not exist in
relation to the body; and
(h) take all reasonable steps to ensure that no disqualified individual
becomes, or remains, involved in the licensee (see Division 2 of
Part 7.4).
(1) A CS facility licensee must give written notice to ASIC, as soon as
practicable, if it becomes aware that it may no longer be able to meet, or has
breached, an obligation under section 821A. If ASIC considers it
appropriate to do so, ASIC may give the Minister advice about the
matter.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) A CS facility licensee must give written notice to ASIC, as soon as
practicable, as required by the following paragraphs:
(a) if the licensee provides a new class of financial service incidental
to the operation of the facility, the licensee must give notice that includes
details of the new class;
(b) if the licensee takes any kind of disciplinary action against a
participant in the facility, the licensee must give notice that
includes:
(i) the participant’s name; and
(ii) the reason for and nature of the action taken;
(c) if the licensee has reason to suspect that a person has committed, is
committing, or is about to commit a significant contravention of the
facility’s operating rules or this Act, the licensee must give notice that
includes:
(i) the person’s name; and
(ii) details of the contravention or impending contravention;
and
(iii) the licensee’s reasons for that belief.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) A CS facility licensee whose licence was granted under subsection
824B(2) (overseas clearing and settlement facilities) must, as soon as
practicable, give written notice to ASIC if:
(a) the licensee ceases to be authorised to operate a clearing and
settlement facility in the foreign country in which the licensee’s
principal place of business is located; or
(b) there is a significant change to the regulatory regime applying in
relation to the facility in the foreign country in which the licensee’s
principal place of business is located.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) As soon as practicable after:
(a) a person becomes or ceases to be a director, secretary or executive
officer of a CS facility licensee or of a holding company of a CS facility
licensee (including when a person changes from one of those positions to
another); or
(b) a CS facility licensee becomes aware that an individual has come to
have, or has ceased to have, more than 15% of the voting power in the licensee
or in a holding company of the licensee;
the licensee must give written notice of this to ASIC. The notice must
include such other information about the matter as is prescribed by regulations
made for the purposes of this subsection.
Note 1: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Note 2: To the extent that the licensee is required to give
the notice and information under any other provision of this Act, the licensee
may comply with this subsection by doing so. It need not provide the same
information twice.
(1) A CS facility licensee must give such assistance to ASIC, or a person
authorised by ASIC, as ASIC or the authorised person reasonably requests in
relation to the performance of ASIC’s functions.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) Such assistance may include showing ASIC the licensee’s books or
giving ASIC other information.
A CS facility licensee must give a person authorised by ASIC such
reasonable access to the facility as the person requests for any of the purposes
of this Chapter.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) A CS facility licensee must, within 3 months after the end of its
financial year, give ASIC an annual report on the extent to which the licensee
complied with its obligations as a CS facility licensee under this
Chapter.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The licensee must ensure that the annual report is accompanied by any
information and statements prescribed by regulations made for the purposes of
this subsection.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) The licensee must also ensure that the annual report is accompanied by
any audit report that the Minister requires under subsection (4).
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) The Minister may, by giving written notice to a CS facility licensee,
require the licensee to obtain an audit report on the annual report and on any
information or statements accompanying it. The Minister must nominate to prepare
the audit report:
(a) ASIC; or
(b) a specified person or body that is suitably qualified.
(5) ASIC must give the annual report and accompanying material to the
Minister.
(1) In the case of a licence granted under subsection 824B(2), the
Minister may approve the location of the licensee’s principal place of
business in a new country only if:
(a) the new country is not Australia; and
(b) the operation of the facility in that country will be subject to
requirements and supervision that are sufficiently equivalent, in relation to
the degree of protection from systemic risk and the level of effectiveness and
fairness of services they achieve, to the requirements and supervision to which
clearing and settlement facilities are subject under this Act in relation to
those matters.
(2) If, in relation to a licence granted under subsection 824B(2), the
licensee’s principal place of business changes to become a place in
Australia:
(a) the licence ceases to be in force from the time of the change;
and
(b) if the licensee wishes the facility to continue to be licensed, the
licensee may apply for the grant of a new licence under subsection 824B(1);
and
(c) the application must be assessed in accordance with Subdivision A of
Division 3, subject to such modifications (if any) of that Subdivision as
are set out in regulations made for the purposes of this paragraph.
(3) An application referred to in paragraph (2)(b) may be made in
advance of the change of location of the principal place of business, and a
decision on the application may be made before that time. However, any licence
granted pursuant to the application does not come into force until the change
occurs.
(1) The operating rules of a licensed CS facility must deal with the
matters prescribed by regulations made for the purposes of this
subsection.
(2) The regulations may also prescribe matters in respect of which a
licensed CS facility must have written procedures.
(3) However, subsections (1) and (2) do not apply if the licensee is
also authorised to operate the facility in the foreign country in which its
principal place of business is located and the licence was granted under
subsection 824B(2) (overseas clearing and settlement facilities).
(4) In a subsection (3) case, ASIC may determine, by giving written
notice to the licensee, matters in respect of which the licensed CS facility
must have written procedures.
The operating rules of a licensed CS facility have effect as a contract
under seal:
(a) between the licensee and each issuer of financial products in respect
of which the facility provides its services; and
(b) between the licensee and each participant in the facility;
and
(c) between each issuer of financial products in respect of which the
facility provides its services and each participant in the facility;
and
(d) between a participant in the facility and each other participant in
the facility;
under which each of those persons agrees to observe the operating rules to
the extent that they apply to the person and to engage in conduct that the
person is required by the operating rules to engage in.
(1) If a person who is under an obligation to comply with or enforce any
of a licensed CS facility’s operating rules fails to meet that obligation,
an application to the Court may be made by:
(a) ASIC; or
(b) the licensee; or
(c) the operator of a financial market with which the facility has
arrangements to provide services for transactions effected through the market;
or
(d) a person aggrieved by the failure.
(2) After giving an opportunity to be heard to the applicant and the
person against whom the order is sought, the Court may make an order giving
directions to:
(a) the person against whom the order is sought; or
(b) if that person is a body corporate—the directors of the body
corporate;
about compliance with, or enforcement of, the operating rules.
Licensed CS facilities other than subsection 824B(2)
facilities
(1) As soon as practicable after a change is made to the operating rules
of a licensed CS facility, other than a facility licensed under subsection
824B(2) (overseas clearing and settlement facilities), the licensee must lodge
with ASIC written notice of the change. The notice must:
(a) set out the text of the change; and
(b) specify the date on which the change was made; and
(c) contain an explanation of the purpose of the change.
(2) If no notice is lodged with ASIC, as required by subsection (1),
within 21 days after the change is made, the change ceases to have effect at the
end of that period.
Subsection 824B(2) facilities
(3) As soon as practicable after a change is made to the operating rules
of a clearing and settlement facility the operation of which is licensed under
subsection 824B(2) (overseas clearing and settlement facilities), the licensee
must lodge with ASIC written notice of the change. The notice must:
(a) set out the text of the change; and
(b) specify the date on which the change was made; and
(c) contain an explanation of the purpose of the change.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) This section does not apply in respect of an Australian CS facility
licence granted under subsection 824B(2) (overseas clearing and settlement
facilities).
(2) As soon as practicable after receiving a notice under
section 822D from a CS facility licensee, ASIC must send a copy of the
notice to the Minister.
(3) Within 28 days after ASIC receives the notice from the licensee, the
Minister may disallow all or a specified part of the change to the operating
rules.
(4) In deciding whether to do so, the Minister must have regard to the
consistency of the change with the licensee’s obligations under this Part
(including in particular the obligation mentioned in paragraph
821A(a)).
Note: The Minister must also have regard to the matters in
section 827A.
(5) As soon as practicable after all or a part of a change is disallowed,
ASIC must give notice of the disallowance to the licensee. The change ceases to
have effect, to the extent of the disallowance, when the licensee receives the
notice.
(1) If the Minister considers that a CS facility licensee is not complying
with its obligations as a CS facility licensee under this Chapter, the Minister
may give the licensee a written direction to do specified things that the
Minister believes will promote compliance by the licensee with those
obligations.
(2) The licensee must comply with the direction.
(3) If the licensee fails to comply with the direction, ASIC may apply to
the Court for, and the Court may make, an order that the licensee comply with
the direction.
(4) The Minister may vary or revoke a direction at any time by giving
written notice to the licensee.
(1) The Minister may give a CS facility licensee a written notice
requiring the licensee to give ASIC a special report on specified matters. ASIC
must give the report to the Minister.
(2) The notice may also require the licensee to give ASIC an audit report
on the special report. The Minister must nominate to prepare the
report:
(a) ASIC; or
(b) a specified person or body that is suitably qualified.
(3) The licensee must give the special report, and audit report (if any),
to ASIC within the time required by the notice.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) ASIC may do an assessment of how well a CS facility licensee is
complying with its obligations as a CS facility licensee under this Chapter. In
doing the assessment, ASIC may take account of any information and reports that
it thinks appropriate, including information and reports from an overseas
regulatory authority.
(2) In respect of the obligation in paragraph 821A(c), ASIC must do such
an assessment at least once a year for each CS facility licensee.
(3) As soon as practicable after doing an assessment under this section,
ASIC must give a written report on the assessment to the Minister.
(4) If an assessment, or part of an assessment, relates to any other
person’s affairs to a material extent, ASIC may, at the person’s
request or of its own motion, give the person a copy of the written report on
the assessment or the relevant part of the report.
(5) If an assessment, or part of an assessment, relates to a serious
contravention of a law of the Commonwealth or of a State or Territory, ASIC may
give a copy of the written report on the assessment, or the relevant part of the
report, to:
(a) the Australian Federal Police; or
(b) the National Crime Authority; or
(c) the Director of Public Prosecutions; or
(d) an agency prescribed by regulations made for the purposes of this
paragraph.
(6) Either the Minister or ASIC may cause the written report on an
assessment, or part of the report on an assessment, to be printed and
published.
(1) If ASIC:
(a) considers that it is necessary, or in the public interest, to protect
people dealing in a financial product or class of financial products;
or
(b) considers that a CS facility licensee has not done all things
reasonably practicable to ensure the facility’s services are provided in a
fair and effective way;
ASIC may give the licensee written advice that it intends to give the
licensee a specified direction under this section. The advice must include the
reasons for ASIC’s intention to give the direction.
(2) As soon as practicable after giving the advice to the licensee, ASIC
must give notice of the advice to the operator of each financial market with
which the facility has arrangements to provide services for transactions
effected through the market.
(3) For the purpose of remedying the matter mentioned in
subsection (1), ASIC may give the following directions to the licensee
under this section:
(a) a direction not to provide the licensee’s services in relation
to any transactions, of which the licensee receives notice after the direction
takes effect, that relate to a specified financial product or class of financial
products;
(b) any other direction concerning dealings with transactions that relate
to a specified financial product or class of financial products.
(4) If, after receiving ASIC’s advice and reasons:
(a) the licensee does not take steps that in ASIC’s view are
adequate to address the situation; and
(b) ASIC still considers that it is appropriate to give the direction to
the licensee;
ASIC may give the licensee the direction, in writing, with a statement
setting out the reasons for giving the direction.
(5) The direction has effect until the earlier of the following
times:
(a) the time ASIC revokes the direction in accordance with
subsection (10);
(b) the end of the period (which may be up to 21 days) specified in the
direction as the period during which the direction is effective ends.
While the direction has effect, the licensee must comply with the direction
and must not provide any services contrary to it.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(6) If the licensee fails to comply with the direction, ASIC may apply to
the Court for, and the Court may make, an order that the licensee comply with
the direction.
(7) As soon as practicable after making or varying (see
subsection (9)) a direction, ASIC must:
(a) give a copy of the direction or variation to:
(i) if the direction relates to a specified financial product—the
issuer of that product; and
(ii) each of the operators mentioned in subsection (2); and
(b) give a written report to the Minister setting out ASIC’s reasons
for making the direction or variation; and
(c) give a copy of the report to the licensee.
(8) If, at any time after the licensee receives ASIC’s advice under
subsection (1), the licensee requests in writing that ASIC refer the matter
to the Minister, ASIC must do so immediately. In that event, the Minister may,
if he or she considers it appropriate, require ASIC not to make, or to revoke,
the direction. ASIC must immediately comply with such a requirement.
(9) ASIC may vary a direction by giving written notice to the
licensee.
(10) ASIC may revoke a direction by giving written notice to the licensee.
ASIC must also give written notice of the revocation to each of the operators
mentioned in subsection (2).
(1) If ASIC considers that a CS facility licensee has not done all things
reasonably practicable to reduce systemic risk in the provision of the
facility’s services, ASIC may give the licensee a direction, in writing,
to take any action that ASIC considers will reduce systemic risk in the
provision of the facility’s services.
(2) The direction may deal with the time by which, or period during which,
it is to be complied with. The time or period must be reasonable.
(3) The licensee must comply with the direction.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) ASIC may vary the direction by giving written notice to the
licensee.
(5) The direction has effect until ASIC revokes it by giving written
notice to the licensee.
(6) ASIC may revoke the direction if, at the time of revocation, it
considers that the direction is no longer necessary or appropriate.
(1) A body corporate may apply for an Australian CS facility licence by
lodging with ASIC an application that:
(a) includes the information required by regulations made for the purposes
of this paragraph; and
(b) is accompanied by the documents (if any) required by regulations made
for the purposes of this paragraph.
Note: For fees in respect of lodging applications, see
Part 9.10.
(2) ASIC must, within a reasonable time, give the application to the
Minister with advice about the application.
General
(1) The Minister may grant an applicant an Australian CS facility licence
if the Minister is satisfied that:
(a) the application was made in accordance with section 824A;
and
(b) the applicant will comply with the obligations that will apply if the
licence is granted; and
(c) the applicant has adequate operating rules, and procedures, (see
Subdivision B of Division 2) for the facility to ensure, as far as is
reasonably practicable, that systemic risk is reduced and the facility is
operated in a fair and effective way; and
(d) the applicant has adequate arrangements (whether they involve a
self-regulatory structure or the appointment of an independent person or related
entity) for supervising the facility, including arrangements for:
(i) handling conflicts between the commercial interests of the licensee
and the need for the licensee to reduce systemic risk and ensure that the
facility’s services are provided in a fair and effective way;
and
(ii) enforcing compliance with the facility’s operating rules;
and
(e) no unacceptable control situation (see Division 1 of
Part 7.4) is likely to result if the licence is granted; and
(f) no disqualified individual appears to be involved in the applicant
(see Division 2 of Part 7.4).
This subsection has effect subject to subsections (3) and
(4).
Note: The Minister must also have regard to the matters in
section 827A in deciding whether to grant a licence.
Alternative criteria for granting licence to overseas clearing and
settlement facility
(2) If an applicant is authorised to operate a clearing and settlement
facility in the foreign country in which its principal place of business is
located, the Minister may grant the applicant an Australian CS facility licence
authorising the applicant to operate the same facility in this jurisdiction. The
Minister must be satisfied that:
(a) the application was made in accordance with section 824A;
and
(b) the applicant will comply with the obligations that will apply if the
licence is granted; and
(c) the operation of the facility in that country is subject to
requirements and supervision that are sufficiently equivalent, in relation to
the degree of protection from systemic risk and the level of effectiveness and
fairness of services they achieve, to the requirements and supervision to which
clearing and settlement facilities are subject under this Act in relation to
those matters; and
(d) the applicant undertakes to cooperate with ASIC by sharing information
and in other ways; and
(e) no unacceptable control situation (see Division 1 of
Part 7.4) is likely to result if the licence is granted; and
(f) no disqualified individual appears to be involved in the applicant
(see Division 2 of Part 7.4); and
(g) any other requirements that are prescribed by regulations made for the
purposes of this subsection are satisfied.
This subsection has effect subject to subsections (3) and
(4).
Note: The Minister must also have regard to the matters in
section 827A in deciding whether to grant a licence.
Foreign bodies
(3) If the applicant is a foreign body corporate, the Minister:
(a) must not grant the applicant a licence unless the applicant is
registered under Division 2 of Part 5B.2; and
(b) may otherwise grant a licence under either subsection (1) or (2)
(subject to the relevant criteria being satisfied).
Disqualified individuals
(4) The Minister must not grant the applicant a licence unless:
(a) ASIC has notified the Minister that, as far as ASIC is aware, no
disqualified individual is involved in the applicant (see Division 2 of
Part 7.4); or
(b) 42 days have passed since the application was made and ASIC has not
given a notice under subsection 853D(2) to the applicant within that 42
days.
If the Minister grants an Australian CS facility licence, the Minister
must publish a notice in the Gazette stating:
(a) the name of the licensee; and
(b) the date on which the licence was granted; and
(c) the conditions on the licence.
If the Minister grants a person 2 or more of the following:
(a) an Australian CS facility licence;
(b) an Australian market licence;
they may be included in the same document.
(1) The same Australian CS facility licence may authorise the licensee to
operate 2 or more clearing and settlement facilities.
(2) In that case, a reference in this Chapter to the clearing and
settlement facility to which an Australian CS facility licence relates is taken
instead to be a reference to each of those facilities severally.
(3) Before varying the conditions on an Australian CS facility licence so
as to add another facility that the licensee is authorised to operate, the
Minister must be satisfied of the matters listed in subsection 824B(1) or (2)
(as appropriate) in relation to the facility.
(4) An Australian CS facility licence that authorises the licensee to
operate 2 or more clearing and settlement facilities may be suspended or
cancelled under Subdivision C in respect of one or some of those facilities
only, as if the licensee held a separate licence for each of the
facilities.
(1) The Minister may, at any time:
(a) impose conditions, or additional conditions, on an Australian CS
facility licence; or
(b) vary or revoke conditions imposed on such a licence;
by giving written notice to the licensee. The Minister must also publish a
notice in the Gazette with details of the action and when it took
effect.
Note: As well as the requirements in this section, the
Minister must also have regard to the matters in
section 827A.
(2) The Minister may do so:
(a) on the Minister’s own initiative, subject to
subsection (3); or
(b) if the licensee lodges with ASIC an application for the Minister to do
so, which is accompanied by the documents, if any, required by regulations made
for the purposes of this paragraph.
Note: For fees in respect of lodging applications, see
Part 9.10.
(3) The Minister may only impose conditions or additional conditions, or
vary the conditions, on the licence on his or her own initiative if:
(a) he or she considers it appropriate to do so having regard
to:
(i) the licensee’s obligations as a CS facility licensee under this
Chapter; and
(ii) any change in the facility’s operations or the conditions in
which the facility is operating; and
(b) the Minister gives the licensee written notice of the proposed action
and an opportunity to make a submission before it takes effect.
This subsection does not apply to the Minister imposing conditions when a
licence is granted.
(4) The Minister must ensure that each Australian CS facility licence is
subject to conditions that specify:
(a) the particular facility that the licensee is authorised to operate;
and
(b) the class or classes of financial products in respect of which the
facility can provide services.
(5) ASIC must give the Minister any application and documents lodged under
subsection (2).
(1) The Minister may vary an Australian CS facility licence to take
account of a change in the licensee’s name if the licensee lodges with
ASIC an application for the variation, accompanied by the documents, if any,
required by regulations made for the purposes of this subsection.
Note 1: The conditions on the licence can be varied under
section 825A.
Note 2: For fees in respect of lodging applications, see
Part 9.10.
(2) The Minister must give written notice of the variation to the
licensee.
(3) ASIC must give the Minister any application and documents lodged under
subsection (1).
The Minister may, by giving written notice to a CS facility licensee,
suspend the licence for a specified period, or cancel it, if:
(a) the licensee ceases to carry on the business of operating the
facility; or
(b) the licensee becomes an externally-administered body corporate;
or
(c) the licensee asks the Minister to do so; or
(d) in the case of a licence granted under subsection 824B(2) (overseas
clearing and settlement facilities):
(i) the licensee ceases to be authorised to operate a clearing and
settlement facility in the foreign country in which the licensee’s
principal place of business is located; or
(ii) there is a change to the regulatory regime applying in relation to
the facility to which the licence relates in the country in which the
licensee’s principal place of business is located, and, because of that
change, the Minister is no longer satisfied as mentioned in paragraph
824B(2)(c).
(1) If the Minister considers that a CS facility licensee has breached one
or more of its obligations as a CS facility licensee under this Chapter, the
Minister may give the licensee a written notice that requires the licensee to
show cause, at a hearing before a specified person, why the licence should not
be suspended or cancelled.
(2) The notice must specify:
(a) the grounds on which it is proposed to suspend or cancel the licence;
and
(b) a reasonable time and place at which the hearing is to be
held.
However, if the licensee consents, the person conducting the hearing may
fix a different time or place.
(3) The person conducting the hearing must:
(a) give the licensee an opportunity to be heard at the hearing;
and
(b) give the Minister:
(i) a report about the hearing; and
(ii) a recommendation about the grounds in the notice on which it is
proposed to suspend or cancel the licence.
(4) After considering the report and recommendation, the Minister
may:
(a) decide to take no further action in relation to the matter and give
written advice of that decision to the licensee; or
(b) suspend the licence for a specified period, or cancel the licence, by
giving written notice to the licensee.
Note: The Minister must have regard to the matters in
section 827A.
(1) A person whose Australian CS facility licence is suspended is taken
not to hold that licence while it is suspended.
(2) However, the Minister may specify in the written notice to the
licensee that subsection (1) does not apply for specified
purposes.
The Minister may at any time vary or revoke a suspension of an Australian
CS facility licence by giving written notice to the licensee.
(1) If the Minister:
(a) suspends, or varies or revokes a suspension of, an Australian CS
facility licence; or
(b) cancels an Australian CS facility licence;
the Minister must publish a notice in the Gazette to that
effect.
(2) The notice must state when the action took effect.
An Australian CS facility licence cannot be varied, suspended or
cancelled otherwise than in accordance with this Subdivision.
Note: The conditions on the licence can be varied under
section 825A.
(1) The Minister must have regard to certain matters in deciding whether
to:
(a) grant an applicant an Australian CS facility licence under
section 824B; or
(b) impose, vary or revoke conditions on such a licence under
section 825A; or
(c) suspend or cancel such a licence under section 826C; or
(d) disallow a change to the operating rules of a licensed CS facility
under section 822E.
(2) These are the matters the Minister must have regard to:
(a) the structure, or proposed structure, of the facility;
(b) the nature of the services provided, or proposed to be provided, by
the facility;
(c) the size, or proposed size, of the facility;
(d) the nature of the financial products in respect of which the facility
provides services or proposes to provide services;
(e) the participants, or proposed participants, in the facility and
whether those participants:
(i) in using the facility’s services, are, or will be, providing
financial services to other persons; or
(ii) use, or will use, the facility’s services in respect of
financial products they acquire or dispose of as retail clients or as wholesale
clients; or
(iii) are, or will be, participants in a financial market, or other
clearing and settlement facilities, as well;
(f) the technology used, or proposed to be used, in the operation of the
facility;
(g) whether it would be in the public interest to take the action referred
to in subsection (1);
(h) any relevant advice received from ASIC.
The Minister may also have regard to any other matter that the Minister
considers relevant.
(3) If the Minister is deciding whether to take the action mentioned in
paragraph (1)(a), (b) or (c) in respect of an Australian CS facility
licence granted under subsection 824B(2) (overseas clearing and settlement
facilities), the Minister must also have regard to:
(a) the criteria that the licensee or applicant satisfied to obtain an
authorisation to operate the same facility in the foreign country in which their
principal place of business is located; and
(b) the obligations they must continue to satisfy to keep the
authorisation; and
(c) the level of supervision to which the facility is subject in that
country; and
(d) whether adequate arrangements exist for cooperation between ASIC and
the authority that is responsible for that supervision.
ASIC may give advice to the Minister in relation to:
(a) any matter in respect of which the Minister has a discretion under
this Part; or
(b) any other matter concerning clearing and settlement
facilities.
Note: In some cases, the Minister must have regard to
ASIC’s advice: see paragraph 827A(2)(h).
(1) This Division applies in relation to a body corporate that:
(a) has an Australian market licence or an Australian CS facility licence;
or
(b) is the holding company of a body corporate that has an Australian
market licence or an Australian CS facility licence;
and that is specified in regulations made for the purposes of this
section.
(2) In this Division, such a body is called a widely held market
body.
For the purposes of this Division, an unacceptable control
situation exists in relation to a widely held market body and in
relation to a particular person if the person’s voting power in the body
is more than:
(a) 15%; or
(b) if an approval of a higher percentage is in force under Subdivision B
in relation to the body and in relation to the person—that higher
percentage.
If:
(a) a person, or 2 or more persons under an arrangement, acquire shares in
a body corporate; and
(b) the acquisition has the result, in relation to a widely held market
body, that:
(i) an unacceptable control situation comes into existence in relation to
the body and in relation to a person; or
(ii) if an unacceptable control situation already exists in relation to
the body and in relation to a person—there is an increase in the voting
power of the person in the body;
the person or persons mentioned in paragraph (a) contravene this
section.
Note: A contravention of this section is an offence (see
subsection 1311(1)).
(1) If an unacceptable control situation exists in relation to a widely
held market body, the Court may make such orders as the Court considers
appropriate for the purpose of ensuring that the unacceptable control situation
ceases to exist.
(2) However, the Court may only make orders under this section on
application by:
(a) the Minister; or
(b) ASIC; or
(c) the body; or
(d) a person who has any voting power in the body.
(3) The Court’s orders may include:
(a) an order directing the disposal of shares; or
(b) an order restraining the exercise of any rights attached to shares;
or
(c) an order prohibiting or deferring the payment of any sums due to a
person in respect of shares held by the person; or
(d) an order that any exercise of rights attached to shares be
disregarded; or
(e) an order directing any person to do or refrain from doing a specified
act, for the purpose of securing compliance with any other order made under this
section; or
(f) an order containing such ancillary or consequential provisions as the
Court thinks just.
(4) Subsection (3) does not, by implication, limit
subsection (1).
(5) Before making an order under this section, the Court may direct that
notice of the application be given to such persons as the Court thinks fit or be
published in such manner as the Court thinks fit, or both.
(6) The Court may, by order:
(a) rescind, vary or discharge an order made by the Court under this
section; or
(b) suspend the operation of such an order.
(1) If any conduct (including a refusal or failure to act) amounts or
would amount to a contravention of this Division in relation to a particular
widely held market body, the body is taken, for the purposes of
section 1324, to be a person whose interests are affected by the
conduct.
(2) Subsection (1) does not, by implication, limit the class of
persons whose interests are affected by the conduct.
(3) The Minister has the same powers as ASIC to apply for an injunction
under section 1324 in relation to a contravention of this
Division.
(4) The powers in sections 850D and 1324 do not, by implication,
limit each other.
(1) A person may apply for approval to have voting power of more than 15%
in a particular widely held market body by lodging with ASIC an application
that:
(a) specifies the percentage of voting power (if any) the person currently
has in the widely held market body; and
(b) specifies the percentage of voting power the person is seeking
approval to have in the body; and
(c) sets out the person’s reasons for making the
application.
Note: For fees in respect of lodging applications, see
Part 9.10.
(2) ASIC must give the application to the Minister as soon as
possible.
(1) If the Minister is satisfied that it is in the national interest to
approve the applicant having voting power in the widely held market body of more
than 15%, the Minister may grant the application.
(2) If the Minister grants the application, the Minister must:
(a) give written notice of the approval to the applicant; and
(b) specify the percentage of the voting power the Minister approves the
applicant having in the widely held market body (which may or may not be the
percentage the applicant applied for); and
(c) either:
(i) specify the period during which the approval remains in force;
or
(ii) specify that the approval remains in force indefinitely.
(3) If the Minister refuses the application, the Minister must give
written notice of the refusal to the applicant.
(4) As soon as practicable, the Minister must arrange for a copy of a
notice of approval under this section to be:
(a) published in the Gazette; and
(b) given to the body concerned.
(1) An approval under section 851B remains in force:
(a) if the notice of approval specifies a period during which the approval
remains in force—until the end of that period, or if the Minister extends
that period, until the end of that extended period; or
(b) otherwise—indefinitely.
Extension of approval
(2) A person who holds an approval under section 851B that is in
force for a specified period may apply to extend that period by lodging with
ASIC an application that sets out the person’s reasons for making the
application.
Note: For fees in respect of lodging applications, see
Part 9.10.
(3) ASIC must give the application to the Minister as soon as
possible.
(4) If the Minister is satisfied that it is in the national interest to
grant the extension, the Minister may grant the application.
(5) If the Minister grants the application, the Minister must:
(a) give written notice of the extension to the applicant; and
(b) specify the extended period during which the approval remains in force
(which may or may not be the period the applicant applied for).
(6) If the Minister refuses the application, the Minister must give
written notice of the refusal to the applicant.
(7) As soon as practicable, the Minister must arrange for a copy of a
notice of extension under this section to be:
(a) published in the Gazette; and
(b) given to the widely held market body concerned.
(1) An approval under section 851B is subject to such conditions (if
any) as are specified in the notice of approval.
(2) The Minister may, by written notice given to a person who holds an
approval under section 851B:
(a) impose one or more conditions or further conditions to which the
approval is subject; or
(b) revoke or vary any condition:
(i) imposed under paragraph (a); or
(ii) specified in the notice of approval.
(3) The Minister’s power under subsection (2) may be
exercised:
(a) on the Minister’s own initiative; or
(b) on application by the person who holds the approval.
(4) An application made by a person under paragraph (3)(b) must be
lodged with ASIC and must set out the person’s reasons for making the
application.
Note: For fees in respect of lodging applications, see
Part 9.10.
(5) ASIC must give the application to the Minister as soon as
possible.
(6) If the Minister refuses an application under paragraph (3)(b),
the Minister must give written notice of the refusal to the applicant.
(7) As soon as practicable, the Minister must arrange for a copy of a
notice under subsection (2) to be:
(a) published in the Gazette; and
(b) given to the widely held market body concerned.
(8) A person who holds an approval under section 851B must give
written notice to ASIC if they become aware that they have breached a condition
to which the approval is subject.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Application by holder of approval
(1) A person who holds an approval under section 851B may apply to
vary the percentage specified in the approval by lodging with ASIC an
application that:
(a) specifies the percentage of the voting power the person currently has
in the widely held market body concerned; and
(b) specifies the percentage of the voting power the person is seeking
approval to have in the body; and
(c) sets out the person’s reasons for making the
application.
Note: For fees in respect of lodging applications, see
Part 9.10.
(2) ASIC must give the application to the Minister as soon as
possible.
(3) If the Minister is satisfied that it is in the national interest to
vary the percentage, the Minister may grant the application.
(4) If the Minister grants the application, the Minister must:
(a) give written notice of the variation to the applicant; and
(b) specify the variation granted (which may or may not be the variation
the applicant applied for).
(5) If the Minister refuses an application, the Minister must give written
notice of the refusal to the applicant.
Minister’s own initiative
(6) The Minister may, by written notice given to a person who holds an
approval under section 851B, vary the percentage specified in the approval
if the Minister is satisfied that it is in the national interest to do
so.
Percentage varied upwards
(7) If the Minister varies a percentage upwards, the variation takes
effect on the day the notice of variation is given.
Percentage varied downwards
(8) If the Minister varies a percentage downwards, the variation takes
effect on the day specified in the notice of variation. The specified day must
be a day at least 90 days after the day on which the notice is given.
Notification of variation
(9) As soon as practicable, the Minister must arrange for a copy of a
notice of variation under this section to be:
(a) published in the Gazette; and
(b) given to the widely held market body concerned.
(1) The Minister may, by written notice given to a person who holds an
approval under section 851B in relation to a widely held market body,
revoke the approval if the Minister is satisfied that:
(a) it is in the national interest to do so; or
(b) an unacceptable control situation exists in relation to the widely
held market body and in relation to the person; or
(c) there has been a contravention of a condition to which the approval is
subject.
(2) The revocation takes effect on the day specified in the notice of
revocation. The specified day must be a day at least 90 days after the day on
which the notice is given.
(3) If a person who holds an approval under section 851B requests the
Minister to revoke the approval, the Minister must, by written notice given to
the person, revoke the approval. The revocation takes effect on the day
specified in the notice of revocation.
(4) As soon as practicable, the Minister must arrange for a copy of a
notice of revocation under this section to be:
(a) published in the Gazette; and
(b) given to the widely held market body concerned.
(1) This section applies to an application under this
Subdivision.
(2) The Minister may, by written notice given to the applicant, require
the applicant to give the Minister, within a specified period, further
information about the application.
(3) The Minister may refuse to consider the application until the
applicant gives the Minister the information.
(1) The Minister must make a decision on an application under this
Subdivision within 30 days after receiving the application.
(2) However, before the end of the 30 days, the Minister may decide to
extend the period for considering the application until the end of 60 days after
the application was received.
(3) If the Minister has not made a decision within the 30 days (or the 60
days, if subsection (2) applies), the Minister is taken to have granted
whatever was applied for. As soon as practicable after that happens, the
Minister must arrange for a notice to that effect to be:
(a) published in the Gazette; and
(b) given to the widely held market body concerned.
(4) The time for making the decision stops running if the Minister gives a
notice under section 851G in relation to the application, and does not
start again until the notice is complied with.
(5) The time limit in this section does not apply to an application under
section 851A or 851E if an unacceptable control situation exists in
relation to the applicant and in relation to the relevant widely held market
body at any time before the Minister makes a decision.
(1) A person holding a particular percentage of voting power in a body at
its specification time (see subsection (3)) is taken at that time to be
granted an approval under section 851B to hold that percentage of voting
power in the body if:
(a) the person holding the percentage of voting power in the body
immediately before the specification time did not, to any extent,
constitute:
(i) if the body’s specification time occurred after the commencement
of this section—an unacceptable control situation; or
(ii) if the body’s specification time occurred at the same time as
the commencement of this section—a contravention of previous law (see
subsection (3)); and
(b) on the body’s specification time, the person holding that
percentage of voting power in the body would (apart from this section)
constitute an unacceptable control situation.
Note: Conditions can be imposed on the approval under
section 851D and then varied or revoked in accordance with that
section.
(2) The Minister is taken to have complied with the Minister’s
obligations under section 851B in relation to the granting of the approval
to the person.
(3) In this section:
contravention of previous law means a contravention of a
provision of Part 7.1A of this Act as in force immediately before the
commencement of this section.
specification time, in relation to a body, means the time a
body first becomes specified in regulations made for the purposes of
section 850A.
(1) The Court must not make an order under section 850D if:
(a) the order would result in the acquisition of property from a person
otherwise than on just terms; and
(b) the order would be invalid because of paragraph 51(xxxi) of the
Constitution.
(2) Section 1350 does not apply in relation to the making of an order
under section 850D.
(3) In this section:
acquisition of property has the same meaning as in paragraph
51(xxxi) of the Constitution.
just terms has the same meaning as in paragraph 51(xxxi) of
the Constitution.
(1) If:
(a) one or more persons enter into, begin to carry out or carry out a
scheme; and
(b) it would be concluded that the person, or any of the persons, who
entered into, began to carry out or carried out the scheme or any part of the
scheme did so for the sole or dominant purpose of avoiding the application of
any provision of Subdivision A in relation to any person or persons (whether or
not mentioned in paragraph (a)); and
(c) as a result of the scheme or a part of the scheme, a person (the
controller) increases the controller’s voting power in a
widely held market body;
the Minister may give the controller a written direction to cease having
that voting power within a specified time.
(2) A person who is subject to a written direction under
subsection (1) must comply with the direction.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) In this section:
increase voting power includes increasing it from a starting
point of nil.
For the purposes of this Division, an individual is disqualified
if:
(a) a declaration by ASIC that the individual is disqualified is in effect
under section 853C; or
(b) the individual is disqualified from managing a corporation under
section 206B; or
(c) the individual is on the Register that ASIC must keep under
section 1274AA.
For the purposes of this Division, an individual is involved
in a market licensee or a CS facility licensee, or an applicant for such
a licence, if:
(a) the individual is a director, secretary or executive officer of the
licensee or applicant, or in a holding company of the licensee or applicant;
or
(b) the individual has more than 15% of the total voting power in the
licensee or applicant, or in a holding company of the licensee or
applicant.
(1) ASIC may declare in writing that an individual who is involved in a
licensed financial market operator or licensed CS facility operator, or in an
applicant for a licence of either of those kinds, is disqualified
for the purposes of this Division.
(2) ASIC may make such a declaration only if ASIC is satisfied that,
because the individual is unfit to be involved in the licensee or applicant,
there is a risk that the licensee or applicant will breach its obligations under
this Chapter if the declaration is not made.
(3) In deciding whether an individual is unfit as mentioned in
subsection (2), ASIC must take into account such matters as the
individual’s fame, character and integrity, rather than his or her
competence, experience, knowledge or other such attributes.
(4) A declaration may be expressed to remain in effect for a specified
period or until a specified event occurs. Otherwise, it remains in effect
indefinitely (unless it is revoked under section 853E).
(1) ASIC must not make a declaration under section 853C unless it has
followed the procedure in this section.
(2) Within 42 days after:
(a) a body corporate applies for an Australian market licence or an
Australian CS facility licence; or
(b) ASIC receives other information that may be relevant to deciding
whether to make a declaration under section 853C about an individual who is
involved in an applicant for an Australian market licence or an Australian CS
facility licence, or in an existing licensee;
ASIC may give the applicant or licensee written notice that ASIC proposes
to make a declaration under section 853C about the individual in
question.
(3) ASIC must give a copy of the notice to the individual and to the
Minister.
(4) The notice must:
(a) state the grounds on which ASIC proposes to make the declaration;
and
(b) require the applicant or licensee, and the individual, to show, at a
hearing before a specified person, why the declaration should not be made;
and
(c) specify a reasonable time and place at which the hearing is to be
held.
However, if the applicant or licensee, and the individual, consent, the
person conducting the hearing may fix a different time or place.
(5) The person conducting the hearing must:
(a) give the applicant or licensee, and the individual, an opportunity to
be heard at the hearing; and
(b) give ASIC:
(i) a report about the hearing; and
(ii) a recommendation about the grounds in the notice on which it is
proposed to make the declaration.
(6) As soon as practicable after the hearing, ASIC must:
(a) decide whether to make the declaration; and
(b) give each of the following persons a copy of the declaration, or a
written notice of its decision not to make the declaration:
(i) the applicant or licensee;
(ii) the individual;
(iii) the Minister.
(1) ASIC may, in writing, revoke a declaration under section 853C if
it is no longer satisfied as mentioned in subsection 853C(2) in relation to the
individual in question.
(2) ASIC must give a copy of the revocation to the relevant applicant or
licensee, the individual and the Minister.
(1) A disqualified individual must not become involved in a market
licensee or a CS licensee.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) A disqualified individual who is involved in a market licensee or CS
licensee must take all reasonable steps to ensure that he or she ceases to be
involved in the licensee.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
If ASIC becomes aware that an individual who is involved in a market
licensee or a CS facility licensee is disqualified because of paragraph 853A(b)
or (c), ASIC must notify the individual, the licensee and the Minister as soon
as practicable.
(1) The regulations may make provision for and in relation to requiring a
person:
(a) to keep and retain records that are relevant to whether a person has
voting power in a widely held market body and, if so, how much; and
(b) to keep and retain records that are relevant to determining whether
any disqualified individual is involved in a market licensee or a CS facility
licensee; and
(c) to give the Minister or ASIC information that is relevant to the
matters mentioned in paragraphs (a) and (b); and
(d) to give a widely held market body information that is relevant to the
matter mentioned in paragraph (a).
(2) The regulations may provide that information given in accordance with
a requirement covered by paragraph (1)(c) or (d) must be verified by
statutory declaration.
(3) However, an individual is not required to give information in
accordance with a requirement covered by paragraph (1)(c) or (d) if the
information might tend to incriminate the individual or expose the individual to
a penalty.
(4) A person contravenes this section if:
(a) the person makes or keeps a record in compliance, or purported
compliance, with a requirement covered by subsection (1); and
(b) the person does so knowing that the record:
(i) is false or misleading; or
(ii) omits any matter or thing without which the record is
misleading.
Note: A contravention of this subsection is an offence (see
subsection 1311(1)).
(5) Regulations made for the purposes of this section may make provision
for or in relation to a matter by conferring a power on the Minister.
Nothing in this Part applies in relation to:
(a) a financial market the operation of which is licensed under subsection
795B(2); or
(b) an application for the grant of a licence under that
subsection.
(1) In this Part:
adequate has a meaning affected by
subsection (2).
borrowing includes obtaining credit.
compensation arrangements are arrangements that consist
of:
(a) a set of rules about compensation; and
(b) a source of funds from which compensation is payable; and
(c) associated administrative and monitoring arrangements.
compensation rules means rules referred to in
paragraph (a) of the definition of compensation
arrangements.
Division 3 arrangements means compensation arrangements
approved under Division 3.
Division 3 loss means a loss described in
section 885C, other than a loss that section 885D provides is to be
taken not to be a Division 3 loss.
Division 4 arrangements means the arrangements
constituted by Division 4.
fidelity fund, in relation to a financial market, means a
fund consisting principally of contributions made by:
(a) participants and past participants in the market; or
(b) participants and past participants in:
(i) the market; and
(ii) one or more other financial markets;
the purpose, or the main purpose, of which is to provide a source of funds
for the payment of compensation to clients of participants. Any investments made
using money in the fund are taken to form part of the fund.
NGF means the National Guarantee Fund that continues in
existence under section 889A.
operating rules, in relation to the SEGC, means the rules
referred to in section 890D.
Part 7.5 arrangements means Division 3
arrangements or Division 4 arrangements.
pay compensation includes provide compensation in a form
other than money.
SEGC means the body corporate in relation to which a
nomination as the Securities Exchanges Guarantee Corporation is in force under
section 890A.
(2) For the purposes of this Part, the question whether proposed
compensation arrangements, compensation arrangements as proposed to be changed,
or compensation arrangements that have been approved, are adequate
is to be determined in accordance with Subdivision D of
Division 3.
(1) If:
(a) any of the participants in a licensed market, in effecting
transactions through the market, provide financial services for persons as
retail clients; and
(b) in connection with the provision of those financial services, those
persons will or may give money or other property, or authority over property, to
those participants; and
(c) the market is not a financial market to which Division 4
applies;
there must be compensation arrangements in relation to the market that are
approved in accordance with Division 3.
(2) The compensation regime applicable in relation to financial markets to
which Division 4 applies is as constituted by that Division.
(1) A person who is applying for an Australian market licence must state
in their application:
(a) whether any of the participants in the market, in effecting
transactions through the market, will provide financial services for persons as
retail clients; and
(b) if any participants will so provide financial services to persons as
retail clients—whether, in connection with the provision of those
financial services, those persons will or may give money or other property, or
authority over property, to those participants.
(2) If:
(a) participants in the market will provide financial services to persons
as retail clients as mentioned in paragraph (1)(a); and
(b) in connection with the provision of those financial services, those
persons will or may give money or property, or authority over property, to those
participants;
the application must:
(c) contain the information, in relation to the proposed compensation
arrangements, required by regulations made for the purposes of this paragraph
and be accompanied by a copy of the proposed compensation rules; or
(d) state that the market is or will be covered by Division 4, and
set out evidence, in accordance with the requirements (if any) of the
regulations, in support of that statement.
If a licence application contains information in relation to proposed
compensation arrangements as required by paragraph 881B(2)(c), the Minister must
deal with the application in accordance with section 882A.
(1) If a licence application contains a statement in accordance with
paragraph 881B(2)(d), the Minister must consider whether he or she is satisfied
that the market will be covered by Division 4.
(2) If the Minister is not so satisfied, the application for the licence
must be rejected.
(3) If the Minister is so satisfied, the Minister may (subject to the
other provisions about granting licences) grant the licence.
Note: The other provisions about granting licences are in
Subdivision A of Division 4 of Part 7.2.
(1) If an application for an Australian market licence contains
information in relation to proposed compensation arrangements in accordance with
paragraph 881B(2)(c), the Minister must treat the application as also being an
application for approval of the compensation arrangements and, for that purpose,
must consider whether the proposed arrangements are adequate.
(2) If the Minister does not consider that the proposed compensation
arrangements are adequate, the application for the licence must be
rejected.
(3) If the Minister considers that the proposed compensation arrangements
are adequate, the Minister may (subject to the other provisions about granting
licences) grant the licence. On the granting of the licence, the Minister is
taken to have approved the compensation arrangements.
Note: The other provisions about granting licences are in
Subdivision A of Division 4 of Part 7.2.
(4) In the conditions of the licence, the Minister must:
(a) deal with the minimum amount of cover required in relation to the
compensation arrangements in such manner as the Minister thinks appropriate;
and
(b) identify the source of funds available to cover claims, on the basis
of which the Minister approves the arrangements (see
section 885H).
(1) If the operator of a licensed market wants to have compensation
arrangements for the market approved after the licence has been granted, the
operator must apply for approval in accordance with this section.
(2) The application must:
(a) contain the information, in relation to the proposed compensation
arrangements, required by regulations made for the purposes of this paragraph
and be accompanied by a copy of the proposed compensation rules; and
(b) be made to the Minister by lodging the application with
ASIC.
Note: For fees in respect of lodging applications, see
Part 9.10.
(3) If the Minister does not consider that the proposed compensation
arrangements are adequate, the application for approval must be
rejected.
(4) If the Minister considers that the proposed compensation arrangements
are adequate, the Minister must:
(a) approve the compensation arrangements in writing; and
(b) vary the conditions of the operator’s licence so as
to:
(i) deal with the minimum amount of cover required in relation to the
compensation arrangements in such manner as the Minister thinks appropriate;
and
(ii) identify the source of funds available to cover claims, on the basis
of which the Minister approves the arrangements (see
section 885H).
(5) In varying licence conditions as mentioned in paragraph (4)(b),
the Minister must proceed under section 796A as though the licensee had
applied for the variation to be made.
The Minister may at any time revoke an approval of compensation
arrangements if the Minister considers that the arrangements are not
adequate.
(1) If the Minister considers that a market licensee’s approved
compensation arrangements are no longer adequate, the Minister may give the
licensee a written direction to do specified things that the Minister believes
will ensure that the arrangements become adequate once more.
(2) The licensee must comply with the direction.
(3) If the licensee fails to comply with the direction, ASIC may apply to
the Court for, and the Court may make, an order that the licensee comply with
the direction.
(4) The Minister may vary or revoke a direction at any time by giving
written notice to the licensee.
Compensation rules forming part of Division 3 arrangements for a
financial market have effect as a contract under seal between the operator of
the market and each participant in the market under which each of those persons
agrees to observe the rules to the extent that they apply to the person and
engage in conduct that the person is required by the rules to engage
in.
(1) If a person who is under an obligation to comply with or enforce any
of the compensation rules forming part of Division 3 arrangements for a
financial market fails to meet that obligation, an application to the Court may
be made by:
(a) ASIC; or
(b) the operator of the market; or
(c) if there are clearing and settlement arrangements for transactions
entered into on the market (as defined in section 790A)—the operator
of the clearing and settlement facility; or
(d) a person aggrieved by the failure.
(2) After giving an opportunity to be heard to the applicant and the
person against whom the order is sought, the Court may make an order giving
directions to:
(a) the person against whom the order is sought; or
(b) if that person is a body corporate—the directors of the body
corporate;
about compliance with, or enforcement of, the compensation rules.
(3) For the purposes of this section, if the operator of the market fails
to comply with or enforce provisions of the compensation rules, a person who is,
under the rules, entitled to make a claim for compensation is (whether or not
they have actually made a claim) taken to be a person aggrieved by the
failure.
(4) There may be other circumstances in which a person may be aggrieved by
a failure for the purposes of this section.
Nothing in this Division makes the operator of a financial market liable
to pay compensation from any source of funds other than the source identified in
the licence conditions under paragraph 882A(4)(b) or subparagraph
882B(4)(b)(ii).
(1) This section applies if, under the compensation rules forming part of
Division 3 arrangements for a particular financial market, a levy is
payable by all or some of the participants in the market in order to ensure that
adequate funds are available for the purposes of the arrangements.
(2) The levy is payable to the operator of the market, as agent for the
Commonwealth, by each of the participants affected.
Note: For the imposition and amount of the levy, see the
Corporations (Compensation Arrangements Levies) Act
2001.
(3) An amount of levy payable under subsection (2) must be paid
within the time and in the manner specified by the operator either generally or
in relation to a particular case.
(4) Whenever an amount of levy (the levy amount) is paid
under this section, or under section 6 of the Corporations (Compensation
Arrangements Levies) Act 2001, to the operator of a market as agent for the
Commonwealth:
(a) the operator must pay an amount equal to the levy amount to the
Commonwealth; and
(b) the Consolidated Revenue Fund is appropriated by that amount for the
purpose of payment to the operator; and
(c) the Commonwealth must pay the amount so appropriated to the operator;
and
(d) the operator must deal with the amount it receives under
paragraph (c) in accordance with the compensation rules.
(5) A payment of an amount to the operator of a market as required by
paragraph (4)(c) in respect of a particular levy amount is subject to a
condition that, if the Commonwealth becomes liable to refund the whole or a part
of the levy amount, the operator must pay the Commonwealth an amount equal to
the amount that the Commonwealth is liable to refund.
(6) The Financial Management and Accountability Act 1997 does not
apply in relation to the payment of an amount of levy under this section to the
operator of a market as agent for the Commonwealth. However, the operation of
that Act in relation to the following payments is not affected:
(a) the payment of an amount to the Commonwealth as required by
paragraph (4)(a); or
(b) the payment of an amount by the Commonwealth as required by
paragraph (4)(c).
The operator must, in accordance with the regulations, notify the
Commonwealth of payments of levy it receives as agent for the
Commonwealth.
(7) An amount payable by an operator as required by paragraph (4)(a)
may be set off against an amount payable to the operator as required by
paragraph (4)(c).
(1) The operator of a financial market in relation to which there are
Division 3 arrangements must not change those arrangements except in
accordance with this Subdivision.
(2) However, a change may be made to Division 3 arrangements
otherwise than in accordance with this Subdivision if:
(a) the change is not to a matter required by section 885B to be
dealt with in the compensation rules; and
(b) the change is merely a minor administrative change.
(1) If the proposed change is to a matter required by section 885B to
be dealt with in the compensation rules, the change may only be made by changing
the rules.
(2) As soon as practicable after the change is made, the operator must
lodge with ASIC written notice of the change.
(3) The notice must:
(a) set out the text of the change; and
(b) specify the date on which the change was made; and
(c) contain an explanation of the purpose of the change.
(4) If no notice is lodged with ASIC within 21 days after the change is
made, the change ceases to have effect.
(5) As soon as practicable after receiving a notice under
subsection (2), ASIC must send a copy of the notice to the
Minister.
(6) Within 28 days after receiving the copy of the notice, the Minister
may disallow all or a specified part of the change to the compensation
rules.
(7) The Minister must not disallow all or part of the change unless the
Minister considers that, because of the change, or that part of the change, the
compensation arrangements are not adequate.
(8) As soon as practicable after all or part of a change is disallowed,
ASIC must give notice of the disallowance to the operator of the market
concerned. The change ceases to have effect, to the extent of the disallowance,
when the operator receives the notice.
(1) If:
(a) the proposed change is to a matter that is not required by
section 885B to be dealt with in the compensation rules (including a matter
that is dealt with in the compensation rules even though it is not required to
be dealt with in those rules); and
(b) the change is not merely a minor administrative change;
the operator must not make the change unless:
(c) the operator has applied for approval of the change; and
(d) the change has been approved by the Minister.
(2) The application for approval must:
(a) include the information, required by regulations made for the purposes
of this paragraph, in relation to the proposed change; and
(b) be made to the Minister by lodging the application with
ASIC.
Note: For fees in respect of lodging applications, see
Part 9.10.
(3) If the Minister does not consider that the compensation arrangements
as proposed to be changed are adequate, the application for approval must be
rejected.
(4) If the Minister considers that the compensation arrangements as
proposed to be changed are adequate, the Minister must approve the
change.
(5) If:
(a) the proposed change is to a matter that is dealt with in the
compensation rules even though it is not required to be dealt with in those
rules; and
(b) the change is approved;
the operator may make any change to the compensation rules that is
necessary to give effect to the change that has been approved or that is
incidental to giving effect to that change.
(6) If a change to the compensation rules is made as permitted by
subsection (5), the operator must, as soon as practicable after the change
is made, give ASIC written notice of the change.
(7) A notice required by subsection (6) must:
(a) set out the text of the change; and
(b) specify the date on which it was made; and
(c) contain an explanation of why it is a change that is permitted to be
made by subsection (5).
(1) This Subdivision applies for the purpose of determining, for the
purposes of a provision of this Division:
(a) whether:
(i) proposed compensation arrangements are adequate; or
(ii) compensation arrangements as proposed to be changed are adequate;
or
(b) whether compensation arrangements that have been approved are
adequate.
(2) A reference in this Subdivision to the arrangements is a
reference to the proposed arrangements, the arrangements as proposed to be
changed, or the arrangements that have been approved, as the case
requires.
(3) A reference in this Subdivision to the compensation rules
is a reference to the compensation rules, or the proposed compensation
rules, forming part of the arrangements under consideration.
(1) The arrangements are adequate if, and only if, the
Minister is satisfied that:
(a) the compensation rules provide adequate coverage for Division 3
losses (see sections 885C and 885D); and
(b) the compensation rules provide for adequate compensation to be paid in
respect of Division 3 losses (see section 885E); and
(c) the compensation rules deal adequately with how compensation in
respect of Division 3 losses is to be paid (see section 885F);
and
(d) the compensation rules deal adequately with the making and
determination of claims in respect of Division 3 losses, and with the
notification of the outcome of such claims (see section 885G);
and
(e) the arrangements provide for an adequate source of funds for paying
compensation in respect of Division 3 losses and in respect of any other
losses covered by the arrangements (see section 885H); and
(f) the arrangements include adequate arrangements for administration and
monitoring (see section 885I); and
(g) under the arrangements, potential claimants have reasonable and timely
access to the compensation regime; and
(h) if the licensee ceases (for whatever reason) to be required to have
Division 3 arrangements, the rights of people to seek compensation under
the arrangements, being rights that accrued while the licensee was required to
have such arrangements, will be adequately protected.
(2) In considering the matters mentioned in subsection (1), the
Minister must also have regard to the matters mentioned in
section 885J.
(3) The matters that may be dealt with in compensation rules are not
limited to matters mentioned in this section.
(1) Subject to section 885D, the compensation rules must cover losses
(Division 3 losses) of a kind described in the following
paragraphs:
(a) a person (the client) gave money or other property, or
authority over property, to a person (the participant):
(i) who was a participant in the market at that time; or
(ii) who the client reasonably believed to be a participant in the market
at that time and who was a participant in the market at some earlier time;
and
(b) the money or other property, or the authority, was given to the
participant in connection with effecting a transaction, or proposed transaction,
covered by provisions of the operating rules of the market relating to
transactions effected through the market; and
(c) the effecting of the transaction through the market constitutes or
would constitute the provision of a financial service to the client as a retail
client; and
(d) the client suffers a loss because of:
(i) if the client gave the participant money or other property—the
defalcation or fraudulent misuse of the money or other property by the
participant; or
(ii) if the client gave the participant authority over property—the
fraudulent misuse of that authority by the participant.
(2) The compensation rules must provide that a claim relating to an
alleged loss caused by defalcation or fraudulent misuse may be allowed even
if:
(a) the person against whom the defalcation or misuse is alleged has not
been convicted or prosecuted; and
(b) the evidence on which the claim is allowed would not be sufficient to
establish the guilt of that person on a criminal trial in respect of the
defalcation or fraudulent misuse.
(3) The compensation rules may exclude losses of a kind described above
that occur in specified situations. However, the compensation arrangements will
not be adequate unless the Minister is satisfied that those exclusions are
appropriate.
(1) If, in relation to a loss suffered by a person:
(a) the requirements of subsection 885C(1) are satisfied in relation to a
participant and 2 or more financial markets; and
(b) the person did not (expressly or impliedly) instruct the participant
to use a particular one of those markets; and
(c) it is not reasonably apparent from the usual business practice of the
participant which of those markets the participant would use when acting for the
person;
the loss is taken not to be a Division 3 loss.
(2) If, in relation to a loss suffered by a person:
(a) the requirements of subsection 885C(1) are satisfied in relation to a
participant and a financial market; and
(b) the loss is also connected (see section 888A) with a financial
market to which Division 4 applies; and
(c) the person did not (expressly or impliedly) instruct the participant
to use a particular one of those markets; and
(d) it is not reasonably apparent from the usual business practice of the
participant which of those markets the participant would use when acting for the
person;
the loss is taken not to be a Division 3 loss.
(3) If, in relation to a loss suffered by a person:
(a) the transaction referred to in paragraph 885C(1)(b) could have been
effected otherwise than through a financial market; and
(b) the person did not (expressly or impliedly) instruct the participant
concerned to effect the transaction through a financial market; and
(c) it is not reasonably apparent from the usual business practice of the
participant that the transaction would be effected through a financial
market;
the loss is taken not to be a Division 3 loss.
(1) Subject to this section, the compensation rules must provide that the
amount of compensation to be paid in respect of a Division 3 loss is to be
not less than the sum of:
(a) the actual pecuniary loss suffered by the claimant, calculated by
reference to the market value of any relevant assets or liabilities as at the
date on which the loss was suffered; and
(b) the claimant’s reasonable costs of, and disbursements incidental
to, the making and proof of the claim.
(2) The compensation rules may provide for the amount of compensation
payable in respect of a Division 3 loss to be reduced by reference to a
right of set-off available to the claimant.
(3) The compensation rules may impose an upper limit on the amount of
compensation to which a person is entitled in respect of a claim in particular
circumstances, or an upper limit on the total amount of compensation to which
persons are entitled in respect of claims referable to a particular event or
circumstance.
(4) That upper limit may be specified in the compensation rules or
determined by a method specified in the rules.
(5) The compensation rules must also provide for the payment to the
claimant of interest at the rate applicable under the regulations on the amount
of the actual pecuniary loss, or so much of that loss as from time to time has
not been compensated by an instalment or instalments of compensation, in respect
of the period starting on the day when the loss was suffered and ending on the
day when the compensation, or the last instalment of compensation, is
paid.
(6) The compensation rules may provide for what is to happen if there are
insufficient funds to meet claims in respect of Division 3 losses and in
respect of any other losses covered by the arrangements. For example, they may
provide for the prioritisation of claims, or the apportionment of available
funds between claims.
(7) In other provisions of this Division a reference to compensation
in respect of a Division 3 loss includes (unless the contrary
intention appears) a reference to interest referred to in
subsection (5).
(1) The compensation rules must deal with how compensation in respect of
Division 3 losses is to be paid.
(2) Without limiting subsection (1), the compensation rules may
provide for compensation to be paid in a lump sum or by instalments.
(1) The compensation rules must provide for how claims in respect of
Division 3 losses are to be made and determined, and for how claimants are
notified of the outcome of their claims.
(2) Without limiting subsection (1), the compensation rules
may:
(a) require a person making a claim to pay money, or transfer other
property, in support of a claim; and
(b) provide for claims to be disallowed unless persons exercise rights of
set-off; and
(c) set time limits for the making of claims; and
(d) provide for claims to be partially allowed (including, for example, in
a case where the operator considers that the claimant’s conduct
contributed to the loss).
There must be an adequate source of funds available to cover claims made
under the compensation arrangements in respect of Division 3 losses and in
respect of any other losses covered by the arrangements.
Note 1: For example, the source of funds may consist
of:
(a) a fidelity fund; or
(b) insurance arrangements; or
(c) an irrevocable letter of credit.
Note 2: The source of funds does not have to consist of a
single thing. It may consist of a combination of different
things.
(1) The arrangements must include arrangements for:
(a) the administration of the compensation arrangements; and
(b) monitoring compliance with the compensation arrangements and reporting
breaches of the arrangements to the board of the operator of the market;
and
(c) monitoring the adequacy of the arrangements and reporting to the board
of the operator of the market on the need for, or desirability of, changes to
the compensation arrangements.
(2) Without limiting subsection (1), the arrangements may give
responsibilities to:
(a) the operator of the market, or a related company, or a director or
employee of the operator or a related company; or
(b) a committee; or
(c) another person acting under an arrangement with the
operator.
(3) The people who may be members of a committee referred to in
paragraph (2)(b) include, but are not limited to:
(a) participants in the market, or representatives of such participants;
and
(b) members of the board of the operator of the market.
(1) In considering whether the arrangements are adequate, the Minister
must also have regard to:
(a) the services provided by the market and by the participants in the
market; and
(b) any risk assessment report in relation to the market given to the
Minister under section 892K.
(2) The Minister may take into account such other matters as the Minister
thinks appropriate.
If:
(a) a claim by a person for compensation in respect of a particular
Division 3 loss suffered by the person has been allowed under
Division 3 arrangements; and
(b) the person makes or has made another claim under those Division 3
arrangements, or under other Division 3 arrangements, in respect of the
same loss;
that other claim must not be allowed.
The regulations may include provisions relating to how a fidelity fund,
or part of a fidelity fund, is to be dealt with if:
(a) the operator of a financial market becomes insolvent, within the
meaning of the regulations; or
(b) a financial market merges with another financial market; or
(c) a financial market ceases to operate (otherwise than because of a
merger), or ceases to be required by subsection 881A(1) to have approved
compensation arrangements.
This Division applies to a financial market that is operated
by:
(a) a body corporate that is a member of the SEGC; or
(b) a body corporate that is a subsidiary of such a member;
other than any such market that the regulations state is not covered by
this Division.
(1) The situations in which compensation may be claimed in respect of a
loss that is connected with a financial market to which this Division applies
are as specified in the regulations.
(2) Without limiting subsection (1), a loss is connected with a
financial market if it is caused by a participant, or past participant, in the
market.
The regulations may provide that compensation under this Division is to
take the form of a payment of money or some other form (for example, a transfer
of financial products).
(1) The amount of compensation (including the value of any non-monetary
compensation) to which a person is entitled in respect of a claim that is
allowed is to be as determined in accordance with the regulations.
(2) Without limiting subsection (1), the regulations may do all or
any of the following:
(a) provide for the amount of compensation to be determined by agreement
with the claimant, or by arbitration if agreement cannot be reached;
and
(b) provide for the payment of interest on the amount of the
claimant’s loss; and
(c) provide for the amount of compensation to be reduced by reference to a
right of set-off available to the claimant or by reference to the extent to
which the claimant was responsible for causing the loss; and
(d) impose an upper limit on the amount of compensation to which a person
is entitled in respect of a claim in particular circumstances, or an upper limit
on the total amount of compensation to which persons are entitled in respect of
claims referable to a particular event or circumstance.
(3) An upper limit referred to in paragraph (2)(d) may be specified
in the regulations or determined by a method specified in the
regulations.
(4) The regulations may also provide for a claimant to be paid an amount
in respect of the claimant’s reasonable costs of, and disbursements
incidental to, the making and proof of the claim (whether or not the claim is
allowed in whole or in part).
(5) The regulations may also provide for a claimant to be paid an amount
in respect of the claimant’s reasonable costs of, and disbursements
incidental to, attempting to recover the loss (whether or not the claim is
allowed in whole or in part).
(1) The regulations may provide for the compensation to be paid in a lump
sum or by instalments.
(2) The regulations may make other provisions in relation to how
compensation is to be paid.
(1) Claims are to be made and determined in accordance with:
(a) the regulations; and
(b) any relevant provisions of the SEGC’s operating rules.
(2) Without limiting subsection (1), the regulations, or the
SEGC’s operating rules, may do all or any of the following:
(a) require a person making a claim to pay money, or transfer other
property, to the SEGC in support of a claim;
(b) provide for claims to be disallowed unless persons exercise rights of
set-off;
(c) set time limits for the making of claims;
(d) provide for claims to be partially allowed (including, for example, in
a case where the SEGC considers that the claimant’s conduct contributed to
the loss).
(3) The regulations, or the SEGC’s operating rules, may impose other
requirements to be complied with by the SEGC in relation to claims (including,
for example, requirements to notify claimants whether their claims have be
allowed).
(4) If a provision of the SEGC’s operating rules is wholly or partly
inconsistent with regulations made for the purposes of this section, the
provision of the SEGC’s operating rules is, to the extent of the
inconsistency, of no effect.
The SEGC has power to determine claims in accordance with this
Division.
If the SEGC allows a claim, that does not constitute an admission (by
anyone) of any liability, other than the liability to provide compensation in
respect of the claim in accordance with this Division.
(1) If the SEGC has disallowed a claim, the claimant may bring proceedings
in the Court to establish the claim. The proceedings must be brought within 3
months of notice of the disallowance of the claim.
(2) If the SEGC has neither allowed nor disallowed a claim within a
reasonable period after it was made, the claimant may bring proceedings in the
Court to establish the claim.
(3) If, on proceedings under subsection (1) or (2), the Court is
satisfied that the claim should be allowed, the Court:
(a) must, by order, make a declaration accordingly and direct the SEGC to
allow the claim and deal with it in accordance with this Division; and
(b) may, at any time after the order is made, on application made (whether
before or after the order is made) by the claimant or the SEGC, give such
directions relating to the claim as the Court thinks just and
reasonable.
(4) In proceedings to establish a claim, all questions of costs are in the
discretion of the Court.
Money or other property of the SEGC that is not part of the NGF is not
available to be applied in respect of a claim that has been allowed by the SEGC,
whether or not under an order of the Court.
(1) The SEGC may enter into a contract with a person (the
insurer) carrying on a fidelity insurance business under which the
SEGC will be insured or indemnified against liability in respect of claims to
the extent and in the manner provided by the contract.
(2) The contract may relate to all claims or only to certain claims as
specified in the contract. The contract may, for example, exclude claims
relating to the conduct of a particular financial services licensee.
(3) The following persons each have qualified privilege in respect of the
publication of a statement that the contract does not apply with respect to
claims relating to the conduct of a particular financial services
licensee:
(a) the SEGC;
(b) any body corporate that is a member of the SEGC;
(c) any subsidiary of such a member;
(d) any employee of a body covered by paragraph (a), (b) or
(c).
(4) A person who has made a claim does not have a right of action against
the insurer in respect of the contract or a right or claim in respect of money
paid by the insurer in accordance with the contract.
The SEGC may pay money out of the NGF to acquire financial products for
the purpose of providing compensation (in accordance with the regulations) that
takes the form of a transfer of financial products.
The National Guarantee Fund that continued to exist under
section 928B of this Act before the repeal of that section by the
Financial Services Reform Act 2001 continues in existence as the National
Guarantee Fund for the purposes of this Part.
Compensation payable under this Division is to be paid out of the
NGF.
(1) The SEGC must keep and administer the NGF.
(2) The assets of the NGF are the property of SEGC, but must be kept
separate from all other property and must be held on trust by the SEGC for the
purposes of this Division.
The NGF consists of:
(a) money and other property constituting the NGF before the commencement
of this Chapter; and
(b) money paid into the NGF in accordance with section 889J or 889K;
and
(c) money paid to the SEGC in accordance with regulations referred to in
section 888E in support of a claim; and
(d) money paid to the SEGC under a contract of insurance or indemnity
referred to in section 888J; and
(e) money paid into the NGF under subsection 889F(2); and
(f) the interest and profits from time to time accruing from the
investment of the NGF; and
(g) money recovered by or on behalf of the SEGC in the exercise of a right
of action that the SEGC has by virtue of a provision of this Part; and
(h) money and other property paid or transferred to the SEGC for inclusion
in the NGF in accordance with regulations referred to in section 891B;
and
(i) all other money and other property lawfully paid into, or forming part
of, the NGF.
(1) If the SEGC considers that, in the interests of the sound financial
management of the NGF, money should be borrowed for the purpose of meeting a
payment due out of the NGF, the SEGC may borrow money for that purpose on such
terms and conditions as the SEGC thinks appropriate.
(2) The SEGC may give security, including over the assets of the NGF, in
respect of the SEGC’s obligations in relation to a borrowing under
subsection (1).
(3) If:
(a) money borrowed under subsection (1) is a loan from a body
corporate that is a member of the SEGC; and
(b) the body corporate borrowed money for the purpose of making the loan
to the SEGC;
the SEGC may give security, including over the assets of the NGF, in
relation to the body corporate’s obligations in respect of the borrowing
referred to in paragraph (b).
(1) This section applies if money borrowed by the SEGC under subsection
889E(1) is paid to the SEGC.
(2) The SEGC must pay the money into the NGF.
(3) If:
(a) the money was borrowed for the purpose of meeting a payment due out of
the NGF; and
(b) the borrowed money has been paid into the NGF; and
(c) the payment due out of the NGF has not yet been made;
then, for the purposes of section 889J, the amount in the NGF is taken
to be reduced by the amount of the borrowed money.
(1) This section applies if money borrowed by the SEGC under subsection
889E(1) is not paid to the SEGC but is payable to other persons at the direction
of the SEGC.
(2) The SEGC must not direct that any of the money be paid to a person
unless the payment is of a kind that can, under section 889H, be made out
of the NGF.
Subject to regulations made for the purposes of this section, the
following are to be paid out of the NGF, in such order as the SEGC considers
appropriate:
(a) amounts, including costs, disbursements and interest, that any
provision of this Part requires to be paid in connection with claims;
(b) all legal and other expenses incurred:
(i) in investigating or defending claims; or
(ii) in relation to the NGF; or
(iii) in the exercise by the SEGC of the rights and powers vested in it by
any provision of this Part in relation to the NGF;
(c) money payable out of the NGF under regulations referred to in
subsection 892G(2);
(d) amounts to be paid to acquire financial products as mentioned in
section 888K;
(e) premiums payable in respect of contracts of insurance or indemnity
entered into by the SEGC under section 888J;
(f) payments of principal, interest and other amounts payable by the SEGC
in respect of money borrowed, and security given, under
section 889E;
(g) the expenses incurred in the administration of the NGF, including the
salaries and wages of persons employed by the SEGC in relation to the
NGF;
(h) amounts to be paid to a body corporate in accordance with a direction
of the Minister under section 891A;
(i) any other money payable out of the NGF in accordance with a provision
of this Part.
(1) The minimum amount in relation to the NGF is:
(a) unless paragraph (b) applies—$80,000,000; or
(b) if a determination is in force under subsection (2)—the
amount specified in the determination.
(2) The SEGC may, in writing, determine an amount (whether greater than,
or less than, $80,000,000) to be the minimum amount in relation to the NGF. The
determination does not come into force until it has been approved by the
Minister.
(3) The SEGC must publish in the Gazette notice of a determination
that has come into force under subsection (2). The notice must specify the
date when the determination came into force.
(4) If the amount in the NGF falls below the minimum amount, the SEGC must
consider what action needs to be taken.
(1) If the amount in the NGF is less than the minimum amount applicable
under section 889I, the SEGC may determine in writing that:
(a) the operators of all, or a class, of the financial markets to which
this Division applies; or
(b) all, or a class, of the participants in any of these
markets;
must pay a levy to the SEGC.
(2) The levy is payable to the SEGC, as agent for the Commonwealth, in
accordance with this section.
Note: For the imposition and amount of the levy, see the
Corporations (National Guarantee Fund Levies) Act 2001.
(3) A levy payable under this section must be paid within the period and
in the manner determined in writing by the SEGC.
(4) Whenever an amount of levy (the levy amount) is paid
under this section, or under subsection 6(2) of the Corporations (National
Guarantee Fund Levies) Act 2001, to the SEGC as agent for the
Commonwealth:
(a) the SEGC must pay an amount equal to the levy amount to the
Commonwealth; and
(b) the Consolidated Revenue Fund is appropriated by that amount for the
purpose of payment to the SEGC; and
(c) the Commonwealth must pay the amount so appropriated to the SEGC;
and
(d) the SEGC must pay the amount it receives under paragraph (c) into
the NGF.
(5) Whenever an amount of levy (the levy amount) is paid
under subsection 6(1) of the Corporations (National Guarantee Fund Levies)
Act 2001, to the operator of a financial market as agent for the
Commonwealth:
(a) the operator must pay an amount equal to the levy amount to the SEGC;
and
(b) the SEGC must pay an amount equal to the amount so paid to it to the
Commonwealth; and
(c) the Consolidated Revenue Fund is appropriated by that amount for the
purpose of payment to the SEGC; and
(d) the Commonwealth must pay the amount so appropriated to the SEGC;
and
(e) the SEGC must pay the amount it receives under paragraph (d) into
the NGF.
(6) A payment of an amount to the SEGC as required by
paragraph (4)(c) or (5)(d) in respect of a particular levy amount is
subject to a condition that, if the Commonwealth becomes liable to refund the
whole or a part of the levy amount, the SEGC must pay the Commonwealth an amount
equal to the amount that the Commonwealth is liable to refund. The SEGC may pay,
out of the NGF, any amount so required to be paid to the Commonwealth.
(7) The Financial Management and Accountability Act 1997 does not
apply in relation to the payment of an amount of levy under this section to the
SEGC, or the operator of a financial products market, as agent for the
Commonwealth. However, the operation of that Act in relation to the following
payments is not affected:
(a) the payment of an amount to the Commonwealth as required by
paragraph (4)(a) or (5)(b); or
(b) the payment of an amount by the Commonwealth as required by
paragraph (4)(c) or (5)(d).
The SEGC must, in accordance with the regulations, notify the Commonwealth
of payments of levy it receives as agent for the Commonwealth, and the operator
of a financial market must, in accordance with the regulations, notify the
Commonwealth of payments it receives as agent for the Commonwealth as mentioned
in paragraph (5)(a).
(8) An amount payable by the SEGC as required by paragraph (4)(a) may
be set off against an amount payable to the SEGC as required by
paragraph (4)(c), and an amount payable by the SEGC as required by
paragraph (5)(b) may be set off against an amount payable to the SEGC as
required by paragraph (5)(d).
(1) An operator of a financial market who must pay an amount of levy (the
primary levy amount) under section 889J may determine in
writing that participants in the market must pay a levy (the contributory
levy). The determination must be such that the total of the amounts of
contributory levy payable by the participants does not exceed the primary levy
amount. The contributory levy is payable to the operator as agent for the
Commonwealth.
Note: For the imposition and amount of the levy, see the
Corporations (National Guarantee Fund Levies) Act 2001.
(2) If a determination is made under subsection (1), the contributory
levy is payable by each participant in the market who, when the determination is
made, is in a class of participants in the market determined in writing by the
operator for the purposes of the levy.
(3) The amount of contributory levy payable by a participant under a
determination under subsection (1) must be paid within the period, and in
the manner, specified in writing by the operator either generally or in relation
to particular participants or classes of participants.
(4) Whenever an amount of levy (the levy amount) is paid
under this section, or under subsection 6(3) of the Corporations (National
Guarantee Fund Levies) Act 2001, to the operator of a financial market as
agent for the Commonwealth:
(a) the operator must pay an amount equal to the levy amount to the
Commonwealth; and
(b) the Consolidated Revenue Fund is appropriated by that amount for the
purpose of payment to the SEGC; and
(c) the Commonwealth must pay the amount so appropriated to the SEGC;
and
(d) the SEGC must pay the amount it receives under paragraph (c) into
the NGF; and
(e) the operator’s liability to pay the primary levy amount is
reduced by the amount paid into the NGF under paragraph (d).
(5) A payment of an amount to the SEGC as required by
paragraph (4)(c) in respect of a particular contributory levy amount is
subject to a condition that, if the Commonwealth becomes liable to refund the
whole or a part of the contributory levy amount, the SEGC must pay the
Commonwealth an amount equal to the amount that the Commonwealth is liable to
refund. The SEGC may pay, out of the NGF, any amount so required to be paid to
the Commonwealth.
(6) The Financial Management and Accountability Act 1997 does not
apply in relation to the payment of an amount of levy under this section to the
operator of a financial market as agent for the Commonwealth. However, the
operation of that Act in relation to the following payments is not
affected:
(a) the payment of an amount to the Commonwealth as required by
paragraph (4)(a); or
(b) the payment of an amount by the Commonwealth as required by
paragraph (4)(c).
The operator must, in accordance with the regulations, notify the
Commonwealth of payments of levy it receives as agent for the
Commonwealth.
(1) Subject to subsection (3), the Minister may nominate in writing
as the Securities Exchanges Guarantee Corporation a body corporate
(whenever incorporated) that is, for the purposes of the national corporate
laws, a company limited by guarantee.
(2) ASIC must cause a copy of a nomination by the Minister under
subsection (1) to be published in the Gazette.
(3) The Minister may only nominate a body corporate under
subsection (1) if he or she is satisfied that:
(a) the Australian Stock Exchange Limited is a member of the body
corporate; and
(b) each of the members of the body corporate is an eligible exchange (see
subsection (4)); and
(c) the body corporate’s constitution provides that only eligible
exchanges may become or remain members of the body corporate; and
(d) the body corporate will, if nominated under subsection (1), be
able to perform and exercise the SEGC’s functions and powers under this
Division adequately and with due regard to the interests of the public;
and
(e) the body corporate has obtained, or will within a reasonable period
after being nominated under subsection (1) obtain, indemnity insurance in
respect of its liabilities for:
(i) negligence in; and
(ii) defalcation, or fraudulent misuse of property, by an officer,
employee or agent of the body corporate in connection with;
the performance or exercise of the SEGC’s functions or powers under
this Division, or has made or will make other satisfactory provisions for
meeting those liabilities; and
(f) the body corporate’s business rules make satisfactory
provision:
(i) for ensuring the safety of property received by the body corporate;
and
(ii) generally for the protection of the interests of the
public.
(4) In this section:
eligible exchange means:
(a) the Exchange; or
(b) a securities exchange that is neither the Exchange nor an Exchange
subsidiary.
(1) In addition to the legal capacity and powers it has because of
section 124, SEGC has such functions and powers as are conferred, or
expressed to be conferred, on it by this Part.
(2) Section 125 does not apply in relation to a function or power
conferred, or expressed to be conferred, as mentioned in subsection (1) of
this section.
(3) The SEGC is to perform the functions, and may exercise the powers,
that are conferred on it by or under this Part.
(4) The SEGC is to administer the arrangements constituted by this
Division.
(1) Subject to this section, all decisions of the SEGC in relation to the
performance of its functions, and the exercise of its powers, under this Part
must be made by the board of the SEGC.
(2) The board of the SEGC must not delegate any of the following powers of
the SEGC:
(a) the power to borrow under section 889E;
(b) the power to determine the order of payments under
section 889H;
(c) the power to determine a minimum amount under
section 889I;
(d) the power to make operating rules under section 890D;
(e) the power (or duty) to make a payment under
section 891A.
(3) Otherwise, the board of the SEGC may delegate any of their powers
under this Part in accordance with section 198D.
The SEGC may make rules (operating rules) relating to the
performance or exercise of its powers or duties under this Part, or relating to
matters permitted by this Part to be dealt with in its operating
rules.
The SEGC’s operating rules have effect as a contract under seal
between the SEGC and each member of the SEGC under which each of those persons
agrees to observe the operating rules to the extent that they apply to the
person and engage in conduct that the person is required by the operating rules
to engage in.
(1) If a person who is under an obligation to comply with or enforce any
of the SEGC’s operating rules fails to meet that obligation, an
application to the Court may be made by:
(a) ASIC; or
(b) the SEGC; or
(c) a member of the SEGC; or
(d) a person aggrieved by the failure.
(2) After giving an opportunity to be heard to the applicant and the
person against whom the order is sought, the Court may make an order giving
directions to:
(a) the person against whom the order is sought; or
(b) if that person is a body corporate—the directors of the body
corporate;
about compliance with, or enforcement of, the operating rules.
(1) As soon as practicable after a change is made to the SEGC’s
operating rules, the SEGC must lodge with ASIC written notice of the
change.
(2) The notice must:
(a) set out the text of the change; and
(b) specify the date on which the change was made; and
(c) contain an explanation of the purpose of the change.
(3) If no notice is lodged with ASIC within 21 days after the change is
made, the change ceases to have effect.
(1) As soon as practicable after receiving a notice under
section 890G, ASIC must send a copy of the notice to the
Minister.
(2) Within 28 days after ASIC received the notice under section 890G,
the Minister may disallow all or a specified part of the change to the
SEGC’s operating rules.
(3) As soon as practicable after all or part of a change is disallowed,
ASIC must give notice of the disallowance to the SEGC. The change ceases to have
effect, to the extent of the disallowance, when the SEGC receives the
notice.
(1) If the Minister is satisfied that a body corporate specified in
regulations made for the purposes of this section has made adequate arrangements
covering all or part of the clearing and settlement system support that this
Division provides for, the Minister may, in writing, direct the SEGC to pay a
specified amount to that body corporate out of the NGF.
(2) The Minister may, in writing, impose conditions to be complied with by
the SEGC or the body corporate, or both, in relation to the payment.
(3) The SEGC and the body corporate must comply with the direction and
with any applicable conditions to which the direction is subject.
(4) Before giving a direction under subsection (1), the Minister must
be satisfied that, after the payment is made, the NGF will still have an
adequate amount of assets to meet claims.
(1) In this section:
joining market means a financial market that:
(a) is operated by a body corporate that becomes a member of the SEGC
after the commencement of this Division, or by a subsidiary of such a body
corporate; and
(b) is a financial market to which this Division applies.
(2) The regulations may make provisions of a transitional or saving nature
dealing with the transition, in relation to a joining market, from the
compensation regime previously applicable in relation to the market to the
arrangements constituted by this Division.
(3) Without limiting subsection (2), the regulations may require
money or other property (including money or other property in a fidelity fund)
to be paid or transferred to the SEGC for inclusion in the NGF.
(4) The regulations may also provide for the allocation of part of the NGF
as being for use for the purposes of claims arising in connection with the
joining market.
(5) The regulations may make modifications of provisions of this Division
and Division 5 that are necessary or convenient to take account of
allocations of a kind referred to in subsection (4).
Regulations made for the purposes of a provision of this Division may
make different provision in respect of different financial markets to which this
Division applies and in respect of different circumstances.
In this Division:
regulated fund means:
(a) a fidelity fund that is the source, or a source, of funds under
Division 3 arrangements; or
(b) the NGF; or
(c) an account kept as required by subsection 892B(3).
relevant authority, in relation to Part 7.5
arrangements, means:
(a) if the arrangements are Division 3 arrangements of a financial
market—the operator of the market; or
(b) if the arrangements are Division 4 arrangements—the
SEGC.
(1) Money in:
(a) a fidelity fund that is the source, or a source, of funds under
Division 3 arrangements; or
(b) the NGF;
must, until applied in paying claims or otherwise spent for the purposes of
this Part, or invested in accordance with section 892C, be kept by the
relevant authority in an account or accounts:
(c) with an Australian ADI; or
(d) of a kind prescribed by regulations made for the purposes of this
paragraph;
separate from any account or accounts in which other money is
kept.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The regulations may impose additional requirements to be complied with
in relation to the keeping of a regulated fund that covers 2 or more financial
markets.
(3) If:
(a) a source of funds under Division 3 arrangements for a financial
market is something other than a fidelity fund; and
(b) the operator of the market, or a person involved in the administration
of the arrangements, receives money from that source of funds;
the money received must, until applied in paying claims or otherwise spent
for the purposes of this Part, or invested in accordance with section 892C,
be kept by the relevant authority in an account or accounts:
(c) with an Australian ADI; or
(d) of a kind prescribed by regulations made for the purposes of this
paragraph;
separate from any account or accounts in which other money is
kept.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) Money in a regulated fund that is not immediately required for the
purposes of meeting claims may be invested in any way in which trustees are for
the time being authorised by law in force in a State or Territory in this
jurisdiction to invest trust funds.
(2) The relevant authority may, with the approval of ASIC, appoint a
person to invest on behalf of the relevant authority money to which
subsection (1) applies.
(3) ASIC must not grant approval to the appointment of a person under
subsection (2) unless it is satisfied that:
(a) the person has appropriate qualifications and expertise to perform the
duties of the appointment; and
(b) the relevant authority has adequate indemnity insurance in respect of
its liabilities for any negligence, or any defalcation or fraudulent misuse of
property, by the person in the performance of those duties, or has made other
satisfactory provisions for meeting those liabilities.
(4) A person appointed under subsection (2) must perform the duties
of the appointment in accordance with the directions of the relevant authority
and subject to such conditions (if any) as the relevant authority
imposes.
(1) The relevant authority in relation to Part 7.5 arrangements may
require a person:
(a) to deliver to the relevant authority documents or copies of documents,
including documents of, or evidencing, title to financial products; or
(b) to make out and deliver to the relevant authority a statement of
evidence;
that the relevant authority considers will assist it in determining a claim
for compensation that has been made.
(2) The requirement must be made by notice in writing given to the person.
The notice must:
(a) so far as it requires documents or copies referred to in
paragraph (1)(a)—identify or describe the documents or copies that
are required; and
(b) so far as it requires a statement referred to in
paragraph (1)(b)—describe the matters in relation to which the
person’s evidence is required, and set out any requirements to be complied
with in relation to how the statement is made out.
(3) The person must comply with the requirement.
(4) If the person fails, without reasonable excuse, to comply with the
requirement, the relevant authority may apply to the Court for, and the Court
may make, an order that the person comply with the direction.
(5) If the person fails, without reasonable excuse, to comply with the
requirement, the relevant authority may disallow a claim made by the
person.
Note: This subsection would not apply if the person subject
to the requirement were someone other than a claimant.
(6) The relevant authority may, in writing, delegate the power given by
this section to a person involved in the administration of the Part 7.5
arrangements.
(7) The relevant authority must return any documents (other than copies of
documents) provided to it under this section as soon as practicable after the
claim referred to in subsection (1) has been determined, and any
proceedings relating to the determination of the claim (including any arising
from the subrogation of the relevant authority for the claimant) have been
completed.
(8) Subsection (7) does not apply if:
(a) another law prohibits or prevents the return of the documents;
or
(b) the documents are no longer in the custody of the relevant authority;
or
(c) the person tells the relevant authority that the person does not want
the documents back.
(1) If Division 3 arrangements give responsibilities (as mentioned in
paragraph 885I(2)(c)) to a person acting under an arrangement with the operator
of the market concerned, the person may give the operator a written request to
give such assistance as the person requires for the purpose of fulfilling the
person’s responsibilities under the arrangement.
(2) The SEGC may give a member of the SEGC, or a subsidiary of a member of
the SEGC, a written request to give such assistance as the SEGC requires for the
purpose of:
(a) dealing with a claim; or
(b) the assessment of risks to the NGF.
(3) A requirement for assistance under subsection (1) or (2) must be
reasonable.
(4) A person who is required under this section to give assistance must
give the assistance.
(5) If the person fails to give the assistance, the person who required
the assistance may apply to the Court for, and the Court may make, an order that
the other person give the assistance.
(1) If compensation in respect of a claim is paid under Part 7.5
arrangements, the relevant authority in relation to the arrangements is
subrogated, to the extent of that payment, to all the claimant’s rights
and remedies in relation to the loss to which the claim relates.
(2) The relevant authority may also recover from the participant or
participants who caused the loss the costs it incurred in determining the
claim.
(1) The regulations may determine, or provide a method for determining,
when there is excess money in a regulated fund.
(2) The regulations may make provision in relation to how excess money in
a regulated fund may be, or is to be, dealt with. The regulations may make
different provision in relation to different funds.
(1) The relevant authority in relation to Part 7.5 arrangements must,
in relation to each regulated fund established in connection with the
arrangements, keep written financial records that:
(a) correctly record and explain the fund’s transactions and
financial position and performance; and
(b) would enable true and fair financial statements to be prepared and
audited;
and must retain the financial records for 7 years after the transactions
covered by the records are completed.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) Within 2 months after the end of each financial year of the relevant
authority, the authority must cause financial statements and notes to those
financial statements (within the meaning of section 295) for the regulated
fund to be made out as at the end of that financial year.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) A registered company auditor must be appointed to audit the accounts
of the regulated fund in accordance with whichever of the following paragraphs
applies:
(a) if there is only one relevant authority for the fund, that relevant
authority must appoint a registered company auditor to audit the fund’s
accounts;
(b) if there is more than one relevant authority for the fund:
(i) each of those relevant authorities must ensure that a registered
company auditor is appointed in accordance with subparagraph (ii) to audit
the fund’s accounts; and
(ii) the appointment is to be made by one or more of the relevant
authorities, with the consent of such of the relevant authorities (if any) as do
not make the appointment; and
(iii) a relevant authority must not purport to appoint a person to audit
the fund’s accounts unless each other relevant authority (if any) who has
not also made the appointment has consented to the appointment.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) If there is more than one relevant authority for a fund and they
cannot agree on which auditor to appoint, ASIC may, on the written application
of any of the authorities, appoint an auditor who consents to being so
appointed.
(5) The auditor must:
(a) audit the accounts of the regulated fund and the financial statements;
and
(b) do the things required by sections 307 and 308 in relation to
those documents, as if the audit were being done under
Chapter 2M.
(6) The relevant authority for the regulated fund must, within 14 days
after receiving the auditor’s report, lodge with ASIC a copy of the report
and a copy of the financial statements. If there is more than one relevant
authority for the regulated fund, the copy must be given to ASIC by at least one
of those authorities, or else they all contravene this subsection.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(7) If the regulated fund is the NGF, the relevant authority (being the
SEGC) must:
(a) give a copy of the audited financial statements to each member of the
SEGC; and
(b) cause a copy of the audited financial statements to be laid before the
annual general meeting of each member of the SEGC next following the making of
that report.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
The regulations may impose reporting requirements to be complied with by
the relevant authority in relation to Division 3 arrangements in relation
to situations in which compensation under the arrangements is provided otherwise
than out of a regulated fund.
The regulations may provide for specified persons to have qualified
privilege in respect of specified things done:
(a) under compensation rules forming part of Division 3 arrangements;
or
(b) under regulations made for the purposes of a provision or provisions
of Subdivision B of Division 4.
(1) For the purposes of monitoring compliance with, and the operation of,
this Part, the Minister may, by giving the operator of a financial market
written notice, require the operator:
(a) to cause a risk assessment report to be prepared in relation to the
market in accordance with the requirements specified in the notice;
and
(b) to give that report to the Minister by the time specified in the
notice.
(2) The operator must comply with the notice.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
In this Part, unless the contrary intention appears:
representative of a financial services licensee
means:
(a) an authorised representative of the licensee; or
(b) an employee or director of the licensee; or
(c) an employee or director of a related body corporate of the licensee;
or
(d) any other person acting on behalf of the licensee.
(1) Subject to this section, a person who carries on a financial services
business in this jurisdiction must hold an Australian financial services
licence covering the provision of the financial services.
Note 1: Also, a person must not provide a financial service
contrary to a banning order or disqualification order under
Division 8.
Note 2: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) However, a person is exempt from the requirement to hold an Australian
financial services licence for a financial service they provide in any of the
following circumstances:
(a) the person provides the service as representative of a second person
who carries on a financial services business and who:
(i) holds an Australian financial services licence that covers the
provision of the service; or
(ii) is exempt under this subsection from the requirement to hold an
Australian financial services licence that covers the provision of the
service;
Note: However, representatives must still comply with
section 911B even if they are exempted from this section by this
paragraph.
(b) the service is the issue, variation or disposal of a financial product
by the person and the following conditions are satisfied:
(i) a second person, or an authorised representative of a second person,
offered to arrange for the issue, variation or disposal of the product for a
third person;
(ii) the offer was covered by an Australian financial services licence
held by the second person;
(iii) the product was issued, varied or disposed of in accordance with
such an arrangement;
(c) all of the following apply:
(i) the service is the variation or disposal of a financial product by the
person;
(ii) the same person issued the original product;
(iii) the person provides the service at the direct request of the person
to whom it is provided (rather than through an intermediary);
(d) the service is provided incidentally to the operation of a licensed
market, or a licensed CS facility, operated by the person;
(e) the person provides the service as a member of a declared professional
body and the service is the provision of financial product advice that is
covered by the declaration (see section 918B);
(f) the person provides the service while performing functions, or
exercising powers, in any of the following capacities or
circumstances:
(i) as an official receiver or trustee within the meaning of the
Bankruptcy Act 1966;
(ii) as a receiver, receiver and manager, or liquidator (whether appointed
by a court or otherwise);
(iii) as a person appointed by a court to carry on a financial services
business;
(iv) as the Public Trustee acting under a law, prescribed by regulations
made for the purposes of this paragraph, of a State or Territory;
(v) as an administrator of a body corporate;
(vi) as an administrator of a deed of company arrangement executed by a
body corporate;
(vii) as a trustee or person administering a compromise or arrangement
between a body corporate and another person or persons;
(viii) as a personal representative of a deceased person other than a
deceased financial services licensee;
(ix) subject to subsection (3), as a personal representative of a
deceased financial services licensee;
(x) in the administration of a bankrupt estate or in the winding up of a
body corporate or partnership;
(g) all of the following apply:
(i) the person is a body regulated by APRA;
(ii) the service is provided in the course of carrying on the business or
undertaking which causes that APRA regulation to be required;
(iii) the service is provided only to wholesale clients;
(h) all of the following apply:
(i) the person is regulated by an overseas regulatory authority;
(ii) the regulatory authority is approved by ASIC in writing for the
purposes of this paragraph;
(iii) the service is provided in the course of carrying on the business or
undertaking which causes that regulation to be required;
(iv) the service is provided only to wholesale clients;
(i) the person provides the service only to related bodies corporate of
the person;
(j) the person provides the service in the person’s capacity as
trustee of a self-managed superannuation fund (within the meaning of the
Superannuation Industry (Supervision) Act 1993);
(k) the provision of the service is covered by an exemption prescribed in
regulations made for the purposes of this paragraph;
(l) the provision of the service is covered by an exemption specified by
ASIC in writing and published in the Gazette.
Note: A defendant bears an evidential burden in relation to
the matters in this subsection. See subsection 13.3(3) of the Criminal
Code.
(3) Subparagraph (2)(f)(ix) only applies until whichever of these
happens first:
(a) the end of 6 months after the death of the licensee;
(b) the removal or discharge of the personal representative;
(c) the final distribution of the licensee’s estate.
(4) A person is not exempt under any paragraph of subsection (2) for
a financial service they provide if the service is the operation of a registered
scheme.
(1) A person (the provider) must only provide a financial
service in this jurisdiction on behalf of another person (the
principal) who carries on a financial services business if one or
more of the following paragraphs apply:
(a) these conditions are satisfied:
(i) the principal holds an Australian financial services licence covering
the provision of the service; and
(ii) the provider is an employee or director of the principal or of a
related body corporate of the principal; and
(iii) the provider is not an employee or director of any other person who
carries on a financial services business and who is not a related body corporate
of the principal; and
(iv) the provider is not an employee or director of a related body
corporate of a person of the kind mentioned in
subparagraph (iii);
(b) these conditions are satisfied:
(i) the principal holds an Australian financial services licence covering
the provision of the service; and
(ii) the provider is an authorised representative of the principal;
and
(iii) the authorisation covers the provision of the service by the
provider; and
(iv) in the case of a provider who is an employee or director of any other
person (the second principal) who carries on a financial services
business, or of a related body corporate of such a second principal—if the
provider provides any financial services in this jurisdiction on behalf of the
second principal, the provider does so as an authorised representative of the
second principal;
(c) these conditions are satisfied:
(i) the principal holds an Australian financial services licence covering
the provision of the service; and
(ii) the provider is an employee of an authorised representative of the
principal; and
(iii) the authorisation covers the provision of the service by the
authorised representative; and
(iv) the service is the provision of a basic deposit product or of a
facility for making non-cash payments (see section 763D) that is related to
a basic deposit product, or is the provision of a financial product of a kind
prescribed by regulations made for the purposes of this subparagraph;
(d) the provider holds their own Australian financial services licence
covering the provision of the service;
Note: However, in general a financial services licensee
cannot be the authorised representative of another financial services licensee:
see sections 916D and 916E.
(e) if the principal (rather than the provider) provided the service, the
principal would not need an Australian financial services licence because the
provision of the service would be exempt under subsection 911A(2).
Note 1: Also, a person must not provide a financial service
on behalf of another person contrary to a banning order or disqualification
order under Division 8.
Note 2: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) Paragraphs (1)(a), (b) and (c) do not apply if the provider is a
financial services licensee, unless the principal is an insurer and the provider
is acting under a binder given by the principal.
A person must not hold out:
(a) that the person has an Australian financial services licence;
or
(b) that a financial service provided by the person or by someone else is
exempt from the requirement to hold an Australian financial services licence;
or
(c) that, in providing a financial service, the person acts on behalf of
another person; or
(d) that conduct, or proposed conduct, of the person is within authority
(within the meaning of Division 6) in relation to a particular financial
services licensee; or
(e) that a body is a declared professional body; or
(f) that a person is a member of a declared professional body;
if that is not the case.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
(1) For the purposes of this Chapter, a financial services business is
taken to be carried on in this jurisdiction by a person if, in the
course of the person carrying on the business, the person engages in conduct
that is:
(a) intended to induce people in this jurisdiction to use the financial
services the person provides; or
(b) is likely to have that effect;
whether or not the conduct is intended, or likely, to have that effect in
other places as well.
(2) This section does not limit the circumstances in which a financial
services business is carried on in this jurisdiction for the
purposes of this Chapter.
A financial services licensee must:
(a) to the extent that it is reasonably practicable to do so, do all
things necessary to ensure that the financial services covered by the licence
are provided competently and honestly; and
(b) comply with the conditions on the licence; and
(c) take reasonable steps to ensure that its representatives comply with
the requirements of this Act (including any obligations under the other Parts of
this Chapter), and any other law of the Commonwealth, a State or a Territory
that relates to the provision of financial services; and
(d) unless the licensee is a body regulated by APRA—have available
adequate resources (including financial, technological and human resources) to
provide the financial services covered by the licence and to carry out
supervisory arrangements; and
(e) maintain the competence to provide those financial services;
and
(f) ensure that its representatives are adequately trained, and are
competent, to provide those financial services; and
(g) if those financial services are provided to persons as retail
clients—have internal and external dispute resolution procedures, that are
approved by ASIC in accordance with the regulations, to resolve complaints such
persons make in connection with the provision of financial services covered by
the licence; and
(h) unless the licensee is a body regulated by APRA—have adequate
risk management systems; and
(i) comply with all the other requirements that apply to the licensee
under this Act; and
Note: Licensees may have additional obligations under, for
example, the other Parts of this Chapter.
(j) comply with any other obligations that are prescribed by regulations
made for the purposes of this paragraph.
(1) If a financial services licensee provides a financial service to
persons as retail clients, the licensee must have arrangements for compensating
those persons for loss or damage suffered because of breaches of the relevant
obligations under this Chapter by the licensee or its representatives. The
arrangements must meet the requirements of subsection (2).
(2) The arrangements must:
(a) if the regulations specify requirements that are applicable to all
arrangements, or to arrangements of that kind—satisfy those requirements;
or
(b) be approved in writing by ASIC.
(3) Before approving arrangements under paragraph (2)(b), ASIC must
have regard to:
(a) the financial services covered by the licence; and
(b) whether the arrangements will continue to cover persons after the
licensee ceases carrying on the business of providing financial services, and
the length of time for which that cover will continue; and
(c) any other matters that are prescribed by regulations made for the
purposes of this paragraph.
(4) Regulations made for the purposes of paragraph (3)(c) may, in
particular, prescribe additional details in relation to the matters to which
ASIC must have regard under paragraphs (3)(a) and (b).
(1) ASIC may, by giving written notice to a financial services licensee,
direct the licensee to give to ASIC a written statement containing the specified
information about:
(a) the financial services provided by the licensee or its
representatives; or
(b) the financial services business carried on by the licensee.
(2) ASIC may also, by giving written notice to the licensee, direct the
licensee to obtain an audit report, prepared by a suitably qualified person
specified in the notice, on such a statement before the statement is given to
ASIC.
(3) The licensee must comply with a direction given under this
section:
(a) within the time specified in the direction if that is a reasonable
time; or
(b) in any other case—within a reasonable time.
ASIC may extend the time within which the licensee must comply with the
direction by giving written notice to the licensee.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) As soon as practicable, and in any case within 3 days, after a
financial services licensee becomes aware that it can no longer meet, or has
breached, an obligation under section 912A or 912B, the licensee must give
a written report to ASIC on the matter.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) A financial services licensee must give written notice to ASIC, as
soon as practicable, if the licensee becomes a participant in a licensed market
or a licensed CS facility, or ceases to be such a participant. The notice must
say when this happened and identify the market or facility.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) A financial services licensee and its representatives must give such
assistance to ASIC, or a person authorised by ASIC, as ASIC or the authorised
person reasonably requests in relation to whether the licensee and its
representatives are complying with this Act, and in relation to the performance
of ASIC’s other functions.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) Such assistance may include showing ASIC the licensee’s books or
giving ASIC other information.
(1) Whenever a financial services licensee identifies itself in a document
in connection with providing financial services under the licence, or otherwise
in connection with the licence, the document must include the licensee’s
licence number (see section 913C).
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) An offence based on subsection (1) is an offence of strict
liability.
Note: For strict liability, see
section 6.1 of the Criminal Code.
A person may apply for an Australian financial services licence by
lodging an application with ASIC that:
(a) includes the information required by regulations made for the purposes
of this paragraph; and
(b) is accompanied by the documents (if any) required by regulations made
for the purposes of this paragraph.
Note: For fees in respect of lodging applications, see
Part 9.10.
(1) ASIC must grant an applicant an Australian financial services licence
if (and must not grant such a licence unless):
(a) the application was made in accordance with section 913A;
and
(b) ASIC has no reason to believe that the applicant will not comply with
the obligations that will apply under section 912A if the licence is
granted; and
(c) the requirement in whichever of subsection (2) or (3) of this
section applies is satisfied; and
(d) the applicant meets any other requirements prescribed by regulations
made for the purposes of this paragraph.
Note: ASIC must not grant an Australian financial services
licence to a person contrary to a banning order or disqualification order (see
Division 8).
(2) If the applicant is a natural person, ASIC must be satisfied that
there is no reason to believe that the applicant is not of good fame or
character.
(3) If the applicant is not a natural person, ASIC must be
satisfied:
(a) that:
(i) if the applicant is a body corporate—there is no reason to
believe that any of the applicant’s responsible officers are not of good
fame or character; or
(ii) if the applicant is a partnership—there is no reason to believe
that any of the partners who would perform duties in connection with the holding
of the licence are not of good fame or character; or
(b) if ASIC is not satisfied of the matter in
paragraph (a)—that the applicant’s ability to provide the
financial services covered by the licence would nevertheless not be
significantly impaired.
(4) In considering whether there is reason to believe that a person is not
of good fame or character, ASIC must (subject to Part VIIC of the Crimes
Act 1914) have regard to:
(a) any conviction of the person, within 10 years before the application
was made, for serious fraud; and
(b) whether the person has held an Australian financial services licence
that was suspended or cancelled; and
(c) whether a banning order or disqualification order under
Division 8 has previously been made against the person; and
(d) any other matter ASIC considers relevant.
Note: Part VIIC of the Crimes Act 1914 includes
provisions that, in certain circumstances, relieve persons from the requirement
to disclose spent convictions and require persons aware of such convictions to
disregard them.
(5) However, ASIC may only refuse to grant a licence after giving the
applicant an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that takes
place in private; and
(b) to make submissions to ASIC in relation to the matter.
ASIC must give each Australian financial services licence a unique
licence number when it is granted, and must notify the licensee of that
number.
(1) Subject to this section, ASIC may, at any time, by giving written
notice to a financial services licensee:
(a) impose conditions, or additional conditions, on the licence;
and
(b) vary or revoke conditions imposed on the licence.
Note: Subsection 923B(3) restricts the circumstances in
which ASIC can impose a condition authorising a person to assume or use a
restricted word or expression under that section.
(2) ASIC may do so:
(a) on its own initiative; or
(b) if the licensee lodges with ASIC an application for ASIC to do so,
which is accompanied by the documents, if any, required by regulations made for
the purposes of this paragraph.
Note: For fees in respect of lodging applications, see
Part 9.10.
(3) However, ASIC may only impose conditions or additional conditions, or
vary the conditions, on the licence after giving the licensee an
opportunity:
(a) to appear, or be represented, at a hearing before ASIC that takes
place in private; and
(b) to make submissions to ASIC in relation to the matter.
(4) If the licensee, or a related body corporate, is a body regulated by
APRA, ASIC must consult with APRA before imposing a condition, or additional
condition, on the licence or before varying or revoking a condition. This does
not however apply in relation to a condition described in
paragraph (5)(a).
(5) If the licensee, or a related body corporate, is an ADI (within the
meaning of the Banking Act 1959), then the following provisions
apply:
(a) ASIC cannot impose a condition, or an additional condition, on the
licence that would have the result of significantly limiting or restricting the
ADI’s ability to carry on all or any of its banking business (within the
meaning of that Act);
(b) subject to paragraphs (c) and (d), the powers that ASIC would
otherwise have under this section to impose, vary or revoke such a condition are
instead powers of the Minister;
(c) subject to paragraph (d), the procedures for the imposition of
the condition, or the variation or revocation of the condition, are otherwise
the same, except that the Minister must only impose, vary or revoke the
condition on advice from ASIC given after ASIC has consulted APRA about the
proposed action;
(d) ASIC (rather than the Minister) must still conduct any hearing
required under paragraph (3)(a) and receive any submissions under
paragraph (3)(b).
(6) ASIC must ensure that the licence is subject to a condition that
specifies the particular financial services or class of financial services that
the licensee is authorised to provide.
(7) The financial services or class of financial services may be specified
by reference to particular financial products, or classes of financial
products.
(8) The licence is subject to such other conditions as are prescribed by
regulations made for the purposes of this subsection. However, ASIC cannot vary
or revoke those conditions.
(1) ASIC may vary an Australian financial services licence to take account
of a change in the licensee’s name if the licensee lodges with ASIC an
application for the variation, accompanied by the documents, if any, required by
regulations made for the purposes of this subsection.
Note 1: The conditions on the licence can be varied under
section 914A.
Note 2: For fees in respect of lodging applications, see
Part 9.10.
(2) ASIC must give written notice of the variation to the
licensee.
Licence held by a natural person
(1) ASIC may suspend or cancel an Australian financial services licence
held by a natural person, by giving written notice to the person, if the
person:
(a) ceases to carry on the financial services business; or
(b) becomes an insolvent under administration; or
(c) is convicted of serious fraud; or
(d) becomes incapable of managing their affairs because of mental or
physical incapacity; or
(e) lodges with ASIC an application for ASIC to do so, which is
accompanied by the documents, if any, required by regulations made for the
purposes of this paragraph.
Note: For fees in respect of lodging applications, see
Part 9.10.
Licence held by a partnership
(2) ASIC may suspend or cancel an Australian financial services licence
held by a partnership, by giving written notice to the partnership,
if:
(a) the partnership ceases to carry on the financial services business;
or
(b) a creditor’s petition or a debtor’s petition is presented
under Division 2 or 3 of Part IV of the Bankruptcy Act 1966
against the partnership; or
(c) one or more of the partners is convicted of serious fraud;
or
(d) the partnership lodges with ASIC an application for ASIC to do so,
which is accompanied by the documents, if any, required by regulations made for
the purposes of this paragraph.
Note: For fees in respect of lodging applications, see
Part 9.10.
Licence held by a body corporate
(3) ASIC may suspend or cancel an Australian financial services licence
held by a body corporate, by giving written notice to the body, if the
body:
(a) ceases to carry on the financial services business; or
(b) becomes an externally-administered body corporate; or
(c) is a responsible entity of a registered scheme whose members have
suffered, or are likely to suffer, loss or damage because the body has breached
this Act; or
(d) lodges with ASIC an application for ASIC to do so, which is
accompanied by the documents, if any, required by regulations made for the
purposes of this paragraph.
Note: For fees in respect of lodging applications, see
Part 9.10.
(1) ASIC may suspend or cancel an Australian financial services licence
(subject to complying with subsection (4)) in any of the following
cases:
(a) the licensee breaches a provision of this Act;
(b) ASIC is no longer satisfied of the matter in whichever of subsection
913B(2) or (3) applied at the time the licence was granted (about whether the
licensee, or the licensee’s representatives, are of good fame or
character);
(c) a banning order or disqualification order under Division 8 is
made against the licensee;
(d) a banning order or disqualification order under Division 8 is
made against a representative of the licensee and ASIC considers that the
representative’s involvement in the provision of the licensee’s
financial services will significantly impair the licensee’s ability to
meet its obligations under this Chapter.
(2) ASIC may also cancel an Australian financial services licence (subject
to complying with subsection (4)) if:
(a) the application for the licence was false in a material particular or
materially misleading; or
(b) there was an omission of a material matter from the
application.
(3) An Australian financial services licence is suspended or cancelled by
ASIC giving written notice to the licensee.
(4) However, ASIC may only suspend or cancel an Australian financial
services licence under this section after giving the licensee an
opportunity:
(a) to appear, or be represented, at a hearing before ASIC that takes
place in private; and
(b) to make submissions to ASIC on the matter.
(1) A suspended Australian financial services licence has no effect while
it remains suspended.
(2) Subsection (1) has effect subject to section 915H.
ASIC may at any time revoke the suspension of an Australian financial
services licence by giving written notice to the licensee.
(1) A variation, suspension, revocation of a suspension, or cancellation,
of an Australian financial services licence takes effect when the written notice
of that action is given to the licensee.
(2) As soon as practicable after the notice is given to the licensee, ASIC
must:
(a) publish a notice of the action in the Gazette; and
(b) if the licensee is a participant in a licensed market or a licensed CS
facility—give written notice of the action to the operator of the market
or facility.
A notice under this subsection must state when the action took
effect.
A notice of suspension or cancellation given to a licensee under this
Subdivision must be accompanied by a statement of reasons for the action
taken.
In the written notice of suspension or cancellation that ASIC gives to
the licensee, ASIC may specify that the licence continues in effect as though
the suspension or cancellation had not happened for the purposes of specified
provisions of this Act in relation to specified matters, a specified period, or
both.
(1) If a financial services licensee, or a related body corporate, is a
body regulated by APRA, ASIC must consult with APRA before doing any of the
following under this Subdivision:
(a) cancel the licence;
(b) suspend the licence;
(c) revoke a suspension of the licence;
This does not however apply if subsection (2) applies to the
licence.
(2) If a financial services licensee, or a related body corporate, is an
ADI (within the meaning of the Banking Act 1959), ASIC’s powers to
do any of the following under this Subdivision:
(a) cancel the licence;
(b) suspend the licence;
(c) revoke a suspension of the licence;
are instead taken to be powers of the Minister.
(3) In a case to which subsection (2) applies, the procedures for
cancellation of a licence, suspension of a licence, or revocation of a
suspension of a licence, are otherwise the same, except that the Minister may
only act on advice from ASIC given after ASIC has consulted APRA about the
proposed action. ASIC (rather than the Minister) must still conduct any hearing
required under paragraph 915C(4)(a) and receive any submissions under paragraph
915C(4)(b).
An Australian financial services licence cannot be varied, suspended or
cancelled otherwise than under this Subdivision.
Note: The conditions on the licence can be varied under
section 914A.
(1) A financial services licensee may give a person (the authorised
representative) a written notice authorising the person, for the
purposes of this Chapter, to provide a specified financial service or financial
services on behalf of the licensee.
(2) The financial services specified may be some or all of the financial
services covered by the licensee’s licence.
(3) An authorisation under subsection (1) is void to the extent that
it purports to authorise a person to provide a financial service:
(a) that is not covered by the licensee’s licence; or
(b) contrary to a banning order or disqualification order under
Division 8.
(4) An authorisation may be revoked at any time by the licensee giving
written notice to the authorised representative.
(1) Subject to subsection (3), an authorised representative of a
financial services licensee cannot, in that capacity, make a person their
authorised representative or an authorised representative of the
licensee.
(2) A purported authorisation contrary to this section is void.
(3) A body corporate that is an authorised representative of a financial
services licensee may, in that capacity, give an individual a written notice
authorising that individual, for the purposes of this Chapter, to provide a
specified financial service or financial services on behalf of the licensee, but
only if the licensee consents.
(4) The financial services specified may be some or all of the financial
services covered by the licensee’s licence.
(5) The licensee may give consent under subsection (3) in respect of
either a specified individual or a specified class of individuals (the
membership of which might change from time to time).
(6) An individual who is authorised as mentioned in subsection (3) is
an authorised representative of the relevant licensee.
(1) One person can be the authorised representative of 2 or more financial
services licensees, but only if:
(a) each of those licensees has consented to the person also being the
authorised representative of each of the other licensees; or
(b) each of those licensees is a related body corporate of each of the
other licensees.
(2) A purported authorisation given in breach of this requirement is
void.
(3) As well, an authorisation that starts to breach this requirement,
because another financial services licensee purports to authorise the same
person, is void.
(1) A financial services licensee cannot be the authorised representative
of another financial services licensee.
Note 1: Instead, the first licensee could use their own
licence to provide financial services on behalf of the second licensee (assuming
that the first licensee’s licence covered the provision of those
services). See paragraph 911B(1)(d).
Note 2: There is an exception to this rule in
section 916E.
(2) A purported authorisation given in breach of this requirement is
void.
(3) As well, an authorisation that starts to breach this requirement,
because the person authorised is subsequently granted an Australian financial
services licence, is void.
(1) Despite section 916D, a financial services licensee (the
authorised licensee) may be the authorised representative of
another financial services licensee who is an insurer, if the authorised
licensee acts under a binder given by the insurer.
(2) For all purposes connected with contracts that are risk insurance
products, or with claims against the insurer, in respect of which the authorised
licensee acts under the binder:
(a) the authorised licensee is taken to act on behalf of the insurer and
not the insured; and
(b) if the insured in fact relied in good faith on the conduct of the
authorised licensee, the authorised licensee is taken to act on behalf of the
insurer regardless of the fact that the authorised licensee did not act within
the scope of the binder.
(1) A person must give ASIC written notice (in accordance with
subsection (2)), within 10 business days, if the person authorises a
representative to provide a financial service as mentioned in section 916A
or 916B.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The notice must include the following details:
(a) the name and business address of the representative;
(b) details of the authorisation, including the date on which it was made
and what the representative is authorised to do on behalf of the relevant
licensee;
(c) details of each other financial services licensee on behalf of whom
the representative is an authorised representative.
(3) The person must notify ASIC in writing, within 10 business days, if
the authorisation is revoked or there is a change in any of those
details.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) For the purposes of an offence based on subsection (3), strict
liability applies to the physical element of circumstance of the offence, that
the details mentioned in subsection (3) changed.
Note: For strict liability, see
section 6.1 of the Criminal Code.
(1) If ASIC considers it appropriate to do so, it may give information to
a financial services licensee about a person who ASIC believes is, or will be, a
representative of the licensee. However, ASIC may only do so if it believes, on
reasonable grounds, that the information is true.
(2) A financial services licensee to whom the information is given may
only make use of, make a record of, or give to another person, the information
for a purpose connected with:
(a) the licensee making a decision about what action (if any) to take in
relation to the representative, as a consequence of receiving the information;
or
(b) the licensee taking action pursuant to such a decision.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) A person to whom information has been given for a purpose or purposes
under subsection (2) or this subsection, may only make use of, make a
record of, or give to another person, that information for that purpose or any
of those purposes.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) A person has qualified privilege in respect of an act done by the
person under subsection (2) or (3).
(5) A person to whom information is given in accordance with this section
must not give any of the information to a court, or produce in a court a
document that sets out some or all of the information, except:
(a) for a purpose connected with:
(i) a financial services licensee making a decision about what action (if
any) to take in relation to the representative, as a consequence of receiving
some or all of the information; or
(ii) a financial services licensee taking action pursuant to that
decision; or
(iii) proving in a proceeding in that court that particular action taken
by a financial services licensee in relation to the representative was taken
pursuant to that decision; or
(b) in a proceeding in that court, in so far as the proceeding relates to
an alleged breach of this section; or
(c) in a proceeding in respect of an ancillary offence relating to an
offence based on this section; or
(d) in a proceeding about giving to a court false information some, at
least, of which was the information given under this section.
(6) A reference in this section to a financial services licensee taking
action in relation to a representative is a reference to the licensee:
(a) taking action by way of making, terminating or varying the terms and
conditions of an agreement; or
(b) otherwise taking action in relation to an agreement;
to the extent that the agreement relates to the representative acting on
behalf of the licensee.
(7) Subsection (5) also has the effect it would have if:
(a) a reference in it to a court were a reference to a court of an
external Territory or of a country outside Australia and the external
Territories; and
(b) paragraphs (5)(b) and (c) were omitted.
(1) This Division applies to any conduct of a representative of a
financial services licensee:
(a) that relates to the provision of a financial service; and
(b) on which a third person (the client) could reasonably be
expected to rely; and
(c) on which the client in fact relied in good faith.
(2) In this Division, a reference to a representative’s conduct
being within authority in relation to a particular financial
services licensee is, subject to subsection (3), a reference to:
(a) if the representative is an employee of the licensee or of a related
body corporate of the licensee—conduct being within the scope of the
employee’s employment; or
(b) if the representative is a director of the licensee or of a related
body corporate of the licensee—conduct being within the scope of the
director’s duties as director; or
(c) in any other case—conduct being within the scope of the
authority given by the licensee.
(3) If:
(a) a person is the representative of more than one financial services
licensee in respect of a particular class of financial service; and
(b) the person engages in conduct relating to that class of service;
and
(c) any one or more of the licensees issues or transfers a financial
product as a result of the conduct;
then, for the purposes of this Division:
(d) the person is taken, in respect of the conduct, to have acted
within authority in relation to the licensee or to each licensee
who issued or transferred a financial product as a result of the conduct;
and
(e) the person is, in respect of the conduct, taken not to have acted
within authority in relation to any licensee who did not issue or
transfer a financial product as a result of the conduct.
If the representative is the representative of only one financial
services licensee, the licensee is responsible, as between the licensee and the
client, for the conduct of the representative, whether or not the
representative’s conduct is within authority.
(1) This section applies if the representative is the representative of
more than one financial services licensee.
Financial service covered by only one authority
(2) If:
(a) the representative is the representative of one of the licensees only
in respect of a particular class of financial service; and
(b) the conduct relates to that class of service;
that licensee is responsible for the conduct, as between that licensee and
the client, whether or not the conduct is within authority.
Financial service covered by multiple authorities: conduct within
authority for only one of them
(3) If:
(a) the representative is the representative of more than one of the
licensees in respect of a particular class of financial service; and
(b) the conduct relates to that class of service; and
(c) the conduct is within authority in relation to one only of those
licensees;
that licensee is responsible for the conduct, as between that licensee and
the client.
All other cases
(4) In any other case, all of the licensees are jointly and severally
responsible for the conduct, as between themselves and the client, whether or
not the representative’s conduct is within authority in relation to any of
them.
A financial services licensee is not responsible under section 917B
or 917C for the conduct of their representative if:
(a) the conduct is not within authority in relation to the licensee (or in
relation to any of the licensees, if there were more than one); and
(b) the representative disclosed that fact to the client before the client
relied on the conduct; and
(c) the clarity and the prominence of the disclosure was such as a person
would reasonably require for the purpose of deciding whether to acquire the
relevant financial service.
Note: A person must not hold out that conduct, or proposed
conduct, of the person is within authority in relation to a particular financial
services licensee, unless that is the case. See
section 911C.
The responsibility of a financial services licensee under this Division
extends so as to make the licensee liable to the client in respect of any loss
or damage suffered by the client as a result of the representative’s
conduct.
(1) If a financial services licensee is responsible for the conduct of
their representative under this Division, the client has the same remedies
against the licensee that the client has against the representative.
(2) The licensee and the representative (along with any other licensees
who are also responsible) are all jointly and severally liable to the client in
respect of those remedies.
(3) However, nothing in this Division imposes:
(a) any criminal responsibility; or
(b) any civil liability under a provision of this Act apart from this
Division;
on a financial services licensee that would not otherwise be imposed on the
licensee.
(4) This Division does not relieve a representative of a financial
services licensee of any liability they have to the client or the
licensee.
(5) An agreement is void in so far as it purports to alter or restrict the
operation of section 917B, 917C, 917D or 917E.
(6) However, subsection (5) does not apply to the extent that the
agreement:
(a) provides for a representative of a financial services licensee to
indemnify the licensee for a liability of the licensee in respect of the
representative; or
(b) provides for a financial services licensee, for whom a representative
acts, to indemnify another financial services licensee for a liability in
respect of the representative.
(7) A financial services licensee must not make, or offer to make, an
agreement that is, or would be, void under subsection (5).
A professional body may apply for a declaration to be made under
section 918B by lodging an application with ASIC that:
(a) includes the information required by regulations made for the purposes
of this paragraph; and
(b) is accompanied by the documents (if any) required by regulations made
for the purposes of this paragraph.
Note: For fees in respect of lodging applications, see
Part 9.10.
(1) On an application under section 918A, ASIC may declare in writing
that a professional body, or a specified part of a professional body, is a
declared professional body.
(2) ASIC must specify in the declaration the kind of financial product
advice that members of the declared professional body may provide in accordance
with the declaration.
(3) ASIC may only make such a declaration if:
(a) the application was made in accordance with section 918A;
and
(b) ASIC has no reason to believe that the body (or specified part of the
body) will not comply with the obligations that will apply if the declaration is
made.
(4) If ASIC makes a declaration, it must give written notice to the
professional body concerned. The notice must include the date on which the
declaration was made, and may include such other matters as ASIC thinks fit.
ASIC must also publish a notice in the Gazette to the same
effect.
(5) If ASIC makes a declaration under subsection (1) in relation to a
specified part of a professional body, the provisions of this Part that relate
to declared professional bodies apply to that part of the body as though the
part of the body were itself a declared professional body.
(1) ASIC may, in writing, vary or revoke a section 918B declaration
(including to take account of a change in a professional body’s name) if
the body lodges with ASIC an application for the variation, accompanied by the
documents, if any, required by regulations made for the purposes of this
subsection.
Note: For fees in respect of lodging applications, see
Part 9.10.
(2) ASIC may, in writing, vary a section 918B declaration in respect
of a professional body if ASIC considers it appropriate to vary the kind of
advice that members of the body may provide in accordance with the
declaration.
(3) ASIC may, in writing, vary or revoke a section 918B declaration
in respect of a professional body if:
(a) the body ceases to function or becomes insolvent; or
(b) a material particular in the application for the declaration was
false, such a particular was omitted from the application, or the application
was otherwise materially misleading; or
(c) the body, or a member or members of the body, breach a provision of
this Chapter.
(4) However, ASIC may only vary or revoke a declaration in respect of a
professional body under subsection (2) or (3) after giving the body an
opportunity:
(a) to be represented at a hearing before ASIC that takes place in
private; and
(b) to make submissions to ASIC on the matter.
(5) If ASIC varies or revokes a declaration under this section, it must
give written notice to the professional body concerned. The notice must include
the date on which the variation or revocation took effect, must be accompanied
by a statement of reasons for the action taken, and may include such other
matters as ASIC thinks fit.
(6) ASIC must also publish a notice in the Gazette to the same
effect as the notice under subsection (5).
(7) In the written notice of variation or revocation that ASIC gives to
the body, ASIC may specify that the declaration continues in effect as though
the variation or revocation had not happened for the purposes of specified
provisions of this Act in relation to specified matters, a specified period, or
both.
(1) ASIC may, at any time, by giving written notice to a declared
professional body:
(a) impose conditions, or additional conditions, on the declaration;
and
(b) vary or revoke conditions imposed on the declaration.
(2) ASIC may do so:
(a) on its own initiative; or
(b) if the body lodges with ASIC an application for ASIC to do so, which
is accompanied by the documents, if any, required by regulations made for the
purposes of this paragraph.
Note: For fees in respect of lodging applications, see
Part 9.10.
(3) However, ASIC may only impose conditions or additional conditions, or
vary the conditions, on the declaration after giving the body an
opportunity:
(a) to be represented at a hearing before ASIC that takes place in
private; and
(b) to make submissions to ASIC in relation to the matter.
This subsection does not apply to ASIC imposing conditions when the
declaration is made.
(4) The declaration is subject to such other conditions as are prescribed
by regulations made for the purposes of this subsection. However, ASIC cannot
vary or revoke those conditions.
(5) In the written notice that ASIC gives to the body under
subsection (1), ASIC may specify that the declaration takes effect, or
continues in effect, as though the changes specified in the notice had not been
made for the purposes of specified provisions of this Act in relation to
specified matters, a specified period, or both.
A declared professional body must:
(a) comply with the conditions on the declaration; and
(b) take reasonable steps to ensure that its members comply with the
requirements of this Act (including any obligations under the other Parts of
this Chapter), and any other law of the Commonwealth, a State or a Territory
that relates to the provision of financial product advice; and
(c) have available adequate resources (including financial, technological
and human resources) to supervise the provision by its members of the kind of
financial product advice covered by the declaration; and
(d) ensure that its members are adequately trained to provide, and
supervised in the provision of, that kind of financial product advice;
and
(e) if members of the body provide that kind of financial product advice
to persons as retail clients—ensure that its members have internal and
external dispute resolution procedures, that are approved by ASIC in accordance
with the regulations, to resolve complaints that retail clients make in
connection with the provision of that kind of financial product advice;
and
(f) have adequate powers to discipline or remove members; and
(g) ensure that adequate conduct and disclosure requirements apply to
members of the body; and
(h) have adequate arrangements for compensating clients for loss or damage
suffered because of breaches of the relevant obligations under this Chapter by
the body or its members; and
(i) comply with all the other requirements that apply to the body under
this Act; and
(j) comply with any other obligations that are prescribed by regulations
made for the purposes of this paragraph.
(1) ASIC may, by giving written notice to a declared professional body,
direct the body to give ASIC a written statement containing the specified
information about:
(a) the financial services provided by the body or a member or members of
the body; or
(b) the financial services business carried on by the body or a member or
members of the body; or
(c) the body’s compliance with this Part.
(2) ASIC may, by giving written notice to a member of a declared
professional body, direct the member to give ASIC a written statement containing
the specified information about:
(a) the financial services provided by the member; or
(b) the financial services business carried on by the member.
(3) A notice under subsection (1) or (2) may also include a direction
that the body or member (as appropriate) obtain an audit report, prepared by a
suitably qualified person specified in the notice, on the required statement
before the statement is given to ASIC.
(4) The body or member must comply with a direction given under this
section:
(a) within the time specified in the direction if that is a reasonable
time; or
(b) in any other case—within a reasonable time.
ASIC may extend the time within which the direction must be complied with
by giving written notice to the body or member.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(5) If a statement given to ASIC under this section relates to a
person’s affairs to a material extent, ASIC may, at the person’s
request or of its own motion, give the person a copy of the statement or of part
of the statement.
(6) If a statement, or part of a statement, relates to a serious
contravention of a law of the Commonwealth or of a State or Territory, ASIC may
give a copy of the statement or part to:
(a) the Australian Federal Police; or
(b) the National Crime Authority; or
(c) the Director of Public Prosecutions; or
(d) an agency prescribed by regulations made for the purposes of this
paragraph.
(7) The Minister may cause a statement, or part of a statement, to be
printed and published.
(1) As soon as practicable, and in any case within 3 days, after a
declared professional body becomes aware that it can no longer meet, or has
breached, an obligation under section 919A, the body must give a written
report to ASIC on the matter.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) As soon as practicable, and in any case within 3 days, after a
declared professional body takes any kind of disciplinary action against a
member of the body, the body must give ASIC written notice of this. The notice
must include:
(a) the member’s name; and
(b) the reason for and nature of the action taken.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) As soon as practicable, and in any case within 3 days, after a
declared professional body forms a belief that a member of the body has
committed, is committing, or is about to commit, a breach of the requirements of
this Chapter, the body must give ASIC written notice of this. The notice must
include:
(a) the member’s name; and
(b) details of the breach or impending breach; and
(c) the body’s reasons for that belief.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
A declared professional body and its members must give such assistance to
ASIC, or a person authorised by ASIC, as ASIC or the authorised person
reasonably requests in relation to whether the body and its members are
complying with this Act, and in relation to the performance of ASIC’s
other functions.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
(1) A declared professional body must establish and maintain a register of
its members.
(2) The regulations may prescribe the way in which the register must be
established or maintained, including the details that the body must enter in the
register.
(3) A person may inspect a register established under this section and may
make copies of, or take extracts from, the register.
(4) The regulations may prescribe the fees that a person must pay the body
for doing the things mentioned in subsection (3). The fees must not be such
as to amount to taxation.
(5) Any disclosure necessary for the purposes of this section is
authorised by this section.
(1) ASIC may make a banning order against a person, by giving written
notice to the person, if:
(a) ASIC suspends or cancels an Australian financial services licence held
by the person; or
(b) ASIC has reason to believe that the person has not complied, or will
not comply, with their obligations under section 912A; or
(c) the person is convicted of fraud; or
(d) if the person is a declared professional body—ASIC revokes the
declaration; or
(e) ASIC has reason to believe that the person has contravened a provision
of this Chapter or of Division 2 of Part 2 of the ASIC Act.
(2) However, ASIC may only make a banning order against a person after
giving the person an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that takes
place in private; and
(b) to make submissions to ASIC on the matter.
(3) Subsection (2) does not apply in so far as ASIC’s grounds
for making the banning order are or include the following:
(a) that the suspension or cancellation of the relevant licence took place
under section 915B;
(b) that the person has been convicted of serious fraud.
(1) A banning order is a written order that prohibits a
person from providing any financial services or specified financial services in
specified circumstances or capacities.
(2) The order may prohibit the person against whom it is made from
providing a financial service:
(a) permanently; or
(b) for a specified period, unless ASIC has reason to believe that the
person is not of good fame or character.
(3) A banning order may include a provision allowing the person against
whom it was made, subject to any specified conditions:
(a) to do specified acts; or
(b) to do specified acts in specified circumstances;
that the order would otherwise prohibit them from doing.
(1) A person against whom a banning order is made cannot be granted an
Australian financial services licence contrary to the banning order.
(2) A person contravenes this subsection if:
(a) the person engages in conduct; and
(b) the conduct breaches a banning order that has been made against the
person.
Note: A contravention of this subsection is an offence (see
subsection 1311(1)).
(1) ASIC may vary or cancel a banning order, by giving written notice to
the person against whom the order was made, if ASIC is satisfied that it is
appropriate to do so because of a change in any of the circumstances based on
which ASIC made the order.
(2) ASIC may do so:
(a) on its own initiative; or
(b) if the person against whom the order was made lodges with ASIC an
application for ASIC to do so, which is accompanied by the documents, if any,
required by regulations made for the purposes of this paragraph.
Note: For fees in respect of lodging applications, see
Part 9.10.
(3) If ASIC proposes not to vary or cancel a banning order in accordance
with an application lodged by a person under paragraph (2)(b), ASIC must
give the person an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that takes
place in private; and
(b) to make submissions to ASIC on the matter.
(1) A banning order, or variation or cancellation of a banning order,
takes effect when it is given to the person against whom the order is or was
made.
(2) ASIC must publish a notice in the Gazette as soon as
practicable after making, varying or cancelling a banning order. The notice must
state when the action took effect and:
(a) in the case of the making of a banning order—set out a copy of
the banning order; or
(b) in the case of the variation of a banning order—set out a copy
of the banning order as varied.
(3) However, if the banning order contains a provision of the kind
referred to in subsection 920B(3) and ASIC considers that the Gazette
notice would be unreasonably long if that provision were included, the notice
may instead set out a summary of the provision’s effect.
(4) If ASIC makes a banning order against a person who is a participant in
a licensed market or a licensed CS facility, or varies a banning order against
such a person, ASIC must give the operator of the market or facility written
notice of the making of the order or the variation.
(1) A banning order given to a person must be accompanied by a statement
of reasons for the order.
(2) If ASIC varies a banning order made against a person, ASIC must, on
request by the person, give the person a statement of reasons for the
variation.
(1) ASIC may apply to the Court for an order or orders under this section
in relation to a person if ASIC:
(a) cancels an Australian financial services licence held by the person;
or
(b) makes a banning order against the person that is to operate
permanently.
(2) The Court may make:
(a) an order disqualifying the person, permanently or for a specified
period, from providing any financial services, or specified financial services,
in specified circumstances or capacities; or
(b) any other order the Court considers appropriate.
(3) The Court may revoke or vary an order made under
subsection (2).
(4) A person against whom such an order is made cannot be granted an
Australian financial services licence contrary to the order.
(5) If the Court makes or varies an order under this section in relation
to a person who is a participant in a licensed market or a licensed CS facility,
ASIC must give the operator of the market or facility written notice of the
making of the order or the variation.
(1) ASIC must establish and maintain one or more registers relating to
financial services.
(2) The regulations may prescribe the way in which the register or
registers must be established or maintained, including the details that ASIC
must enter in the register or registers in respect of the following persons or
bodies:
(a) financial services licensees;
(b) authorised representatives of financial services licensees;
(c) persons against whom a banning order or disqualification order under
Division 8 is made;
(d) declared professional bodies;
(e) any other persons or bodies that are prescribed by regulations made
for the purposes of this paragraph.
(1) A person may inspect the register or registers relating to financial
services established under this Division and may make copies of, or take
extracts from, the register or registers.
(2) The regulations may prescribe the fees that a person must pay ASIC to
do the things mentioned in subsection (1). The fees must not be such as to
amount to taxation.
(3) Any disclosure necessary for the purposes of this section is
authorised by this section.
(1) A person contravenes this subsection if:
(a) either:
(i) the person carries on a financial services business or provides a
financial service (whether or not on behalf of another person); or
(ii) another person (the provider) provides a financial
service on behalf of the first person; and
(b) the first person assumes or uses, in this jurisdiction, a restricted
word or expression in relation to that business or service.
Note 1: For the meanings of restricted word or
expression and assume or use, see
subsection (5).
Note 2: A contravention of this subsection is an offence
(see subsection 1311(1)).
(2) However, it is not a contravention of subsection (1) for a person
to assume or use a restricted word or expression if:
(a) the person does not receive any of the following:
(i) commissions (apart from commissions that are rebated in full to the
person’s clients);
(ii) forms of remuneration calculated on the basis of the volume of
business placed by the person with an issuer of a financial product;
(iii) other gifts or benefits from an issuer of a financial product which
may reasonably be expected to influence the person; and
(b) none of the following persons receives any of the things covered by
paragraph (a):
(i) the person’s employer (if any);
(ii) if the person provides the financial service on behalf of another
person (as mentioned in subparagraph (1)(a)(i))—that other
person;
(ii) any other person identified (whether by reference to a class of
person or otherwise) in regulations made for the purposes of this subparagraph;
and
(c) if subparagraph (1)(a)(ii) applies in relation to a financial
service—the provider mentioned in that subparagraph does not receive any
of the things mentioned in paragraph (a) of this subsection in respect of
the provision of that service; and
(d) in carrying on a financial services business, or providing financial
services, the person operates free from direct or indirect restrictions relating
to the financial products in respect of which they provide financial services;
and
(e) in carrying on that business, or providing those services, the person
operates without any conflicts of interest that might:
(i) arise from their associations or relationships with issuers of
financial products; and
(ii) reasonably be expected to influence the person in carrying on the
business or providing the services.
Note: A defendant bears an evidential burden in relation to
the matters in subsection (2). See subsection 13.3(3) of the Criminal
Code.
(3) The reference in paragraph (2)(d) to direct or indirect
restrictions does not include a reference to restrictions imposed on a person
by:
(a) the conditions on an Australian financial services licence;
or
(b) this Chapter or regulations made for the purposes of this
Chapter.
(4) If a person assumes or uses a word or expression in circumstances that
give rise to the person committing an offence based on subsection (1) of
this section, the person is guilty of such an offence 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).
(5) In this section:
(a) a reference to a restricted word or expression is a reference
to:
(i) the word independent, impartial or
unbiased; or
(ii) any other word or expression specified in the regulations as a
restricted word or expression for the purposes of this section; or
(iii) any other word or expression (whether or not in English) that is of
like import to a word or expression covered by any of the previous
subparagraphs; and
(b) a reference to a word or expression being assumed or used includes a
reference to the word or expression being assumed or used:
(i) as part of another word or expression; or
(ii) in combination with other words, letters or other symbols.
(1) A person contravenes this subsection if:
(a) the person carries on a financial services business or provides a
financial service (whether or not on behalf of another person); and
(b) the person assumes or uses, in this jurisdiction, a restricted word or
expression in relation to that business or service; and
(c) the person is not authorised, by the conditions on an Australian
financial services licence held by the person, to assume or use that word or
expression (see subsection (3)).
Note 1: For the meanings of restricted word or
expression and assume or use, see
subsection (4).
Note 2: A contravention of this subsection is an offence
(see subsection 1311(1)).
(2) If a person assumes or uses a word or expression in circumstances that
give rise to the person committing an offence based on subsection (1), the
person is guilty of such an offence 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).
(3) ASIC can only impose a condition on an Australian financial services
licence authorising a person to assume or use a restricted word or expression in
these circumstances:
(a) in the case of a word or expression covered by
subparagraph (4)(a)(i)—if the person:
(i) can, under the licence, provide a financial service relating to
securities (whether or not the person can provide other financial services under
the licence as well); and
(ii) is a participant in a licensed market whose licence covers dealings
in securities;
(b) in the case of a word or expression covered by
subparagraph (4)(a)(ii)—if the person:
(i) can, under the licence, provide a financial service relating to
derivatives (whether or not the person can provide other financial services
under the licence as well); and
(ii) is a participant in a licensed market whose licence covers dealings
in derivatives;
(c) in the case of a word or expression covered by
subparagraph (4)(a)(iii)—if the person:
(i) can, under the licence, provide a financial service relating to
contracts of insurance (whether or not the person can provide other financial
services under the licence as well); and
(ii) in providing that service, acts on behalf of intending
insureds;
(d) in the case of a word or expression covered by
subparagraph (4)(a)(iv)—if the person:
(i) can, under the licence, provide a financial service relating to
contracts of general insurance (whether or not the person can provide other
financial services under the licence as well); and
(ii) in providing that service, acts on behalf of intending
insureds;
(e) in the case of a word or expression covered by
subparagraph (4)(a)(v)—if the person:
(i) can, under the licence, provide a financial service relating to
contracts of life insurance (whether or not the person can provide other
financial services under the licence as well); and
(ii) in providing that service, acts on behalf of intending
insureds;
(f) in the case of a word or expression covered by
subparagraph (4)(a)(vi)—in the circumstances (if any) that are
prescribed by regulations made for the purposes of this paragraph, or after ASIC
has considered the matters (if any) that are so prescribed.
(4) In this section:
(a) a reference to a restricted word or expression is a reference
to:
(i) the expression stockbroker or sharebroker,
or any other word or expression (whether or not in English) that is of like
import to that expression; or
(ii) the expression futures broker, or any other word or
expression (whether or not in English) that is of like import to that
expression; or
(iii) the expression insurance broker or insurance
broking, or any other word or expression (whether or not in English)
that is of like import to that expression; or
(iv) the expression general insurance broker, or any other
word or expression (whether or not in English) that is of like import to that
expression; or
(v) the expression life insurance broker, or any other word
or expression (whether or not in English) that is of like import to that
expression; or
(vi) any other expression or word specified in the regulations as a
restricted word or expression for the purposes of this section, or any other
word or expression (whether or not in English) that is of like import to such a
word or expression; and
(b) a reference to a word or expression being assumed or used includes a
reference to the word or expression being assumed or used:
(i) as part of another word or expression; or
(ii) in combination with other words, letters or other symbols;
and
(c) contract of insurance and insured have the
same meanings as in Division 4 of Part 7.8.
(1) Subdivision B applies to an agreement entered into by a person (in
this section and Subdivision B called the non-licensee) and
another person (in this section and Subdivision B called the
client) (not being a financial services licensee) that
constitutes, or relates to, the provision of a financial service by the
non-licensee if:
(a) the agreement is entered into in the course of a financial services
business carried on by the non-licensee; and
(b) the non-licensee does not hold an Australian financial services
licence covering the provision of the financial service, and is not exempt from
the requirement to hold such a licence.
Note: It does not matter whether the financial service is
provided to the client as a wholesale client or as a retail
client.
(2) Subdivision B applies to the agreement whether or not anyone else is a
party to the agreement.
(1) Subject to this section, the client may, whether before or after
completion of the agreement, give to the non-licensee a written notice stating
that the client wishes to rescind the agreement.
(2) The client may only give a notice under this section within a
reasonable period after becoming aware of the facts entitling the client to give
the notice.
(3) The client is not entitled to give a notice under this section if the
client engages in conduct by engaging in which the client would, if the
entitlement so to give a notice were a right to rescind the agreement for
misrepresentation by the non-licensee, be taken to have affirmed the
agreement.
(4) The client is not entitled to give a notice under this section if,
within a reasonable period before the agreement was entered into, the
non-licensee informed the client (whether or not in writing) that the
non-licensee did not hold an Australian financial services licence.
(5) If, at a time when an Australian financial services licence held by
the non-licensee was suspended, the non-licensee informed the client that the
licence was suspended, the non-licensee is to be taken for the purposes of
subsection (4) to have informed the client at that time that the
non-licensee did not hold the licence.
(6) None of subsections (2), (3) and (4) limits the generality of
either of the others.
(7) Subject to this section, the client may give a notice under this
section whether or not:
(a) the notice will result under section 925B in rescission of the
agreement; or
(b) the Court will, if the notice so results, be empowered to make a
particular order, or any order at all, under section 925D.
A notice given under section 925A rescinds the agreement unless
rescission of the agreement would prejudice a right, or an estate in property,
acquired by a person (other than the non-licensee) in good faith, for valuable
consideration and without notice of the facts entitling the client to give the
notice.
(1) If the client gives a notice under section 925A but the notice
does not rescind the agreement because rescission of it would prejudice a right
or estate of the kind referred to in section 925B, the client may, within a
reasonable period after giving the notice, apply to the Court for an order under
subsection (4) of this section.
(2) The Court may extend the period for making an application under
subsection (1).
(3) If an application is made under subsection (1), the Court may
make such orders expressed to have effect until the determination of the
application as it would have power to make if the notice had rescinded the
agreement under section 925B and the application were for orders under
section 925D.
(4) On an application under subsection (1), the Court may make an
order:
(a) varying the agreement in such a way as to put the client in the same
position, as nearly as can be done without prejudicing such a right or estate
acquired before the order is made, as if the agreement had not been entered
into; and
(b) declaring the agreement to have had effect as so varied at and after
the time when it was originally made.
(5) If the Court makes an order under subsection (4), the agreement
is to be taken for the purposes of section 925D to have been rescinded
under section 925B.
(6) An order under subsection (4) does not affect the application of
section 925F or 925H in relation to the agreement as originally made or as
varied by the order.
(1) Subject to subsection (2), on rescission of the agreement under
section 925B, the Court, on the application of the client or the
non-licensee, may make such order or orders as it would have power to make if
the client had duly rescinded the agreement because of misrepresentation by the
non-licensee.
(2) The Court is not empowered to make a particular order under
subsection (1) if the order would prejudice a right, or an estate in
property, acquired by a person (other than the non-licensee) in good faith, for
valuable consideration and without notice of the facts entitling the client to
give the notice.
(1) This section:
(a) applies while both of the following are the case:
(i) the client is entitled to give a notice under
section 925A;
(ii) a notice so given will result under section 925B in rescission
of the agreement; and
(b) applies after the agreement is rescinded under
section 925B;
but does not otherwise apply.
(2) The non-licensee is not entitled, as against the client:
(a) to enforce the agreement, whether directly or indirectly; or
(b) to rely on the agreement, whether directly or indirectly and whether
by way of defence or otherwise.
(1) Without limiting the generality of section 925E, this
section:
(a) applies while the client is entitled to give a notice under
section 925A; and
(b) applies after the client so gives a notice, even if the notice does
not result under section 925B in rescission of the agreement;
but does not otherwise apply.
(2) The non-licensee is not entitled to recover by any means (including,
for example, set-off or a claim on a quantum meruit) any brokerage,
commission or other fee for which the client would, but for this section, have
been liable to the non-licensee under or in connection with the
agreement.
For the purposes of determining, in a proceeding in a court, whether or
not the non-licensee is, or was at a particular time, entitled as mentioned in
subsection 925E(2) or 925F(2), it is to be presumed, unless the contrary is
proved, that section 925E or 925F, as the case may be, applies, or applied
at that time, as the case may be.
(1) Without limiting the generality of section 925D, if the client
gives a notice under section 925A, the client may, even if the notice does
not result under section 925B in rescission of the agreement, recover from
the non-licensee as a debt the amount of any brokerage, commission or other fee
that the client has paid to the non-licensee under or in connection with the
agreement.
(2) ASIC may, if it considers that it is in the public interest to do so,
bring an action under subsection (1) in the name of, and for the benefit
of, the client.
The client’s rights and remedies under this Division are additional
to, and do not prejudice, any other right or remedy of the client.
If a financial services licensee is, in providing a financial service,
acting as the authorised representative of another financial services licensee
(see section 916E), this Part applies to the first-mentioned licensee, in
relation to the service, in the capacity of authorised representative (rather
than the capacity of licensee).
(1) If:
(a) apart from this section, a person (the providing entity)
would be required by a provision of this Part to give another person (the
client) a particular document (for example, a Financial Services
Guide or a Statement of Advice), or particular information or a particular
statement; and
(b) the providing entity has not had a reasonable opportunity to give (in
accordance with section 940C) the client the document, information or
statement by the time they are required by this Part to give it to the client;
and
the fact that the providing entity has not given the document, information
or statement to the client as required by the provision is not a contravention
of the provision.
Note: In a prosecution for an offence, a defendant bears an
evidential burden in relation to the matters in this section (see subsection
13.3(3) of the Criminal Code).
(2) For the purposes of subsection (1), the providing entity is not
taken not to have had a reasonable opportunity to provide the document,
information or statement if:
(a) section 940C (or regulations made for the purposes of that
section) permit the document, information or statement to be sent to an address
(including an electronic address) or fax number nominated by the client;
and
(b) the client has not given the providing entity an address (including an
electronic address) or fax number to which the document, information or
statement can be sent; but
(c) the providing entity has had a reasonable opportunity to make, but has
not made, reasonable enquiries of the client to obtain such an address or fax
number.
(1) For the purposes of this Part (unless a contrary intention appears), a
Financial Services Guide, a Supplementary Financial Services Guide or a
Statement of Advice, or information or a statement that section 950D or
950E requires to be given, is given by a person (the providing
entity) to another person (the client) if (and only
if):
(a) it is:
(i) given to the client, or to the client’s agent, personally;
or
(ii) sent to the client, or the client’s agent, at an address
(including an electronic address) or fax number nominated by the client or the
client’s agent; or
(iii) otherwise made available to the client, or the client’s agent,
as agreed between the client, or the client’s agent, and the providing
entity; and
(b) it is in printed or electronic form.
(2) For the purposes of this Part (unless a contrary intention appears),
information that subsection 941C(7) or 946B(6) requires to be given by a
person (the providing entity) to another person (the
client) is given by the providing entity to the client if (and
only if):
(a) it is given to the client, or the client’s agent, orally;
or
(b) it is in printed or electronic form and is:
(i) given to the client, or the client’s agent, personally;
or
(ii) sent to the client, or the client’s agent, at an address
(including an electronic address) or fax number nominated by the client or the
client’s agent; or
(iii) otherwise made available to the client, or the client’s agent,
as agreed between the client or the client’s agent and the providing
entity; or
(c) it is given by some other method permitted by regulations made for the
purposes of this paragraph.
(3) For the purposes of this Part (unless a contrary intention appears),
information that subsection 941C(5) or 946B(3) requires to be given by a person
(the providing entity) to another person (the
client) is given by the providing entity to the client if (and
only if) it is given to the client, or the client’s agent, in accordance
with the applicable requirements of regulations made for the purposes of this
subsection.
(4) For the purposes of this Part (unless a contrary intention appears), a
statement that subsection 941D(2) or 946C(2) requires to be given by a person
(the providing entity) to another person (the
client) is given by the providing entity to the client if (and
only if) it is given orally to the client or the client’s agent.
(5) For the purposes of this section, a document, information or statement
to which this section applies is sent to a person at an address if, and only
if:
(a) the document, information or statement is sent to the address;
and
(b) either:
(i) the envelope or other container in which it is sent; or
(ii) the message that accompanies it;
is addressed to the person.
(6) A document, information or statement to which this section applies may
be given or sent to a person’s agent only if the agent is not acting as
the person’s agent in one of the following capacities:
(a) a financial services licensee;
(b) an authorised representative of a financial services
licensee;
(c) a person who is a member of a declared professional body;
(d) a person who is not required to hold an Australian financial services
licence because the person is covered by:
(i) paragraph 911(2)(j); or
(ii) an exemption in regulations made for the purposes of paragraph
911A(2)(k); or
(iii) an exemption specified by ASIC for the purposes of paragraph
911A(2)(l);
(e) a person who is required to hold an Australian financial services
licence but who does not hold such a licence;
(f) an employee, director or other representative of a person referred to
in paragraph (a), (b), (c), (d) or (e).
(7) The regulations may specify requirements as to:
(a) the manner in which a document, information or statement may be given
to a person; and
(b) the presentation, structure and format for a document, information or
statement that is to be given in electronic form.
The giving of the document, information or statement is not effective
unless those requirements are satisfied.
Subdivision A of Division 7 contains provisions creating offences by
reference to various rules contained in Divisions of this Part. However, it does
not create all the offences relating to those rules, as some offences are
created by subsection 1311(1). Where offences are created by subsection 1311(1)
in relation to a rule, this is indicated by a note at the end of the provision
containing the rule.
(1) A financial services licensee (the providing entity)
must give a person a Financial Services Guide in accordance with this Division
if the providing entity provides a financial service to the person (the
client) as a retail client.
(2) This section has effect subject to section 941C.
(1) An authorised representative (the providing entity) of a
financial services licensee (the authorising licensee), or of 2 or
more financial services licensees (the authorising licensees),
must give a person a Financial Services Guide in accordance with this Division
if the providing entity, as a representative of the authorising licensee, or one
or more of the authorising licensees, provides a financial service to the person
(the client) as a retail client.
Note: If the providing entity is the authorised
representative of 2 or more financial services licensees, each of those
licensees is, for the purposes of this Division, an authorising licensee in
relation to the financial service provided to the client, even though the
providing entity may not have been acting as representative of each of those
licensees in providing the service to the client.
(2) A Financial Services Guide must not be given to the person by the
providing entity unless the authorising licensee, or each of the authorising
licensees, has authorised its distribution by the providing entity.
(3) This section has effect subject to section 941C.
Client has already received the information
(1) The providing entity does not have to give the client a Financial
Services Guide (the new FSG) if the client has already received a
Financial Services Guide that contains all of the information that the new FSG
is required to contain.
Providing entity is product issuer dealing in own products
(2) The providing entity does not have to give the client a Financial
Services Guide if:
(a) the providing entity is an issuer of financial products; and
(b) the financial service is a dealing (see section 766C) in
financial products, other than derivatives able to be traded on a licensed
market, issued by the providing entity, and does not also relate to financial
products issued by someone else.
Note: The issuer will however have to comply with the
Product Disclosure Statement requirements (see Division 2 of
Part 7.9).
Providing entity is merely operating a registered scheme
(3) The providing entity does not have to give the client a Financial
Services Guide if:
(a) the providing entity is the responsible entity of a registered scheme;
and
(b) the financial service consists only of the operation of that scheme by
the providing entity.
Financial product advice given in a public forum
(4) The providing entity does not have to give the client a Financial
Services Guide if the financial service is general advice provided in a public
forum.
(5) However, if subsection (4) applies and the client is not given a
Financial Services Guide before the advice is provided, the client must instead,
before the advice is provided, be given the information that would be required
to be in the Financial Services Guide by paragraphs 942B(2)(a), (e) and (f), or
paragraphs 942C(2)(a), (c), (f) and (g), as the case requires.
Certain basic deposit and other products
(6) The providing entity does not have to give the client a Financial
Services Guide if the financial service is a dealing (see section 766C) in,
or otherwise relates to, any of the following:
(a) a basic deposit product;
(b) a facility for making non-cash payments (see section 763D) that
is related to a basic deposit product;
(c) a financial product of a kind prescribed by regulations made for the
purposes of this paragraph.
(7) However, if subsection (6) applies and the client is not given a
Financial Services Guide before the service is provided, the client must
instead, before the service is provided, be given the information that would be
required to be in the Financial Services Guide by paragraphs 942B(2)(a) and (h),
or paragraphs 942C(2)(a) and (i), as the case requires.
Regulations may specify other exemptions
(8) A Financial Services Guide does not have to be given to the client in
circumstances specified in regulations made for the purposes of this
subsection.
General rule
(1) Subject to this section, the Financial Services Guide must be given to
the client as soon as practicable after it becomes apparent to the providing
entity that the financial service will be, or is likely to be, provided to the
client, and must in any event be given to the client before the financial
service is provided.
Time critical cases
(2) If:
(a) the client expressly instructs that they require the financial service
to be provided immediately, or by a specified time; and
(b) it is not reasonably practicable to give the Financial Services Guide
to the client before the service is provided as so instructed;
the providing entity must instead give the client a statement that complies
with subsection (3) before the service is provided.
(3) The statement must contain:
(a) the information that would be required to be in the Financial Services
Guide by paragraphs 942B(2)(e), (f) and (i), or paragraphs 942C(2)(f), (g) and
(j), as the case requires; and
(b) such other information as would be required to be in the Financial
Services Guide as is particularly relevant to the financial service to be
provided.
(4) The client must then be given the Financial Services Guide within 5
days after being given the statement, or sooner if practicable.
The information in the Financial Services Guide must be up to date as at
the time when it is given to the client.
Note: A Supplementary Financial Services Guide containing
updated information may be given with a Financial Services Guide that has become
out of date. The updated information is taken to be included in the Financial
Services Guide (see section 943D.)
If:
(a) the Financial Services Guide is given to the client before the
financial service is provided; and
(b) there is a change in circumstances before the service is provided, and
the Financial Services Guide does not contain the information it would be
required to contain if it were given to a person immediately after that
change;
the providing entity must, before the service is provided, give the
client:
(c) another Financial Services Guide that contains the up to date
information before the service is provided; or
(d) a Supplementary Financial Services Guide (see Subdivision C) that
updates the information in the Financial Services Guide.
(1) The title “Financial Services Guide” must be used on the
cover of, or at or near the front of, a Financial Services Guide.
(2) In any other part of a Financial Services Guide, “Financial
Services Guide” may be abbreviated to “FSG”.
(1) This section applies if the providing entity is a financial services
licensee.
(2) Subject to subsection (3) and to the regulations (see
subsection (4)), the Financial Services Guide must include the following
statements and information:
(a) a statement setting out the name and contact details of the providing
entity; and
(b) a statement setting out any special instructions about how the client
may provide instructions to the providing entity; and
(c) information about the kinds of financial services (the
authorised services) that the providing entity is authorised by
its licence to provide, and the kinds of financial products to which those
services relate; and
(d) information about who the providing entity acts for when providing the
authorised services; and
(e) information about the remuneration (including commission) or other
benefits that any of the following is to receive in respect of, or that is
attributable to, the provision of any of the authorised services:
(i) the providing entity;
(ii) a related body corporate of the providing entity;
(iii) a director or employee of the providing entity or a related body
corporate;
(iv) an associate of any of the above;
(v) any other person in relation to whom the regulations require the
information to be provided;
(f) information about any associations or relationships between the
providing entity, or any related body corporate, and the issuers of any
financial products, being associations or relationships that might reasonably be
expected to be capable of influencing the providing entity in providing any of
the authorised services; and
(g) if the providing entity provides execution-related telephone advice
(see subsections 946B(1) to (4)) and does not usually provide clients with a
record of that advice unless requested—a statement:
(i) to the effect that the client may request a record of such advice;
and
(ii) setting out particulars of how and when the client may make such a
request (these particulars must be such as will allow the client a reasonable
opportunity to request a record of the advice); and
(h) information about the internal and external dispute resolution
procedures that are available to deal with complaints by persons to whom the
providing entity provides financial services, and about how those procedures may
be accessed; and
(i) if the providing entity acts under a binder in providing any of the
authorised services—a statement that:
(i) identifies the services provided under the binder; and
(ii) states that they are provided under a binder; and
(iii) explains the significance of the services being provided under a
binder; and
(j) if the providing entity is a participant in a licensed market or a
licensed CS facility—a statement that the providing entity is a
participant in that market or facility; and
(k) any other statements or information required by the
regulations.
Note: A Supplementary Financial Services Guide containing
additional information may be given with a Financial Services Guide that does
not contain all the required information. The additional information is taken to
be included in the Financial Services Guide (see
section 943D.)
(3) Subject to subsection (4), the level of information about a
matter that is required is such as a person would reasonably require for the
purpose of making a decision whether to acquire financial services from the
providing entity as a retail client.
(4) The regulations may provide all or any of the following:
(a) that a provision of subsection (2) does not apply in a particular
situation;
(b) that particular information is not required by a provision of
subsection (2), either in a particular situation or generally;
(c) a more detailed statement of the information that is required by a
provision of subsection (2), either in a particular situation or
generally;
(d) that certain supplementary information must be given or made available
to the client in some other way.
(5) The Financial Services Guide must be dated. The date must be the date
on which the Financial Services Guide was prepared or its preparation was
completed.
(6) The Financial Services Guide may also contain other
information.
(7) The regulations may require the providing entity, in circumstances
specified in the regulations, to provide the client, on request, with more
detailed information about remuneration (including commission) or other benefits
of a kind referred to in paragraph (2)(e).
(1) This section applies if the providing entity is an authorised
representative.
(2) Subject to subsection (3) and to the regulations (see
subsection (4)), the Financial Services Guide must include the following
statements and information:
(a) a statement setting out the name and contact details of the providing
entity; and
(b) a statement setting out any special instructions about how the client
may provide instructions to the providing entity; and
(c) a statement:
(i) setting out the name and contact details of the authorising licensee,
or of each of the authorising licensees; and
(ii) stating that the providing entity is the authorised representative of
that licensee or those licensees; and
(d) information, in relation to the authorising licensee or each of the
authorising licensees, about the kinds of financial services (the
authorised services) that the providing entity provides as
representative of the authorising licensee, and the kinds of financial products
to which those services relate; and
(e) information about who the authorising licensee, or each of the
authorising licensees, acts for when financial services are provided on their
behalf by the providing entity; and
(f) information about the remuneration (including commission) or other
benefits that any of the following is to receive in respect of, or that is
attributable to, the provision of any of the authorised services:
(i) the providing entity;
(ii) an employer of the providing entity;
(iii) the authorising licensee, or any of the authorising
licensees;
(iv) an employee or director of the authorising licensee, or of any of the
authorising licensees;
(v) an associate of any of the above;
(vi) any other person in relation to whom the regulations require the
information to be provided; and
(g) information about any associations or relationships between:
(i) the providing entity, or any employer of the providing entity, and the
issuers of any financial products; or
(ii) the authorising licensee, or any of the authorising licensees, or any
related body corporate of the authorising licensee or any of the authorising
licensees, and the issuers of any financial products;
being associations or relationships that might reasonably be expected to
be capable of influencing the providing entity in providing any of the
authorised services; and
(h) if the providing entity, when acting as representative of the
authorising licensee or any of the authorising licensees, provides
execution-related telephone advice (see subsections 946B(1) to (4)) and does not
usually provide clients with a record of that advice unless requested—a
statement:
(i) to the effect that the client may request a record of such advice;
and
(ii) setting out particulars of how and when the client may make such a
request (these particulars must be such as will allow the client a reasonable
opportunity to request a record of the advice); and
(i) information about the internal and external dispute resolution
procedures that are available to deal with complaints by persons to whom the
providing entity provides financial services when acting as representative of
the authorising licensee or any of the authorising licensees, and about how
those procedures may be accessed; and
(j) if the providing entity acts under a binder in providing any of the
authorised services—a statement that:
(i) identifies the services provided under the binder; and
(ii) states that they are provided under a binder; and
(iii) explains the significance of the services being provided under a
binder; and
(k) if the providing entity, or the authorising licensee or any of the
authorising licensees, is a participant in a licensed market or a licensed CS
facility—a statement that the providing entity or authorising licensee is
a participant in that market or facility; and
(l) a statement to the effect that the distribution of the Financial
Services Guide by the providing entity has been authorised by the authorising
licensee, or by each of the authorising licensees; and
(m) any other statements or information required by the
regulations.
Note: A Supplementary Financial Services Guide containing
additional information may be given with a Financial Services Guide that does
not contain all the required information. The additional information is taken to
be included in the Financial Services Guide (see
section 943D.)
(3) Subject to subsection (4), the level of detail of information
about a matter that is required is such as a person would reasonably require for
the purpose of making a decision whether to acquire financial services from the
providing entity as a retail client.
(4) The regulations may provide all or any of the following:
(a) that a provision of subsection (2) does not apply in a particular
situation;
(b) that particular information is not required by a provision of
subsection (2), either in a particular situation or generally;
(c) a more detailed statement of the information that is required by a
provision of subsection (2), either in a particular situation or
generally;
(d) that certain supplementary information must be given or made available
to the client in some other way.
(5) The Financial Services Guide must be dated. The date must be the date
on which the Financial Services Guide was prepared or its preparation was
completed.
(6) The Financial Services Guide may also contain other
information.
(7) The regulations may require the providing entity, in circumstances
specified in the regulations, to provide the client, on request, with more
detailed information about remuneration (including commission) or other benefits
of a kind referred to in paragraph (2)(f).
(1) Subject to this section, a Financial Services Guide may be made up of
2 or more separate documents that are given at the same time.
(2) Each of the documents must have on the cover of the document, or at or
near the front of the document, a statement:
(a) to the effect that the document is part of a Financial Services Guide;
and
(b) that (subject to subsection (3)) identifies the other documents
that make up the Financial Services Guide.
(3) If there are or may be different versions of a document referred to in
paragraph (2)(b), the statement required by subsection (2) does not
have to identify any particular one of those versions and may instead identify
the document generically.
Note: For example, if a Financial Services Guide is made up
of a core document that is not updated very frequently, and a separate document
providing information about remuneration that is updated more
frequently:
(a) the statement in the core document need only refer to
the fact that it, and a separate document about remuneration, make up the
Financial Services Guide; and
(b) the statement in the document about remuneration need
only refer to the fact that it, and a separate document about all other required
matters, make up the Financial Services Guide.
(4) The requirement of section 942A (title of Financial Services
Guide) is taken to be satisfied if the title “Financial Services
Guide” is used on the cover of, or at or near the front of, at least one
of the documents that make up the Financial Services Guide.
(5) The requirement of subsection 942B(5) or 942C(5) (dating of Financial
Services Guide) must be separately complied with in relation to each of the
documents. If, for any purpose, a single date needs to be determined as the date
of the Financial Services Guide as a whole, that date is the most recent of the
dates of those documents.
(6) Section 942E applies to an alteration to one of the documents as
though the reference in that section to the date specified in the Financial
Services Guide were a reference to the date specified in the document.
(7) The regulations may impose additional requirements to be complied with
if a Financial Services Guide is made up of 2 or more documents.
A financial services licensee, or an authorised representative of a
financial services licensee, must not, in purported compliance with a provision
of this Part, give a person a Financial Services Guide (the FSG)
that has been altered (otherwise than pursuant to paragraph (b)) after the
date specified in the FSG as required by subsection 942B(5) or 942C(5)
unless:
(a) the alteration was made by, or with the authority of:
(i) if section 942B applies to the FSG—the financial services
licensee to which the FSG relates; or
(ii) if section 942C applies to the FSG—the financial services
licensee, or each of the financial services licensees, who authorised the
distribution of the FSG; and
(b) if the alteration is a material alteration—the date of the FSG
has been changed to the date on which the alteration was made.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
(1) A Supplementary Financial Services Guide is a document
by which a person who has prepared a Financial Services Guide (the
FSG) can:
(a) correct a misleading or deceptive statement in the FSG; or
(b) correct an omission from the FSG of information it is required to
contain; or
(c) update the information contained in the FSG.
(2) A Supplementary Financial Services Guide must not be given to a person
by an authorised representative of a financial services licensee unless the
licensee has authorised its distribution by the authorised
representative.
(1) The title “Supplementary Financial Services Guide” must be
used on the cover of, or at or near the front of, a Supplementary Financial
Services Guide.
(2) In any other part of a Supplementary Financial Services Guide,
“Supplementary Financial Services Guide” may be abbreviated to
“SFSG”.
(1) At the beginning of a Supplementary Financial Services Guide there
must be:
(a) a statement that it is a Supplementary Financial Services Guide;
and
(b) an identification of the Financial Services Guide that it supplements;
and
(c) a statement that it is to be read together with that Financial
Services Guide and any other specified Supplementary Financial Services
Guides.
(2) The Supplementary Financial Services Guide must be dated. The date
must be the date on which the Supplementary Financial Services Guide was
prepared or its preparation was completed.
(3) If the Supplementary Financial Services Guide will or may be
distributed by an authorised representative of a financial services licensee, it
must contain a statement to the effect that its distribution by the authorised
representative has been authorised by the licensee.
If:
(a) a person is given a Financial Services Guide (the FSG);
and
(b) at the same time, or later, they are given a Supplementary Financial
Services Guide (the SFSG) that supplements the FSG;
the FSG is taken, from when the SFSG is given to the person, to include the
information and statements contained in the SFSG.
If:
(a) apart from this section, a person (the providing entity)
would be required to give another person (the client) a Financial
Services Guide (the new FSG); and
(b) the client has, because of some previous conduct, already been given a
Financial Services Guide (the earlier FSG) containing some, but
not all, of the information that the new FSG is required to contain;
the provider may, instead of giving the client the new FSG, give the client
a Supplementary Financial Services Guide that contains the additional
information.
A financial services licensee, or an authorised representative of a
financial services licensee, must not, in purported compliance with a provision
of this Part, give a person a Supplementary Financial Services Guide (the
SFSG) that has been altered (otherwise than pursuant to
paragraph (b)) after the date specified in the SFSG as required by
subsection 943C(2) unless:
(a) the alteration was made by, or with the authority of:
(i) if section 942B applies to the Financial Services Guide that the
SFSG supplements—the financial services licensee to which the Guide
relates; or
(ii) if section 942C applies to the Financial Services Guide that the
SFSG supplements—the financial services licensee, or each of the financial
services licensees, who authorised the distribution of the SFSG; and
(b) if the alteration is a material alteration—the date of the SFSG
has been changed to the date on which the alteration was made.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
This Division applies in relation to the provision of personal advice
(the advice) in the following circumstances:
(a) the advice is provided:
(i) by a financial services licensee (the providing entity);
or
(ii) by a person (the providing entity) in their capacity as
authorised representative of a financial services licensee (the
authorising licensee), or of 2 or more financial services
licensees (the authorising licensees); and
(b) the advice is provided to a person (the client) as a
retail client.
(1) The providing entity must only provide the advice to the client
if:
(a) having regard to the client’s objectives, financial situation
and needs (so far as they are known to the providing entity after making
reasonable inquiries of the client), the providing entity has given such
consideration to, and conducted such investigation of, the subject matter of the
advice as is reasonable in all the circumstances; and
(b) the advice is appropriate, having regard to that consideration and
investigation.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) In any proceedings against an authorised representative of a financial
services licensee for an offence based on subsection (1), it is a defence
if:
(a) the licensee had provided the authorised representative with
information or instructions about the requirements to be complied with in
relation to the giving of personal advice; and
(b) the representative’s failure to comply with subsection (1)
occurred because the representative was acting in reliance on that information
or those instructions; and
(c) the representative’s reliance on that information or those
instructions was reasonable.
Note: A defendant bears an evidential burden in relation to
the matters in subsection (2). See subsection 13.3(3) of the Criminal
Code.
(3) A financial services licensee must take reasonable steps to ensure
that an authorised representative of the licensee complies with
subsection (1).
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) If:
(a) the advice is based on information relating to the client that is
incomplete or inaccurate; and
(b) the providing entity knows that the information is incomplete or
inaccurate, or is reckless as to whether it is incomplete or
inaccurate;
the providing entity must, in accordance with subsections (2) and (3),
warn the client that:
(c) the advice is, or may be, based on incomplete or inaccurate
information relating to the client’s objectives, financial situation and
needs; and
(d) because of that, the client should, before acting on the advice,
consider the appropriateness of the advice, having regard to the client’s
objectives, financial situation and needs.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The warning must be given to the client at the same time as the advice
is provided and, subject to subsection (3), by the same means as the advice
is provided.
(3) If the Statement of Advice (see Subdivision C) is the means by which
the advice is provided, or is given to the client at the same time as the advice
is provided, the warning may be given by including it in the Statement of
Advice.
Note: The Statement of Advice must at least contain a record
of the warning—see paragraphs 947B(2)(f) and 947C(2)(g).
(1) The providing entity must give the client a Statement of Advice in
accordance with this Subdivision and Subdivision D.
(2) The Statement of Advice may be:
(a) the means by which the advice is provided; or
(b) a separate record of the advice.
(3) This section has effect subject to section 946B.
Execution-related telephone advice
(1) Subsections (2) to (4) apply to advice (execution-related
telephone advice) in relation to which the following conditions are
satisfied:
(a) the execution-related telephone advice is given by telephone;
and
(b) the execution-related telephone advice:
(i) relates to financial products that are able to be traded on a licensed
market; and
(ii) is given by the providing entity as an integral part of the execution
of a transfer of, or order for, those financial products; and
(c) the execution-related telephone advice does not also contain any other
kind of financial product advice.
(2) The providing entity does not have to give the client a Statement of
Advice if, before the execution-related telephone advice is provided:
(a) the client agrees to a Statement of Advice not being given in respect
of the advice, or advice of that kind; and
(b) unless subsection 941D(2) applies, the providing entity gives the
client a Financial Services Guide that contains a statement:
(i) to the effect that the client may request a record of such advice;
and
(ii) setting out particulars of how and when the client may make such a
request (these particulars must be such as will allow the client a reasonable
opportunity to request a record of the advice); and
(c) the providing entity keeps a record of the advice in accordance with
the requirements (if any) of the regulations.
(3) However, at the same time as the advice is provided to the client, the
client must be given the information that would, if a Statement of Advice were
to be given, be required to be in the Statement by paragraphs 947B(2)(d) and
(e), or 947C(2)(e) and (f), as the case requires.
(4) The providing entity must comply with any request made by a person in
accordance with a statement of a kind referred to in paragraph (2)(b) that
was contained in a Financial Services Guide given to the person (including in a
situation where the Financial Services Guide was not given to the person until
after the advice was provided).
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Certain basic deposit and other products
(5) The providing entity does not have to give the client a Statement of
Advice if the advice relates to any or all of the following:
(a) a basic deposit product;
(c) a facility for making non-cash payments (see section 763D) that
is related to a basic deposit product;
(c) a financial product of a kind prescribed by regulations made for the
purposes of this paragraph.
(6) However, if subsection (5) applies and the client is not given a
Statement of Advice, the client must instead, when, or as soon as practicable
after, the advice is provided, be given the information that would be
required to be in the Statement of Advice by paragraphs 947B(2)(d) and (e), or
947C(2)(e) and (f), as the case requires.
General rule
(1) Subject to this section, if the Statement of Advice is not the means
by which the advice is provided, the Statement of Advice must be given to the
client when, or as soon as practicable after, the advice is provided and, in any
event, before the providing entity provides the client with any further
financial service that arises out of or is connected with that advice.
Statement of certain information if Statement of Advice not given when
advice provided
(2) If the Statement of Advice is not given to the client when the advice
is provided, the providing entity must, when the advice is provided, give the
client a statement that contains the information that would be required to be in
a Statement of Advice by paragraphs 947B(2)(d) and (e), or 947C(2)(e) and (f),
as the case requires, and by section 947D, if applicable.
Time critical cases
(3) If:
(a) the client expressly instructs that they require a further financial
service that arises out of, or is connected with, the advice to be provided
immediately, or by a specified time; and
(b) it is not reasonably practicable to give the Statement of Advice to
the client before that further service is provided as so instructed;
the providing entity must give the client the Statement of
Advice:
(c) unless paragraph (d) applies—within 5 days after providing
that further service, or sooner if practicable; or
(d) if that further service is the provision to the person of a financial
product and section 1019B (cooling-off period) will apply to the
acquisition of the product by the person—before the start of the period
applicable under subsection 1019B(3), or sooner if practicable.
(1) The title “Statement of Advice” must be used on the cover
of, or at or near the front of, a Statement of Advice.
(2) In any other part of a Statement of Advice, “Statement of
Advice” may be abbreviated to “SoA”.
(1) This section applies if the providing entity is a financial services
licensee.
(2) Subject to subsection (3) and to the regulations (see
subsection (4)), the Statement of Advice must include the following
statements and information:
(a) a statement setting out the advice; and
(b) information about the basis on which the advice is or was given;
and
(c) a statement setting out the name and contact details of the providing
entity; and
(d) information about any remuneration (including commission) or other
benefits that any of the following is to receive that might reasonably be
expected to be or have been capable of influencing the providing entity in
providing the advice:
(i) the providing entity;
(ii) a related body corporate of the providing entity;
(iii) a director or employee of the providing entity or a related body
corporate;
(iv) an associate of any of the above;
(v) any other person in relation to whom the regulations require the
information to be provided; and
(e) information about:
(i) any other interests, whether pecuniary or not and whether direct or
indirect, of the providing entity or of any associate of the providing entity;
and
(ii) any associations or relationships between the providing entity or any
associate of the providing entity and the issuers of any financial
products;
that might reasonably be expected to be or have been capable of
influencing the providing entity in providing the advice; and
(f) if section 945B requires a warning to be given to the client in
relation to the advice—a statement setting out, or recording, the warning
required by that section; and
(g) any other statements or information required by the
regulations.
(3) Subject to subsection (4), the level of detail about a matter
that is required is such as a person would reasonably require for the purpose of
deciding whether to act on the advice as a retail client.
(4) The regulations may provide all or any of the following:
(a) that a provision of subsection (2) does not apply in a particular
situation;
(b) that particular information is not required by a provision of
subsection (2), either in a particular situation or generally;
(c) a more detailed statement of the information that is required by a
provision of subsection (2), either in a particular situation or
generally.
(5) The Statement of Advice:
(a) must also include any information required by section 947D, if
applicable; and
(b) may also include other information.
(1) This section applies if the providing entity is an authorised
representative.
(2) Subject to subsection (3) and to the regulations (see
subsection (4)), the Statement of Advice must include the following
statements and information:
(a) a statement setting out the advice; and
(b) information about the basis on which the advice is or was given;
and
(c) a statement setting out the name and contact details of the providing
entity; and
(d) a statement
(i) setting out the name and contact details of the authorising licensee,
or of each of the authorising licensees; and
(ii) stating that the providing entity is the authorised representative of
that licensee or those licensees; and
(e) information about the remuneration (including commission) or other
benefits that any of the following is to receive that might reasonably be
expected to be or have been capable of influencing the providing entity in
providing the advice:
(i) the providing entity;
(ii) an employer of the providing entity;
(iii) the authorising licensee, or any of the authorising
licensees;
(iv) an employee or director of the authorising licensee, or of any of the
authorising licensees;
(v) an associate of any of the above;
(vi) any other person in relation to whom the regulations require the
information to be provided; and
(f) information about:
(i) any other interests, whether pecuniary or not and whether direct or
indirect, of the providing entity, any employer of the providing entity, the
authorising licensee or any of the authorising licensees, or of any associate of
any of those persons; and
(ii) any associations or relationships between the providing entity, any
employer of the providing entity, the authorising licensee or any of the
authorising licensees, or any associate of any of those persons, and the issuers
of any financial products;
that might reasonably be expected to be or have been capable of
influencing the providing entity in providing the advice; and
(g) if section 945B requires a warning to be given to the client in
relation to the advice—a statement setting out, or recording, the warning
required by that section; and
(h) any other statements or information required by the
regulations.
(3) Subject to subsection (4), the level of detail about a matter
that is required is such as a person would reasonably require for the purpose of
deciding whether to act on the advice as a retail client.
(4) The regulations may provide all or any of the following:
(a) that a provision of subsection (2) does not apply in a particular
situation;
(b) that particular information is not required by a provision of
subsection (2), either in a particular situation or generally;
(c) a more detailed statement of the information that is required by a
provision of subsection (2), either in a particular situation or
generally.
(5) The Statement of Advice:
(a) must also include any information required by section 947D, if
applicable; and
(b) may also include other information.
(1) This section applies (subject to subsection (4)) if the advice is
or includes a recommendation that the client dispose of, or reduce the
client’s interest in, all or part of a particular financial product and
instead acquire all or part of, or increase the client’s interest in,
another financial product.
(2) The following additional information must be included in the Statement
of Advice:
(a) information about the following, to the extent that the information is
known to, or could reasonably be found out by, the providing entity:
(i) any charges the client will or may incur in respect of the disposal or
reduction;
(ii) any charges the client will or may incur in respect of the
acquisition or increase;
(iii) any pecuniary or other benefits that the client will or may lose
(temporarily or otherwise) as a result of taking the recommended
action;
(b) information about any other significant consequences for the client of
taking the recommended action that the providing entity knows, or ought
reasonably to know, are likely;
(c) any other information required by regulations made for the purposes of
this paragraph.
(3) If:
(a) the providing entity knows that, or is reckless as to
whether:
(i) the client will or may incur charges as mentioned in
subparagraph (2)(a)(i) or (ii); or
(ii) the client will or may lose benefits as mentioned in
subparagraph (2)(a)(iii); or
(iii) there will or may be consequences for the client as mentioned in
paragraph (2)(b); but
(b) the providing entity does not know, and cannot reasonably find out,
what those charges, losses or consequences are or will be;
the Statement of Advice must include a statement to the effect that there
will or may be such charges, losses or consequences but the providing entity
does not know what they are.
(4) The regulations may provide either or both of the following:
(a) that this section does not apply in relation to a financial product or
a class of financial products;
(b) that this section does not require the provision of information of a
particular kind, whether generally or in relation to a particular situation,
financial product or class of financial products.
The providing entity has qualified privilege in respect of a statement
made to the client, whether orally or in writing, in the course of, or in
connection with, providing the advice if the providing entity has complied with
all material requirements of this Division in relation to the advice.
(1) This section applies in relation to the provision of general advice
if:
(a) the advice is provided:
(i) by a financial services licensee (the providing entity);
or
(ii) by an authorised representative (the providing entity)
of a financial services licensee, or of 2 or more financial services licensees;
and
(b) the advice is provided to a person (the client) as a
retail client.
(2) The providing entity must, in accordance with subsection (3),
warn the client that:
(a) the advice has been prepared without taking account of the
client’s objectives, financial situation and needs; and
(b) because of that, the client should, before acting on the advice,
consider the appropriateness of the advice, having regard to the client’s
objectives, financial situation and needs; and
(c) if the advice relates to the acquisition, or possible acquisition, of
a particular financial product—the client should obtain a Product
Disclosure Statement (see Division 2 of Part 7.9) relating to the
product and consider the Statement before making any decision about whether to
acquire the product.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) The warning must be given to the client at the same time as the advice
is provided and by the same means as the advice is provided.
(4) In any proceedings against an authorised representative of a financial
services licensee for an offence based on subsection (1), it is a defence
if:
(a) the licensee had provided the authorised representative with
information or instructions about the requirements to be complied with in
relation to the giving of personal advice; and
(b) the representative’s failure to comply with subsection (1)
occurred because the representative was acting in reliance on that information
or those instructions; and
(c) the representative’s reliance on that information or those
instructions was reasonable.
Note: A defendant bears an evidential burden in relation to
the matters in subsection (4). See subsection 13.3(3) of the Criminal
Code.
(5) A financial services licensee must take reasonable steps to ensure
that an authorised representative of the licensee complies with
subsection (2).
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) The regulations may impose disclosure requirements, or additional
disclosure requirements, to be complied with in any of the following
situations:
(a) a financial service related to a risk insurance product or an
investment life insurance product is provided to a person as a retail client by
a financial services licensee, or an authorised representative of a financial
services licensee, acting under a binder;
(b) a financial services licensee, or an authorised representative of a
financial services licensee, arranges for a person’s instructions to be
carried out through a financial market or a clearing and settlement facility
(whether inside or outside Australia) that is not a licensed market or a
licensed CS facility;
(c) a financial service is provided by a person who is a member of a
declared professional body;
(d) a financial service is provided by a person who does not need an
Australian financial services licence because the person is covered by an
exemption under paragraph 911A(2)(k) or (l);
(e) a financial service is provided to a person as a wholesale
client.
(2) A person to whom regulations made for the purposes of
subsection (1) apply must comply with any applicable requirements in those
regulations.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) In any proceedings against an authorised representative of a financial
services licensee for an offence based on subsection (2), it is a defence
if:
(a) the licensee had provided the authorised representative with
information or instructions about the requirements to be complied with in
relation to the matter dealt with in the requirement in the regulations;
and
(b) the representative’s failure to comply with the requirement in
the regulations occurred because the representative was acting in reliance on
that information or those instructions; and
(c) the representative’s reliance on that information or those
instructions was reasonable.
Note: A defendant bears an evidential burden in relation to
the matters in subsection (3). See subsection 13.3(3) of the Criminal
Code.
(4) A financial services licensee must take reasonable steps to ensure
that an authorised representative of the licensee complies with
subsection (2).
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
This Division applies in relation to the provision of personal advice
if:
(a) the advice is provided by a member (the providing
entity) of a declared professional body (the DPB);
and
(b) the advice is provided to a person (the client) as a
retail client.
The providing entity must only provide the advice to the client
if:
(a) having regard to the client’s objectives, financial situation
and needs (so far as they are known to the providing entity after making
reasonable inquiries of the client), the providing entity has given such
consideration to, and conducted such investigation of, the subject matter of the
advice as is reasonable in all the circumstances; and
(b) the advice is appropriate, having regard to that consideration and
investigation.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
(1) If:
(a) the advice is based on information relating to the client that is
incomplete or inaccurate; and
(b) the providing entity knows that the information is incomplete or
inaccurate, or is reckless as to whether it is incomplete or
inaccurate;
the providing entity must, in accordance with subsection (2), warn the
client that:
(c) the advice is or may be based on incomplete or inaccurate information
relating to the client’s objectives, financial situation and needs;
and
(d) because of that, the client should, before acting on the advice,
consider the appropriateness of the advice, having regard to the client’s
objectives, financial situation and needs.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The warning must be given to the client at or before the giving of the
advice.
(1) At or before the giving of the advice, the providing entity must give
the client information about:
(a) any commission, fee, benefit or advantage, whether pecuniary or not,
that:
(i) the providing entity; or
(ii) any associate of the providing entity; or
(iii) the DPB; or
(iv) if the DPB is a body corporate—any associate of the
DPB;
has received or will receive, in connection with the advice or in
connection with the client acting on the advice; and
(b) any other interests, whether pecuniary or not and whether direct or
indirect, of:
(i) the providing entity; or
(ii) any associate of the providing entity; or
(iii) the DPB;
(iv) if the DPB is a body corporate—any associate of the DPB;
and
(c) any associations or relationships between the issuers of financial
products and:
(i) the providing entity; or
(ii) any associate of the providing entity; or
(iii) the DPB; or
(iv) if the DPB is a body corporate—any associate of the
DPB;
that might reasonably be expected to be or have been capable of influencing
the providing entity in providing the advice.
(2) Subject to subsection (3), the level of detail of information
required by subsection (1) is such as a person would reasonably require for
the purpose of deciding whether to act on the advice as a retail
client.
(3) The regulations may:
(a) provide that a provision of subsection (1) does not apply in a
particular situation; or
(b) provide that particular information is not required by
subsection (1), either in a particular situation or generally; or
(c) provide a more detailed statement of the information that is required
by subsection (1), either in a particular situation or generally.
(1) This section applies (subject to subsection (4)) if the advice is
or includes a recommendation that the client dispose of, or reduce the
client’s interest in, all or part of a particular financial product and
instead acquire all or part of, or increase the client’s interest in,
another financial product.
(2) The following additional information must, at or before the giving of
the advice, be given to the client:
(a) information about the following, to the extent that the information is
known to, or could reasonably be found out by, the providing entity:
(i) any charges the client will or may incur in respect of the disposal or
reduction;
(ii) any charges the client will or may incur in respect of the
acquisition or increase;
(iii) any pecuniary or other benefits that the client will or may lose
(temporarily or otherwise) as a result of taking the recommended
action;
(b) information about any other significant consequences for the client of
taking the recommended action that the providing entity knows, or ought
reasonably to know, are likely;
(c) any other information required by regulations made for the purposes of
this paragraph.
(3) If:
(a) the providing entity knows that, or is reckless as to
whether:
(i) the client will or may incur charges as mentioned in
subparagraph (2)(a)(i) or (ii); or
(ii) the client will or may lose benefits as mentioned in
subparagraph (2)(a)(iii); or
(iii) there will or may be consequences for the client as mentioned in
paragraph (2)(b); but
(b) the providing entity does not know, and cannot reasonably find out,
what those charges, losses or consequences are or will be;
then, at or before the giving of the advice, the providing entity must make
a statement to the client to the effect that there will or may be such charges,
losses or consequences but the providing entity does not know what they
are.
(4) The regulations may provide either or both of the following:
(a) that this section does not apply in relation to a financial product or
a class of financial products;
(b) that this section does not require the provision of information of a
particular kind, whether generally or in relation to a particular situation,
financial product or class of financial products.
A condition of a contract for the acquisition of a financial product, or
for the provision of a financial service, is void if it provides that a party to
the contract is:
(a) required or bound to waive compliance with any requirement of this
Part; or
(b) taken to have notice of any contract, document or matter not
specifically referred to in a Financial Services Guide, Statement of Advice or
other document given to the party.
(1) ASIC may, subject to subsection (2):
(a) exempt a person or a class of persons from all or specified provisions
of this Part; or
(b) exempt a financial product or class of financial products from all or
specified provisions of this Part; or
(c) declare that this Part applies in relation to a person or a financial
product, or a class of persons or financial products, as if specified provisions
of this Part were omitted, modified or varied as specified in the
declaration.
(2) However, ASIC cannot declare that provisions of this Part are modified
so that they apply in relation to persons or financial products to which they
would not otherwise apply.
(3) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an exemption applies must
comply with the condition. The Court may order the person to comply with the
condition in a specified way. Only ASIC may apply to the Court for the
order.
(4) An exemption or declaration must be in writing and ASIC must publish
notice of it in the Gazette.
(5) If conduct (including an omission) of a person would not have
constituted an offence if a particular declaration under paragraph (1)(c)
had not been made, that conduct does not constitute an offence unless, before
the conduct occurred (in addition to complying with the gazettal requirement of
subsection (4)):
(a) the text of the declaration was made available by ASIC on the
Internet; or
(b) ASIC gave written notice setting out the text of the declaration to
the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with before
the conduct occurred.
(6) For the purpose of this section, the provisions of this Part
include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 10.2 (transitional provisions) that relate
to provisions of this Part.
This Subdivision contains provisions creating offences by references to
various rules contained in preceding Divisions of this Part. However, it does
not create all the offences relating to those rules, as some offences are
created by subsection 1311(1). Where offences are created by subsection 1311(1)
in relation to a rule, this is indicated by a note at the end of the provision
containing the rule.
(1) In this Subdivision:
defective, in relation to a disclosure document or statement,
means:
(a) if the disclosure document or statement is a Financial Services
Guide, a Supplementary Financial Services Guide, or is information or a
statement required by subsection 941C(5), 941C(7) or 941D(2):
(i) there is a misleading or deceptive statement in the disclosure
document or statement; or
(ii) if it is a Financial Services Guide—there is an omission
from the Financial Services Guide of material required by section 942B or
942C; or
(iii) if it is a Supplementary Financial Services Guide that is given for
the purposes of paragraph 941F(d)—there is an omission from the
Supplementary Financial Services Guide of material required by that paragraph;
or
(iv) if it is information or a statement required by subsection 941C(5),
941C(7) or 941D(2)—there is an omission from the document or statement of
material required by that subsection;
being a statement, or an omission, that is or would be materially
adverse from the point of view of a reasonable person considering whether
to proceed to be provided with the financial service concerned; or
(b) if the disclosure document or statement is a Statement of Advice, or
is information or a statement required by subsection 946B(3), 946B(6) or 946C(2)
or by section 950D or 950E:
(i) there is a misleading or deceptive statement in the disclosure
document or statement; or
(ii) if it is a Statement of Advice—there is an omission from the
Statement of advice of material required by section 947B, 947C or 947D;
or
(iii) if it is information or a statement required by subsection 946B(3),
946B(6) or 946C(2) or by section 950D or 950E—there is an omission
from the information or statement of material required by that subsection or
section;
being a statement, or an omission, that is or would be materially
adverse from the point of view of a reasonable person considering whether
to act in reliance on the advice concerned.
Note: In determining whether a Financial Services Guide is
defective, the effect of section 943D must be taken into account
(section 943D takes information and statements in a Supplementary Financial
Services Guide to be included in the Financial Services Guide it
supplements).
disclosure document or statement means:
(a) a Financial Services Guide; or
(b) a Supplementary Financial Services Guide; or
(c) a Statement of Advice; or
(d) information or a statement required by subsection 941C(5), 941C(7),
941D(2), 946B(3), 946B(6) or 946C(2) or by section 950D or 950E.
(2) In this Subdivision, a reference (including in the definitions in
subsection (1)) to a document or statement of a kind referred to in a
paragraph of the definition of disclosure document or statement in
subsection (1) includes a reference to something purporting to be a
document or statement of that kind.
Strict liability offence
(1) A person (the providing entity) commits an offence
if:
(a) the providing entity is required by a provision of this Part to give
another person a disclosure document or statement (the required disclosure
document or statement); and
(b) the providing entity does not give (within the meaning of
section 940C) the other person anything purporting to be the required
disclosure document or statement by the time they are required to do
so.
Note: A defendant bears an evidential burden in relation to
the matters in subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(2) An offence based on subsection (1) is an offence of strict
liability.
Note: For strict liability, see
section 6.1 of the Criminal Code.
Ordinary offence
(3) A person (the providing entity) commits an offence
if:
(a) the providing entity is required by a provision of this Part to give
another person a disclosure document or statement (the required disclosure
document or statement); and
(b) the providing entity does not give (within the meaning of
section 940C) the other person anything purporting to be the required
disclosure document or statement by the time they are required to do
so.
Note: A defendant bears an evidential burden in relation to
the matters in subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
Defence for authorised representative
(4) In any proceedings against an authorised representative of a financial
services licensee for an offence based on subsection (1) or (3), it is a
defence if:
(a) the licensee had provided the representative with information or
instructions about the giving of disclosure documents or statements;
and
(b) the representative’s failure to give the required disclosure
document or statement occurred because the representative was acting in reliance
on that information or those instructions; and
(c) the representative’s reliance on that information or those
instructions was reasonable.
Note: A defendant bears an evidential burden in relation to
the matters in subsection (4). See subsection 13.3(3) of the Criminal
Code.
(1) A person (the providing entity), being a financial
services licensee or a member of a declared professional body, commits an
offence if:
(a) the providing entity:
(i) gives (see subsection (3)) another person a disclosure document
or statement in circumstances in which the document or statement is required by
a provision of this Part to be given to the other person; or
(ii) is a financial services licensee and gives (see subsection (3)),
or makes available to, another person a disclosure document or statement, being
a Financial Services Guide or a Supplementary Financial Services Guide, reckless
as to whether the other person will or may rely on the information in it;
and
(b) the providing entity knows that the disclosure document or statement
is defective.
Note: A defendant bears an evidential burden in relation to
the matters in subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(2) An authorised representative of a financial services licensee commits
an offence if:
(a) the representative:
(i) gives (see subsection (3)) a person a disclosure document or
statement in circumstances in which the document or statement is required by a
provision of this Part to be given to the person; or
(ii) gives (see subsection (3)), or makes available to, a person a
disclosure document or statement, being a Financial Services Guide or a
Supplementary Financial Services Guide, reckless as to whether the person will
or may rely on the information in it; and
(b) the representative knows that the disclosure document or statement is
defective.
Note: A defendant bears an evidential burden in relation to
the matters in subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(3) In this section, give means give by any means (including
orally), and is not limited to the meaning it has because of
section 940C.
(1) A person (the providing entity), being a financial
services licensee or a member of a declared professional body, commits an
offence if:
(a) the providing entity:
(i) gives (see subsection (7)) another person a disclosure document
or statement in circumstances in which the document or statement is required by
a provision of this Part to be given to the other person; or
(ii) is a financial services licensee and gives (see subsection (7)),
or makes available to, another person a disclosure document or statement, being
a Financial Services Guide or a Supplementary Financial Services Guide, reckless
as to whether the other person will or may rely on the information in it;
and
(b) the disclosure document or statement is defective.
Note: A defendant bears an evidential burden in relation to
the matters in subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(2) For the purposes of an offence based on subsection (1), strict
liability applies to the physical element of the offence specified in
paragraph (1)(b).
Note: For strict liability, see
section 6.1 of the Criminal Code.
(3) An authorised representative of a financial services licensee commits
an offence if:
(a) the representative gives (see subsection (7)) a person a
disclosure document or statement, being a Statement of Advice, or information or
a statement required by subsection 941C(5), 941C(7), 941D(2), 946B(3), 946B(6)
or 946C(2), in circumstances in which the document or statement is required by a
provision of this Part to be given to the person; and
(b) the disclosure document or statement is defective.
Note: A defendant bears an evidential burden in relation to
the matters in subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(4) For the purposes of an offence based on subsection (3), strict
liability applies to the physical element of the offence specified in
paragraph (3)(b).
Note: For strict liability, see
section 6.1 of the Criminal Code.
(5) In any proceedings against a person for an offence based on
subsection (1) or (3), it is a defence if the person took reasonable steps
to ensure that the disclosure document or statement would not be
defective.
Note: A defendant bears an evidential burden in relation to
the matters in subsection (5). See subsection 13.3(3) of the Criminal
Code.
(6) In any proceedings against a person for an offence based on
subsection (3), it is a defence if the disclosure document or
statement:
(a) was provided to the person by a financial services licensee for whom
they were, at that time, an authorised representative; or
(b) was defective because of information, or an omission from information,
provided to them by a financial services licensee for whom they were, at that
time, an authorised representative.
Note: A defendant bears an evidential burden in relation to
the matters in subsection (6). See subsection 13.3(3) of the Criminal
Code.
(7) In this section, give means give by any means (including
orally), and is not limited to the meaning it has because of
section 940C.
(1) For the purposes of this section, a financial services licensee
provides disclosure material to an authorised representative of
the licensee if:
(a) the licensee authorises the distribution by the representative of a
disclosure document or statement, being a Financial Services Guide or a
Supplementary Financial Services Guide; or
(b) the licensee provides the representative with a disclosure document or
statement, being a Statement of Advice, or information or a statement required
by subsection 941C(5), 941C(7), 941D(2), 946B(3), 946B(6) or 946C(2);
or
(c) the licensee provides the representative with information:
(i) for the purpose of it being included by the representative in a
disclosure document or statement, being a Statement of Advice, or information or
a statement required by subsection 941C(5), 941C(7), 941D(2), 946B(3), 946B(6)
or 946C(2); or
(ii) knowing that it is likely that it will be so included in such a
document.
(2) A financial services licensee commits an offence if:
(a) the licensee provides disclosure material (being a disclosure document
or statement) to an authorised representative of the licensee as mentioned in
paragraph (1)(a) or (b); and
(b) the licensee knows that the disclosure document or statement is
defective.
(3) A financial services licensee commits an offence if:
(a) the licensee provides disclosure material (being information) to an
authorised representative of the licensee as mentioned in paragraph (1)(c);
and
(b) the licensee knows that, if the information is included by the
representative as mentioned in that paragraph, the disclosure document or
statement concerned will be defective.
(4) A financial services licensee commits an offence if:
(a) the licensee provides disclosure material (being information) to an
authorised representative of the licensee as mentioned in paragraph (1)(c);
and
(b) the information relates to a matter or matters, but the licensee knows
that it is only some of the information relating to the matter or matters that
the disclosure document or statement concerned is required to contain;
and
(c) the licensee is reckless as to whether the representative will or may
prepare the disclosure document or statement on the basis that the information
is all the information relating to the matter or matters that the disclosure
document or statement is required to contain.
(1) For the purposes of this section, a financial services licensee
provides disclosure material to an authorised representative of
the licensee if:
(a) the licensee authorises the distribution by the representative of a
disclosure document or statement, being a Financial Services Guide or a
Supplementary Financial Services Guide; or
(b) the licensee provides the representative with a disclosure document or
statement, being a Statement of Advice, or information or a statement required
by subsection 941C(5), 941C(7), 941D(2), 946B(3), 946B(6) or 946C(2);
or
(c) the licensee provides the representative with information:
(i) for the purpose of it being included by the representative in a
disclosure document or statement, being a Statement of Advice, or information or
a statement required by subsection 941C(5), 941C(7), 941D(2), 946B(3), 946B(6)
or 946C(2); or
(ii) knowing that it is likely that it will be so included in such a
document.
(2) A financial services licensee commits an offence if:
(a) the licensee provides disclosure material (being a disclosure document
or statement) to an authorised representative of the licensee as mentioned in
paragraph (1)(a) or (b); and
(b) the disclosure document or statement is defective in a respect that
does not relate to material required to be in the document or statement only
because the representative is also the authorised representative of another
financial services licensee.
(3) For the purposes of an offence based on subsection (2), strict
liability applies to the physical element of the offence specified in
paragraph (2)(b).
Note: For strict liability, see
section 6.1 of the Criminal Code.
(4) A financial services licensee commits an offence if:
(a) the licensee provides disclosure material (being information) to an
authorised representative of the licensee as mentioned in paragraph (1)(c);
and
(b) the authorised representative includes the information in the
disclosure document or statement concerned; and
(c) the disclosure document or statement is defective because it includes
that information (whether or not it is also defective for other
reasons).
(5) For the purposes of an offence based on subsection (4), strict
liability applies to the physical element of the offence specified in
paragraph (4)(c).
Note: For strict liability, see
section 6.1 of the Criminal Code.
(6) A financial services licensee commits an offence if:
(a) the licensee provides disclosure material (being information) to an
authorised representative of the licensee as mentioned in paragraph (1)(c);
and
(b) the information relates to a matter or matters, but it is only some of
the information relating to the matter or matters that the disclosure document
or statement concerned is required to contain; and
(c) the representative prepares the disclosure document or statement on
the basis that the information is all the information relating to the matter or
matters that the disclosure document or statement is required to contain;
and
(d) the disclosure document or statement is defective because it includes
only that information about the matter or matters (whether or not it is also
defective for other reasons).
(7) For the purposes of an offence based on subsection (6), strict
liability applies to the physical elements of the offence specified in
paragraphs (6)(b) and (d).
Note: For strict liability, see
section 6.1 of the Criminal Code.
(8) In any proceedings against a person for an offence based on
subsection (2), it is a defence if the person took reasonable steps to
ensure that the disclosure document or statement would not be
defective.
Note: A defendant bears an evidential burden in relation to
the matters in subsection (8). See subsection 13.3(3) of the Criminal
Code.
(9) In any proceedings against a person for an offence based on
subsection (4), it is a defence if the person took reasonable steps
to ensure that the information they provided would not be such as to make the
disclosure document or statement defective.
Note: A defendant bears an evidential burden in relation to
the matters in subsection (9). See subsection 13.3(3) of the Criminal
Code.
(10) In any proceedings against a person for an offence based on
subsection (6), it is a defence if the person took reasonable steps
to ensure that the information they provided about the matter or matters would
be all the information about the matter or matters that the disclosure document
or statement would be required to contain.
Note: A defendant bears an evidential burden in relation to
the matters in subsection (10). See subsection 13.3(3) of the Criminal
Code.
A financial services licensee commits an offence if the licensee does not
take reasonable steps to ensure that an authorised representative of the
licensee:
(a) complies with their obligations under this Part to give disclosure
documents or statements as and when required; and
(b) without limiting paragraph (a), does not, in purported compliance
with obligations under this Part, give disclosure documents or statements that
are defective.
(1) A financial services licensee commits an offence if:
(a) the licensee:
(i) gives (see subsection (6)) a person a Financial Services Guide in
circumstances in which it is required by a provision of this Part to be given to
the person; or
(ii) gives (see subsection (6)), or makes available to, a person a
Financial Services Guide, reckless as to whether the person will or may rely on
the information in it; and
(b) the Financial Services Guide does not comply with section 942A,
subsection 942B(5) or paragraph 942E(b).
Note: A defendant bears an evidential burden in relation to
the matters in subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(2) A financial services licensee commits an offence if:
(a) the financial services licensee authorises the distribution of
a Financial Services Guide by an authorised representative of the licensee;
and
(b) the Financial Services Guide does not comply with section 942A,
subsection 942B(5) or paragraph 942E(b).
(3) A financial services licensee commits an offence if:
(a) the licensee:
(i) gives (see subsection (6)) a person a Supplementary Financial
Services Guide in circumstances in which it is required by a provision of this
Part to be given to the person; or
(ii) gives (see subsection (6)), or makes available to, a person a
Supplementary Financial Services Guide, reckless as to whether the person will
or may rely on the information in it; and
(b) the Supplementary Financial Services Guide does not comply with
section 943B or 943C.
Note: A defendant bears an evidential burden in relation to
the matters in subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(4) A financial services licensee commits an offence if:
(a) the financial services licensee authorises the distribution of
a Supplementary Financial Services Guide by an authorised representative of
the licensee; and
(b) the Supplementary Financial Services Guide does not comply with
section 943B or 943C.
(5) For the purposes of an offence based on subsection (1), (2), (3)
or (4), strict liability applies to paragraph (b) of that
subsection.
Note: For strict liability, see
section 6.1 of the Criminal Code.
(6) In this section, give means give by any means (including
orally), and is not limited to the meaning it has because of
section 940C.
(1) A financial services licensee, or an authorised representative of a
financial services licensee, commits an offence if:
(a) the licensee or representative gives (see subsection (3)) a
person a Statement of Advice in circumstances in which it is required by a
provision of this Part to be given to the person; and
(b) the Statement of Advice does not comply with
section 947A.
Note: A defendant bears an evidential burden in relation to
the matters in subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(2) For the purposes of an offence based on subsection (1), strict
liability applies to paragraph (b) of that subsection.
Note: For strict liability, see
section 6.1 of the Criminal Code.
(3) In this section, give means give by any means (including
orally), and is not limited to the meaning it has because of
section 940C.
An authorised representative of a financial services licensee commits an
offence if:
(a) the representative:
(i) gives a person a Financial Services Guide, or a Supplementary
Financial Services Guide, in circumstances in which it is required by a
provision of this Part to be given to the person; or
(ii) gives, or makes available to, a person a Financial Services Guide, or
a Supplementary Financial Services Guide, reckless as to whether the person will
or may rely on the information in it; and
(b) the licensee has not authorised the distribution by the representative
of the Financial Services Guide or the Supplementary Financial Services
Guide.
Note: A defendant bears an evidential burden in relation to
the matters in subsections 941C(1), (2) and (3). See subsection 13.3(3) of the
Criminal Code.
(1) A financial services licensee commits an offence if:
(a) the licensee has authorised an authorised representative of the
licensee to distribute a Financial Services Guide or a Supplementary Financial
Services Guide; and
(b) the licensee becomes aware that the Financial Services Guide, or the
Supplementary Financial Services Guide, is defective; and
(c) the licensee does not, as soon as practicable, give the representative
a direction that satisfies one or more of the following subparagraphs:
(i) a direction not to distribute the Financial Services Guide or the
Supplementary Financial Services Guide;
(ii) a direction not to distribute the Financial Services Guide unless it
is accompanied by a Supplementary Financial Services Guide that corrects the
deficiency;
(iii) a direction not to distribute the Financial Services Guide or the
Supplementary Financial Services Guide without first altering it in a way that
is specified in the direction, being a way that corrects the deficiency and that
complies with section 942E or 943F.
(2) An authorised representative commits an offence if:
(a) the representative is given a direction under subsection (1);
and
(b) the representative does not comply with the direction.
(3) An authorised representative of a financial services licensee commits
an offence if:
(a) the licensee has authorised the representative to distribute a
Financial Services Guide or a Supplementary Financial Services Guide;
and
(b) the representative becomes aware that the Financial Services Guide, or
the Supplementary Financial Services Guide, is defective; and
(c) the representative does not, as soon as practicable, notify the
licensee of the particulars of the deficiency.
(4) In this section, a reference to distributing a Financial
Services Guide or a Supplementary Financial Services Guide includes (but is not
limited to) giving or reading the document or statement to another person in
purported compliance with a requirement of this Part.
A person commits an offence if:
(a) the person engages in conduct that results in an alteration of a
Financial Services Guide or a Supplementary Financial Services Guide
that:
(i) has been prepared by or on behalf of a particular financial services
licensee; or
(ii) the distribution of which by the person has been authorised by a
particular financial services licensee; and
(b) the alteration results in the Financial Services Guide or
Supplementary Financial Services Guide becoming defective, or more defective
than it previously was; and
(c) the alteration is not made with the authority of the licensee;
and
(d) the person, in purported compliance with a provision of this Part,
gives the altered Financial Services Guide or Supplementary Financial Services
Guide to another person.
(1) In this Subdivision:
defective, in relation to a disclosure document or statement,
means:
(a) if the disclosure document or statement is a Financial Services
Guide, a Supplementary Financial Services Guide, or is information or a
statement required by subsection 941C(5), 941C(7) or 941D(2):
(i) there is a misleading or deceptive statement in the disclosure
document or statement; or
(ii) if it is a Financial Services Guide—there is an omission
from the Financial Services Guide of material required by section 942B or
942C; or
(iii) if it is a Supplementary Financial Services Guide that is given for
the purposes of paragraph 941F(d)—there is an omission from the
Supplementary Financial Services Guide of material required by that paragraph;
or
(iv) if it is information or a statement required by subsection 941C(5),
941C(7) or 941D(2)—there is an omission from the document or statement of
material required by that subsection; or
(b) if the disclosure document or statement is a Statement of Advice, or
is information or a statement required by subsection 946B(3), 946B(6) or 946C(2)
or by section 950D or 950E:
(i) there is a misleading or deceptive statement in the disclosure
document or statement; or
(ii) if it is a Statement of Advice—there is an omission from the
Statement of Advice of material required by section 947B, 947C or 947D;
or
(iii) if it is information or a statement required by subsection 946B(3),
946B(6) or 946C(2) or by section 950D or 950E—there is an omission
from the information or statement of material required by that subsection or
section.
Note: In determining whether a Financial Services Guide is
defective, the effect of section 943D must be taken into account
(section 943D takes information and statements in a Supplementary Financial
Services Guide to be included in the Financial Services Guide it
supplements).
disclosure document or statement means:
(a) a Financial Services Guide; or
(b) a Supplementary Financial Services Guide; or
(c) a Statement of Advice; or
(d) information or a statement required by subsection 941C(5), 941C(7),
941D(2), 946B(3), 946B(6) or 946C(2) or by section 950D or 950E.
(2) In this Subdivision, a reference (including in the definitions in
subsection (1)) to a document or statement of a kind referred to in a
paragraph of the definition of disclosure document or statement in
subsection (1) includes a reference to something purporting to be a
document or statement of that kind.
(1) This section applies in the following situations:
(a) a person:
(i) is required by a provision of this Part to give another person (the
client) a disclosure document or statement (the required
disclosure document or statement); and
(ii) does not give (within the meaning of section 940C) the client
anything purporting to be the required disclosure document or statement by the
time they are required to do so; or
(b) a person:
(i) gives another person (the client) a disclosure document
or statement that is defective in circumstances in which a disclosure document
or statement is required by a provision of this Part to be given to the client;
or
(ii) is a financial services licensee and gives, or makes available to,
another person (the client) a disclosure document or statement,
being a Financial Services Guide or a Supplementary Financial Services Guide,
that is defective, reckless as to whether the client will or may rely on the
information in it; or
(c) a person contravenes section 945A, 945B, 949A, 949B, 950B or
950C.
In paragraph (b), give means give by any means
(including orally), and is not limited to the meaning it has because of
section 940C.
(2) In a situation to which this section applies, if a person suffers loss
or damage:
(a) if paragraph (1)(a) applies—because the client was not
given the disclosure document or statement that they should have been given;
or
(b) if paragraph (1)(b) applies—because the disclosure document
or statement the client was given was defective; or
(c) if paragraph (1)(c) applies—because of the contravention
referred to in that paragraph;
the person may, subject to subsection (6), recover the amount of the
loss or damage by action against the, or a, liable person (see
subsections (3) and (4)), whether or not that person (or anyone else) has
been convicted of an offence in respect of the matter referred to in
paragraph (a), (b) or (c).
(3) For the purposes of subsection (2), the, or a, liable
person is:
(a) if the person first-referred to in paragraph (1)(a), (b) or (c)
is a financial services licensee or a member of a declared professional
body—subject to subsection (4), that person; or
(b) if the person first-referred to in paragraph (1)(a), (b) or (c)
is an authorised representative of only one financial services
licensee—that financial services licensee; or
(c) if the person first-referred to in paragraph (1)(a), (b) or (c)
is an authorised representative of more than one financial services
licensee:
(i) if, under the rules in section 917C, one of those licensees is
responsible for the person’s conduct—that licensee; or
(ii) if, under the rules in section 917C, 2 or more of those
licensees are jointly and severally responsible for the person’s
conduct—each of those licensees.
(4) If:
(a) paragraph (1)(b) applies; and
(b) an alteration was made to the disclosure document or statement before
it was given to the client; and
(c) the alteration made the disclosure document or statement defective, or
more defective than it would otherwise have been; and
(d) the alteration was not made by, or with the authority of, the person
who would, but for this subsection, be the liable person because of
paragraph (3)(a);
then, so far as a person has suffered loss or damage because the disclosure
document or statement was defective because of the alteration, the liable person
is the person who made the alteration, rather than the person referred to in
paragraph (d).
(5) An action under subsection (2) may be begun at any time within 6
years after the day on which the cause of action arose.
(6) A person is not liable under subsection (2) in a situation
described in paragraph (1)(b) if the person took reasonable steps to ensure
that the disclosure document or statement would not be defective.
(7) This section does not affect any liability that a person has under any
other law.
(1) The court dealing with an action under subsection 953B(2) may, in
addition to awarding loss or damage under that subsection and if it thinks it
necessary in order to do justice between the parties:
(a) make an order declaring void a contract entered into by the client
referred to in that subsection for or relating to a financial product or a
financial service; and
(b) if it makes an order under paragraph (a)—make such other
order or orders as it thinks are necessary or desirable because of that
order.
(2) Without limiting paragraph (1)(b), an order under that paragraph
may include an order for the return of money paid by a person, and/or an order
for payment of an amount of interest specified in, or calculated in accordance
with, the order.
This Part contains:
(a) provisions (see Divisions 2 to 7) relating to conduct etc. of
financial services licensees; and
(b) miscellaneous provisions (see Division 8) relating to other
conduct connected with financial products and financial services.
It does not deal with financial product disclosure (which is dealt with in
Part 7.9).
Division 9 contains provisions creating offences by reference to
various rules contained in Divisions of this Part. However, it does not create
all the offences relating to those rules, as some offences are created by
subsection 1311(1). Where offences are created by subsection 1311(1) in relation
to a rule, this is indicated by a note at the end of the provision containing
the rule.
(1) This Subdivision applies (subject to subsections (2), (3) and
(4)) to money paid to a financial services licensee (the licensee)
in the following circumstances:
(a) the money is paid in connection with:
(i) a financial service that has been provided, or that will or may be
provided, to a person (the client); or
(ii) a financial product held by a person (the client);
and
(b) the money is paid:
(i) by the client; or
(ii) by a person acting on behalf of the client or
(iii) for the benefit of the client.
(2) This Subdivision does not apply to money paid as mentioned in
subsection (1) to the extent that:
(a) the money is paid by way of remuneration payable to the licensee, or
the licensee is entitled to deduct such remuneration from the money;
or
(b) the money is paid:
(i) to reimburse the licensee for payments made to acquire, or acquire an
increased interest in, a financial product; or
(ii) to discharge a liability incurred by the licensee in respect of the
acquisition of a financial product or an increased interest in a financial
product, or to indemnify the licensee in respect of such a liability;
or
(c) the money is paid to acquire, or acquire an increased interest in, a
financial product from the licensee, whether by way of issue or sale by the
licensee; or
(d) Subdivision B (loan money) applies to the money.
Note: Money excluded by paragraph (c) is covered by
section 1017E.
(3) If a person pays money to a financial services licensee in order for
it to be deposited to the credit of a deposit product held by the person or
another person with the licensee, that payment does not constitute money to
which this Subdivision applies.
(4) The regulations may:
(a) exempt money paid in specified circumstances from some or all of the
provisions of this Subdivision; or
(b) declare that this Subdivision applies in relation to money paid in
specified circumstances as if specified provisions of this Subdivision were
omitted, modified or varied as set out in the regulations.
(5) An exemption in regulations made for the purposes of
paragraph (4)(a) may be made subject to conditions specified in, or imposed
in accordance with, the regulations. The regulations may provide for
consequences of a contravention of a condition.
(1) The licensee must ensure that money to which this Subdivision applies
is paid into an account that satisfies these requirements:
(a) the account is:
(i) with an Australian ADI; or
(ii) of a kind prescribed by regulations made for the purposes of this
paragraph;
and is designated as an account for the purposes of this section of this
Act; and
(b) the only money paid into the account is:
(i) money to which this Subdivision applies (which may be money paid by,
on behalf or, or for the benefit of, several different clients); or
(ii) interest on the amount from time to time standing to the credit of
the account; or
(iii) interest, or other similar payments, on an investment made in
accordance with regulations referred to in section 981C, or the proceeds of
the realisation of such an investment; or
(iv) other money permitted to be paid into the account by the regulations;
and
(c) if regulations made for the purposes of this paragraph impose
additional requirements—the requirements so imposed by the regulations;
and
(d) if the licence conditions of the licensee’s licence impose
additional requirements—the requirements so imposed by the licence
conditions.
The money must be paid into such an account on the day it is received by
the licensee, or on the next business day.
(2) The licensee may, for the purposes of this section, maintain a single
account or 2 or more accounts.
The regulations may deal with all or any of the following in relation to
accounts, or a class of accounts, maintained for the purposes of
section 981B:
(a) the circumstances in which payments may be made out of an account
(including the circumstances in which money may be withdrawn and invested, and
the kinds of investment that may be made);
(b) the minimum balance to be maintained in an account;
(c) how interest on an account is to be dealt with;
(d) how interest or other earnings on an investment of money withdrawn
from an account, or the proceeds of the realisation of such an investment, are
to be dealt with.
Despite anything in regulations made for the purposes of
section 981C, if:
(a) the financial service referred to in subparagraph 981A(1)(a)(i)
is or relates to a dealing in a derivative; or
(b) the financial product referred to in subparagraph 981A(1)(a)(ii) is a
derivative;
the money concerned may also be used for the purpose of meeting obligations
incurred by the licensee in connection with margining, guaranteeing, securing,
transferring, adjusting or settling dealings in derivatives by the licensee
(including dealings on behalf of people other than the client).
(1) This section applies to:
(a) money to which this Subdivision applies that has been paid to the
licensee, both while it is in an account maintained for the purposes of
section 981B and before and after it is paid into such an account;
and
(b) other money in such an account as permitted by paragraph 981B(1)(b);
and
(c) investments made in accordance with regulations made for the purposes
of section 981C.
(2) Money and investments to which this section applies are not
capable:
(a) of being attached or otherwise taken in execution; or
(b) of being made subject to a set-off, charge or charging order, or to
any process of a similar nature;
except at the suit of a person who is otherwise entitled to the money or
investment.
The regulations may include provisions dealing with how money in an
account maintained for the purposes of section 981B, or an investment of
such money, is to be dealt with if:
(a) the licensee ceases to be a financial services licensee; or
(b) the licensee becomes insolvent, within the meaning of the regulations;
or
(c) the licensee merges with another financial services licensee;
or
(d) the licensee ceases to carry on some or all of the activities
authorised by their licence.
Nothing in this Subdivision, or in regulations made for the purposes of
this Subdivision, makes the body (not being the licensee) that the account is
with under paragraph 981B(1)(a) subject to any liability merely because of a
failure by the licensee to comply with any of the provisions of this Subdivision
or those regulations.
(1) Subject to subsection (2), this Subdivision applies to money paid
to a financial services licensee (the licensee) by way of a loan
from a person (the client) in connection with activities
authorised by the licensee’s licence.
(2) If a person pays money to a financial services licensee:
(a) in order for it to be deposited to the credit of a deposit product
held by the person or another person with the licensee; or
(b) on condition that it is to be repaid to the person by the licensee, as
a debt, pursuant to the terms of a debenture or other financial product issued
by the licensee;
that payment does not constitute money to which this Subdivision
applies.
(1) The licensee must ensure that money to which this Subdivision applies
is paid into an account that satisfies these requirements:
(a) the account is:
(i) with an Australian ADI; or
(ii) of a kind prescribed by regulations made for the purposes of this
paragraph;
and is designated as an account for the purposes of this section of this
Act; and
(b) the only money paid into the account is:
(i) money to which this Subdivision applies (which may be money lent by
several different persons); or
(ii) interest on the amount from time to time standing to the credit of
the account.
The money must be paid into such an account on the day it is received by
the licensee, or on the next business day.
(2) The licensee may, for the purposes of this section, maintain a single
account or 2 or more accounts.
Obligation to give client a statement
(1) The licensee must, in accordance with the regulations, give the client
a statement setting out:
(a) the terms and conditions on which the loan is made and accepted;
and
(b) the purpose for which, and the manner in which, the licensee is to use
the money.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Obligation to keep money in account until receive acknowledgment of
receipt of statement
(2) The licensee must not take money out of the account before the client
has given the licensee a written acknowledgment that the client has received the
statement required by subsection (1).
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
The licensee must only use the money:
(a) for the purpose, and in the manner, set out in the statement given
under section 982C; or
(b) for another purpose, or in another manner, agreed on in writing by the
licensee and the client after the licensee gave the client the
statement.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
(1) The Court may, by order, restrain dealings in respect of specified
accounts with financial institutions that a person holds or maintains (whether
in Australia or elsewhere), subject to such terms and conditions as the Court
imposes, if subsection (2) or (3) applies in relation to the
person.
(2) This subsection applies to a person if, on application by ASIC, the
Court is satisfied that the person holds, or has at any time held, an Australian
financial services licence and that:
(a) there are reasonable grounds for believing that there is a deficiency
in an account maintained by the person for the purposes of section 981B or
982B, whether the account is maintained in this jurisdiction or elsewhere;
or
(b) there has been undue delay, or unreasonable refusal, on the
person’s part in paying, applying or accounting for money as provided for
by this Division, by a condition of the licence, or by the operating rules of a
licensed market or a licensed CS facility in which the person is or has been a
participant; or
(c) without limiting the generality of paragraph (a) or (b), the
person has contravened section 981B or 982B.
(3) This subsection applies to a person if, on application by ASIC, the
Court is satisfied that the person holds, or has at any time held, an Australian
financial services licence and that:
(a) the licence has been revoked or suspended; or
(b) the person is incapable, through mental or physical incapacity, of
managing his or her affairs; or
(c) the person no longer carries on a financial services business;
or
(d) the person has died.
(1) Before considering an application under section 983A, the Court
may, if it considers it desirable to do so, grant an interim order that is an
order of the kind applied for and is expressed to apply until the application is
determined.
(2) The Court must not require ASIC or any other person, as a condition of
granting an order under subsection (1), to give an undertaking as to
damages.
If an order made under section 983A is directed to a financial
institution, the institution must:
(a) disclose to ASIC every account kept at the institution in the name of
the person to whom the order relates, and any account that the institution
reasonably suspects is held or kept at the institution for the benefit of that
person; and
(b) permit ASIC to make a copy of, or to take an extract from, any account
of the person to whom the order relates or any of the institution’s books
relating to that person.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
(1) If an order is made under section 983A or 983B, the Court may, on
application by ASIC or a person whom the order affects, make a further order
that does one or more of the following:
(a) deals with such ancillary matters as the Court thinks necessary or
desirable;
(b) directs that specified amounts in an account affected by the
first-mentioned order be paid to ASIC or a person nominated by ASIC;
(c) varies or discharges the first-mentioned order or an order under this
section.
(2) An order under this section may be made subject to such terms and
conditions as the Court imposes.
(1) An order made under section 983D may include directions to a
person to whom money is ordered to be paid directing that the person:
(a) must pay the money into a separate account; or
(b) is authorised to prepare a scheme for distributing the money to
persons who claim, within 6 months after the person receives the money, to be
entitled to the money and satisfy the person that they are so entitled;
or
(c) if the money received is insufficient to pay all proved claims, may,
despite any rule of law or equity to the contrary, apportion the money among the
claimants in proportion to their proved claims and show in the scheme how the
money is so apportioned.
(2) If a person prepares a scheme for a distribution of money under
subsection (1), the person must apply to the Court for approval of the
scheme and for directions in respect of it.
(3) The Court may, in relation to money held in a separate account under
subsection (1), give such directions as the Court thinks fit as
to:
(a) the persons to whom that money is to be paid, and in what amounts the
whole or any portion of that money is to be paid; and
(b) the payment of the balance of the money (if any) remaining in the
account.
(1) Subject to subsection (2), this Division applies to property
other than money (for example, share certificates) given to a financial services
licensee (the licensee) in the following circumstances:
(a) the property is given in connection with:
(i) a financial service that has been provided, or that will or may be
provided, to a person (the client); or
(ii) a financial product held by a person (the client);
and
(b) the property is given:
(i) by the client; or
(ii) by a person acting on behalf of the client; or
(iii) for the benefit of the client; and
(c) the licensee is accountable for the property.
(2) The regulations may:
(a) exempt money given in specified circumstances from some or all of the
provisions of this Division; or
(b) declare that this Division applies in relation to property given in
specified circumstances as if specified provisions of this Division were
omitted, modified or varied as set out in the regulations.
The circumstances that may be specified include (but are not limited to)
that the money was given in connection with a specified class of financial
product or financial service.
(3) An exemption in regulations made for the purposes of
paragraph (2)(a) may be made subject to conditions specified in, or imposed
in accordance with, the regulations. The regulations may provide for
consequences of a contravention of a condition.
(1) Subject to subsection (2), the licensee must ensure that property
to which this Division applies is only dealt with in accordance with:
(a) the requirements (if any) specified in regulations made for the
purposes of this paragraph; and
(b) subject to those requirements:
(i) the terms and conditions on which the property was given to the
licensee; and
(ii) any subsequent instructions given by the client.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) If:
(a) the financial service referred to in subparagraph 984A(1)(a)(i) is
or relates to a dealing in a derivative; or
(b) the financial product referred to in subparagraph 984A(1)(a)(ii) is a
derivative;
the property concerned may also be used for the purpose of meeting
obligations incurred by the licensee in connection with margining, guaranteeing,
securing, transferring, adjusting or settling dealings in derivatives by the
licensee (including dealings on behalf of people other than the
client).
(1) In this Division:
contract of insurance includes a contract of life
insurance.
Note: Contract of life insurance has a meaning
affected by subsection (2).
insured, in relation to a contract of life insurance,
means a person (other than the insurer) who is entitled to a benefit
under the contract, whether that person is the life insured or some other
person.
Note: Intending insured has a corresponding
meaning.
(2) For the purposes of this Division, if:
(a) a life policy (within the meaning of the Life Insurance Act
1995) would not ordinarily be regarded as a contract of life insurance;
and
(b) liability under the policy is borne by a company registered under that
Act; and
(c) the policy was entered into after the commencement of section 9D
of the Insurance (Agents and Brokers) Act 1984 as in force before the
commencement of this Chapter;
the policy is taken to be a contract of life insurance.
(1) If:
(a) a contract of insurance is arranged or effected by a financial
services licensee; and
(b) the licensee is not the insurer;
payment to the licensee of money payable (whether in respect of a premium
or otherwise) by the insured under or in relation to the contract is a
discharge, as between the insured and the insurer, of the liability of the
insured to the insurer in respect of that money.
(2) Payment to a financial services licensee by or on behalf of an
intending insured of money (whether in respect of a premium or otherwise) in
respect of a contract of insurance to be arranged or effected by the licensee
with an insurer (not being the licensee) is a discharge, as between the insured
and the insurer, of any liability of the insured under or in respect of the
contract, to the extent of the amount of the payment.
(3) Payment by an insurer to a financial services licensee of money
payable to an insured, whether in respect of a claim, return of premiums or
otherwise, under or in relation to a contract of insurance, does not discharge
any liability of the insurer to the insured in respect of that money.
(4) An agreement, so far as it purports to alter or restrict the operation
of subsection (1), (2) or (3), is void.
(5) Subsection (4) does not make void an agreement between a
financial services licensee and an insured in so far as the agreement allows the
licensee to set off against money payable to the insured money payable by the
insured to the licensee in respect of premiums.
(1) The regulations may impose requirements to be complied with by a
financial services licensee in relation to, or make other provision dealing
with, a situation specified in subsection (2) that arises in relation to a
contract or proposed contract of insurance under which the licensee is not the
insurer.
(2) The situations are as follows:
(a) the licensee receives an amount as a premium or instalment of
premium;
(b) the licensee does not receive an amount as a premium or instalment of
premium by a particular time;
(c) the licensee is not aware of the amount of a premium or instalment of
premium that is to be paid;
(d) the licensee receives money from the insured or intending insured but
the risk or part of the risk has not been accepted by a particular
time;
(e) the licensee receives money from the insurer for payment to or on
behalf of the insured.
The regulations may impose reporting requirements to be complied with by
a financial services licensee in relation to money to which Subdivision A or B
of Division 2 applies or property to which Division 3
applies.
The regulations may impose reporting requirements to be complied with by
a financial services licensee in relation to dealings in derivatives on behalf
of other people.
(1) This Division applies in relation to a financial services licensee and
a financial services business carried on by the licensee, whether that business
is carried on in this jurisdiction or elsewhere.
(2) This Division does not affect, and is to be taken never to have
affected, the operation of Chapter 2M in relation to a company that is a
financial services licensee or in relation to a financial services business that
is carried on by such a company.
(1) A financial services licensee must (subject to
subsection (3)):
(a) keep financial records that correctly record and explain the
transactions and financial position of the financial services business carried
on by the licensee; and
(b) keep those records in accordance with the requirements of this
Subdivision; and
(c) comply with the requirements of this Subdivision in relation to
conversion of records into the English language (see subsection
988C(2)).
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The licensee does not contravene a requirement of this Subdivision
merely because some or all of the records are kept as a part of, or in
conjunction with, the records relating to any other business that is carried on
by the licensee.
Note: A defendant bears an evidential burden in relation to
the matters in this subsection. See subsection 13.3(3) of the Criminal
Code.
The records must be kept in a way that:
(a) enables true and fair profit and loss statements, and balance sheets,
of the financial services business of the licensee to be prepared from time to
time; and
(b) allows those statements and balance sheets to be conveniently and
properly audited.
(1) The records must be kept in writing in the English language, or in a
manner that enables them to be readily accessible and readily converted into
writing in the English language.
(2) If any of the records are not kept in writing in the English language,
the licensee must, if required to convert the records concerned into writing in
the English language by a person who is entitled to examine the records
concerned, comply with the requirement within a reasonable time.
If any of the records are kept outside this jurisdiction, the licensee
must:
(a) cause to be sent to and kept at a place in this jurisdiction such
particulars with respect to the business dealt with in those records as will
enable true and fair profit and loss statements and balance sheets to be
prepared; and
(b) if required by ASIC to produce those records at a place in this
jurisdiction, comply with the requirement not later than 28 days after the
requirement is made.
The records must be kept in sufficient detail to show particulars
of:
(a) all money received or paid by the licensee, including money paid to,
or disbursed from, an account maintained for the purposes of section 981B
or 982B; and
(b) all acquisitions and disposals of financial products made by the
licensee, the charges and credits arising from them, and the names of the person
acquiring or disposing of each of those products; and
(c) all income received by the licensee from commissions, interest,
and other sources, and all expenses, commissions, and interest paid by the
licensee; and
(d) all the assets and liabilities (including contingent liabilities) of
the licensee; and
(e) all securities or managed investment products that are the property of
the licensee, showing by whom the securities or products, or the documents of
title to the securities or products, are held and, if they are held by some
other person, whether or not they are held as security against loans or
advances; and
(f) all securities or managed investment products that are not the
property of the licensee and for which the licensee or a nominee controlled by
the licensee is accountable, showing:
(i) by whom, and for whom, the securities or products, or the documents of
title to the securities or products, are held; and
(ii) the extent to which they are either held for safe custody or
deposited with a third party as security for loans or advances made to the
licensee; and
(g) such other matters (if any) as are specified in regulations made for
the purposes of this paragraph.
The regulations may impose additional requirements to be complied with in
relation to the records including, for example, requirements for things to be
contained in the records, and requirements relating to the level of detail to be
shown in the records.
An entry in the records is, unless the contrary is proved, to be taken to
have been made by, or with the authority of, the licensee.
In this Subdivision:
financial year, in relation to a financial services licensee,
means:
(a) if the licensee is not a body corporate—a year ending on
30 June; and
(b) if the licensee is a body corporate—a financial year of the body
corporate.
(1) A financial services licensee must, in respect of each financial year,
prepare a true and fair profit and loss statement and balance sheet in
accordance with this Subdivision.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1).
(2) The licensee must lodge the statement and balance sheet with ASIC in
accordance with this Subdivision.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1).
(3) The licensee must, with the statement and balance sheet, lodge an
auditor’s report with ASIC containing the information and matters required
by the regulations.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1).
The profit and loss statement and the balance sheet must:
(a) contain the information that is required by the regulations;
and
(b) be prepared in accordance with any requirements in the regulations as
to the accounting principles to be used.
(1) Unless an extension is granted under subsection (3), the profit
and loss statement and the balance sheet must be lodged before:
(a) if the licensee is not a body corporate—the day that is 2 months
after the end of that financial year; or
(b) if the licensee is a body corporate—the day that is 3 months
after the end of that financial year.
(2) If an extension is granted under subsection (3), the profit and
loss statement and the balance sheet must be lodged before the end of the
extended period.
(3) ASIC may, on application made:
(a) by a financial services licensee and the licensee’s auditor;
and
(b) before the end of the period that would otherwise apply;
approve an extension of the period for lodging the profit and loss
statement and balance sheet. The extension may be of the period originally
applicable or the period applicable under a previous extension.
(4) An approval under subsection (3) may be given subject to such
conditions (if any) as ASIC imposes.
(5) If an approval under subsection (3) is given subject to
conditions, the licensee must comply with those conditions.
If:
(a) a financial services licensee is a body corporate to which
section 327 applies; and
(b) the licensee is not a proprietary company;
nothing in sections 990B to 990H applies to the licensee.
(1) A financial services licensee must, within 1 month after beginning to
hold the licence, appoint as auditor or auditors to audit the licensee’s
financial statements:
(a) a person or persons; or
(b) a firm or firms; or
(c) a person or persons and a firm or firms.
Subsections (4) and (5) must be complied with in relation to the
appointment.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) Within 14 days after a vacancy occurs in the office of an auditor of
the licensee, if there is no surviving or continuing auditor of the licensee,
the licensee must appoint:
(a) a person or persons; or
(b) a firm or firms; or
(c) a person or persons and a firm or firms;
to fill the vacancy. Subsections (4) and (5) must be complied with in
relation to the appointment.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) While a vacancy in the office of an auditor of the licensee continues,
the surviving or continuing auditor or auditors (if any) may act.
(4) The licensee must not appoint as auditor a person who, or firm that,
is ineligible by virtue of regulations made for the purposes of
section 990C to act as auditor of the licensee.
(5) The licensee must not appoint a person or firm as auditor of the
licensee unless that person or firm has, before the appointment, consented by
written notice given to the licensee to act as auditor and has not withdrawn the
consent by written notice given to the licensee.
(6) The licensee must, within 14 days after an appointment of a person or
firm as auditor, lodge a written notice with ASIC stating that the licensee has
made the appointment and specifying the name of the person or firm.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(7) The regulations may include provisions (including provisions imposing
obligations) dealing with matters related to the appointment of a firm as
auditor, including, for example:
(a) taking certain members of the firm to have been appointed as auditors;
and
(b) the effect of a dissolution and reconstitution of the firm;
and
(c) requiring a member of the firm who retires or withdraws to continue to
act as auditor in certain circumstances; and
(d) how a report, notice or other document is to be made or
given.
(8) Regulations made for the purposes of subsection (7) may also
include provisions modifying the effect of provisions of this Subdivision in
relation to matters dealt with in those regulations.
A person or firm is ineligible to act as auditor of the licensee if
regulations made for the purposes of this section provide that the person or
firm is ineligible so to act.
(1) A person or firm, while ineligible to act as auditor of the licensee,
must not:
(a) consent to be appointed as auditor of the licensee; or
(b) act as auditor of the licensee; or
(c) prepare a report that an auditor of the licensee is to prepare under
this Part.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) A person must not:
(a) if the person has been appointed auditor of the
licensee—disqualify himself or herself, while the appointment continues,
from acting as auditor of the licensee; or
(b) if the person is a member of a firm that has been appointed auditor of
the licensee—disqualify the firm, while the appointment continues, from
acting as auditor of the licensee.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
An auditor of the licensee holds office until:
(a) death; or
(b) removal in accordance with section 990F; or
(c) resignation in accordance with sections 990G and 990H;
or
(d) becoming prohibited by subsection 990D(1) from acting as auditor of
the licensee;
whichever occurs first.
The licensee:
(a) must remove an auditor of the licensee from office if the auditor
becomes ineligible to act as auditor of the licensee; and
(b) may, with ASIC’s consent, remove an auditor of the licensee from
office.
Note: Failure to comply with paragraph (a) is an
offence (see subsection 1311(1)).
(1) An auditor of the licensee may, by written notice given to the
licensee, resign as auditor of the licensee if:
(a) the auditor has, by written notice given to ASIC, applied for consent
to the resignation and, at or about the same time as the auditor gave notice to
ASIC, gave written notice of the application to the licensee; and
(b) ASIC has consented and the auditor has received notice of ASIC’s
consent.
(2) ASIC must, as soon as practicable after receiving an application from
an auditor under subsection (1), notify the auditor and the licensee
whether it consents to the resignation.
(3) A statement by an auditor in an application under subsection (1),
or in answer to an inquiry by ASIC relating to the reasons for the
application:
(a) is not admissible in evidence in any civil or criminal proceedings in
a court against the auditor other than proceedings for a contravention of
section 1308; and
(b) may not be made the ground of a prosecution (other than a prosecution
for a contravention of section 1308), action or suit against the
auditor.
(4) A certificate by ASIC that a statement was made in an application
under subsection (1), or in answer to an inquiry by ASIC relating to the
reasons for such an application, is conclusive evidence that the statement was
so made.
The resignation of an auditor of the licensee takes effect on:
(a) if the notice of resignation specifies a date as the date the
resignation is to take effect—the date so specified; or
(b) the date on which ASIC gives its consent to the resignation;
or
(c) if ASIC has fixed a date as the date the resignation is to take
effect—the date so fixed;
whichever last occurs.
(1) An auditor of the licensee has a right of access at all reasonable
times to the financial records or other records (including any register) of the
licensee.
(2) An auditor of the licensee is entitled to require:
(a) from the licensee; or
(b) if the licensee is a body corporate—from any executive officer
of the licensee;
such assistance and explanations as the auditor desires for the purposes of
audit.
(3) The licensee, or an executive officer of the licensee if it is a body
corporate, must not:
(a) refuse or fail to allow an auditor of the licensee access, in
accordance with subsection (1), to financial records or other records of
the licensee; or
(b) refuse or fail to give assistance, or an explanation, to an auditor of
the licensee as and when required under subsection (2); or
(c) otherwise hinder, obstruct or delay an auditor of the licensee in the
performance or exercise of the auditor’s duties or powers.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) The reasonable fees and expenses of an auditor of the licensee are
payable by the licensee.
(2) The auditor may recover those fees by action against the
licensee.
(1) If an auditor, in the performance of duties as auditor of the
licensee, becomes aware of a matter referred to in subsection (2), the
auditor must, within 7 days after becoming aware of the matter, lodge a written
report on the matter with ASIC and send a copy of the report to the licensee,
and to each licensed market (if any) and each licensed CS facility (if any) in
which the licensee is a participant.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
(2) A report must be given in relation to any matter that, in the opinion
of the auditor:
(a) has adversely affected, is adversely affecting or may adversely affect
the ability of the licensee to meet the licensee’s obligations as a
licensee; or
(b) constitutes or may constitute a contravention of:
(i) a provision of Subdivision A or B of Division 2 (or a provision
of regulations made for the purposes of such a provision); or
(ii) a provision of Division 3 (or a provision of regulations made
for the purposes of such a provision); or
(iii) a provision of Subdivision B or C of this Division (or a provision
of regulations made for the purposes of such a provision); or
(iv) a condition of the licensee’s licence.
(1) An auditor of the licensee has qualified privilege in respect
of:
(a) a statement that the auditor makes, orally or in writing, in the
course of the auditor’s duties as auditor; or
(b) the lodging of a report, or the sending of a report to the licensee,
or to a licensed market or a licensed CS facility, under subsection
990K(1).
(2) A person has qualified privilege:
(a) in respect of the publishing of a document:
(i) prepared by an auditor of the licensee in the course of the
auditor’s duties as auditor; or
(ii) required by or under this Chapter to be lodged with ASIC, whether or
not the document has been so lodged; or
(b) in respect of the publishing of a statement made by an auditor of the
licensee as mentioned in subsection (1).
(1) A financial services licensee must not, in or in relation to the
provision of a financial service, engage in conduct that is, in all the
circumstances, unconscionable.
(2) If a person suffers loss or damage because a financial services
licensee contravenes subsection (1), the person may recover the amount of
the loss or damage by action against the licensee.
(3) An action under subsection (2) may be begun at any time within 6
years after the day on which the cause of action arose.
(4) This section does not affect any liability that a person has under any
other law.
(1) This section applies if:
(a) a person (the client) has instructed a financial
services licensee to buy or sell financial products of a particular class that
are able to be traded on a licensed market; and
(b) the licensee has not complied with the instruction; and
(c) the client is not an associate of the licensee; and
(d) regulations made for the purposes of this paragraph do not exclude
those financial products from this section.
(2) The financial services licensee must not, except as permitted by
subsection (3):
(a) enter into a transaction of purchase or sale of financial products of
that class either on their own behalf or on behalf of an associate of the
licensee; or
(b) instruct another person to enter into a transaction of purchase or
sale of financial products of that class on behalf of the licensee or an
associate of the licensee.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) Subsection (2) does not apply in relation to the entering into of
a transaction, or the giving of an instruction, by the licensee if:
(a) the client’s instructions required the purchase or sale to be
effected only on specified conditions relating to price and the licensee has
been unable to comply with the instructions because of those conditions;
or
(b) the transaction, or the giving of the instruction, is permitted by
regulations made for the purposes of this paragraph.
Note: A defendant bears an evidential burden in relation to
the matters in this subsection. See subsection 13.3(3) of the Criminal
Code.
The regulations may do all or any of the following in relation to
instructions received by financial services licensees to deal in financial
products through licensed markets:
(a) impose requirements relating to the order in which instructions are to
be transmitted to a licensed market or to another financial services licensee
who is a participant in a licensed market;
(b) impose requirements relating to the order in which dealings that have
been effected on a licensed market are to be allocated to
instructions;
(c) prohibit the disclosure of instructions in specified
circumstances.
The regulations may impose requirements for the keeping of records
relating to all or any of the following:
(a) instructions received by financial services licensees to deal in
financial products through licensed markets or through other financial markets
(whether inside or outside Australia);
(b) the execution of such instructions;
(c) the transmission of such instructions.
Obligation to disclose if acting on own behalf
(1) Subject to the regulations, a financial services licensee must not,
either personally or through an authorised representative, enter into a
financial product transaction on their own behalf:
(a) that relates to a financial product that is able to be traded on a
licensed market; and
(b) that is with a person (the non-licensee) who is not a
financial services licensee or an authorised representative;
if:
(c) the licensee has not (in accordance with any applicable regulations
made for the purposes of paragraph (2)(a)) disclosed to the non-licensee
the fact that the licensee will be acting on their own behalf in the proposed
dealing; or
(d) the non-licensee has not (in accordance with any applicable
regulations made for the purposes of paragraph (2)(b)) consented to the
licensee so acting in the proposed dealing.
If the licensee is acting through an authorised representative, the
disclosure referred to in paragraph (c) may instead be given by the
representative.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The regulations may deal with either or both of the
following:
(a) how a disclosure referred to in paragraph (1)(c) is to be
made;
(b) how a consent referred to in paragraph (1)(d) is to be
given.
Obligation not to charge fee
(3) If a financial services licensee, either personally or through an
authorised representative, enters into a transaction of sale or purchase of
financial products on their own behalf:
(a) that relates to a financial product that is able to be traded on a
licensed market; and
(b) that is with a person (the non-licensee) who is not a
financial services licensee or an authorised representative;
the licensee must only charge the non-licensee a brokerage, commission or
other fee in respect of the transaction if the charge is permitted by the
regulations.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Person may rescind contract if section contravened
(4) If subsection (1) or (3) is contravened in relation to a
transaction (whether or not anyone is convicted of an offence in respect of the
contravention), the non-licensee may, subject to subsection (5), rescind
the contract effecting the transaction, unless the contract was for the purchase
of financial products by the non-licensee and the non-licensee has disposed of
those products.
(5) The right under subsection (4) to rescind the contract:
(a) can only be exercised during the period of 14 days starting
on:
(i) unless subparagraph (ii) applies—the day on which the
contract was entered into; or
(ii) if regulations made for the purposes of this subparagraph specify a
later day—that later day; and
(b) is to be exercised by notice in writing to the licensee.
(6) Nothing in subsections (4) and (5) affects any other right that a
person has.
Regulations may require records to be kept in relation to transactions
entered into by licensee on own behalf
(7) The regulations may impose requirements for the keeping of records
relating to financial products transactions entered into by a financial services
licensee on their own behalf.
(1) Subject to the regulations, a financial services licensee and an
employee of the licensee must not, on their own behalves, jointly acquire a
financial product.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) Subject to the regulations, a financial services licensee must not
give credit to an employee of the licensee, or to a person who they know is an
associate of an employee of the licensee, if:
(a) the credit is given for the purpose of enabling the person to whom the
credit is given to acquire a financial product; or
(b) the licensee knows or has reason to believe that the credit will be
used for the purpose of acquiring a financial product.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) Subject to the regulations, a person:
(a) who is an employee of a financial services licensee that is a
participant in a licensed market; and
(b) who is so employed in connection with a business of dealing in
financial products;
must only, on their own behalf, acquire or agree to acquire a financial
product of a kind that is able to be traded on that market if the licensee acts
as the agent of the person in respect of the acquisition.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) In this section, a reference to an employee of a financial services
licensee includes, for a licensee that is a body corporate, a reference to an
officer of the body.
(1) A person must not offer financial products for issue or sale in the
course of, or because of, an unsolicited meeting with another person.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) Subsection (1) does not apply to offering of securities, hawking
of which is prohibited by section 736.
Note: A defendant bears an evidential burden in relation to
the matters in this subsection. See subsection 13.3(3) of the Criminal
Code.
(1) ASIC may, subject to subsection (2):
(a) exempt a person or class of persons from all or specified provisions
of this Part; or
(b) exempt a financial product or class of financial products from all or
specified provisions of this Part; or
(c) declare that this Part applies in relation to a person or a financial
product, or a class of persons or financial products, as if specified provisions
of this Part were omitted, modified or varied as specified in the
declaration.
(2) However, ASIC cannot declare that provisions of this Part are modified
so that they apply in relation to persons or financial products to which they
would not otherwise apply.
(3) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an exemption applies must
comply with the condition. The Court may order the person to comply with the
condition in a specified way. Only ASIC may apply to the Court for the
order.
(4) An exemption or declaration must be in writing and ASIC must publish
notice of it in the Gazette.
(5) If conduct (including an omission) of a person would not have
constituted an offence if a particular declaration under paragraph (1)(c)
had not been made, that conduct does not constitute an offence unless, before
the conduct occurred (in addition to complying with the gazettal requirement of
subsection (4)):
(a) the text of the declaration was made available by ASIC on the
Internet; or
(b) ASIC gave written notice setting out the text of the declaration to
the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with before
the conduct occurred.
(6) For the purpose of this section, the provisions of this Part
include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 10.2 (transitional provisions) that relate
to provisions of this Part.
This Division contains provisions creating offences by reference to
various rules contained in preceding Divisions of this Part. However, it does
not create all the offences relating to those rules, as some offences are
created by subsection 1311(1). Where offences are created by subsection 1311(1)
in relation to a rule, this is indicated by a note at the end of the provision
containing the rule.
Strict liability offence
(1) A financial services licensee commits an offence if:
(a) the licensee is required by subsection 981B(1) to pay particular money
into an account in accordance with that subsection; and
(b) the licensee does not pay the money into an account in accordance with
that subsection.
(2) An offence based on subsection (1) is an offence of strict
liability.
Note: For strict liability, see
section 6.1 of the Criminal Code.
Ordinary offence
(3) A financial services licensee commits an offence if:
(a) the licensee is required by subsection 981B(1) to pay particular money
into an account in accordance with that subsection; and
(b) the licensee does not pay the money into an account in accordance with
that subsection.
Strict liability offence
(1) A financial services licensee commits an offence if the licensee
contravenes a requirement in regulations made for the purposes of
section 981C.
(2) An offence based on subsection (1) is an offence of strict
liability.
Note: For strict liability, see
section 6.1 of the Criminal Code.
Ordinary offence
(3) A financial services licensee commits an offence if:
(a) a requirement in regulations made for the purposes of
section 981C applies to the licensee; and
(b) the licensee contravenes the requirement.
Strict liability offence
(1) A financial services licensee commits an offence if:
(a) the licensee is required by subsection 982B(1) to pay particular money
into an account in accordance with that subsection; and
(b) the licensee does not pay the money into an account in accordance with
that subsection.
(2) An offence based on subsection (1) is an offence of strict
liability.
Note: For strict liability, see
section 6.1 of the Criminal Code.
Ordinary offence
(3) A financial services licensee commits an offence if:
(a) the licensee is required by subsection 982B(1) to pay particular money
into an account in accordance with that subsection; and
(b) the licensee does not pay the money into an account in accordance with
that subsection.
(1) Apart from section 1017F and Division 6 (and provisions of
Division 7 that apply in relation to that section or provisions of that
Division), nothing in this Part applies in relation to securities.
Note: Chapters 6CA and 6D provide for disclosure in
relation to securities.
(2) Apart from section 1017F and Division 6, nothing in this
Part applies in relation to debentures, stocks or bonds issued or proposed to be
issued by a government.
Note: These financial products are not
securities within the meaning of
section 761A.
(1) Nothing in this Part applies in relation to a financial product that
is not or was not issued, or that will not be issued, in the course of a
business of issuing financial products.
(2) For this purpose, the issue of:
(a) any managed investment product; or
(b) any superannuation product;
is taken to occur in the course of a business of issuing financial
products.
(1) For the purposes of this Part, a reference to a sale or
purchase of a financial product is a reference to a sale of the
product by, or a purchase of the product from, a person who has (whether by
issue or otherwise) acquired the product. The issue of a financial product is
not a sale of the financial product.
(2) For the purposes of this Part:
(a) a reference to offering to issue a financial product includes a
reference to inviting an application for the issue of the financial product;
and
(b) a reference to offering to sell a financial product includes a
reference to inviting an offer to purchase the financial product.
Division 7 contains provisions creating offences by reference to
various rules contained in Divisions of this Part. However, it does not create
all the offences relating to those rules, as some offences are created by
subsection 1311(1). Where offences are created by subsection 1311(1) in relation
to a rule, this is indicated by a note at the end of the provision containing
the rule.
This Division only applies in relation to offers, recommendations and
advice that are received in this jurisdiction.
In this Division:
issue Statement has the meaning given by subsection
1013A(1).
offer has a meaning affected by sections 1010C and
1011C.
regulated person, in relation a financial
product, means:
(a) an issuer of the financial product; or
(b) a seller of the financial product if the sale takes place in
circumstances described in subsection 1012C(5), (6) or (8) (secondary sales that
require a Product Disclosure Statement); or
(c) any financial services licensee; or
(d) any authorised representative of a financial services licensee;
or
(e) any person who is a member of a declared professional body;
or
(f) any person who is not required to hold an Australian financial
services licence because the person is covered by:
(i) paragraph 911(2)(j); or
(ii) an exemption in regulations made for the purposes of paragraph
911A(2)(k); or
(iii) an exemption specified by ASIC for the purposes of paragraph
911A(2)(l); or
(g) any person who is required to hold an Australian financial services
licence but who does not hold such a licence.
responsible person for a Product Disclosure Statement has the
meaning given by subsection 1013A(3).
sale has a meaning affected by section 1010C.
sale Statement has the meaning given by subsection
1013A(2).
For the purposes of this Division:
(a) an offer of an option over a financial product is not to be taken to
be an offer of the underlying financial product; and
(b) the grant of an option without an offer of the option is taken to be
an offer of the option; and
(c) an offer to grant an option is taken to be an offer to issue the
financial product constituted by the option.
Section sets out recommendation situation in which Product Disclosure
Statement required
(1) This section sets out the situations in which giving financial product
advice that consists of, or includes, a recommendation to acquire a financial
product gives rise to an obligation on a regulated person to give another person
a Product Disclosure Statement for the product.
(2) For the purposes of this Division:
(a) each of the situations is a recommendation situation;
and
(b) the relevant conduct for that situation is the making of
the recommendation; and
(c) the client for that situation is the person to whom the
advice is provided.
Personal advice recommending a particular financial
product
(3) A regulated person must give a person a Product Disclosure Statement
for a financial product if:
(a) the regulated person provides financial product advice to the person
that consists of, or includes, a recommendation that the person acquire the
financial product; and
(b) the person would acquire the financial product by way of:
(i) the issue of the product to the person (rather than the transfer of
the product to the person); or
(ii) the transfer of the product to the person in circumstances described
in subsection 1012C(5), (6) or (8) (secondary sales that require a Product
Disclosure Statement); and
(c) the financial advice is provided to the client as a retail client;
and
(d) the financial product advice is personal advice to the
client.
The Product Disclosure Statement must be given at or before the time when
the regulated person provides the advice and must be given in accordance with
this Division.
This section has effect subject to other provisions
(4) This section has effect subject to sections 1012D, 1012E, 1012F,
1012G and 1014E.
Section sets out issue situations in which Product Disclosure Statement
required
(1) This section sets out situations in which:
(a) an offer relating to the issue of a financial product; or
(b) the issue of a financial product;
gives rise to an obligation on a regulated person to give another person a
Product Disclosure Statement for the product.
(2) For the purposes of this Division:
(a) each of the situations is an issue situation;
and
(b) the relevant conduct for that situation is the conduct
by the regulated person that gives rise to the obligation to give the Product
Disclosure Statement; and
(c) the client for that situation is the person to whom the
financial product is to be or is issued.
Offering to issue, or arrange for issue of, a particular financial
product
(3) A regulated person must give a person a Product Disclosure Statement
for a financial product if:
(a) the regulated person:
(i) offers to issue the financial product to the person; or
(ii) offers to arrange for the issue of the financial product to the
person; or
(iii) issues the financial product to the person in circumstances in which
there are reasonable grounds to believe that the person has not been given a
Product Disclosure Statement for the product; and
(b) the financial product is, or is to be, issued to the person as a
retail client.
The Product Disclosure Statement must be given at or before the time when
the regulated person makes the offer, or issues the financial product, to the
person and must be given in accordance with this Division.
Note: If a Product Disclosure Statement is given when the
offer is made, it will not need to be given again when the product is issued to
the person (see subsection 1012D(1)) unless the Product Disclosure Statement
that was given is no longer up to date.
Receiving offer to acquire financial product
(4) A regulated person must give a person a Product Disclosure Statement
for a financial product if:
(a) the person makes an offer to the regulated person to acquire the
financial product; and
(b) the person would acquire the financial product by way of the issue of
the product to the person (rather than the transfer of the product to the
person); and
(c) the financial product is to be issued to the person as a retail
client.
The Product Disclosure Statement must be given to the person before the
person becomes bound by a legal obligation to acquire the financial product
pursuant to the offer and must be given in accordance with this
Division.
This section has effect subject to other provisions
(5) This section has effect subject to sections 1012D, 1012E, 1012F,
1012G and 1014E.
Section sets out sale situations in which Product Disclosure Statement
required
(1) This section sets out situations in which an offer relating to the
sale of a financial product gives rise to an obligation on a regulated person to
give another person a Product Disclosure Statement for the product.
(2) For the purposes of this Division:
(a) each of the situations is a sale situation;
and
(b) the relevant conduct for that situation is the offer;
and
(c) the client for that situation is the person to whom the
product is to be sold.
Sale offers that require a Product Disclosure Statement
(3) A regulated person must give a person a Product Disclosure Statement
for a financial product if:
(a) the regulated person offers to sell the financial product to the
person; and
(b) a sale of the product to the person pursuant to the offer would take
place in circumstances covered by subsection (5), (6) or (8); and
(c) the financial product is to be sold to the person as a retail
client.
The Product Disclosure Statement must be given at or before the time when
the regulated person makes the offer and must be given in accordance with this
Division.
(4) A regulated person must give a person a Product Disclosure Statement
for a financial product if:
(a) the person makes an offer to the regulated person to acquire the
financial product; and
(b) the person would acquire the financial product by way of the transfer
of the product to the person; and
(c) a sale of the product to the person pursuant to the offer would take
place in the circumstances described in subsection (5), (6) or (8);
and
(d) the financial product is to be sold to the person as a retail
client.
The Product Disclosure Statement must be given to the person before the
person becomes bound by a legal obligation to acquire the financial product
pursuant to the offer and must be given in accordance with this
Division.
Off-market sale by controller
(5) This subsection covers the circumstances in which:
(a) the seller controls the issuer of the financial product; and
(b) either:
(i) the product is not able to be traded on any licensed market;
or
(ii) although the product is able to be traded on a licensed market, the
offer is not made in the ordinary course of trading on a licensed
market.
Note: See section 50AA for when a person controls a
body.
Sale amounting to indirect issue
(6) This subsection covers the circumstances in which the offer is made
within 12 months after the issue of the financial product, and the financial
product was issued:
(a) without a Product Disclosure Statement being prepared before the issue
of the product; and
(b) with the purpose of the person to whom the product was
issued:
(i) selling or transferring the product; or
(ii) granting, issuing or transferring interests in, or options or
warrants over, the product.
Evidence of intention—indirect issue
(7) Unless the contrary is proved, a person is taken to issue a financial
product with the purpose referred to in paragraph (6)(b) if the financial
product, or any financial product of the same kind that was issued at the same
time, is subsequently sold, or offered for sale, within 12 months after
issue.
Sale amounting to indirect off-market sale by controller
(8) This subsection covers the circumstances in which the offer is made
within 12 months after the sale of the financial product by a person (the
controller) who controlled the issuer of the product at the time
of the sale and:
(a) either:
(i) at the time of the sale by the controller, the product was not able to
be traded on any licensed market; or
(ii) although the product was able to be traded on a licensed market at
that time, the sale by the controller did not occur in the ordinary course of
trading on a licensed market; and
(b) a Product Disclosure Statement was not prepared by, or on behalf of,
the controller before the sale of the product by the controller; and
(c) the controller sold the product with the purpose of the person to whom
it was sold:
(i) selling or transferring the product; or
(ii) granting, issuing or transferring interests in, or options or
warrants over, the product.
Note: See section 50AA for when a person controls a
body.
Evidence of intention—indirect sale by controller
(9) Unless the contrary is proved, a person who controls an issuer of
financial products is taken to sell a financial product with the purpose
referred to in paragraph (8)(c) if the financial product, or any financial
product of the same kind that was issued at the same time, is subsequently sold,
or offered for sale, within 12 months after its sale by the
controller.
This section has effect subject to other provisions
(10) This section has effect subject to sections 1012D, 1012E and
1014E.
Recommendation, issue or sale situation—client has already
received an up to date Product Disclosure Statement
(1) In a recommendation situation, issue situation or sale situation, the
regulated person does not have to give the client a Product Disclosure Statement
if:
(a) the client has already received a Product Disclosure Statement that
contains all of the information that the first-mentioned Product Disclosure
Statement would be required to contain; or
(b) the regulated person believes on reasonable grounds that
paragraph (a) applies.
Recommendation, issue or sale situation—client has or has access
to up to date information
(2) In a recommendation situation, issue situation or sale situation, the
regulated person does not have to give the client a Product Disclosure Statement
for the financial product if:
(a) the client already holds a financial product of the same kind;
and
(b) the regulated person believes on reasonable grounds that the client
has received, or has access to, all of the information that the first-mentioned
Product Disclosure Statement would be required to contain through:
(i) a Product Disclosure Statement; and
(ii) information provided to the client under section 1017B, 1017C or
1017D or through continuous disclosure under Chapter 6CA.
Note: Paragraph (a)—see
subsection (11).
Recommendation or issue situation—certain offers to present
holders
(3) In a recommendation situation or issue situation, the regulated person
does not have to give the client a Product Disclosure Statement for the
financial product if:
(a) the client already holds a financial product of the same kind;
and
(b) either:
(i) in a recommendation situation—the advice that constitutes the
relevant conduct relates to an offer made under a distribution reinvestment plan
or switching facility; or
(ii) in an issue situation—the offer or issue that constitutes the
relevant conduct is made under a distribution reinvestment plan or switching
facility.
Note: Paragraph (a)—see
subsection (10).
Issue situation—additional contributions etc. in relation to
existing financial product
(4) In an issue situation, the regulated person does not have to give the
client a Product Disclosure Statement if the issue of the financial product
would arise merely because the client:
(a) makes a further contribution to a superannuation fund of which the
client is already a member on the same terms as those on which the client has
made earlier contributions to the fund; or
(b) makes a further deposit into an RSA maintained in the client’s
name; or
(c) makes a further payment under a life insurance investment product;
or
(d) makes a further deposit into a deposit product; or
(e) engages in conduct specified in regulations made for the purposes of
this subsection.
Recommendation, issue or sale situation—no consideration to be
provided
(5) In a recommendation situation, an issue situation or a sale situation,
the regulated person does not have to give the client a Product Disclosure
Statement if:
(a) no consideration is to be provided for the issue or sale of the
financial product; and
(b) the financial product is not an option and is:
(i) a managed investment product; or
(ii) a financial product of a kind prescribed by regulations made for the
purposes of this subparagraph.
(6) In a recommendation situation, an issue situation or a sale situation,
the regulated person does not have to give the client a Product Disclosure
Statement if:
(a) the financial product is an option; and
(b) no consideration is to be provided for the issue or sale of the
financial product; and
(c) no consideration is to be provided for the underlying financial
product on the exercise of the option.
Issue or sale situation—takeovers
(7) In an issue situation or a sale situation, the regulated person does
not have to give the client a Product Disclosure Statement if:
(a) the financial product is:
(i) a managed investment product; or
(ii) an option to acquire, by way of transfer, a share in a body, a
debenture of a body or a legal or equitable right or interest in a share in a
body or a debenture of a body; and
(b) the offer that constitutes the relevant conduct is made as
consideration for an offer made under a takeover bid under Chapter 6;
and
(c) the offer is accompanied by a bidder’s statement.
Note: Although a Product Disclosure Statement is not needed,
disclosures must be made in the bidder’s document under
section 636.
Recommendation, issue or sale situation—responsible entity an
exempt body
(8) In a recommendation situation, an issue situation or a sale situation,
the regulated person does not have to give the client a Product Disclosure
Statement if:
(a) the financial product is a managed investment product; and
(b) the responsible entity of the managed investment scheme is an exempt
body of this jurisdiction; and
(c) in the case of a recommendation situation or an issue
situation—either:
(i) the recommendation that constitutes the relevant conduct relates to an
offer made by the responsible entity of the scheme; or
(ii) the offer that constitutes the relevant conduct is made by or to the
responsible entity of the scheme.
Note 1: Section 66A defines exempt
body.
Note 2: In the case of a sale situation, there is no
additional requirement equivalent to paragraph (c).
Recommendation or issue situation—interim contracts of
insurance
(9) In a recommendation situation or an issue situation, the regulated
person does not have to give the client a Product Disclosure Statement if the
financial product is an interim contract of insurance (as defined in subsection
11(2) of the Insurance Contracts Act 1984).
Note: This does not detract from the obligation to give a
Product Disclosure Statement relating to any contract of insurance that replaces
or supersedes the interim contract.
(10) For the purposes of this section:
(a) a financial product (other than a managed investment product or a
superannuation product) is of the same kind as another financial product only if
they are both issued:
(i) by the same issuer; and
(ii) on the same terms and conditions (other than price); and
(b) a managed investment product, or a superannuation product, is the same
as another product only if the other product is an interest in the same scheme
or fund.
(1) This section applies only to financial products that are:
(a) managed investment products; or
(b) financial products of a kind prescribed by regulations made for the
purposes of this paragraph.
(2) Personal offers of financial products do not need a Product Disclosure
Statement under this Part if:
(a) all of the financial products are issued by the same person (the
issuer); and
(b) none of the offers results in a breach of the 20 purchasers ceiling
(see subsections (6) and (7)); and
(c) none of the offers results in a breach of the $2 million ceiling (see
subsections (6) and (7)).
(3) Subsection (2) does not apply to an offer to which subsection
1012C(6) (sale amounting to indirect issue) or (8) (sale amounting to indirect
sale by controller) applies.
Note: Under section 1012K, ASIC may make a
determination aggregating the transactions of bodies that ASIC considers to be
closely related.
(4) If subsection (2) applies to an offer of a financial product, a
recommendation to a person to acquire a financial product in response to a
personal offer of that kind does not need a Product Disclosure Statement under
this Part.
(5) For the purposes of subsections (2) and (4), a personal
offer is one that:
(a) may only be accepted by the person to whom it is made; and
(b) is made to a person who is likely to be interested in the offer,
having regard to:
(i) previous contact between the person making the offer and that person;
or
(ii) some professional or other connection between the person making the
offer and that person; or
(iii) statements or actions by that person that indicate that they are
interested in offers of that kind.
(6) An offer to issue, or arrange for the issue of, a financial
product:
(a) results in a breach of the 20 purchasers ceiling if it results in the
number of people to whom the issuer has issued financial products exceeding 20
in any 12 month period; and
(b) results in a breach of the $2 million ceiling if it results in the
amount raised by the issuer from issuing financial products exceeding $2 million
in any 12 month period.
(7) An offer by a person to sell a financial product:
(a) results in a breach of the 20 purchasers ceiling if it results in the
number of people to whom the person sells financial products issued by the
issuer of that financial product exceeding 20 in any 12 month period;
and
(b) results in a breach of the $2 million ceiling if it results in the
amount raised by the person from selling financial products issued by the issuer
of that financial product exceeding $2 million in any 12 month period.
(8) In counting issues and sales of the financial products issued by the
issuer, and the amount raised from issues and sales, for the purposes of
subsection (2), disregard issues and sales that result from offers
that:
(a) do not need a Product Disclosure Statement (otherwise than because of
this section); or
(b) are made under a Product Disclosure Statement.
Note: Also see provisions on restrictions on advertising
(section 1018A) and the anti-hawking provisions in
section 992A).
(9) In counting issues and sales of the financial products issued by the
issuer, and the amount raised from issues and sales, for the purposes of
subsection (2), disregard any issues and sales made by a body if:
(a) the body was a managed investment scheme (but not a registered scheme)
at the time that the offer of interests in the scheme that resulted in the
issues or sales was made; and
(b) the body became a registered scheme within 12 months after that offer
was made; and
(c) the offer would not have required a Product Disclosure Statement
(otherwise than because of this section) if the managed investment scheme had
been a registered scheme at the time that the offer was made.
(10) In working out the amount of money raised by the issuer from issuing
financial products, include the following:
(a) the amount payable for the financial products at the time when they
are issued;
(b) if the financial product is an option—any amount payable on the
exercise of the option;
(c) if the financial products carry a right to convert the financial
product into other financial products—any amount payable on the exercise
of that right.
(11) If a person relies on subsection (2) to make offers of financial
products without a Product Disclosure Statement under this Part, the person must
not issue, arrange for the issue of, or transfer, financial products without a
Product Disclosure Statement under this Part if the issue or transfer would
result in a breach of the 20 purchasers ceiling or the $2 million ceiling (see
subsections (6), (7), (8), (9) and (10)).
(12) For the purposes of this section, an offer of a financial
product is an offer to:
(a) issue the financial product; or
(b) arrange for the issue of the financial product; or
(c) sell the financial product.
In a recommendation situation or an issue situation in which the
financial product is a superannuation product of a kind specified in regulations
made for the purposes of this section, the regulated person:
(a) need not give the client the Product Disclosure Statement at or before
the time when it would otherwise be required to be given; and
(b) must give the client the Product Disclosure Statement as soon as is
reasonably practicable and in any event within 3 months after the product is
issued to the client; and
(c) need not give the client the Product Disclosure Statement at all if
the client ceases to be a member of the superannuation fund concerned before the
regulated person is required to give the Product Disclosure Statement under
paragraph (b).
(1) The regulated person may deal with a financial product under this
section only if:
(a) the financial product is one for which an application form is not
required under section 1016A and section 1019B (cooling off period)
will apply if the client enters into a legal obligation to acquire the product
pursuant to the recommendation or offer that constitutes the relevant conduct;
or
(b) the financial product is:
(i) a basic deposit product; or
(ii) a facility for making non-cash payments (see section 763D) that
is related to a basic deposit product; or
(iii) a financial product of a kind prescribed by regulations made for the
purposes of this subparagraph.
(2) In a recommendation situation or an issue situation, the regulated
person need not give the client a Product Disclosure Statement for the financial
product at or before the time when it would otherwise be required to be given
if:
(a) the client expressly instructs the regulated person that they
require:
(i) in a recommendation situation—the advice constituting the
recommendation; or
(ii) in an issue situation—the financial product;
to be provided or issued immediately, or by a specified time;
and
(b) it is not reasonably practicable, while complying with the
client’s instructions, to give the client the Product Disclosure Statement
at or before the time when it would otherwise be required to be given.
The regulated person must comply with subsection (3)
instead.
(3) The regulated person must:
(a) at or before the time referred to in paragraph (2)(b), read the
client a statement, prepared by or on behalf of the product issuer, that
contains:
(i) the name and contact details of the issuer of the financial product;
and
(ii) information about the essential features of the financial product;
and
(iii) the information that would be required to be in a Product Disclosure
Statement for the financial product by paragraphs 1013D(1)(c), (d), (h) and (i);
and
(b) give the client the Product Disclosure Statement as soon as
practicable after that time, and in any event not later than:
(i) the time when the confirmation requirement (if applicable) is complied
with; or
(ii) the end of the fifth day after the day on which the financial product
was issued or sold to the client.
(4) For the purposes of paragraph (3)(b), the confirmation
requirement is complied with when:
(a) the client receives confirmation, as mentioned in paragraph
1017F(5)(a), of the transaction by which they acquired the financial product;
or
(b) confirmation of that transaction is available to the client by a
facility as mentioned in paragraph 1017F(5)(b).
(1) This section covers the situation in which a financial
product:
(a) is issued to a person; and
(b) covers, or is designed to cover, a group of people; and
(c) may cover a particular person (the new group member) if
the person elects to be covered by the financial product.
(2) The issuer must take reasonable steps to ensure that the new group
member is given a Product Disclosure Statement for the financial product in
accordance with this Division before the new group member makes an election to
be covered by the financial product.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) For the purposes of this section, a person is covered by a financial
product if benefits are, or may be, provided under the financial product
directly to:
(a) the person; or
(b) a relative of the person; or
(c) a person nominated by the person.
(1) At or before the time when a person (the employer)
becomes a standard employer-sponsor of a superannuation entity, the person (the
issuer) who is to provide the superannuation products to the
employer’s employees must give the employer a Product Disclosure Statement
in accordance with this Division for each of those superannuation
products.
(2) If a person (the employer) applies on behalf of an
employee for an RSA product for the employee, the person (the
issuer) who is to provide the RSA product must, at or before the
time when the issuer issues the RSA product to the employee, give the employer a
Product Disclosure Statement in accordance with this Division for the RSA
product.
(3) The issuer does not have to give the employer a Product Disclosure
Statement under subsection (1) or (2) for a financial product if:
(a) the employer has already received a Product Disclosure Statement for
that financial product that contains all of the information that the
first-mentioned Product Disclosure Statement would be required to contain;
or
(b) the issuer believes on reasonable grounds that paragraph (a)
applies.
(4) The issuer need not give the employer a Product Disclosure Statement
under subsection (1) or (2) in the circumstances specified in the
regulations.
(5) Terms used in this section that are defined for the purposes of the
Superannuation Industry (Supervision) Act 1993 have the same meaning as
in that Act.
The information in a Product Disclosure Statement must be up to date as
at the time when it is given.
Note: A Supplementary Product Disclosure Statement
containing updated information may be given with a Product Disclosure Statement
that has become out of date. The updated information is taken to be included in
the Product Disclosure Statement (see section 1014D).
(1) ASIC may determine in writing that a number of different bodies are
closely related and that their transactions should be aggregated for the
purposes of this Subdivision. If ASIC does so:
(a) an issue, sale or transfer of financial products of any other bodies
is taken to also be an issue, sale or transfer of the financial products of each
of the other bodies by those bodies; and
(b) any money received from an issue, sale or transfer of financial
products of any of the bodies is taken to also be received by each of the other
bodies from an issue, sale or transfer of its own financial products.
ASIC must give written notice of the determination to each of the
bodies.
(2) ASIC may determine in writing that the transactions of a body and of a
person who controls the body should be aggregated for the purposes of this
Subdivision. If ASIC does so:
(a) an issue of financial products of the body is taken to also be the
transfer of the financial products by the controller; and
(b) any money received from an issue of financial products of the body is
taken to also be received by the controller from a transfer of the financial
products; and
(c) a sale or transfer of financial products of the body by the controller
is taken to also be the issue of the financial products by the body;
and
(d) any money received from a sale or transfer of financial products of
the body by the controller is taken to also be received by the body from an
issue of the financial products.
ASIC must give written notice of the determination to the body and the
controller.
(1) A Product Disclosure Statement that:
(a) is required to be given by section 1012A (otherwise than in a
situation in which the recommendation concerned relates to an offer described in
subsection 1012C(3) or (4)); or
(b) is required to be given by section 1012B; or
(c) section 1012H requires an issuer to take reasonable steps to
ensure is given to a new group member; or
(d) is required to be given by section 1012I;
must be a document that has been prepared by the issuer of the financial
product. A Product Disclosure Statement of this kind is in this Division
referred to as an issue Statement.
(2) A Product Disclosure Statement that:
(a) is required to be given by section 1012A in a situation in which
the recommendation concerned relates to an offer described in subsection
1012C(3) or (4)); or
(b) is required to be given by section 1012C;
must be a document that has been prepared by the person making the offer to
sell the financial product. A Product Disclosure Statement of this kind is in
this Division referred to as a sale Statement.
(3) The person who, or on whose behalf, a Product Disclosure Statement for
a financial product is required to be prepared is, in this Division, referred to
as the responsible person for the financial product.
(4) For the purposes of this Part, a Product Disclosure Statement prepared
on behalf of a person is taken to be prepared by the person.
(1) The title “Product Disclosure Statement” must be used on
the cover of, or at or near the front of, a Product Disclosure
Statement.
(2) In any other part of a Product Disclosure Statement, “Product
Disclosure Statement” may be abbreviated to “PDS”.
(1) A Product Disclosure Statement:
(a) must include the following statements and information required by this
Subdivision:
(i) the statements and information required by section 1013D;
and
(ii) the information required by section 1013E; and
(iii) the information required by the other provisions of this
Subdivision; and
(b) may also:
(i) include other information; or
(ii) refer to other information that is set out in another
document.
Note: A Supplementary Product Disclosure Statement
containing additional information may be given with a Product Disclosure
Statement that does not contain all the required information. The additional
information is taken to be included in the Product Disclosure Statement (see
section 1014D).
(2) The information required by sections 1013D and 1013E need only be
included in the Product Disclosure Statement to the extent to which it is
actually known to:
(a) the responsible person; and
(b) in the case of a sale Statement—the issuer of the financial
product; and
(c) any person named in the Statement as an underwriter of the issue or
sale of the financial product; and
(d) any person:
(i) named in the Statement as a financial services licensee providing
services in relation to the issue or sale of the financial product;
and
(ii) who participated in any way in the preparation of the Statement;
and
(e) any person who has given a consent referred to in section 1013K
in relation to a statement included in the Statement; and
(f) any person named in the Statement with their consent as having
performed a particular professional or advisory function; and
(g) if any of the above persons is a body corporate—any director of
that body corporate.
(3) The information included in the Product Disclosure Statement must be
worded and presented in a clear, concise and effective manner.
(4) The responsible person may include in the Product Disclosure Statement
a statement about the association between the financial product and another
person.
(5) The responsible person must not include a statement about the
association between the financial product and a person if:
(a) the statement creates the impression that the financial product is
issued or sold by that other person; and
(b) the person has not issued or sold the product.
(6) The responsible person must not include a statement about the
association between the financial product and a person if:
(a) the statement creates the impression that the financial product is
guaranteed or underwritten by that other person; and
(b) the person has not guaranteed or underwritten the product.
(7) If the Product Disclosure Statement states that a person provides, or
is to provide, services in relation to the financial product, the Product
Disclosure Statement must clearly distinguish between the respective roles of
that person and the issuer or seller of the financial product.
(1) Subject to this section, subsection 1013C(2) and section 1013F, a
Product Disclosure Statement must include the following statements, and such of
the following information as a person would reasonably require for the purpose
of making a decision, as a retail client, whether to acquire the financial
product:
(a) a statement setting out the name and contact details of:
(i) the issuer of the financial product; and
(ii) if the Statement is a sale Statement—the seller; and
(b) information about any significant benefits to which a holder of the
product will or may become entitled, the circumstances in which and times at
which those benefits will or may be provided, and the way in which those
benefits will or may be provided; and
(c) information about any significant risks associated with holding the
product; and
(d) information about:
(i) the cost of the product; and
(ii) any amounts that will or may be payable by a holder of the product in
respect of the product after its acquisition, and the times at which those
amounts will or may be payable; and
(iii) if the amounts paid in respect of the financial product and the
amounts paid in respect of other financial products are paid into a common
fund—any amounts that will or may be deducted from the fund by way of
fees, expenses or charges; and
(e) if the product will or may generate a return to a holder of the
product—information about any commission, or other similar payments, that
will or may impact on the amount of such a return; and
(f) information about any other significant characteristics or features of
the product or of the rights, terms, conditions and obligations attaching to the
product; and
(g) information about the internal and external dispute resolution
procedures that are available to deal with complaints by holders of the product
and about how those procedures may be accessed; and
(h) general information about any significant taxation implications of
financial products of that kind; and
(i) information about any cooling-off regime that applies in respect of
acquisitions of the product (whether the regime is provided for by a law or
otherwise); and
(j) if the product issuer (in the case of an issue Statement) or the
seller (in the case of a sale Statement) makes other information relating to the
product available to holders or prospective holders of the product, or to people
more generally—a statement of how that information may be
accessed.
(2) For the purposes of paragraph (1)(d), an amount will or may be
payable in respect of a financial product by the holder of the financial product
if:
(a) the holder will or may have to pay an amount in respect of the
product; or
(b) an amount will or may be deducted from:
(i) a payment to be made by the holder; or
(ii) a payment to be made to the holder; or
(iii) an amount held on the holder’s behalf under the financial
product; or
(c) an account representing the holder’s interest in the financial
product will or may be debited with an amount.
It includes an amount that the holder will or may have to pay, or that will
or may be deducted or debited, as a fee, expense or charge in relation to a
particular transaction in relation to the financial product.
(3) Subsection (1) requires information to be included in the Product
Disclosure Statement only to the extent to which the requirement is applicable
to the financial product. The Product Disclosure Statement does not need to
indicate that a particular requirement is not applicable to the financial
product.
(4) The regulations may:
(a) provide that a provision of subsection (1) does not apply in a
particular situation; or
(b) provide that particular information is not required by a provision of
subsection (1), either in a particular situation or generally; or
(c) provide a more detailed statement of the information that is required
by a provision of subsection (1), either in a particular situation or
generally.
Subject to subsection 1013C(2) and section 1013F, a Product
Disclosure Statement must also contain any other information that might
reasonably be expected to have a material influence on the decision of a
reasonable person, as a retail client, whether to acquire the product.
(1) Despite anything in section 1013D or 1013E, information is not
required to be included in a Product Disclosure Statement if it would not be
reasonable for a person considering, as a retail client, whether to acquire the
product to expect to find the information in the Statement.
(2) In considering whether it would not be reasonable for a person
considering, as a retail client, whether to acquire the product to expect to
find particular information in the Statement, the matters that may be taken into
account include, but are not limited to:
(a) the nature of the product (including its risk profile); and
(b) the extent to which the product is well understood by the kinds of
person who commonly acquire products of that kind as retail clients;
and
(c) the kinds of things such persons may reasonably be expected to know;
and
(d) if the product is an ED security—the effect of the following
provisions:
(i) Chapter 2M as it applies to disclosing entities;
(ii) sections 674 and 675; and
(e) the way in which the product is promoted, sold or distributed;
and
(f) any other matters specified in the regulations.
A Product Disclosure Statement must be dated. The date must be:
(a) if a copy of the Product Disclosure Statement has been lodged with
ASIC (see section 1015B)—the date on which it was so lodged;
or
(b) in any other case—the date on which the Product Disclosure
Statement was prepared or its preparation was completed.
If a Product Disclosure Statement states or implies that the financial
product will be able to be traded on a financial market (whether in Australia or
elsewhere), the Statement must state that:
(a) the product is able to be traded on that market; or
(b) an application has been made to the operator of that market for the
taking of such action as is necessary to enable the product to be traded on that
market; or
(c) an application of a kind referred to in paragraph (b) will be
made to the operator of that market within 7 days after the date of the
Statement.
(1) This section applies to a Product Disclosure Statement that relates to
managed investment products that are ED securities.
(2) The Product Disclosure Statement must include a statement
that:
(a) as a disclosing entity, the scheme is subject to regular reporting and
disclosure obligations; and
(b) copies of documents lodged with ASIC in relation to the scheme may be
obtained from, or inspected at, an ASIC office.
(3) The Product Disclosure Statement must either:
(a) inform people of their right to obtain a copy of the following
documents:
(i) the annual financial report most recently lodged with ASIC by the
scheme;
(ii) any half-year financial report lodged with ASIC by the scheme after
the lodgment of that annual financial report and before the lodgment of a copy
of the Product Disclosure Statement with ASIC;
(iii) any continuous disclosure notices given by the scheme after the
lodgment of that annual report and before the lodgment of a copy of the Product
Disclosure Statement with ASIC; or
(b) include, or be accompanied by, a copy of the relevant document or
documents.
(4) If:
(a) the Product Disclosure Statement informs people of their right to
obtain a copy of a document referred to in subsection (3); and
(b) a person asks the issuer (in the case of an issue Statement) or the
seller (in the case of a sale Statement) for a copy of the
document;
the issuer or seller must give (see subsection (5)) the person a copy
of the document free of charge as soon as practicable, and in any event within 5
days, after receiving the person’s request.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(5) In subsection (4), give means give in a way that
would satisfy the requirements of section 1015C if the copy of the document
were a Statement to which that section applied.
A Product Disclosure Statement, a copy of which has been lodged with ASIC
(see section 1015B), must include a statement that:
(a) a copy of the document has been lodged with ASIC; and
(b) ASIC takes no responsibility for the content of the
document.
(1) A Product Disclosure Statement must only include a statement made by a
person, or a statement said in the Product Disclosure Statement to be based on a
statement made by a person, if:
(a) the person has consented to the statement being included in the
Product Disclosure Statement in the form and context in which it is included;
and
(b) the Product Disclosure Statement states that the person has given this
consent; and
(c) the person has not withdrawn this consent before the date of the
Product Disclosure Statement.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The person who prepared the Product Disclosure Statement must not,
without reasonable excuse, fail to keep the consent, or a copy of it, for the
period, and in the manner, required by the regulations.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) Subject to this section, a Product Disclosure Statement may be made up
of 2 or more separate documents that are given at the same time.
(2) Each of the documents must have on the cover of the document, or at or
near the front of the document, a statement:
(a) to the effect that the document is part of a Product Disclosure
Statement; and
(b) that (subject to subsection (3)) identifies the other documents
that make up the Product Disclosure Statement.
(3) If there are or may be different versions of a document referred to in
paragraph (2)(b), the statement required by subsection (2) does not
have to identify any particular one of those versions and may instead identify
the document generically.
Note: For example, if a Product Disclosure Statement is made
up of a core document that is not updated very frequently, and a separate
document providing information about remuneration that is updated more
frequently:
(a) the statement in the core document need only refer to
the fact that it, and a separate document about remuneration, make up the
Product Disclosure Statement; and
(b) the statement in the document about remuneration need
only refer to the fact that it, and a separate document about all other required
matters, make up the Product Disclosure Statement.
(4) The requirement of section 1013B (title of Product Disclosure
Statement) is taken to be satisfied if the title “Product Disclosure
Statement” is used on the cover of, or at or near the front of, at least
one of the documents that make up the Product Disclosure Statement.
(5) The requirement of section 1013G (dating of Product Disclosure
Statement) must be separately complied with in relation to each of the
documents. If, for any purpose, a single date needs to be determined as the date
of the Product Disclosure Statement as a whole, that date is the most recent of
the dates of those documents.
(6) Section 1015E applies to an alteration to one of the documents as
though the reference in that section to the date specified in the Product
Disclosure Statement were a reference to the date specified in the
document.
(7) The regulations may impose additional requirements to be complied with
if a Product Disclosure Statement is made up of 2 or more documents.
A Supplementary Product Disclosure Statement is a document
by which a person who has prepared a Product Disclosure Statement (the
PDS) can:
(a) correct a misleading or deceptive statement in the PDS; or
(b) correct an omission from the PDS of information it is required to
contain; or
(c) update the information contained in the PDS; or
(d) change a statement of a kind referred to in paragraph 1016E(1)(a) or
(b).
(1) The title “Supplementary Product Disclosure Statement”
must be used on the cover of, or at or near the front of, a Product Disclosure
Statement.
(2) In any other part of a Supplementary Product Disclosure Statement,
“Supplementary Product Disclosure Statement” may be abbreviated to
“SPDS”.
At the beginning of a Supplementary Product Disclosure Statement there
must be:
(a) a statement that it is a Supplementary Product Disclosure Statement;
and
(b) an identification of the Product Disclosure Statement that it
supplements; and
(c) a statement that it is to be read together with that Product
Disclosure Statement and any other specified Supplementary Disclosure
Statements.
If:
(a) a person is given a Product Disclosure Statement (the
PDS); and
(b) at the same time, or later, they are given a Supplementary Product
Disclosure Statement (the SPDS) that supplements the
PDS;
the PDS is taken, from when the SPDS is given to the person, to include the
information and statements contained in the SPDS.
If:
(a) apart from this section, a person would be required to give another
person a Product Disclosure Statement (the new PDS) relating to a
financial product; and
(b) the client has, because of some previous conduct, already received a
Product Disclosure Statement (the earlier PDS) relating to the
financial product; and
(c) the earlier PDS contains some, but not all, of the information that
the new PDS is required to contain;
the person may, instead of giving the person the new PDS, give the person a
Supplementary Product Disclosure Statement that contains the additional
information.
Sections 1013A, 1013G, 1013H, 1013J and 1013K apply in relation to a
Supplementary Product Disclosure Statement in the same way as they apply to a
Product Disclosure Statement.
This Subdivision applies to Product Disclosure Statements and to
Supplementary Product Disclosure Statements. Both kinds of document are referred
to in this Subdivision as a Statement.
(1) A copy of a Statement must have been lodged with ASIC (in accordance
with the requirements of subsection (2) for consents) before the Statement
is given to a person for the purposes of a provision of this Part if:
(a) the following subparagraphs apply:
(i) the financial product is a managed investment product; and
(ii) the Statement states or implies that the product will be able to be
traded on a financial market; and
(iii) the Statement meets the requirements set out in section 1013H;
or
(b) the financial product is a managed investment product that can be
traded on a financial market; or
(c) the financial product is a financial product of a kind specified in
regulations made for the purposes of this paragraph.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The lodgment of a Statement with ASIC requires the consent
of:
(a) whether it is an issue Statement or a sale Statement:
(i) if the responsible person is a body corporate—every director of
the responsible person; or
(ii) otherwise—the responsible person; and
(b) if it is a sale Statement:
(i) if the issuer of the financial product concerned is a body
corporate—every director of the issuer; or
(ii) otherwise—the issuer of the financial product
concerned.
(1) A Statement:
(a) must be:
(i) given to a person, or the person’s agent, personally;
or
(ii) sent to the person, or the person’s agent, at an address
(including an electronic address) or fax number nominated by the person or the
agent; and
(b) may be printed or be in electronic form.
(2) For the purposes of this section, the Statement is sent to a person at
an address if, and only if:
(a) the Statement is sent to the address; and
(b) either:
(i) the envelope or other container in which the Statement is sent;
or
(ii) the message that accompanies the Statement;
is addressed to the person.
(3) The Statement may be given or sent to the person’s agent only if
the agent is not acting as the person’s agent in one of the following
capacities:
(a) a financial services licensee;
(b) an authorised representative of a financial services
licensee;
(c) a person who is a member of a declared professional body;
(d) a person who is not required to hold an Australian financial services
licence because the person is covered by:
(i) paragraph 911(2)(j); or
(ii) an exemption in regulations made for the purposes of paragraph
911A(2)(k); or
(iii) an exemption specified by ASIC for the purposes of paragraph
911A(2)(l);
(e) a person who is required to hold an Australian financial services
licence but who does not hold such a licence;
(f) an employee, director or other representative of a person referred to
in paragraph (a), (b), (c), (d) or (e).
(4) The regulations may provide for alternative ways of giving a Statement
to a person.
(5) The regulations may specify requirements as to:
(a) the manner in which a Statement may be given to a person;
and
(b) the presentation, structure and format for a Statement that is to be
given in electronic form.
The giving of the Statement is not effective unless those requirements are
satisfied.
(1) This section applies to a Statement if section 1015B does not
require a copy of the Statement to be lodged with ASIC.
(2) The responsible person for the Statement must notify ASIC that the
Statement is in use as soon as practicable after a copy of the Statement is
first given to someone in a recommendation, issue or sale situation.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) The responsible person for the Statement must keep a copy of the
Statement for the period of 7 years after the date of the Statement.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) During that period the responsible person:
(a) must make a copy of the Statement available to ASIC if asked to do so
by ASIC; and
(b) must comply with any reasonable request from any other person for a
copy of the Statement.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) A regulated person must not, in purported compliance with a provision
of this Part, give a person a Statement that has been altered (otherwise than
pursuant to paragraph (b)) after the date of the Statement if either or
both of the following paragraphs applies:
(a) the alteration was not made by, or with the authority of, the issuer
or seller, as the case requires, of the financial products;
(b) the alteration is a material alteration and the date of the Statement
has not been changed to:
(i) if a copy of the altered Statement has been lodged with ASIC (see
subsection (2))—the date on which it was so lodged; or
(ii) in any other case—the date on which the alteration was
made.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) If the alteration is a material alteration to a Statement that has
been lodged with ASIC under section 1015B, that section applies to the
altered Statement as if it were a new Statement.
(1) This section applies to an offer:
(a) that is of a kind described in subsection 1012B(3) or (4) or 1012C(3)
or (4); and
(b) that is not made in a situation to which a subsection, other than
subsection (1), of section 1012D applies; and
(c) that relates to a financial product that is:
(i) a managed investment product; or
(ii) a superannuation product; or
(iii) an investment life insurance product; or
(iv) of a kind specified in regulations made for the purposes of this
paragraph; and
(d) if the financial product is a superannuation
product—section 1012F does not apply to the issue of the
product.
(2) A person (the issuer or seller) must not
issue or sell the financial product to another person pursuant to the offer if
the other person has not applied for the product using an application
form.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) If there is a Product Disclosure Statement for the financial product,
a person (the issuer or seller) must only issue or
sell the financial product to another person pursuant to the offer if:
(a) the application form was included in, or accompanied, a Product
Disclosure Statement given to the other person that contained all the
information that would have been required to be contained in a Product
Disclosure Statement given at the time of the offer; or
(b) the form was copied, or directly derived, by the person making the
application from a form referred to in paragraph (a).
Note 1: Information in a Supplementary Product Disclosure
Statement is taken to be contained in the Product Disclosure Statement it
supplements (see section 1014D).
Note 2: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) If:
(a) a copy of a Product Disclosure Statement has been lodged with ASIC;
and
(b) the financial product to which the Statement relates is not able to be
traded on any financial market (whether in Australia or elsewhere);
the responsible person must not issue or sell a financial product to which
the Statement applies until the period of 7 days (or that period as extended
under subsection (2)) after lodgment of the Statement has ended.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) ASIC may extend the period by notice in writing to the responsible
person. The period as extended must end no more than 14 days after
lodgment.
If a Product Disclosure Statement for a financial product states that a
financial product to which the Statement relates will not be issued or sold
unless:
(a) applications for a minimum number of financial products of that kind
are received; or
(b) a minimum amount is raised;
the responsible person must not issue or sell a financial product of that
kind if that condition has not been satisfied. For the purpose of working out
whether the condition has been satisfied, a person who has agreed to take a
financial product as underwriter is taken to have applied for that
product.
Note 1: Statements in a Supplementary Product Disclosure
Statement are taken to be contained in the Product Disclosure Statement it
supplements (see section 1014D).
Note 2: Failure to comply with this section is an offence
(see subsection 1311(1)).
(1) If a Product Disclosure Statement for a financial product states or
implies that a financial product to which the Statement relates will be able to
be traded on a financial market (whether in Australia or elsewhere), the
responsible person must only issue or sell a financial product of that kind
if:
(a) the product is able to be traded on that market; or
(b) an application has, within 7 days after the relevant date (see
subsection (3)), been made to the operator of that market for the taking of
such action as is necessary to enable financial products of that kind to be
traded on that market.
Paragraph (b) ceases to apply to the financial product at the end of
the period of 3 months starting on the relevant date.
Note 1: Statements in a Supplementary Product Disclosure
Statement are taken to be contained in the Product Disclosure Statement it
supplements (see section 1014D).
Note 2: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Issue or transfer void if quotation condition not
fulfilled
(2) If a Product Disclosure Statement for a financial product states or
implies that the financial product is to be quoted on a financial market
(whether in Australia or elsewhere) and:
(a) an application has not, within 7 days after the relevant date (see
subsection (3)), been made to the operator of that market for the taking of
such action as is necessary to enable financial products of that kind to be
traded on that market; or
(b) the product is not able to be traded on that market at the end of 3
months after the relevant date;
then:
(c) an issue or transfer of a financial product of that kind to a person
to whom the Statement was, or should have been, given is void; and
(d) the responsible person must return any money received from a person to
whom the Statement was, or should have been, given as soon as
practicable.
Note: Failure to comply with paragraph (d) is an
offence (see subsection 1311(1)).
The relevant date
(3) For the purposes of this section, the relevant date in
relation to an express or implied statement is:
(a) if the Statement is express or implied in a Product Disclosure
Statement, disregarding the effect of section 1014D—the date of the
Product Disclosure Statement; or
(b) if the Statement is express or implied in a Supplementary Product
Disclosure Statement—the date of the Supplementary Product Disclosure
Statement.
(1) This section applies if:
(a) a Product Disclosure Statement for a financial product states that a
financial product to which the Statement relates will not be issued or sold
unless:
(i) applications for a minimum number of financial products of that kind
are received; or
(ii) a minimum amount is raised;
and that condition is not satisfied within 4 months after the relevant
date (see subsections (3) and (4)); or
(b) a Product Disclosure Statement for a financial product states or
implies that a financial product to which the Statement relates will be able to
be traded on a financial market (whether in Australia or elsewhere)
and:
(i) an application has not, within 7 days after the relevant date (see
subsection (4)), been made to the operator of that market for the taking of
such action as is necessary to enable financial products of that kind to be
traded on that market; or
(ii) at the end of the period of 3 months starting on the relevant date,
financial products of that kind are not able to be traded on that market;
or
(c) in relation to a Product Disclosure Statement for a financial product,
the responsible person becomes aware that:
(i) the Statement contains a misleading or deceptive statement;
or
(ii) there is an omission from the Statement of information it was
required to contain;
that is materially adverse from the point of view of a reasonable person
deciding, as a retail client, whether to acquire a financial product to which
the Statement relates; or
(d) in relation to a Product Disclosure Statement for a financial product,
the responsible person becomes aware of a new circumstance that:
(i) has arisen since the Product Disclosure Statement was prepared;
and
(ii) would have been required to be included in the Product Disclosure
Statement if it had arisen before the Statement was prepared; and
(iii) is materially adverse from the point of view of a reasonable person
deciding, as a retail client, whether to acquire a financial product to which
the Statement relates.
Note: Information and statements in a Supplementary Product
Disclosure Statement are taken to be contained in the Product Disclosure
Statement it supplements (see section 1014D).
(2) If this section applies, the responsible person must, in relation to
any application for financial products of the relevant kind that is made in
response to the Product Disclosure Statement and that has not resulted in an
issue or sale of financial products of that kind, comply with one of the
following paragraphs:
(a) the responsible person must repay the money they received from the
applicant;
(b) the responsible person must give the applicant:
(i) a Supplementary Product Disclosure Statement that changes the
statement referred to in paragraph (1)(a) or (b), or that corrects the
deficiency referred to in paragraph (1)(c) or (d); and
(ii) 1 month to withdraw their applications and be repaid; or
(c) the responsible person must issue or sell the financial products to
the applicant and give them:
(i) a Supplementary Product Disclosure Statement that changes the
statement referred to in paragraph (1)(a) or (b), or that corrects the
deficiency referred to in paragraph (1)(c) or (d); and
(ii) 1 month to return the financial products and be repaid.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) For the purpose of working out whether the condition referred to in
paragraph (1)(a) has been satisfied, a person who has agreed to take a
financial product as an underwriter is taken to have applied for that financial
product.
(4) For the purposes of paragraphs (1)(a) and (b), the relevant
date in relation to an express or implied statement is:
(a) if the statement is express or implied in a Product Disclosure
Statement, disregarding the effect of section 1014D—the date of the
Product Disclosure Statement; or
(b) if the statement is express or implied in a Supplementary Product
Disclosure Statement—the date of the Supplementary Product Disclosure
Statement.
(1) Subject to this section, if a financial product is issued or sold to a
person (the client) in contravention of section 1016E, the
client has the right to return the product and to have the money they paid to
acquire the product repaid. This is so even if the responsible person is being
wound up.
(2) If the responsible person:
(a) is a body corporate; and
(b) does not repay the money as required by subsection (1);
the directors of the responsible person are personally liable to repay the
money.
(3) The right to return the product must be exercised by notifying the
responsible person in one of the following ways:
(a) in writing; or
(b) electronically; or
(c) in any other way specified in the regulations.
Also, if the regulations require the client to comply with other
requirements in order to exercise the right to return the product, those other
requirements must be complied with.
(4) The right to return the product can only be exercised during the
period of 1 month starting on the date of the issue or sale of the product to
the client.
(5) On the exercise of the right to return the product:
(a) if the product is constituted by a legal relationship between the
client and the issuer of the product—that relationship is, by force of
this section, terminated with effect from that time without penalty to the
client; and
(b) any contract for the acquisition of the product by the client is, by
force of this section, terminated with effect from that time without penalty to
the client.
(6) The regulations may provide for consequences and obligations (in
addition to those provided for by subsection (5)) to apply if the right to
return a financial product is exercised.
(7) The regulations may do any or all of the following:
(a) provide that a specified subclass of financial products that would
otherwise be covered by this section is excluded from this section;
(b) provide additional requirements to be satisfied before this section
applies in relation to a class or subclass of financial products;
(c) provide that this section does not apply in relation to the provision
of a financial product in specified circumstances.
Obligation to give information
(1) The following people may request the person who is the responsible
person for a Product Disclosure Statement for a financial product under
Division 2 to provide further information about the product:
(a) a person who:
(i) has been or should have been given, or who has obtained, the Product
Disclosure Statement for the financial product; and
(ii) is not a holder of the financial product;
(b) a financial services licensee;
(c) an authorised representative of a financial services
licensee;
(d) a person who is a member of a declared professional body;
(e) a person who is not required to hold an Australian financial services
licence because the person is covered by:
(i) paragraph 911(2)(j); or
(ii) an exemption in regulations made for the purposes of paragraph
911A(2)(k); or
(iii) an exemption specified by ASIC for the purposes of paragraph
911A(2)(l).
(2) The responsible person must give the person the information
if:
(a) the financial product is offered in this jurisdiction or the Product
Disclosure Statement is given or obtained in this jurisdiction; and
(b) the responsible person has previously made the information generally
available to the public; and
(c) the information might reasonably influence a person’s decision,
as a retail client, whether to acquire a financial product to which the
Statement relates; and
(d) it is reasonably practicable for the responsible person to give the
person the information; and
(e) the person pays any charge payable under
subsection (5).
The responsible person does not need to give information that is contained
in the Product Disclosure Statement.
Note 1: Paragraph (b)—This requirement means that
the responsible person does not have to disclose material that is confidential
because it is:
(a) an internal working document; or
(b) personal information about another person;
or
(c) a trade secret or other information that has a
commercial value that would be reduced or destroyed by the disclosure;
or
(d) material that the responsible person owes another a
person a duty not to disclose.
Note 2: Information in a Supplementary Product Disclosure
Statement is taken to be contained in the Product Disclosure Statement it
supplements (see section 1014D).
(3) The responsible person must take reasonable steps to ensure that, as
soon as practicable after receiving the request, and in any event within one
month, subsection (2) is complied with.
Manner of giving information
(4) The responsible person may give the person making the request the
information:
(a) by making a document containing the information available for
inspection by the person:
(i) at a suitable place (having adequate facilities for the person to
inspect and photocopy the document); and
(ii) during normal business hours; or
(b) in some other way that is agreed between the responsible person and
the person making the request.
Issuer or seller may charge for giving information
(5) The responsible person may require the person making the request to
pay a charge for obtaining the information.
(6) The amount of the charge must not exceed the reasonable costs that the
responsible person incurs that are reasonably related to giving the information
(including any costs incurred in photocopying the document containing the
information).
Note: This would include the costs of searching for,
obtaining and collating the information.
Responsible person must notify holders
(1) If:
(a) a person (the holder) acquired a financial product as a
retail client; and
(b) either:
(i) the financial product was offered in this jurisdiction; or
(ii) the holder applied for the financial product in this jurisdiction;
and
(c) the product is not specified in regulations made for the purposes of
this paragraph; and
(d) a Product Disclosure Statement was, or should have been, produced for
the product;
the person who is the responsible person for the Product Disclosure
Statement for the financial product under Division 2 must, in accordance
with subsections (3) to (8), notify the holder of:
(e) any material change to any of the matters specified, or that should
have been specified, in the Statement that occurs while the holder holds the
product; or
(f) any significant event that affects any of the matters specified, or
that should have been specified, in the Statement and that occurs while the
holder holds the product.
Note 1: Information in a Supplementary Product Disclosure
Statement is taken to be contained in the Product Disclosure Statement it
supplements (see section 1014D).
Note 2: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The responsible person does not need to give the notice if the
financial product is a managed investment product.
Note 1: The continuous disclosure provisions in
Chapter 6CA (sections 674-677) apply to managed investment
products.
Note 2: A defendant bears an evidential burden in relation
to the matters in this subsection.
(3) The responsible person must notify the holder in one of the following
ways:
(a) in writing; or
(b) electronically; or
(c) in a way specified in the regulations.
(4) The notice must give the holder the information that is reasonably
necessary for the holder to understand the nature and effect of the change or
event.
Time for notifying holders
(5) The time within which the responsible person must give the notice is
set out in the following table:
|
Time for giving notice of change or event |
||
|---|---|---|
|
|
Nature of change or event |
Time for giving notice |
|
1 |
Change or event is not an increase in fees or charges |
Subject to subsection (6), before the change or event occurs or as
soon as practicable after, but not more than 3 months after, the change or event
occurs |
|
2 |
Change is an increase in fees or charges |
30 days before the change takes effect |
(6) If the change or event is not an increase in fees or charges, the
notice may be given more than 3 months after the change or event occurs
if:
(a) the responsible person reasonably believes that the event is not
adverse to the holder’s interests and accordingly the holder would not be
expected to be concerned about the delay in receiving the information;
and
(b) the notice is given no later than 12 months after the change or event
occurs.
(7) If the change or event might result in an increase in fees or charges,
this section applies to the change or event as if it would result in an increase
in fees or charges.
(8) In any proceedings against the responsible person for an offence based
on subsection (1), it is a defence if the responsible person took
reasonable steps to ensure that the other person would be notified of the
matters required by subsection (1) in accordance with subsections (3)
to (8).
Note: A defendant bears an evidential burden in relation to
the matters in subsection (8). See subsection 13.3(3) of the Criminal
Code.
(9) In this section:
fees or charges does not include fees or charges payable
under a law of the Commonwealth or of a State or Territory.
Application
(1) This section applies to the responsible person for a Product
Disclosure Statement for a financial product if the product is:
(a) a superannuation product; or
(b) an RSA product.
Information for concerned person
(2) Subject to subsection (4), the responsible person must, on
request by a concerned person, give the concerned person information that the
concerned person reasonably requires for the purposes of:
(a) understanding any benefit entitlements that the concerned person may
have, has or used to have under the financial product; or
(b) understanding the main features of:
(i) the relevant sub-plan; or
(ii) the responsible person if there is no relevant sub-plan; or
(c) making an informed judgment about the management and financial
condition of:
(i) the responsible person; and
(ii) the relevant sub-plan (if any); or
(d) making an informed judgment about the investment performance
of:
(i) the relevant sub-plan; or
(ii) the responsible person if there is no relevant sub-plan; or
(e) understanding the particular investments of:
(i) the relevant sub-plan; and
(ii) the responsible person.
The information must be given in accordance with the other requirements of
this section.
Note 1: Subsection (9) defines concerned
person.
Note 2: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Information for employer-sponsor
(3) Subject to subsection (4), the responsible person must, on
request by an employer-sponsor, give the employer-sponsor information that the
employer-sponsor reasonably requires for the purposes of:
(a) understanding the kinds of benefits to which the
employer-sponsor’s employees are entitled or will or may become entitled,
and the main features of:
(i) the relevant sub-plan; or
(ii) the responsible person if there is no relevant sub-plan; or
(b) making an informed judgment about the management and financial
condition of:
(i) the responsible person; and
(ii) the relevant sub-plan (if any); or
(c) making an informed judgment about the investment performance
of:
(i) the relevant sub-plan; or
(ii) the responsible person if there is no relevant sub-plan; or
(d) a matter related to the Superannuation Guarantee (Administration)
Act 1992.
The information must be given in accordance with the other requirements of
this section.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Exceptions
(4) This section does not require (and does not, by implication,
authorise) the disclosure of:
(a) internal working documents of the responsible person; or
(b) information or documents that would disclose, or tend to
disclose:
(i) personal information of another person if, in the circumstances, the
disclosure would be unreasonable; or
(ii) trade secrets or other information having a commercial value that
would be reduced or destroyed by the disclosure; or
(c) information or documents in relation to which the responsible person
owes to another person a duty of non-disclosure.
Note: A defendant bears an evidential burden in relation to
the matters in this subsection. See subsection 13.3(3) of the Criminal
Code.
Specific requirements
(5) The responsible person must, on request in writing by a concerned
person or an employee-sponsor, give the concerned person or the
employer-sponsor:
(a) a copy of a prescribed document (to the extent the responsible person
has access to the document) specified in the request; or
(b) prescribed information (to the extent to which the responsible person
has or has access to the information) specified in the request.
The document or information must be given in accordance with the other
requirements of this section.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(6) Subsection (5) does not apply if the responsible person is the
trustee of a self-managed superannuation fund.
Documents may be made available for inspection
(7) It is sufficient compliance with a requirement imposed by this section
on the responsible person to give information, or to give a copy of a document,
to a person (the client) if:
(a) a document containing the information; or
(b) a copy of the document;
is made available for inspection by the responsible person:
(c) at a suitable place (having adequate facilities for the person to
inspect and photocopy the document); and
(d) during normal business hours;
or as otherwise agreed between the responsible person for the financial
product and the client.
Time for compliance
(8) The responsible person must comply with a request to give information,
or a copy of a document, as soon as practicable. The responsible person must, in
any event, make reasonable efforts to comply with the request within 1 month of
receiving the request.
Definitions
(9) In this section:
concerned person means a person who:
(a) is, or was within the preceding 12 months, a member of the responsible
person to which the request is made; or
(b) is a beneficiary of the responsible person to which the request is
made.
(1) If:
(a) a person (the holder) of a financial product acquired
the financial product as a retail client (whether or not it was acquired from
the issuer); and
(b) the product is:
(i) a managed investment product; or
(ii) a superannuation product; or
(iii) an RSA product; or
(iv) an investment life insurance product; or
(v) a deposit product; or
(vi) specified in regulations made for the purposes of this paragraph;
and
(c) either:
(i) the financial product was offered in this jurisdiction; or
(ii) the holder applied for the financial product in this
jurisdiction;
the issuer of the product must, in accordance with subsections (2) to
(6), give the holder a periodic statement for each reporting period during which
the holder holds the product.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The following provisions apply in relation to reporting
periods:
(a) each reporting period lasts for a period, not exceeding 1 year,
determined by the issuer;
(b) the first reporting period starts when the holder acquired the
product;
(c) each subsequent reporting period starts at the end of the preceding
reporting period;
(d) if the holder ceases to hold the product, the period starting at the
end of the preceding reporting period and ending when the holder ceases to hold
the product is a reporting period.
(3) The periodic statement must be given as soon as practicable after, and
in any event within 6 months after, the end of the reporting period to which it
relates.
(4) The periodic statement must give the holder the information that the
issuer reasonably believes the holder needs to understand his or her investment
in the financial product.
(5) The periodic statement must include the following if they are relevant
to the financial product:
(a) opening and closing balances for the reporting period;
(b) the termination value of the investment at the end of the reporting
period (to the extent to which it is reasonably practicable to calculate that
value for the investment or a component of the investment);
(c) a summary of all transactions in relation to the product during the
reporting period, indicating the nature and purpose of those
transactions;
(d) any increases in contributions in relation to the financial product by
the holder or another person during the reporting period;
(e) return on investment during the reporting period (on an individual
basis if reasonably practicable to do so and otherwise on a fund
basis);
(f) details of any change in circumstances affecting the investment that
has not been notified since the previous periodic statement;
(g) details prescribed by regulations made for the purposes of this
paragraph.
(6) The periodic statement must be given in one of the following
ways:
(a) in writing; or
(b) electronically; or
(c) in a way specified in the regulations.
(7) The periodic statement need not be given if the issuer has already
given the holder all the information that would be included in the periodic
statement if it were to be given.
Note: A defendant bears an evidential burden in relation to
the matters in this subsection.
(1) This section applies to money paid to:
(a) an issuer (the product provider) of financial products;
or
(b) a seller (the product provider) of financial products in
relation to which the seller has prepared a Product Disclosure
Statement;
if:
(c) the money is paid to acquire, or acquire an increased interest in, one
or more of those financial products from the product provider (whether or not
the acquisition would be by a person as a retail client); and
(d) the product provider does not, for whatever reason, issue or transfer
the product or products, or the increased interest, immediately after receiving
the money; and
(e) either:
(i) the financial product or increased interest was offered in this
jurisdiction; or
(ii) the application for the financial product or increased interest
was made in this jurisdiction; or
(iii) the money was received in this jurisdiction.
(2) The product provider must ensure that the money is paid into an
account that satisfies these requirements:
(a) the account is:
(i) with an Australian ADI; or
(ii) of a kind prescribed by regulations made for the purposes of this
paragraph;
and is designated as an account for the purposes of this section of this
Act; and
(b) the only money paid into the account is:
(i) money to which this section applies; or
(ii) interest on the amount from time to time standing to the credit of
the account; and
(c) if regulations made for the purposes of this paragraph impose
additional requirements—the requirements so imposed by the
regulations.
The money must be paid into the account on the day it is received by the
product provider, or on the next business day.
Note: See section 1021O for related
offences.
(3) The money must only be taken out of the account if:
(a) it is taken out for the purpose of return to the person by whom it was
paid; or
(b) the product is issued or transferred to, or in accordance with the
instructions of, that person; or
(c) it is taken out for a purpose specified by regulations made for the
purposes of this paragraph; or
(d) it is taken out in a situation specified by regulations made for the
purposes of this paragraph.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) The product provider must:
(a) return the money; or
(b) issue or transfer the product to, or in accordance with the
instructions of, the person who paid the money; or
(c) if the money is taken out:
(i) for a purpose specified by regulations made for the purposes of
paragraph (3)(c); or
(ii) in a situation specified by regulations made for the purposes of
paragraph (3)(d);
do any action required, by regulations made for the purposes of this
paragraph, after taking out that money;
either:
(d) before the end of one month starting on the day on which the money was
received; or
(e) if it is not reasonably practicable to do so before the end of that
month—by the end of such longer period as is reasonable in the
circumstances.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(5) The product provider may, for the purposes of this section, maintain a
single account or 2 or more accounts.
(6) Nothing in this section, or in regulations made for the purposes of
this section, makes the body (not being the product provider) that the account
is with under paragraph (2)(a) subject to any liability merely because of a
failure by the product provider to comply with any of the provisions of this
section or those regulations.
Transactions to which this section applies
(1) This section applies in relation to a transaction involving a
financial product if:
(a) a person (the holder) acquired the product as a retail
client; and
(b) the transaction is:
(i) the transaction by which the holder acquired the product; or
(ii) a transaction that occurs while the holder holds the product,
including a transaction by which the holder disposes of all or part of the
product (and see also subsection (3)); and
(c) the transaction is not one that does not require confirmation because
of subsection (4); and
(d) the holder has not, in accordance with regulations made for the
purposes of paragraph (9)(d), waived their right to be provided with
confirmation of the transaction; and
(e) either:
(i) the financial product was offered to, or acquired by, the holder in
this jurisdiction; or
(ii) the transaction takes place in this jurisdiction.
Note: This section extends to financial products that are
securities (see section 1010A).
Obligation to confirm transactions
(2) The person (the responsible person) specified in column
3 of an item in the following table must provide the holder with confirmation of
the transaction specified in column 2 of the same item. The confirmation must be
provided in accordance with subsections (5) to (8).
|
Who bears the obligation to confirm a transaction |
||
|---|---|---|
|
Item |
Transaction |
Whose obligation? |
|
1 |
transaction by which the holder acquired the financial product, unless that
transaction was a sale pursuant to an offer to which section 1012C
applies |
the issuer of the product |
|
2 |
transaction by which the holder acquired the financial product, where that
transaction was a sale pursuant to an offer to which section 1012C
applies |
the seller of the product |
|
3 |
any other transaction in relation to the financial product that occurs
while the holder holds the product, other than a disposal of all or part of the
product |
the issuer of the product |
|
4 |
transaction by which the holder disposes of all or part of the financial
product |
the person specified in the regulations made for the purposes of this
item |
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Examples of transactions that are covered by
subparagraph (1)(b)(ii)
(3) Without limiting the generality of subparagraph (1)(b)(ii), the
transactions that are covered by that subparagraph include:
(a) varying the terms of the financial product while the holder holds the
product (unless subsection (4) provides that the variation does not require
confirmation); and
(b) the redemption or surrender of the financial product from or by the
holder.
Transactions that do not require confirmation
(4) The following transactions do not require confirmation:
(a) a transaction consisting solely of an additional contribution towards
the financial product in either of the following circumstances:
(i) the timing and amount, or method of calculating the amount, of the
additional contribution was agreed on when the product was acquired by the
holder;
(ii) the additional contribution is an amount that is payable under the
terms of the product because of an increase in an external factor, such as a
person’s salary, an inflation index or a rate of a tax or levy;
(b) if the financial product is a security—a transaction consisting
solely of a variation of the rights attaching to the security;
(c) if the financial product is a deposit product—any of the
following transactions:
(i) a withdrawal from the deposit product pursuant to a cheque drawn on
the account;
(ii) a deposit to, or withdrawal from, the deposit product under a direct
credit arrangement or a direct debit arrangement;
(iii) crediting interest to the deposit product;
(iv) debiting the deposit product for fees or charges in respect of the
product or transactions involving the product;
(v) debiting the deposit product for charges or duties on deposits into,
or withdrawals from, the product that are payable under a law of the
Commonwealth or of a State or Territory;
(vi) a transaction of a kind specified in regulations made for the
purposes of this subparagraph;
(d) a variation of the terms of all financial products in the class to
which the financial product belongs;
(e) a transaction of a kind specified in regulations made for the purposes
of this paragraph.
Note 1: Because of subparagraph (a)(i), confirmation is
not required, e.g., for regular monthly contributions to a superannuation
fund.
Note 2: A defendant bears an evidential burden in relation
to the matters in this subsection.
Confirmation may be provided on a transaction-by-transaction basis or by
means of a standing facility
(5) Confirmation of a transaction must be provided:
(a) by confirming the transaction in accordance with subsections (6)
to (8), to the holder as soon as is reasonably practicable after the transaction
occurs; or
(b) if the holder agrees, by providing the holder with access to a
facility through which they can, for themselves, get a confirmation of the
transaction in accordance with subsections (6) to (8) as soon as is
reasonably practicable after the transaction occurs.
An arrangement under which the holder may request or require another person
to provide a confirmation does not count as a facility that satisfies
paragraph (b).
Means of confirmation
(6) The confirmation of the transaction:
(a) must be:
(i) in writing; or
(ii) electronic; or
(iii) in some other form applicable under regulations made for the
purposes of this paragraph; and
(b) may be provided:
(i) in a case to which paragraph (5)(a) applies—directly by the
responsible person or through another person (such as a financial services
licensee); or
(ii) in a case to which paragraph (5)(b) applies—through a
facility provided directly by the responsible person, or provided on behalf of
the responsible person by someone else.
Content of confirmation
(7) The confirmation of the transaction must give the holder the
information that the holder requires (having regard to the information he or she
has received before the transaction) to understand the nature of the
transaction.
(8) Without limiting subsection (7), the confirmation of the
transaction must:
(a) identify the issuer and the holder; and
(b) if required to be given by a person other than the
issuer—identify that person; and
(c) give details of the transaction, including:
(i) the date of the transaction; and
(ii) a description of the transaction; and
(iii) subject to regulations made for the purposes of this
subparagraph—any amount paid or payable by the holder in relation to the
transaction; and
(iv) subject to any regulations made for the purposes of this
subparagraph—any taxes and stamp duties payable in relation to the
transaction; and
(d) give any other details prescribed by regulations made for the purposes
of this paragraph.
Regulations may provide for modification or waiver of confirmation
obligation
(9) The regulations may do all or any of the following:
(a) modify subsection (2) to change the person required to provide
confirmation of a transaction;
(b) modify subsections (5) and (6) to expand on or change the way in
which confirmation of a transaction must be provided in particular
circumstances;
(c) modify subsections (7) and (8) to expand on or change the
information that must be included in the confirmation of a transaction in
particular circumstances;
(d) specify the circumstances in which a person may waive the right to be
provided with confirmation of a transaction, and specify how such a waiver may
be made.
If:
(a) an issuer of financial products is not a financial services licensee;
and
(b) the financial products are available for acquisition (whether or not
from the issuer) by a person or persons as retail clients;
the issuer must have internal and external dispute resolution procedures,
that are approved by ASIC in accordance with the regulations, to resolve
complaints such persons make in relation to alleged contraventions of this
Part.
Note 1: For product issuers that are financial services
licensees, the requirement to have approved internal and external dispute
resolution procedures is imposed by paragraph 912A(g).
Note 2: Failure to comply with this section is an offence
(see subsection 1311(1)).
Advertisements and promotional material must identify issuer (or issuer
and seller) and refer to Product Disclosure Statement
(1) Subject to this section, if a particular financial product is
available for acquisition by persons as retail clients (whether or not it is
also available for acquisition by persons as wholesale clients) by way of issue,
or pursuant to sale offers to which section 1012C applies or will apply, a
person must only:
(a) advertise the product; or
(b) publish a statement that is reasonably likely to induce people to
acquire the product;
if the advertisement or statement:
(c) identifies:
(i) if the product is available by way of issue—the issuer of the
product; or
(ii) if the product is available pursuant to sale offers to which
section 1012C applies or will apply—the issuer of the product and the
seller of the product; and
(d) indicates that a Product Disclosure Statement for the product is
available and where it can be obtained; and
(e) indicates that a person should consider the Product Disclosure
Statement in deciding whether to acquire, or to continue to hold, the
product.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) Subject to this section, if a particular financial product, or
proposed financial product, is not available for acquisition by persons as
retail clients but it is reasonably likely that the product will become so
available (whether or not it is, or will also become, available for acquisition
by persons as wholesale clients) by way of issue, or pursuant to sale offers to
which section 1012C will apply, a person must only:
(a) advertise the product; or
(b) publish a statement that is reasonably likely to induce people to
acquire the product;
if the advertisement or statement:
(c) identifies:
(i) if the product is likely to be so available by way of issue—the
issuer of the product; or
(ii) if the product is likely to be so available pursuant to sale offers
to which section 1012C will apply—the issuer of the product and the
seller of the product; and
(d) indicates that a Product Disclosure Statement for the product will be
made available when the product is released or otherwise becomes available;
and
(e) indicates when and where the Product Disclosure Statement is expected
to be made available; and
(f) indicates that a person should consider the Product Disclosure
Statement in deciding whether to acquire, or continue to hold, the
product.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Distribution of disclosure document
(3) A person may distribute a Product Disclosure Statement without
contravening subsection (1) or (2). This does not apply if an order under
section 1020E is in force in relation to the product.
Note: A defendant bears an evidential burden in relation to
the matters in this section. See subsection 13.3(3) of the Criminal
Code.
General exceptions
(4) An advertisement or publication does not contravene
subsection (1) or (2) if it:
(a) relates to a financial product that is able to be traded on a
financial market and consists of a notice or report by the issuer of the
product, or one of its officers, about its affairs to the market operator;
or
(b) consists solely of a notice or report of a general meeting of the
issuer; or
(c) consists solely of a report about the issuer that is published by the
issuer and:
(i) does not contain information that materially affects affairs of the
issuer, other than information previously made available in a Product Disclosure
Statement that has been distributed or disclosure document that has been lodged
with ASIC, an annual report or a notice or report referred to in
paragraph (a) or (b); and
(ii) does not refer (whether directly or indirectly) to the offer of the
financial product; or
(d) is a news report, or is genuine comment, in the media relating
to:
(i) a Product Disclosure Statement that has been distributed or disclosure
document that has been lodged with ASIC; or
(ii) information contained in such a Statement or document; or
(iii) a notice or report covered by paragraph (a), (b) or (c);
or
(e) is a report about the financial products of the issuer published by
someone who is not:
(i) the issuer; or
(ii) acting at the instigation of, or by arrangement with, the issuer;
or
(iii) a director of the issuer; or
(iv) a person who has an interest in the success of the issue or sale of
the financial product.
Paragraphs (d) and (e) do not apply if anyone gives consideration or
another benefit for publishing the report.
Note: A defendant bears an evidential burden in relation to
the matters in this section. See subsection 13.3(3) of the Criminal
Code.
Liability of publishers
(5) A person does not contravene subsection (1) or (2) by publishing
an advertisement or statement if the person:
(a) publishes it in the ordinary course of a media business; and
(b) did not know, and had no reason to suspect, that its publication would
amount to a contravention of a provision of this section.
Note: A defendant bears an evidential burden in relation to
the matters in this section. See subsection 13.3(3) of the Criminal
Code.
Meaning of media
(6) For the purposes of this section, the media consists
of:
(a) newspapers and magazines; and
(b) radio and television broadcasting services; and
(c) electronic services (including services provided through the Internet)
that:
(i) are operated on a commercial basis; and
(ii) are similar to newspapers, magazines or radio or television
broadcasts.
(1) A person must not advertise an offer, or intended offer, of financial
products that would not need a Product Disclosure Statement because of
section 1012E.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) A person does not contravene subsection (1) by publishing an
advertisement or statement if the person:
(a) publishes it in the ordinary course of a media business; and
(b) did not know, and had no reason to suspect, that a Product Disclosure
Statement was needed.
For this purpose, media has the same meaning as it has in
section 1018A.
Note: A defendant bears an evidential burden in relation to
the matters in this section. See subsection 13.3(3) of the Criminal
Code.
(1) Subject to subsection (2), this Division applies if:
(a) a financial product of one of the following classes is provided in
this jurisdiction to a person as a retail client after the commencement of this
Chapter:
(i) risk insurance products;
(ii) investment life insurance products;
(iii) managed investment products;
(iv) superannuation products;
(v) RSA products; and
(b) the product is provided to the person:
(i) by way of issue; or
(ii) by way of sale pursuant to an offer to which section 1012C
applies.
(2) The regulations may do any or all of the following:
(a) provide that a specified subclass of financial products that would
otherwise be covered by a subparagraph of paragraph (1)(a) are excluded
from that subparagraph;
(b) provide additional requirements to be satisfied before this Division
applies in relation to a class or subclass of financial products;
(c) provide that this Division does not apply in relation to the provision
of a financial product in specified circumstances.
(3) In this Division:
(a) the person referred to in paragraph (1)(a) is the
client; and
(b) the person who issues or sells the product to the client is the
responsible person.
(1) Subject to this section, the client has the right to return the
financial product to the responsible person and to have the money they paid to
acquire the product repaid. This is so even if the responsible person is being
wound up.
(2) The right to return the product must be exercised by notifying the
responsible person in one of the following ways:
(a) in writing; or
(b) electronically; or
(c) in any other way specified in the regulations.
Also, if the regulations require the client to comply with other
requirements in order to exercise the right to return the product, those other
requirements must be complied with.
(3) The right to return the product can only be exercised during the
period of 14 days starting on the earlier of:
(a) the time when the confirmation requirement (if applicable) is complied
with; or
(b) the end of the 5th day after the day on which the product was issued
or sold to the client.
(4) For the purposes of subsection (3), the confirmation requirement
is complied with when:
(a) the client receives confirmation, as mentioned in paragraph
1017F(5)(a), of the transaction by which they acquired the product; or
(b) confirmation of that transaction is available to the client by a
facility as mentioned in paragraph 1017F(5)(b).
(5) The right to return the product (and have money paid to acquire it
repaid) cannot be exercised at any time after:
(a) the client has (whether before or after the start of the period
referred to in subsection (3)) exercised a right or power that they have
under the terms applicable to the product; or
(b) the time (whether before or after the start of the period referred to
in subsection (3)) at which, under the terms applicable to the product, the
client’s rights or powers in respect of the product end.
Note: So, e.g.:
(a) if the product is a contract of insurance, the right to
return cannot be exercised after the client has made a claim under the contract
of insurance; and
(b) if the product is a contract of insurance covering a
period of only one week, the right to return cannot be exercised after the end
of that week.
(6) On the exercise of the right to return the product:
(a) if the product is constituted by a legal relationship between the
client and the issuer of the product—that relationship is, by force of
this section, terminated with effect from that time without penalty to the
client; and
(b) any contract for the acquisition of the product by the client is, by
force of this section, terminated with effect from that time without penalty to
the client.
(7) The regulations may provide for consequences and obligations (in
addition to those provided for by subsection (6)) to apply if the right to
return a financial product is exercised.
(8) The regulations may provide that, in specified circumstances, the
amount to be repaid on exercise of the right to return a financial product is to
be reduced in accordance with the regulations.
(1) A person must not engage in conduct of a kind referred to in
subsection (2) in relation to a managed investment product if the managed
investment scheme concerned needs to be, or will need to be, registered and has
not been registered. This is so even if it is proposed to register the
scheme.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) Subject to subsection (3), the kinds of conduct that must not be
engaged in in relation to such a managed investment product are as
follows:
(a) making a recommendation, as described in subsection 1012A(3), that is
received in this jurisdiction;
(b) making an offer, as described in subsection 1012B(3) or 1012C(3), that
is received in this jurisdiction;
(c) accepting an offer, made as described in subsection 1012B(3) or (4),
that was received in this jurisdiction.
(3) Subsection (2) does not apply to a recommendation or offer made
in a situation to which a subsection of section 1012D, other than
subsection 1012D(1), applies.
Note: A defendant bears an evidential burden in relation to
the matters in this subsection. See subsection 13.3(3) of the Criminal
Code.
(1) In this section and section 1020C:
section 1020B products means:
(a) securities; or
(b) managed investment products; or
(c) financial products referred to in paragraph 764A(1)(j); or
(d) financial products of any other kind prescribed by regulations made
for the purposes of this definition.
(2) Subject to this section and the regulations, a person must only, in
this jurisdiction, sell section 1020B products to a buyer if, at the time
of the sale:
(a) the person has or, if the person is selling on behalf of another
person, that other person has; or
(b) the person believes on reasonable grounds that the person has, or if
the person is selling on behalf of another person, that other person
has;
a presently exercisable and unconditional right to vest the products in the
buyer.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) For the purposes of subsection (2):
(a) a person who, at a particular time, has a presently exercisable and
unconditional right to have section 1020B products vested in the person, or
in accordance with the directions of the person, has at that time a presently
exercisable and unconditional right to vest the products in another person;
and
(b) a right of a person to vest section 1020B products in another
person is not conditional merely because the products are charged or pledged in
favour of another person to secure the repayment of money.
(4) Subsection (2) does not apply in relation to:
(a) a sale of section 1020B products by a financial services licensee
who is a participant in a licensed market and specialises in transactions
relating to odd lots of section 1020B products, being a sale made by the
licensee on their own behalf solely for the purpose of:
(i) accepting an offer to buy an odd lot of section 1020B products;
or
(ii) disposing of a parcel of section 1020B products that is less
than one marketable parcel of section 1020B products by means of a sale of
one marketable parcel of those products; or
(b) a sale of section 1020B products as part of an arbitrage
transaction; or
(c) a sale of section 1020B products by a person who, before the time
of sale, has entered into a contract to buy those products and who has a right
to have those products vested in the person that is conditional only upon all or
any of the following:
(i) payment of the consideration in respect of the purchase;
(ii) the receipt by the person of a proper instrument of transfer in
respect of the products;
(iii) the receipt by the person of the documents that are, or are
documents of title to, the products; or
(d) a sale of section 1020B products in the following
circumstances:
(i) the person who sold the products is not an associate of the body
corporate that issued the products; and
(ii) arrangements are made before the time of the sale that will enable
delivery of products of the class sold to be made to the buyer within 3 business
days after the date of the transaction effecting the sale; and
(iii) if the sale is made on a licensed market:
(A) the price per unit in respect of the sale is not below the price at
which the immediately preceding ordinary sale was effected; and
(B) the price per unit is above the price at which the immediately
preceding ordinary sale was made, unless the price at which the immediately
preceding ordinary sale was made was higher than the next preceding different
price at which an ordinary sale had been made;
and the operator of the market is informed as soon as practicable that
the sale has been made short in accordance with this subparagraph; or
(e) a sale of section 1020B products in the following
circumstances:
(i) the products are included in a class of products in relation to which
there is in force a declaration, made by the operator of a licensed market as
provided by the operating rules of the market, to the effect that the class is a
class of products to which this paragraph applies; and
(ii) the sale is made as provided by the operating rules of the market;
and
(iii) at the time of the sale, neither the person who sold the products,
nor any person on behalf of whom the first-mentioned person sold the products,
was an associate, in relation to the sale, of the body corporate that issued the
products.
Note: A defendant bears an evidential burden in relation to
the matters in this subsection. See subsection 13.3(3) of the Criminal
Code.
(5) A person who requests a financial services licensee to make a sale of
section 1020B products that would contravene subsection (2) but for
paragraph (4)(b), (d) or (e) must, when making the request, inform the
licensee that the sale is a short sale.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(6) If:
(a) a person who, through a licensed market, makes a sale of
section 1020B products (whether or not on the person’s own behalf);
and
(b) the sale would contravene subsection (2) but for
paragraph (4)(d);
the person must endorse a statement that the sale was a short sale on any
document evidencing the sale that is given to the person who buys the products
(whether or not on that person’s own behalf).
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(7) For the purposes of this section, a person who:
(a) purports to sell section 1020B products; or
(b) offers to sell section 1020B products; or
(c) holds himself, herself or itself out as entitled to sell
section 1020B products; or
(d) instructs a financial services licensee to sell section 1020B
products;
is taken to sell the products.
(1) If ASIC forms the opinion that it is necessary to prohibit
section 1020B products (as defined in subsection 1020B(1)), or a particular
class of section 1020B products, from being sold on a licensed market in a
manner that, but for paragraph 1020B(4)(e), would contravene subsection
1020B(2), in order to:
(a) protect persons who might suffer financial loss if they were to buy or
sell those products in that manner; or
(b) protect the public interest;
ASIC may give written notice (the preliminary notice) to the
operator of the market stating that it has formed that opinion and setting out
the reasons for that opinion.
(2) If, after receiving the preliminary notice:
(a) the operator does not take action to prevent the selling on the market
of the products, or class of products, specified in the preliminary notice in
the manner referred to in subsection (1); and
(b) ASIC is still of the opinion that it is necessary to prohibit the
selling on that market of the products, or class of products, in that
manner;
ASIC may, by a further written notice (the prohibition
notice) given to the operator, prohibit the selling on the market of the
products, or class of products, in that manner during a period of not more than
21 days.
(3) As soon as practicable after giving the prohibition notice to the
operator, ASIC must give to the Minister a written report setting out the
reasons for the giving of the prohibition notice and send a copy of the report
to the operator.
(4) On receiving the report, the Minister may direct ASIC to revoke the
prohibition notice and, if such a direction is given, ASIC must immediately
revoke the prohibition notice.
(5) While the prohibition notice is in force, the operator must not permit
the selling of section 1020B products on the market in a way that
contravenes the prohibition notice.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
A condition of a contract for the acquisition of a financial product is
void if it provides that a party to the contract is:
(a) required or bound to waive compliance with any requirement of this
Part (or of regulations made for the purposes of this Part); or
(b) taken to have notice of any contract, document or matter not
specifically referred to in a Product Disclosure Statement or Supplementary
Product Disclosure Statement given to the party.
(1) This section applies if:
(a) either:
(i) a disclosure document or statement is defective (see
subsection (11)); or
(ii) an advertisement or statement of a kind referred to in subsection
1018A(1) or (2) that relates to financial products is defective (see
subsection (11)); or
(b) an issuer of financial products is in breach of
section 1017G.
(2) ASIC may order that:
(a) if paragraph (1)(a) applies—specified conduct in respect of
the financial products to which the document, advertisement or statement
relates; or
(b) if paragraph (1)(b) applies—specified conduct in respect of
financial products issued by that issuer;
must not be engaged in while the order is in force.
(3) The order may include a statement that specified conduct engaged in
contrary to the order will be regarded as not complying with the requirements of
a specified provision of this Part.
(4) Before making an order under subsection (2), ASIC must:
(a) hold a hearing; and
(b) give a reasonable opportunity to any interested people to make oral or
written submissions to ASIC on whether an order should be made.
(5) If ASIC considers that any delay in making an order under
subsection (2) pending the holding of a hearing would be prejudicial to the
public interest, ASIC may make an interim order under that subsection. The
interim order may be made without holding a hearing and lasts for 21 days after
the day on which it is made unless revoked before then.
(6) At any time during the hearing, ASIC may make an interim order under
subsection (2). The interim order lasts until:
(a) ASIC makes an order under subsection (2) after the conclusion of
the hearing; or
(b) the interim order is revoked;
whichever happens first.
(7) The order under subsection (2) must be in writing and must be
served on:
(a) unless paragraph (b) applies—the issuer of the financial
products concerned; or
(b) if paragraph (1)(a) applies and the document, advertisement or
statement relates to a sale or proposed sale of the financial products—the
seller of the financial products.
(8) The person on whom the order is served must take reasonable steps to
ensure that other people who engage in conduct to which the order applies are
aware of the order.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(9) The person on whom the order is served, or a person who is aware of
the order, must not engage in conduct contrary to the order.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(10) If the person on whom the order is served, or a person who is aware
of the order, engages in conduct contrary to the order, any relevant statement
included in the order under subsection (3) has effect accordingly. This
applies in addition to any other consequence that is provided for by this
Act.
(11) In this section:
defective:
(a) in relation to a disclosure document or statement—has the same
meaning as in Subdivision A of Division 7; and
(b) in relation to an advertisement or statement of a kind referred to in
subsection 1018A(1) or (2) that relates to financial
products—means:
(i) there is a misleading or deceptive statement in the advertisement or
statement; or
(ii) there is an omission from the advertisement or statement of material
required by paragraph 1018A(1)(c), (d) or (e), or paragraph 1018A(2)(c), (d),
(e) or (f), to be included in the advertisement or statement;
being a statement, or an omission, that is or would be material from the
point of view of a reasonable person considering whether to proceed to acquire
any of those financial products.
disclosure document or statement has the same meaning as it
has in Subdivision A of Division 7.
(1) ASIC may, subject to subsection (3):
(a) exempt a person or class of persons from all or specified provisions
of this Part; or
(b) exempt a financial product or a class of financial products from all
or specified provisions of this Part; or
(c) declare that this Part applies in relation to a person or a financial
product, or a class of persons or financial products, as if specified provisions
were omitted, modified or varied as specified in the declaration.
(2) Without limiting subsection (1), ASIC may, under this section,
declare that provisions of this Part are modified so that they apply (whether
with or without further modifications) in a way that changes the person to whom
a document or information is required to be given by a provision of this
Part.
(3) However, except as mentioned in subsection (2), ASIC cannot
declare that provisions of this Part are modified so that they apply in relation
to persons or financial products to which they would not otherwise
apply.
(4) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an exemption applies must
comply with the condition. The Court may order the person to comply with the
condition in a specified way. Only ASIC may apply to the Court for the
order.
(5) An exemption or declaration must be in writing and ASIC must publish
notice of it in the Gazette.
(6) If conduct (including an omission) of a person would not have
constituted an offence if a particular declaration under paragraph (1)(c)
had not been made, that conduct does not constitute an offence unless, before
the conduct occurred (in addition to complying with the gazettal requirement of
subsection (5)):
(a) the text of the declaration was made available by ASIC on the
Internet; or
(b) ASIC gave written notice setting out the text of the declaration to
the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with before
the conduct occurred.
(7) For the purpose of this section, the provisions of this
Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 10.2 (transitional provisions) that relate
to provisions of this Part.
(1) The regulations may:
(a) exempt a person or class of persons from all or specified provisions
of this Part; or
(b) exempt a financial product or a class of financial products from all
or specified provisions of this Part; or
(c) provide that this Part applies in relation to a person or a financial
product, or a class of persons or financial products, as if specified provisions
were omitted, modified or varied as specified in the regulations.
(2) Without limiting subsection (1), regulations made for the
purposes of this section may:
(a) declare that provisions of this Part are modified so that they apply
(with or without further modifications) in relation to persons, financial
products or situations to which they would not otherwise apply; or
(b) declare that provisions of this Part are modified so that they apply
(whether with or without further modifications) in a way that changes the person
by whom or to whom a document or information is required to be given by a
provision of this Part.
(3) For the purpose of this section, the provisions of this
Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 10.2 (transitional provisions) that
relates to provisions of this Part.
This Division contains provisions creating offences by reference to
various rules contained in preceding Divisions of this Part. However, it does
not create all the offences relating to those rules, as some offences are
created by subsection 1311(1). Where offences are created by subsection 1311(1)
in relation to a rule, this is indicated by a note at the end of the provision
containing the rule.
(1) In this Division:
defective, in relation to a disclosure document or statement,
means:
(a) there is a misleading or deceptive statement in the disclosure
document or statement; or
(b) if it is a Product Disclosure Statement—there is an omission
from the Product Disclosure Statement of material required by
section 1013C, other than material required by section 1013B or 1013G;
or
(c) if it is a Supplementary Product Disclosure Statement that is given
for the purposes of section 1014E—there is an omission from the
Supplementary Product Disclosure Statement of material required by that section;
or
(d) if it is a statement required by paragraph 1012G(3)(a) to be read to a
person—there is an omission from the statement of material required by
that paragraph;
being a statement, or an omission, that is or would be materially
adverse from the point of view of a reasonable person considering whether
to proceed to acquire the financial product concerned.
Note: In determining whether a Product Disclosure Statement
is defective, the effect of section 1014D must be taken into account
(section 1014D takes information and statements in a Supplementary Product
Disclosure Statement to be included in the Product Disclosure Statement it
supplements).
disclosure document or statement means:
(a) a Product Disclosure Statement; or
(b) a Supplementary Product Disclosure Statement; or
(c) a statement required by paragraph 1012G(3)(a) to be read to a
person.
(2) In this Subdivision, a reference (including in the definitions in
subsection (1)) to a document or statement of a kind referred to in a
paragraph of the definition of disclosure document or statement in
subsection (1) includes a reference to something purporting to be a
document or statement of that kind.
Strict liability offence
(1) A person (the providing entity) commits an offence
if:
(a) the providing entity:
(i) is required by a provision of this Part to give another person a
Product Disclosure Statement or a Supplementary Product Disclosure Statement
(the required disclosure document or statement); or
(ii) is required by paragraph 1012G(3)(a) to read another person a
statement (the required disclosure document or statement);
and
(b) the providing entity does not:
(i) if subparagraph (a)(i) applies—give (in accordance with
section 1015C) the other person anything purporting to be the required
disclosure document or statement by the time they are required to do so;
or
(ii) if subparagraph (a)(ii) applies—read the other person
anything purporting to be the required disclosure document or statement when
they are required to do so.
Note: A defendant bears an evidential burden in relation to
the matters in sections 1012D and 1012E.
(2) An offence based on subsection (1) is an offence of strict
liability.
Note: For strict liability, see
section 6.1 of the Criminal Code.
Ordinary offence
(3) A person (the providing entity) commits an offence
if:
(a) the providing entity:
(i) is required by a provision of this Part to give another person a
Product Disclosure Statement or a Supplementary Product Disclosure Statement
(the required disclosure document or statement); or
(ii) is required by paragraph 1012G(3)(a) to read another person a
statement (the required disclosure document or statement);
and
(b) the providing entity does not:
(i) if subparagraph (a)(i) applies—give (in accordance with
section 1015C) the other person anything purporting to be the required
disclosure document or statement by the time they are required to do so;
or
(ii) if subparagraph (a)(ii) applies—read the other person
anything purporting to be the required disclosure document or statement when
they are required to do so.
Note: A defendant bears an evidential burden in relation to
the matters in sections 1012D and 1012E.
Defence for authorised representative
(4) In any proceedings against an authorised representative of a financial
services licensee for an offence based on subsection (1) or (3), it is a
defence if:
(a) the licensee had provided the representative with information or
instructions about the giving of disclosure documents or statements;
and
(b) the representative’s failure to give the required disclosure
document or statement occurred because the representative was acting in reliance
on that information or those instructions; and
(c) the representative’s reliance on that information or those
instructions was reasonable.
Note: A defendant bears an evidential burden in relation to
the matters in subsection (4). See subsection 13.3(3) of the Criminal
Code.
(1) A person commits an offence if:
(a) the person prepares (or has someone else prepare for them) a
disclosure document or statement; and
(b) the person knows that the disclosure document or statement is
defective; and
(c) the person:
(i) gives (see subsection (3)) another person the disclosure
document or statement in circumstances in which it is required by a provision of
this Part to be given to the other person; or
(ii) gives (see subsection (3)), or makes available to, another
person the disclosure document or statement reckless as to whether the
other person will or may rely on the information in it.
Note: A defendant bears an evidential burden in relation to
the matters in sections 1012D and 1012E.
(2) A person commits an offence if:
(a) the person prepares (or has someone else prepare for them) a
disclosure document or statement; and
(b) the person knows that the disclosure document or statement is
defective; and
(c) the person gives (see subsection (3)), or makes available to,
another person the disclosure document or statement, reckless as to whether the
other person, or someone else, will or may give it, or make it available, to
another person as mentioned in subparagraph (1)(c)(i) or (ii).
(3) In this section, give means give by any means (including
orally), and is not limited to giving in accordance with section 1015C or
paragraph 1012G(3)(a).
(1) A person commits an offence if:
(a) the person prepares (or has someone else prepare for them) a
disclosure document or statement; and
(b) the disclosure document or statement is defective; and
(c) the person:
(i) gives (see subsection (5)) another person the disclosure document
or statement in circumstances in which it is required by a provision of this
Part to be given to the other person; or
(ii) gives (see subsection (5)), or makes available to, another
person a disclosure document or statement, reckless as to whether the other
person will or may rely on the information in it.
Note: A defendant bears an evidential burden in relation to
the matters in sections 1012D and 1012E.
(2) A person commits an offence if:
(a) the person prepares (or has someone else prepare for them) a
disclosure document or statement; and
(b) the disclosure document or statement is defective; and
(c) the person gives (see subsection (5)), or makes available to,
another person the disclosure document or statement, reckless as to whether the
other person, or someone else, will or may give it, or make it available, to
another person as mentioned in subparagraph (1)(c)(i) or (ii).
(3) For the purposes of an offence based on subsection (1) or (2),
strict liability applies to the physical element of the offence specified in
paragraph (1)(b) or (2)(b).
Note: For strict liability, see
section 6.1 of the Criminal Code.
(4) In any proceedings against a person for an offence based on
subsection (1) or (2), it is a defence if the person took reasonable steps
to ensure that the disclosure document or statement would not be
defective.
Note: A defendant bears an evidential burden in relation to
the matters in subsection (4). See subsection 13.3(3) of the Criminal
Code.
(5) In this section, give means give by any means (including
orally), and is not limited to giving in accordance with section 1015C or
paragraph 1012G(3)(a).
(1) A regulated person commits an offence if:
(a) another person prepares (or has someone else prepare for them) a
disclosure document or statement; and
(b) the regulated person knows that the disclosure document or statement
is defective; and
(c) the regulated person:
(i) gives (see subsection (2)) another person the disclosure
document or statement in circumstances in which it is required by a provision of
this Part to be given to the other person; or
(ii) gives (see subsection (2)), or makes available to, another
person the disclosure document or statement, reckless as to whether the
other person will or may rely on the information in it.
Note: A defendant bears an evidential burden in relation to
the matters in sections 1012D and 1012E.
(2) In this section, give means give by any means (including
orally), and is not limited to giving in accordance with section 1015C or
paragraph 1012G(3)(a).
A financial services licensee commits an offence if the licensee does not
take reasonable steps to ensure that an authorised representative of the
licensee complies with their obligations under this Part to give or read
disclosure documents or statements as and when required by this Part.
(1) A person commits an offence if:
(a) the person prepares (or has someone else prepare for them) a Product
Disclosure Statement or a Supplementary Product Disclosure Statement (the
disclosure document); and
(b) the disclosure document does not comply with:
(i) if it is a Product Disclosure Statement—section 1013B or
1013G; or
(ii) if it is a Supplementary Product Disclosure
Statement—section 1013G, 1014B or 1014C; and
(c) the person:
(i) gives (see subsection (3)) another person the disclosure document
in circumstances in which it is required by a provision of this Part to be given
to the other person; or
(ii) gives (see subsection (3)), or makes available to, another
person the disclosure document, reckless as to whether the other person will or
may rely on the information in it; or
(iii) gives (see subsection (3)), or makes available to, another
person the disclosure document, reckless as to whether the other person, or
someone else, will or may give it, or make it available, to another person as
mentioned in subparagraph (i) or (ii).
Note: A defendant bears an evidential burden in relation to
the matters in sections 1012D and 1012E.
(2) For the purposes of an offence based on subsection (1), strict
liability applies to paragraph (b) of that subsection.
Note: For strict liability, see
section 6.1 of the Criminal Code.
(3) In this section, give means give by any means (including
orally), and is not limited to giving in accordance with section 1015C or
paragraph 1012G(3)(a).
(1) A regulated person commits an offence if:
(a) the regulated person:
(i) gives (see subsection (2)) another person a disclosure
document or statement in circumstances in which it is required by a provision of
this Part to be given to the other person; or
(ii) gives (see subsection (2)), or makes available to, another
person a disclosure document or statement, reckless as to whether the other
person will or may rely on the information in it; and
(b) the disclosure document or statement has not been prepared by, or on
behalf of, the person required by section 1013A or paragraph 1012G(3)(a) to
prepare it.
Note: A defendant bears an evidential burden in relation to
the matters in sections 1012D and 1012E.
(2) In this section, give means give by any means (including
orally), and is not limited to giving in accordance with section 1015C or
paragraph 1012G(3)(a).
(1) A person commits an offence if:
(a) the person prepares (or has someone else prepare for them) a
disclosure document or statement; and
(b) the person becomes aware that the disclosure document or statement is
defective; and
(c) the person does not, as soon as practicable, take reasonable steps to
ensure that any regulated person to whom the disclosure document or
statement has been provided for further distribution is given a direction that
satisfies one of more of the following subparagraphs:
(i) a direction not to distribute the disclosure document or
statement;
(ii) if it is a Product Disclosure Statement—a direction not to
distribute the Product Disclosure Statement unless it is accompanied by a
Supplementary Product Disclosure Statement that corrects the
deficiency;
(iii) if it is a Product Disclosure Statement or a Supplementary Product
Disclosure Statement—a direction not to distribute the Product Disclosure
Statement or Supplementary Product Disclosure Statement without first altering
it in a way that is specified in the direction, being a way that corrects the
deficiency and that complies with section 1015E.
(2) A regulated person commits an offence if:
(a) the person is given a direction referred to in paragraph (1)(c);
and
(b) the person does not comply with the direction.
(3) A regulated person commits an offence if:
(a) a disclosure document or statement has been provided to the person for
distribution; and
(b) the person becomes aware that the disclosure document or statement is
defective; and
(c) the person does not take reasonable steps to notify the person
by whom, or on whose behalf, the disclosure document or statement was prepared
of the particulars of the deficiency.
(4) In this section, a reference to distributing a
disclosure document or statement includes (but is not limited to) giving or
reading the document or statement to another person in purported compliance with
a requirement of this Part.
(5) In this section, regulated person has the same meaning
as it has in Division 2.
(1) A person commits an offence if:
(a) the person engages in conduct that results in an alteration of a
Product Disclosure Statement or a Supplementary Product Disclosure Statement
that has been prepared by or on behalf of another person (the responsible
person); and
(b) the alteration results in the Product Disclosure Statement or
Supplementary Product Disclosure Statement becoming defective, or more defective
than it previously was; and
(c) the alteration is not made with the authority of the responsible
person; and
(d) either:
(i) the person, in purported compliance with a provision of this Part,
gives (see subsection (2)) the altered Product Disclosure Statement or
Supplementary Product Disclosure Statement to another person; or
(ii) the person gives (see subsection (2)), or makes available to,
another person the altered Product Disclosure Statement or Supplementary Product
Disclosure Statement, reckless as to whether the other person will or may rely
on the information in it; or
(iii) the person gives (see subsection (2)), or makes available to,
another person the altered Product Disclosure Statement or Supplementary Product
Disclosure Statement, reckless as to whether the other person, or someone else,
will or may give it, or make it available, to another person as mentioned in
subparagraph (i) or (ii).
(2) In this section, give means give by any means (including
orally), and is not limited to giving in accordance with
section 1015C.
(1) A person commits an offence if:
(a) they consent to the inclusion of a statement (the consented
material) in a Product Disclosure Statement or a Supplementary Product
Disclosure Statement as mentioned in paragraph 1013K(1)(a); and
(b) either:
(i) there is a misleading or deceptive statement in the consented
material; or
(ii) there is an omission of information from the consented material;
and
(c) the statement or omission is or would be materially adverse
from the point of view of a reasonable person considering whether to
proceed to acquire the financial product concerned.
(2) A person commits an offence if:
(a) they consent to the inclusion of a statement (the consented
material) in a Product Disclosure Statement or a Supplementary Product
Disclosure Statement as mentioned in paragraph 1013K(1)(a); and
(b) they become aware that either:
(i) there is a misleading or deceptive statement in the consented
material; or
(ii) there is an omission of information from the consented
material;
being a statement, or an omission, that:
(iii) is or would be materially adverse from the point of view of a
reasonable person considering whether to proceed to acquire the financial
product concerned; or
(iv) results in the Product Disclosure Statement or the Supplementary
Product Disclosure Statement being defective, or more defective than it would
otherwise be; and
(c) they do not withdraw their consent after becoming aware of the matter
mentioned in paragraph (b).
Strict liability offence
(1) A person commits an offence if:
(a) the person is required by section 1015D:
(i) to notify ASIC that a Product Disclosure Statement or a Supplementary
Product Disclosure Statement is in use; or
(ii) to keep a copy of a Product Disclosure Statement or a Supplementary
Product Disclosure Statement for a particular period; or
(iii) to make a copy of a Product Disclosure Statement or a Supplementary
Product Disclosure Statement available to ASIC; or
(iv) to comply with a request from a person for a copy of a Product
Disclosure Statement or a Supplementary Product Disclosure Statement;
and
(b) the person does not comply with that requirement.
(2) An offence based on subsection (1) is an offence of strict
liability.
Note: For strict liability, see
section 6.1 of the Criminal Code.
Ordinary offence
(3) A person commits an offence if:
(a) the person is required by section 1015D:
(i) to notify ASIC that a Product Disclosure Statement or a Supplementary
Product Disclosure Statement is in use; or
(ii) to keep a copy of a Product Disclosure Statement or a Supplementary
Product Disclosure Statement for a particular period; or
(iii) to make a copy of a Product Disclosure Statement or a Supplementary
Product Disclosure Statement available to ASIC; or
(iv) to comply with a request from a person for a copy of a Product
Disclosure Statement or a Supplementary Product Disclosure Statement;
and
(b) the person does not comply with that requirement.
A person (the responsible person) commits an offence
if:
(a) a request is made to them by another person, in accordance with
subsection 1017A(1), to provide further information about a financial product;
and
(b) the responsible person is required by subsection 1017A(2) to give the
other person the information; and
(c) the other person has paid any charge in respect of the request, being
a charge that is in accordance with subsections 1017A(5) and (6); and
(d) the responsible person does not take reasonable steps to ensure that,
as soon as practicable after receiving the request, and in any event within one
month, the information is provided to the other person in accordance with
subsection 1017A(4).
Strict liability offence
(1) An issuer or seller of financial products commits an offence
if:
(a) the issuer or seller is required by subsection 1017E(2) to pay
particular money into an account in accordance with that subsection;
and
(b) the issuer or seller does not pay the money into an account in
accordance with that subsection.
(2) An offence based on subsection (1) is an offence of strict
liability.
Note: For strict liability, see
section 6.1 of the Criminal Code.
Ordinary offence
(3) An issuer or seller of financial products commits an offence
if:
(a) the issuer or seller is required by subsection 1017E(2) to pay
particular money into an account in accordance with that subsection;
and
(b) the issuer or seller does not pay the money into an account in
accordance with that subsection.
(1) In this Subdivision:
defective, in relation to a disclosure document or statement,
means:
(a) there is a misleading or deceptive statement in the disclosure
document or statement; or
(b) if it is a Product Disclosure Statement—there is an omission
from the Product Disclosure Statement of material required by
section 1013C, other than material required by section 1013B or 1013G;
or
(c) if it is a Supplementary Product Disclosure Statement that is given
for the purposes of section 1014E—there is an omission from the
Supplementary Product Disclosure Statement of material required by that section;
or
(d) if it is a statement required by paragraph 1012G(3)(a) to be read to a
person—there is an omission from the statement of material required by
that paragraph.
Note: In determining whether a Product Disclosure Statement
is defective, the effect of section 1014D must be taken into account
(section 1014D takes information and statements in a Supplementary Product
Disclosure Statement to be included in the Product Disclosure Statement it
supplements).
disclosure document or statement means:
(a) a Product Disclosure Statement; or
(b) a Supplementary Product Disclosure Statement; or
(c) a statement required by paragraph 1012G(3)(a) to be read to a
person.
(2) In this Subdivision, a reference (including in the definitions in
subsection (1)) to a document or statement of a kind referred to in a
paragraph of the definition of disclosure document or statement in
subsection (1) includes a reference to something purporting to be a
document or statement of that kind.
(1) This section applies in the following situations:
(a) a person:
(i) is required by a provision of this Part to give another person (the
client) a Product Disclosure Statement or a Supplementary Product
Disclosure Statement (the required disclosure document or
statement); and
(ii) does not give (in accordance with section 1015C) the client
anything purporting to be the required disclosure document or statement by the
time they are required to do so; or
(b) a person:
(i) is required by paragraph 1012G(3)(a) to read another person (the
client) a statement (the required disclosure document or
statement); and
(ii) does not read the client anything purporting to be the required
disclosure document or statement when they are required to do so; or
(c) a person:
(i) gives another person (the client) a disclosure document
or statement that is defective in circumstances in which a disclosure document
or statement is required by a provision of this Part to be given to the client;
or
(ii) is a regulated person and gives, or makes available to, another
person (the client) a disclosure document or statement, being a
Product Disclosure Statement or a Supplementary Product Disclosure Statement,
that is defective, reckless as to whether the client will or may rely on the
information in it; or
(d) a person:
(i) gives consent to the inclusion of a statement in a Product Disclosure
Statement or a Supplementary Product Disclosure Statement as mentioned in
subsection 1021L(1), disregarding paragraph 1021L(1)(c); or
(ii) does not take reasonable steps to withdraw such a statement as
mentioned in subsection 1021L(2), disregarding subparagraphs 1021L(2)(b)(iii)
and (iv); or
(e) a person contravenes section 1017B or 1017D.
In paragraph (c), give means give by any means
(including orally), and is not limited to giving in accordance with
section 1015C or paragraph 1012G(3)(a).
(2) In a situation to which this section applies, if a person suffers loss
or damage:
(a) if paragraph (1)(a) applies—because the client was not
given the disclosure document or statement that they should have been given;
or
(b) if paragraph (1)(b) applies—because the client was not read
the statement that should have been read to them; or
(c) if paragraph (1)(c) applies—because the disclosure document
or statement the client was given was defective; or
(d) if paragraph (1)(d) applies—because the consent referred to
in that paragraph was given, or was not withdrawn, as the case requires;
or
(e) if paragraph (1)(e) applies—because of the contravention
referred to in that paragraph;
the person may recover the amount of the loss or damage by action against
the, or a, liable person (see subsections (3) to (5)), whether or not that
person (or anyone else) has been convicted of an offence in respect of the
matter referred to in paragraph (a), (b), (c), (d) or (e).
(3) For the purposes of subsection (2), the, or a, liable
person is:
(a) if paragraph (1)(a) or (b) applies—subject to
subsection (4), the person first-referred to in that paragraph;
or
(b) if paragraph (1)(c) applies—subject to
subsection (5):
(i) the person by whom, or on whose behalf, the disclosure document or
statement was prepared; and
(ii) each other person involved in the preparation of the disclosure
document or statement who, directly or indirectly, caused the disclosure
document or statement to be defective or contributed to it being defective;
or
(c) if paragraph (1)(d) applies—the person who gave the
consent; or
(d) if paragraph (1)(e) applies—the person who contravened the
provision concerned.
(4) If paragraph (1)(a) or (b) applies and the person who would, but
for this subsection, be the liable person is an authorised representative, the
authorised representative is not the liable person and the following paragraphs
apply:
(a) if the authorised representative is an authorised representative of
only one financial services licensee—that financial services licensee is
the liable person;
(b) if the authorised representative is an authorised representative of
more than one financial services licensee:
(i) if, under the rules in section 917C, one of those licensees is
responsible for the person’s conduct—that licensee is the (or a)
liable person; or
(ii) if, under the rules in section 917C, 2 or more of those
licensees are jointly and severally responsible for the person’s
conduct—each of those licensees is a liable person.
(5) If:
(a) paragraph (1)(c) applies; and
(b) an alteration was made to the disclosure document or statement before
it was given to the client; and
(c) the alteration made the disclosure document or statement defective, or
more defective than it would otherwise have been; and
(d) the alteration was not made by, or with the authority of, the person
who would, but for this subsection, be a liable person because of
subparagraph (3)(b)(i);
then, so far as a person has suffered loss or damage because the disclosure
document or statement was defective because of the alteration, the person who
made the alteration is a liable person, rather than the person referred to in
paragraph (d).
(6) An action under subsection (2) may be begun at any time within 6
years after the day on which the cause of action arose.
(7) A person is not liable under subsection (2) in a situation
described in paragraph (1)(c) if the person took reasonable steps to ensure
that the disclosure document or statement would not be defective.
(8) This section does not affect any liability that a person has under any
other law.
(1) The court dealing with an action under subsection 1022B(2) may, in
addition to awarding loss or damage under that subsection and if it thinks it
necessary in order to do justice between the parties:
(a) make an order declaring void a contract entered into by the client
referred to in that subsection for or relating to a financial product or a
financial service; and
(b) if it makes an order under paragraph (a)—make such other
order or orders as it thinks are necessary or desirable because of that
order.
(2) Without limiting paragraph (1)(b), the orders that may be made
under that paragraph include (but are not limited to) an order for the return of
money paid by a person, and/or an order for payment of an amount of interest
specified in, or calculated in accordance with, the order.
This Part deals in Division 2 with various kinds of prohibited
conduct, other than insider trading. The insider trading prohibitions are
contained in Division 3.
A person must not take part in, or carry out (whether directly or
indirectly and whether in this jurisdiction or elsewhere):
(a) a transaction that has or is likely to have; or
(b) 2 or more transactions that have or are likely to have;
the effect of:
(c) creating an artificial price for trading in financial products on a
financial market operated in this jurisdiction; or
(d) maintaining at a level that is artificial (whether or not it was
previously artificial) a price for trading in financial products on a financial
market operated in this jurisdiction.
Note 1: Failure to comply with this section is an offence
(see subsection 1311(1)).
Note 2: This section is also a civil penalty provision (see
section 1317E). For relief from liability to a civil penalty relating to
this section, see section 1317S.
(1) A person must not do, or omit to do, an act (whether in this
jurisdiction or elsewhere) if that act or omission has or is likely to have the
effect of creating, or causing the creation of, a false or misleading
appearance:
(a) of active trading in financial products on a financial market operated
in this jurisdiction; or
(b) with respect to the market for, or the price for trading in, financial
products on a financial market operated in this jurisdiction.
Note 1: Failure to comply with this subsection is an offence
(see subsection 1311(1)). For defences to a prosecution based on this
subsection, see Division 4.
Note 2: This subsection is also a civil penalty provision
(see section 1317E). For relief from liability to a civil penalty relating
to this subsection, see Division 4 and
section 1317S.
(2) For the purposes of subsection (1), a person is taken to have
created a false or misleading appearance of active trading in particular
financial products on a financial market if the person:
(a) enters into, or carries out, either directly or indirectly, any
transaction of acquisition or disposal of any of those financial products that
does not involve any change in the beneficial ownership of the products;
or
(b) makes an offer (the regulated offer) to acquire or to
dispose of any of those financial products in the following
circumstances:
(i) the offer is to acquire or to dispose of at a specified price;
and
(ii) the person has made or proposes to make, or knows that an associate
of the person has made or proposes to make:
(A) if the regulated offer is an offer to acquire—an offer to
dispose of; or
(B) if the regulated offer is an offer to dispose of—an offer to
acquire;
the same number, or substantially the same number, of those financial
products at a price that is substantially the same as the price referred to in
subparagraph (i).
Note: The circumstances in which a person creates a false or
misleading appearance of active trading in particular financial products on a
financial market are not limited to the circumstances set out in this
subsection.
(3) For the purposes of paragraph (2)(a), an acquisition or disposal
of financial products does not involve a change in the beneficial ownership
if:
(a) a person who had an interest in the financial products before the
acquisition or disposal; or
(b) an associate of such a person;
has an interest in the financial products after the acquisition or
disposal.
(4) The reference in paragraph (2)(a) to a transaction of acquisition
or disposal of financial products includes:
(a) a reference to the making of an offer to acquire or dispose of
financial products; and
(b) a reference to the making of an invitation, however expressed, that
expressly or impliedly invites a person to offer to acquire or dispose of
financial products.
(1) A person must not, by any fictitious or artificial transactions or
devices (whether in this jurisdiction or elsewhere) maintain, inflate, depress,
or cause fluctuations in, the price for trading in financial products on a
financial market operated in this jurisdiction.
Note 1: Failure to comply with this subsection is an offence
(see subsection 1311(1)). For defences to a prosecution based on this
subsection, see Division 4.
Note 2: This subsection is also a civil penalty provision
(see section 1317E). For relief from liability to a civil penalty relating
to this subsection, see Division 4 and
section 1317S.
(2) In determining whether a transaction is fictitious or artificial for
the purposes of subsection (1), the fact that the transaction is, or was at
any time, intended by the parties who entered into it to have effect according
to its terms is not conclusive.
A person must not (whether in this jurisdiction or elsewhere) circulate
or disseminate, or be involved in the circulation or dissemination of,
any statement or information to the effect that the price for trading in
financial products on a financial market operated in this jurisdiction will, or
is likely to, rise or fall, or be maintained, because of a transaction, or other
act or thing done, in relation to those financial products, if:
(a) the transaction, or thing done, constitutes or would constitute a
contravention of section 1041A, 1041B, 1041C, 1041E or 1041F; and
(b) the person, or an associate of the person:
(i) has entered into such a transaction or done such an act or thing;
or
(ii) has received, or may receive, directly or indirectly, a consideration
or benefit for circulating or disseminating, or authorising the circulation or
dissemination of, the statement or information.
Note 1: Failure to comply with this section is an offence
(see subsection 1311(1)). For defences to a prosecution based on this section,
see Division 4.
Note 2: This section is also a civil penalty provision (see
section 1317E). For relief from liability to a civil penalty relating to
this section, see Division 4 and
section 1317S.
A person must not (whether in this jurisdiction or elsewhere) make a
statement, or disseminate information, if:
(a) the statement or information is false in a material particular or is
materially misleading; and
(b) the statement or information is likely:
(i) to induce persons in this jurisdiction to apply for financial
products; or
(ii) to induce persons in this jurisdiction to dispose of or acquire
financial products; or
(iii) to have the effect of increasing, reducing, maintaining or
stabilising the price for trading in financial products on a financial market
operated in this jurisdiction.
Note 1: Failure to comply with this section is an offence
(see subsection 1311(1)). For defences to a prosecution based on this
subsection, see Division 4.
Note 2: Failure to comply with this section may also lead to
civil liability under section 1041I. For relief from liability under that
section, see Division 4.
(1) A person must not, in this jurisdiction, induce another person to deal
in financial products:
(a) by making or publishing a statement, promise or forecast if the person
knows, or is reckless as to whether, the statement is misleading, false or
deceptive; or
(b) by a dishonest concealment of material facts; or
(c) by recording or storing information that the person knows to be false
or misleading in a material particular or materially misleading if:
(i) the information is recorded or stored in, or by means of, a
mechanical, electronic or other device; and
(ii) when the information was so recorded or stored, the person had
reasonable grounds for expecting that it would be available to the other person,
or a class of persons that includes the other person.
Note 1: Failure to comply with this subsection is an offence
(see subsection 1311(1)). For defences to a prosecution based on this
subsection, see Division 4.
Note 2: Failure to comply with this subsection may also lead
to civil liability under section 1041I. For relief from liability under
that section, see Division 4.
(2) In this section:
dishonest means:
(a) dishonest according to the standards of ordinary people; and
(b) known by the person to be dishonest according to the standards of
ordinary people.
(1) A person must not, in the course of carrying on a financial services
business in this jurisdiction, engage in dishonest conduct in
relation to a financial product or financial service.
Note 1: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Note 2: Failure to comply with this subsection may also lead
to civil liability under section 1041I.
(2) In this section:
dishonest means:
(a) dishonest according to the standards of ordinary people; and
(b) known by the person to be dishonest according to the standards of
ordinary people.
(1) A person must not, in this jurisdiction, engage in conduct, in
relation to a financial product or a financial service, that is misleading or
deceptive or is likely to mislead or deceive.
Note 1: Failure to comply with this subsection is not an
offence.
Note 2: Failure to comply with this subsection may lead to
civil liability under section 1041I. For relief from liability under that
section, see Division 4.
(2) The reference in subsection (1) to engaging in conduct in
relation to a financial product includes (but is not limited to) any of the
following:
(a) dealing in a financial product;
(b) without limiting paragraph (a):
(i) issuing a financial product;
(ii) publishing a notice in relation to a financial product;
(iii) making, or making an evaluation of, an offer under a takeover bid or
a recommendation relating to such an offer;
(iv) carrying on negotiations, making arrangements, or doing any other
act, preparatory to, or in any way related to, an activity covered by
subparagraph (i), (ii) or (iii).
(3) Conduct:
(a) that contravenes:
(i) section 670A (misleading or deceptive takeover document);
or
(ii) section 728 (misleading or deceptive fundraising document);
or
(b) in relation to a disclosure document or statement within the meaning
of section 953A; or
(c) in relation to a disclosure document or statement within the meaning
of section 1022A;
does not contravene subsection (1). For this purpose, conduct
contravenes the provision even if the conduct does not constitute an offence, or
does not lead to any liability, because of the availability of a
defence.
(1) A person who suffers loss or damage by conduct of another person that
was engaged in in contravention of section 1041E, 1041F, 1041G or 1041H may
recover the amount of the loss or damage by action against that other person or
against any person involved in the contravention, whether or not that other
person or any person involved in the contravention has been convicted of an
offence in respect of the contravention.
(2) An action under subsection (1) may be begun at any time within 6
years after the day on which the cause of action arose.
(3) This section does not affect any liability that a person has under any
other law.
(4) Section 1317S (which provides for relief from liability) applies
in relation to liability under subsection (1) as if:
(a) the sections referred to in subsection (1) were civil penalty
provisions; and
(b) proceedings under subsection (1) were eligible
proceedings.
Note: Relief from liability under this section may also be
available (depending on the circumstances) under
Division 4.
Subject to any express provision to the contrary, the various sections in
this Division have effect independently of each other, and nothing in any of the
sections limits the scope or application of any of the other sections.
(1) This section applies to conduct:
(a) that contravenes:
(i) section 670A (misleading or deceptive takeover document);
or
(ii) section 728 (misleading or deceptive fundraising document);
or
(b) that relates to a disclosure document or statement within the meaning
of section 953A; or
(c) that relates to a disclosure document or statement within the meaning
of section 1022A.
For this purpose, conduct contravenes the provision even if the conduct
does not constitute an offence, or does not lead to any liability, because of
the availability of a defence.
(2) This Division operates in relation to conduct to which this section
applies to the exclusion of the provisions of the State Fair Trading Act of any
State or Territory.
In this Division:
able to be traded has a meaning affected by
section 1042E.
Division 3 financial products means:
(a) securities; or
(b) derivatives; or
(c) managed investment products; or
(d) superannuation products, other than those prescribed by regulations
made for the purposes of this paragraph; or
(e) any other financial products that are able to be traded on a financial
market.
generally available, in relation to information, has the
meaning given by section 1042C.
information includes:
(a) matters of supposition and other matters that are insufficiently
definite to warrant being made known to the public; and
(b) matters relating to the intentions, or likely intentions, of a
person.
material effect, in relation to a reasonable person’s
expectations of the effect of information on the price or value of
Division 3 financial products, has the meaning given by
section 1042D.
procure has a meaning affected by
section 1042F.
This Division applies to:
(a) acts and omissions within this jurisdiction in relation to
Division 3 financial products (regardless of where the issuer of the
products is formed, resides or located and of where the issuer carries on
business); and
(b) acts and omissions outside this jurisdiction (and whether in Australia
or not) in relation to Division 3 financial products issued by:
(i) a person who carries on business in this jurisdiction; or
(ii) a body corporate that is formed in this jurisdiction.
(1) For the purposes of this Division, information is generally
available if:
(a) it consists of readily observable matter; or
(b) both of the following subparagraphs apply:
(i) it has been made known in a manner that would, or would be likely to,
bring it to the attention of persons who commonly invest in Division 3
financial products of a kind whose price might be affected by the information;
and
(ii) since it was made known, a reasonable period for it to be
disseminated among such persons has elapsed; or
(c) it consists of deductions, conclusions or inferences made or drawn
from either or both of the following:
(i) information referred to in paragraph (a);
(ii) information made known as mentioned in
subparagraph (b)(i).
(2) None of the paragraphs of subsection (1) limits the generality of
any of the other paragraphs of that subsection.
For the purposes of this Division, a reasonable person would be taken to
expect information to have a material effect on the price or value
of particular Division 3 financial products if (and only if) the
information would, or would be likely to, influence persons who commonly acquire
Division 3 financial products in deciding whether or not to acquire or
dispose of the first-mentioned financial products.
Particular Division 3 financial products that are ordinarily able to
be traded on a licensed market are taken, for the purposes of this Division, to
be able to be traded on that market even though trading in those
products on that market is suspended by action taken by the market licensee, or
is contrary to a direction given to the market licensee by ASIC under subsection
794D(2).
(1) For the purposes of this Division, but without limiting the meaning
that the expression procure has apart from this section, if a
person incites, induces, or encourages an act or omission by another person, the
first-mentioned person is taken to procure the act or omission by
the other person.
(2) Subsection (1) does not limit the application in relation to
provisions in this Division of:
(a) section 6 of the Crimes Act 1914; or
(b) section 11.1, 11.2, 11.4 or 11.5 of the Criminal
Code.
(1) For the purposes of this Division:
(a) a body corporate is taken to possess any information which an officer
of the body corporate possesses and which came into his or her possession in the
course of the performance of duties as such an officer; and
(b) if an officer of a body corporate knows any matter or thing because he
or she is an officer of the body corporate, it is to be presumed that the body
corporate knows that matter or thing; and
(c) if an officer of a body corporate, in that capacity, is reckless as to
a circumstance or result, it is to be presumed that the body corporate is
reckless as to that circumstance or result; and
(d) for the purposes of paragraph 1043M(2)(b), if an officer of a body
corporate ought reasonably to know any matter or thing because he or she is an
officer of the body corporate, it is to be presumed that the body corporate
ought reasonably to know that matter or thing.
(2) This section does not limit the application of section 769B in
relation to this Division.
(1) For the purposes of this Division:
(a) a member of a partnership is taken to possess any
information:
(i) which another member of the partnership possesses and which came into
the other member’s possession in the other member’s capacity as a
member of the partnership; or
(ii) which an employee of the partnership possesses and which came into
his or her possession in the course of the performance of duties as such an
employee; and
(b) if a member or employee of a partnership knows any matter or thing
because the member or employee is such a member or employee, it is to be
presumed that every member of the partnership knows that matter or thing;
and
(c) if a member or employee of a partnership, in that capacity, is
reckless as to a circumstance or result, it is to be presumed that every member
of the partnership is reckless as to that circumstance or result; and
(d) for the purposes of paragraph 1043M(2)(b), if a member or employee of
a partnership ought reasonably to know any matter or thing because he or she is
such a member or employee, it is to be presumed that every member of the
partnership ought reasonably to know that matter or thing.
(2) This section does not limit the application of section 769B in
relation to this Division.
(1) Subject to this Subdivision, if:
(a) a person (the insider) possesses information that is not
generally available but, if the information were generally available, a
reasonable person would expect it to have a material effect on the price or
value of particular Division 3 financial products; and
(b) the insider knows that, or is reckless as to whether:
(i) the information is not generally available; and
(ii) if it were generally available, it might have a material effect on
the price or value of those securities;
the insider must not (whether as principal or agent):
(c) apply for, acquire, or dispose of, any of those products, or enter
into an agreement to apply for, acquire, or dispose of, any of those financial
products; or
(d) procure another person to apply for, acquire, or dispose of, any of
those products, or enter into an agreement to apply for, acquire, or dispose of,
any of those financial products.
Note 1: Failure to comply with this subsection is an offence
(see subsection 1311(1)). For defences to a prosecution based on this
subsection, see section 1043M.
Note 2: This subsection is also a civil penalty provision
(see section 1317E). For relief from liability to a civil penalty relating
to this subsection, see sections 1043N and 1317S.
(2) Subject to this Subdivision, if:
(a) a person (the insider) possesses information that is not
generally available but, if the information were generally available, a
reasonable person would expect it to have a material effect on the price or
value of particular Division 3 financial products; and
(b) the insider knows that, or is reckless as to whether:
(i) the information is not generally available; and
(ii) if it were generally available, it might have a material effect on
the price or value of those securities; and
(c) the financial products are able to be traded on a financial market
operated in this jurisdiction;
the insider must not, directly or indirectly, communicate the information,
or cause the information to be communicated, to another person if the insider
knows that, or is reckless as to whether, the other person would or would be
likely to:
(d) apply for, acquire, or dispose of, any of those products, or enter
into an agreement to apply for, acquire, or dispose of, any of those products;
or
(e) procure another person to apply for, acquire, or dispose of, any of
those products, or enter into an agreement to apply for, acquire, or dispose of,
any of those products.
Note 1: Failure to comply with this subsection is an offence
(see subsection 1311(1)). For defences to a prosecution based on this
subsection, see section 1043M.
Note 2: This subsection is also a civil penalty provision
(see section 1317E). For relief from liability to a civil penalty relating
to this subsection, see sections 1043N and 1317S.
Subsection 1043A(1) does not apply in respect of a member’s
withdrawal from a registered scheme if the amount paid to the member on
withdrawal is calculated (so far as is reasonably practicable) by reference to
the underlying value of the assets of the financial or business undertaking or
scheme, common enterprise, investment contract or time-sharing scheme to which
the member’s interest relates, less any reasonable charge for acquiring
the member’s interest.
(1) Subsection 1043A(1) does not apply in respect of:
(a) applying for or acquiring securities or managed investment products
under an underwriting agreement or a sub-underwriting agreement; or
(b) entering into an agreement referred to in paragraph (a);
or
(c) disposing of securities or managed investment products acquired under
an agreement referred to in paragraph (a).
(2) Subsection 1043A(2) does not apply in respect of:
(a) the communication of information in relation to securities or managed
investment products to a person solely for the purpose of procuring the person
to enter into an underwriting agreement in relation to any such securities or
managed investment products; or
(b) the communication of information in relation to securities or managed
investment products by a person who may be required under an underwriting
agreement to apply for or acquire any such securities or managed investment
products if the communication is made to another person solely for the purpose
of procuring the other person to do either or both of the following:
(i) enter into a sub-underwriting agreement in relation to any such
securities or managed investment products;
(ii) apply for any such securities or managed investment
products.
Subsection 1043A(1) does not apply in respect of the acquisition of
financial products pursuant to a requirement imposed by this Act.
Subsection 1043A(2) does not apply in respect of the communication of
information pursuant to a requirement imposed by the Commonwealth, a State, a
Territory or any regulatory authority.
A body corporate does not contravene subsection 1043A(1) by entering into
a transaction or agreement at any time merely because of information in the
possession of an officer of the body corporate if:
(a) the decision to enter into the transaction or agreement was taken on
its behalf by a person or persons other than that officer; and
(b) it had in operation at that time arrangements that could reasonably be
expected to ensure that the information was not communicated to the person or
persons who made the decision and that no advice with respect to the transaction
or agreement was given to that person or any of those persons by a person in
possession of the information; and
(c) the information was not so communicated and no such advice was so
given.
(1) The members of a partnership do not contravene subsection 1043A(1) by
entering into a transaction or agreement at any time merely because one or more
(but not all) of the members, or an employee or employees of the partnership,
are in actual possession of information if:
(a) the decision to enter into the transaction or agreement was taken on
behalf of the partnership by any one or more of the following persons:
(i) a member or members who are taken to have possessed the information
merely because another member or other members, or an employee or employees of
the partnership, were in possession of the information;
(ii) an employee or employees of the partnership who was not or were not
in possession of the information; and
(b) the partnership had in operation at that time arrangements that could
reasonably be expected to ensure that the information was not communicated to
the person or persons who made the decision and that no advice with respect to
the transaction or agreement was given to that person or any of those persons by
a person in possession of the information; and
(c) the information was not so communicated and no such advice was so
given.
(2) A member of a partnership does not contravene subsection 1043A(1) by
entering into a transaction or agreement otherwise than on behalf of the
partnership merely because the member is taken to possess information that is in
the possession of another member or an employee of the partnership.
A natural person does not contravene subsection 1043A(1) by entering into
a transaction or agreement in relation to financial products issued by another
person merely because the person is aware that he or she proposes to enter into,
or has previously entered into, one or more transactions or agreements in
relation to financial products issued by that other person.
(1) A body corporate does not contravene subsection 1043A(1) by entering
into a transaction or agreement in relation to financial products issued by
another person merely because the body corporate is aware that it proposes to
enter into, or has previously entered into, one or more transactions or
agreements in relation to financial products issued by the other
person.
(2) Subject to subsection (3), a body corporate does not contravene
subsection 1043A(1) by entering into a transaction or agreement in relation to
financial products issued by another person merely because an officer of the
body corporate is aware that the body corporate proposes to enter into, or has
previously entered into, one or more transactions or agreements in relation to
financial products issued by the other person.
(3) Subsection (2) does not apply unless the officer of the body
corporate became aware of the matters referred to in that subsection in the
course of the performance of duties as such an officer.
(1) Subject to subsection (2), a person (the first
person) does not contravene subsection 1043A(1) by entering into a
transaction or agreement on behalf of a person (the second person)
in relation to financial products issued by another person (the third
person) merely because the first person is aware that the second person
proposes to enter into, or has previously entered into, one or more transactions
or agreements in relation to financial products issued by the third
person.
(2) Subsection (1) does not apply unless the first person became
aware of the matters referred to in that subsection in the course of the
performance of duties as an officer of the second person or in the course of
acting as an agent of the second person.
A person (the agent) does not contravene subsection
1043A(1) by applying for, acquiring, or disposing of, or entering into an
agreement to apply for, acquire, or dispose of, financial products that are able
to be traded on a licensed market if:
(a) the agent is a financial services licensee or a representative of a
financial services licensee; and
(b) the agent entered into the transaction or agreement concerned on
behalf of another person (the principal) under a specific
instruction by the principal to enter into that transaction or agreement;
and
(c) the licensee had in operation, at the time when that transaction or
agreement was entered into, arrangements that could reasonably be expected to
ensure that any information in the possession of the licensee, or of any
representative of the licensee, as a result of which the person in possession of
the information would be prohibited by subsection 1043A(1) from entering into
that transaction or agreement was not communicated to the agent and that no
advice with respect to the transaction or agreement was given to the principal
or to the agent by a person in possession of the information; and
(d) the information was not so communicated and no such advice was so
given; and
(e) the principal is not an associate of the licensee or of any
representative of the licensee;
but nothing in this section affects the application of subsection 1043A(1)
in relation to the principal.
Situation to which this section applies
(1) If:
(a) a person (the insider) possesses information that is not
generally available but, if the information were generally available, a
reasonable person would expect it to have a material effect on the price or
value of Division 3 financial products (other than derivatives);
and
(b) the insider knows that, or is reckless as to whether:
(i) the information is not generally available; and
(ii) if the information were generally available, it might have a material
effect on the price or value of those Division 3 financial products;
and
(c) the insider (whether as principal or agent) in contravention of
subsection 1043A(1):
(i) applies for, acquires, or disposes of, or enters into an agreement to
apply for, acquire, or dispose of, any such Division 3 financial products;
or
(ii) procures another person to apply for, acquire, or dispose of, or to
enter into an agreement to apply for, acquire, or dispose of, any such
Division 3 financial products;
the following subsections apply.
Compensation for damage suffered by person applying for the
Division 3 financial products
(2) If the insider applied for or agreed to apply for, or procured another
person to apply for or to agree to apply for, the Division 3 financial
products, the issuer of the products may, by action under section 1317HA,
recover as compensation for damage suffered by the issuer, the amount (if any)
by which the price described in the first of the following paragraphs was less
than the price described in the second of those paragraphs:
(a) the price at which the products were applied for, or agreed to be
applied for, by the insider or the other person;
(b) the price at which they would have been likely to have been disposed
of in a disposal made at the time of the application or the time of the
agreement, as the case may be, if the information had been generally
available.
The action may be taken against the insider, the other person or any other
person involved in the contravention.
Compensation for damage suffered by person disposing of the
Division 3 financial products
(3) If the insider acquired or agreed to acquire, or procured another
person to acquire or to agree to acquire, the Division 3 financial products
from a person (in this subsection and subsection (5) called the
disposer) who did not possess the information, the disposer may,
by action under section 1317HA, recover, as compensation for damage
suffered by the disposer, the amount (if any) by which the price described in
the first of the following paragraphs was less than the price described in the
second of those paragraphs:
(a) the price at which the financial products were acquired, or agreed to
be acquired, by the insider or the other person from the disposer;
(b) the price at which they would have been likely to have been acquired
in an acquisition made at the time of the first-mentioned acquisition or the
time of the agreement, as the case may be, if the information had been generally
available.
The action may be taken against the insider, the other person or any other
person involved in the contravention.
Compensation for damage suffered by person acquiring the Division 3
financial products
(4) If the insider disposed of or agreed to dispose of, or procured
another person to dispose of or to agree to dispose of, the Division 3
financial products to a person (in this subsection and subsection (5)
called the acquirer) who did not possess the information, the
acquirer may, by action under section 1317HA, recover, as compensation for
damage suffered by the acquirer, the amount (if any) by which the price
described in the first of the following paragraphs was greater than the price
described in the second of those paragraphs:
(a) the price at which the financial products were disposed of, or agreed
to be disposed of, by the insider or the other person to the acquirer;
(b) the price at which they would have been likely to have been disposed
of in a disposal made at the time of the first-mentioned disposal or the time of
the agreement, as the case may be, if the information had been generally
available.
The action may be taken against the insider, the other person or any other
person involved in the contravention.
Additional situations in which issuer may recover
(5) In addition to any action that may be brought as provided by
subsection (3) or (4), the issuer of the financial products may, in the
case of an acquisition or disposal of, or an agreement to acquire or dispose of,
the financial products by the insider or another person in the circumstances
mentioned in that subsection, by action under section 1317HA, recover, as
compensation for damage suffered by the issuer:
(a) in the case of an acquisition or agreement to acquire the financial
products—the amount (if any) by which the price described in the first of
the following subparagraphs was less than the price described in the second of
those subparagraphs:
(i) the price at which the financial products were acquired, or agreed to
be acquired, by the insider or other person from the disposer;
(ii) the price at which they were likely to have been acquired in an
acquisition made at the time of the first-mentioned acquisition or the time of
the agreement, as the case may be, if the information had been generally
available; or
(b) in the case of a disposal or an agreement to dispose of financial
products—the amount (if any) by which the price described in the first of
the following subparagraphs was greater than the price described in the second
of those subparagraphs:
(i) the price at which the financial products were disposed of, or agreed
to be disposed of, by the insider or other person to the acquirer;
(ii) the price at which they would have been likely to have been disposed
of at the time of the first-mentioned disposal or the time of the agreement, as
the case may be, if the information had been generally available.
The action may be taken against the insider, the other person or any other
person involved in the contravention.
ASIC may take action for benefit of issuer
(6) ASIC may, if it considers that it is in the public interest to do so,
bring an action in accordance with subsection (2) or (5) in the name of,
and for the benefit of, an issuer of Division 3 financial products for the
recovery of an amount that the issuer is entitled to recover by virtue of that
subsection.
Relief from liability
(7) In an action brought against a person in accordance with this section
because the person entered into, or procured another person to enter into, a
transaction or agreement at a time when certain information was in the
first-mentioned person’s possession, the court may relieve the person
wholly or partly from liability if it appears to the court that the information
came into the first-mentioned person’s possession solely as a result of
the information having been made known as mentioned in subparagraph
1042C(1)(b)(i).
Special provision for registered schemes—treatment of amount
recovered in respect of subsection (2) loss
(8) If:
(a) the responsible entity for a registered scheme; or
(b) ASIC in the name of, and for the benefit of, the responsible entity
for a registered scheme;
brings an action in accordance with subsection (2) in respect of a
subscription for, or any agreement to subscribe for, any interests in the
scheme, any amount recovered in the action:
(c) is to be held by the responsible entity on behalf of the persons who,
at the time of the subscription or agreement, had rights or interests in the
relevant financial or business undertaking or scheme, common enterprise,
investment contract or time-sharing scheme; and
(d) is to be held on their behalf in the respective proportions that, at
that time, their individual rights or interests bore to the total of all those
rights or interests.
Special provision for registered schemes—treatment of amount
recovered in respect of subsection (5) loss
(9) If:
(a) the responsible entity for a registered scheme; or
(b) ASIC in the name of, and for the benefit of, the responsible entity
for a registered scheme;
brings an action in accordance with subsection (5) in respect of an
acquisition or disposal of, or an agreement to acquire or dispose of, interests
in the scheme, any amount recovered in the action:
(c) is to be held by the responsible entity on behalf of the persons who,
at the time of the disposal, acquisition or agreement, had rights or interests
in the relevant financial or business undertaking or scheme, common enterprise,
investment contract or time-sharing scheme; and
(d) is to be held on their behalf in the respective proportions that, at
that time, their individual rights or interests bore to the total of all those
rights or interests.
(10) Any right of action that a person has by virtue of this section is in
addition to any right that any other person has under
section 1317HA.
(1) In a prosecution of a person for an offence based on subsection
1043A(1) or (2), it is not necessary for the prosecution to prove the
non-existence of facts or circumstances which, if they existed, would, by virtue
of section 1043B, 1043C, 1043D, 1043E, 1043F, 1043G, 1043H, 1043I, 1043J or
1043K, preclude the act or omission from constituting a contravention of
subsection 1043A(1) or (2), as the case may be, but it is a defence if the facts
or circumstances existed.
Note: A defendant bears an evidential burden in relation to
the facts or circumstances. See subsection 13.3(3) of the Criminal
Code.
(2) In a prosecution brought against a person for an offence based on
subsection 1043A(1) because the person entered into, or procured another person
to enter into, a transaction or agreement at a time when certain information was
in the first-mentioned person’s possession:
(a) it is a defence if the information came into the first-mentioned
person’s possession solely as a result of the information having been made
known as mentioned in subparagraph 1042C(1)(b)(i); and
(b) it is a defence if the other party to the transaction or agreement
knew, or ought reasonably to have known, of the information before entering into
the transaction or agreement.
Note: A defendant bears an evidential burden in relation to
the matters referred to in paragraphs (a) and (b). See subsection 13.3(3)
of the Criminal Code.
(3) In a prosecution against a person for an offence based on subsection
1043A(2) because the person communicated information, or caused information to
be communicated, to another person:
(a) it is a defence if the information came into the first-mentioned
person’s possession solely as a result of the information having been made
known as mentioned in subparagraph 1042C(1)(b)(i); and
(b) it is a defence if the other person knew, or ought reasonably to have
known, of the information before the information was communicated.
Note: A defendant bears an evidential burden in relation to
the matters referred to in paragraphs (a) and (b). See subsection 13.3(3)
of the Criminal Code.
In proceedings against a person under Part 9.4B (including under
section 1317HA) relating to a contravention of subsection 1043A(1) or (2),
the court may relieve the person wholly or partly from liability if it appears
to the court that:
(a) in any case—the circumstances in any of the sections referred to
in subsection 1043M(1) applied; or
(b) in the case of subsection 1043A(1)—the circumstance referred to
in paragraph 1043M(2)(a) or (b) applied; or
(c) in the case of subsection 1043A(2)—the circumstance referred to
in paragraph 1043M(3)(a) or (b) applied.
If, in a proceeding instituted under this Act, the Court finds that a
contravention of section 1043A has occurred, the Court may, in addition to
any other orders that it may make under any other provision of this Act, make
such order or orders as it thinks just, including, but without limiting the
generality of the above, any one or more of the following orders:
(a) an order restraining the exercise of rights attached to
Division 3 financial products;
(b) an order restraining the issue of Division 3 financial
products;
(c) an order restraining the acquisition or disposal of Division 3
financial products;
(d) an order directing the disposal of Division 3 financial
products;
(e) an order vesting Division 3 financial products in ASIC;
(f) an order cancelling an agreement for the acquisition or disposal of
Division 3 financial products;
(g) an order cancelling an Australian financial services
licence;
(h) for the purpose of securing compliance with any other order made under
this section, an order directing a person to do or refrain from doing a
specified act.
(1) It is a defence to a prosecution for an offence based on a provision
of this Part committed by the publication of an advertisement if:
(a) the defendant was, at that time, a person whose business it was to
publish or arrange for the publication of advertisements; and
(b) they received the advertisement for publication in the ordinary course
of that business and did not know, and had no reason to believe, that its
publication would amount to an offence against that provision.
Note: A defendant bears an evidential burden in relation to
the matters in subsection (1). See subsection 13.3(3) of the Criminal
Code.
(2) In proceedings against a person under:
(a) Part 9.4B (including under section 1317H) relating to a
contravention of a civil penalty provision that is in this Part; or
(b) section 1041I relating to a contravention of a provision to which
that section applies;
the court may relieve the person wholly or partly from liability if it
appears to the court that the circumstances mentioned in paragraphs (1)(a)
and (b) applied.
(1) A share, other interest of a member in a company or interest of a
person in a registered scheme:
(a) is personal property; and
(b) is transferable or transmissible as provided by:
(i) the company’s, or scheme’s, constitution; or
(ii) the operating rules of a prescribed CS facility if they are
applicable; and
(c) is capable of devolution by will or by operation of law.
(2) Paragraph (1)(c) has effect subject to:
(a) in the case of a company:
(i) the company’s constitution (if any); and
(ii) any replaceable rules that apply to the company; and
(iii) the operating rules of a prescribed CS facility if they apply to the
share or interest; and
(b) in the case of a scheme:
(i) the scheme’s constitution; and
(ii) the operating rules of a prescribed CS facility if they apply to the
interest.
(3) Subject to subsection (1):
(a) the laws applicable to ownership of, and dealing with, personal
property apply to a share, other interest of a member in a company or interest
of a person in a registered scheme as they apply to other property;
and
(b) equitable interests in respect of a share, interest of a member in a
company or other interest of a person in a registered scheme may be created,
dealt with and enforced as in the case of other personal property.
(4) For the purposes of any law, a share, other interest of a member in a
company or interest of a person in a registered scheme is taken to be
situated:
(a) if the share, interest in a company, or managed investment product is
entered on the register kept under section 169—in the State or
Territory where that register is kept; or
(b) if the share or interest in the company is entered on an overseas
branch register kept under section 178—in the foreign country where
that register is kept.
(1) Except as provided in subsection (2), a company must ensure that
each share in the company is distinguished by an appropriate number.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) Despite subsection (1):
(a) if at any time all the issued shares in a company, or all the issued
shares in a company of a particular class:
(i) are fully paid up; and
(ii) rank equally for all purposes;
none of those shares is required to have a distinguishing number so long
as each of those shares remains fully paid up, and ranks equally for all
purposes with all shares of the same class for the time being issued and fully
paid up; and
(b) if:
(i) all the issued shares in a company are evidenced by certificates in
accordance with section 1070C; and
(ii) each certificate is distinguished by an appropriate number;
and
(iii) that number is recorded in the register of members;
none of those shares is required to have a distinguishing number;
and
(c) a share need not have a distinguishing number if the operating rules
of a prescribed CS facility through which it is able to be transferred provide
that the share need not have a distinguishing number.
Note: A defendant bears an evidential burden in relation to
the matters in this subsection. See subsection 13.3(3) of the Criminal
Code.
(1) A company must ensure that a certificate it issues specifying the
shares held by a member of the company states:
(a) the name of the company and the fact that it is registered
under this Act; and
(b) the class of the shares; and
(c) the amount (if any) unpaid on the shares.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) A certificate issued in accordance with subsection (1) specifying
shares held by a member of a company is prima facie evidence of the title
of the member to the shares.
(3) A failure to comply with subsection (1) does not affect the
rights of a holder of shares.
(1) This section deals with the following securities:
(a) shares in the company;
(b) debentures of the company;
(c) managed investment products.
(2) This section applies to a managed investment product as if:
(a) references to a company were instead references to the responsible
entity of the registered scheme; and
(b) references to the directors of a company were instead references to
the directors of the responsible entity of the registered scheme.
(3) A company must, in accordance with subsection (4), issue a
duplicate certificate or other title document for securities if:
(a) the certificate or document is lost or destroyed; and
(b) the owner of the securities applies to the company for the duplicate
in accordance with subsection (5); and
(c) the owner complies with any requirements made in accordance with
subsection (6).
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) The company must issue the duplicate:
(a) if the company requires the payment of an amount not exceeding the
amount prescribed by regulations made for the purposes of this
paragraph—within 21 days after the payment is received by the company or
within such longer period as ASIC approves; or
(b) in a case to which paragraph (a) does not apply—within 21
days after the application is made or within such longer period as ASIC
approves.
(5) The application must be accompanied by:
(a) a statement in writing that the certificate or other
document:
(i) has been lost or destroyed; and
(ii) has not been pledged, sold or otherwise disposed of; and
(b) if the certificate or other document has been lost—a statement
in writing that proper searches have been made; and
(c) an undertaking in writing that if the certificate or other document is
found or received by the owner it will be returned to the company.
(6) The directors of the company may, before accepting an application for
the issue of a duplicate certificate, require the applicant to do either or both
of the following:
(a) place an advertisement in a daily newspaper circulating in a place
specified by the directors stating that:
(i) the certificate or other document has been lost or destroyed;
and
(ii) the owner intends, after the end of 14 days after the publication of
the advertisement, to apply to the company for a duplicate
certificate;
(b) give a bond for an amount equal to at least the current market value
of the securities indemnifying the company against loss following the production
of the original certificate or other document.
(7) If:
(a) a certificate or other title document for securities is cancelled in
reliance on the operating rules of a prescribed CS facility; and
(b) having regard to those provisions, the certificate or other document
should not have been cancelled;
this section applies to the certificate or other document as though it were
destroyed on its cancellation.
(1) This Division applies to the following securities:
(a) shares in a company;
(b) debentures of a company;
(c) managed investment products.
(2) This Division applies to a managed investment product as if:
(a) references to a company were instead references to the responsible
entity of the registered scheme; and
(b) references to the constitution of a company were instead references to
the constitution of the registered scheme; and
(c) references to members of a company were instead references to members
of the registered scheme.
(1) This section does not apply to a transfer of a security through a
prescribed CS facility.
(2) Subject to subsection (5), a company must only register a
transfer of securities if a proper instrument of transfer (see
subsections (3) and (4)) has been delivered to the company. This is so
despite:
(a) anything in its constitution; or
(b) anything in a deed relating to debentures.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) An instrument of transfer is not a proper instrument of transfer for
the purposes of subsection (2) if it does not show the details, specified
in the regulations, in relation to the company concerned.
(4) If the transfer of the securities is covered by Division 3 of
this Part, then (in addition to subsection (3)), the instrument is not a
proper instrument of transfer for the purposes of subsection (2) unless it
is a sufficient transfer of the securities under regulations made for the
purposes of that Division.
(5) Subsection (2) does not prejudice the power of the company to
register, as the holder of securities, a person to whom the right to the
securities has devolved by will or by operation of law.
(6) Subsections (7) to (13) deal with a transfer of a security of a
dead holder by the dead holder’s personal representative. They deal with
the transfer differently depending on whether the personal representative is a
local representative or not.
(7) The personal representative is a local representative if
the representative is duly constituted as a personal representative under the
law of the State or Territory in which the security is situated.
Note: Subsection 1070A(4) provides that the security is
situated where the relevant register is kept.
(8) If the personal representative is a local representative, a transfer
of the security by the representative is as valid as if the representative had
been registered as the holder of the security at the time when the instrument of
transfer was executed.
(9) If:
(a) the personal representative is not a local representative;
and
(b) the representative:
(i) executes an instrument of transfer of the security to the
representative or to another person; and
(ii) delivers the instrument to the company; and
(iii) delivers to the company with the instrument a statement in writing
made by the representative to the effect that, to the best of the
representative’s knowledge, information and belief, no grant of
representation of the estate of the deceased holder has been applied for or made
in the State or Territory in which the security is located and no application
for such a grant will be made; and
(c) the statement is made within 3 months immediately before the date on
which the statement is delivered to the company;
the company must (subject to subsection (10)) register the transfer
and pay to the representative any dividends or other money accrued in respect of
the security up to the time when the instrument was executed.
(10) Subsection (9) does not operate so as to require the company to
do anything that it would not have been required to do if the personal
representative were a local representative.
(11) A transfer or payment made under subsection (9) and a receipt or
acknowledgment of such a payment is, for all purposes, as valid and effectual as
if the personal representative were a local representative.
(12) For the purposes of this section, an application by a personal
representative of a dead person for registration as the holder of a security in
place of the dead person is taken to be an instrument of transfer effecting a
transfer of the security to the personal representative.
(13) The production to a company of a document that is, under the law of a
State or Territory, sufficient evidence of probate of the will, or letters of
administration of the estate, of a dead person having been granted to a person,
is sufficient evidence of the grant (for the company’s purposes). This is
so despite:
(a) anything in its constitution; or
(b) in a deed relating to debentures.
(1) A document transferring securities need not state the occupation of
the transferor or transferee and, if it is signed by a person, the signature
need not be witnessed.
(2) Subsection (1) applies despite anything in:
(a) the constitution of:
(i) a company; or
(ii) a body referred to in paragraph 1073C(a) or (b); or
(b) the terms and conditions on which securities are created or
issued.
(3) The omission from a register, certificate, document transferring
securities or other document relating to a security, of a statement of the
occupation of a person who is, or is entitled to be, registered as the holder of
the security does not breach any law, constitution, trust deed or other document
relating to the securities.
(1) A written application by the transferor of a security of a company for
the transferee’s name to be entered in the appropriate register is as
effective (for the company’s purposes) as if it were an application by the
transferee. The application is subject to the same conditions as it would be if
it had been made by the transferee.
(2) If the transferor of a security of a company requests the company in
writing to do so, the company must, by written notice, require a person who has
possession, custody or control of either or both of the following:
(a) any title documents for the security;
(b) the instrument of transfer of the security;
to bring it or them into the office of the company within a specified
period, to have the document cancelled or rectified and the transfer registered
or otherwise dealt with.
(3) The period specified under subsection (2) must be not less than 7
and not more than 28 days after the date of the notice.
(4) If a person refuses or fails to comply with a notice given under
subsection (2), the transferor may apply to the Court for the issue of a
summons for that person to appear before the Court and show cause why the
documents mentioned in the notice should not be delivered up or produced as
required by the notice.
(5) The Court may:
(a) if the person appears:
(i) examine the person upon oath or affirmation; and
(ii) receive other evidence; and
(b) if the person does not appear after being duly served with the
summons—receive evidence in the person’s absence; and
(c) in either case order the person to deliver up such documents to the
company upon such terms or conditions as the Court considers just and
reasonable.
The costs of the summons and of proceedings on the summons are in the
discretion of the Court.
(6) Lists of documents required to be brought in under subsection (2)
but not brought in in accordance with a requirement made under
subsection (2) or delivered up in accordance with an order under
subsection (5), must be:
(a) exhibited in the office of the company; and
(b) advertised in the Gazette and in such newspapers and at such
times as the company thinks fit.
If a company refuses to register a transfer of a security of the company,
it must, within 2 months after the date on which the transfer was lodged with
it, give the transferee notice of the refusal.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
(1) If a relevant authority in relation to a company:
(a) refuses or fails to register; or
(b) refuses or fails to give its consent or approval to the registration
of;
a transfer or transmission of securities of the company, the transferee or
transmittee may apply to the Court for an order under this section.
(2) If the Court is satisfied on the application that the refusal or
failure was without just cause, the Court may:
(a) order that the transfer or transmission be registered; or
(b) make such other order as it thinks just and reasonable,
including:
(i) in the case of a transfer or transmission of shares—an order
providing for the purchase of the shares by a specified member of the company or
by the company; and
(ii) in the case of a purchase by the company—an order providing for
the reduction accordingly of the capital of the company.
(3) In this section:
relevant authority, in relation to a company,
means:
(a) a person who has, 2 or more persons who together have, or a body that
has, authority to register a transfer or transmission of securities of the
company; or
(b) a person, 2 or more persons, or a body, whose consent or approval is
required before a transfer or transmission of securities of the company is
registered.
(1) The certification by a company of an instrument of transfer of
securities of the company:
(a) is taken as a representation by the company to any person acting on
the faith of the certification that there have been produced to the company such
documents as on the face of them show prima facie title to the securities
in the transferor named in the instrument of transfer; and
(b) is not taken as a representation that the transferor has any title to
the securities.
(2) If a person acts on the faith of a false certification by a company
made negligently, the company is under the same liability to the person as if
the certification had been made fraudulently.
(3) A certification may be expressed to be limited to 42 days or any
longer period from the date of certification. If it is, the company and its
officers are not, in the absence of fraud, liable in respect of the registration
of any transfer of securities comprised in the certification after the end
of:
(a) the period so limited; or
(b) any extension of that period given by the company;
if the instrument of transfer has not, within that period, been lodged with
the company for registration.
(4) For the purposes of this section:
(a) an instrument of transfer is taken to be certified if it bears the
words “certificate lodged” or words to the like effect;
and
(b) the certification of an instrument of transfer is taken to be made by
a company if:
(i) the person issuing the instrument is a person authorised to issue
certified instruments of transfer on the company’s behalf; and
(ii) the certification is signed by a person authorised to certify
transfers on the company’s behalf or by an officer of the company or of a
body corporate so authorised; and
(c) a certification that purports to be authenticated by a person’s
signature or initials (whether handwritten or not) is taken to be signed by the
person unless it is shown that the signature or initials:
(i) was not or were not placed there by the person; and
(ii) was not or were not placed there by any other person authorised to
use the signature or initials;
for the purpose of certifying transfers on the company’s
behalf.
(1) Subject to subsection (2), within 2 months after a company issues
a security, the company must:
(a) complete and have ready for delivery to the holder of the security all
the appropriate certificates or other title documents in connection with the
issue of the security; and
(b) unless otherwise instructed by the holder, send or deliver the
completed certificates or other title documents to:
(i) the holder; or
(ii) if the holder has instructed the company in writing to send them to a
nominated person—that person.
Paragraph (a) has effect in relation to shares subject to the
conditions on which the shares are issued.
(2) If the operating rules of a prescribed CS facility include a provision
to the effect that:
(a) no document is required by subsection (1) to be completed and
delivered by a company in relation to the issue of a security in specified
circumstances; or
(b) the only document required by subsection (1) to be completed and
delivered by a company in relation to the issue of a security in specified
circumstances is the document required by the provision;
the provision has effect accordingly.
(3) Within one month after the date on which a transfer of a security is
lodged with a company, the company must:
(a) complete and have ready for delivery to the transferee all the
appropriate transfer and title documents in connection with the transfer;
and
(b) unless otherwise instructed by the transferee, send or deliver the
completed documents to:
(i) the transferee; or
(ii) if the transferee has instructed the company in writing to send them
to a nominated person—that person.
This subsection does not apply to a transfer that the company is for any
reason entitled to refuse to register and does not register.
(4) The only document required by subsection (3) to be completed and
delivered by a company in relation to a transfer covered by the operating rules
of a prescribed CS facility is the document (if any) that those rules require to
be completed and delivered.
(5) A company need not comply:
(a) with subsection (1) in relation to the issue of a security;
or
(b) with subsection (3) in relation to a transfer of a
security;
if the person to whom the security is issued, or the transferee,
has:
(c) applied to ASIC for the making of a declaration under this subsection;
and
(d) been declared by ASIC, by writing published in the Gazette, to
be a person in relation to whom this section does not apply.
(6) If:
(a) either:
(i) if subsection (1) applies—the holder referred to in that
subsection serves a notice on the company requiring the company to remedy a
contravention of that subsection; or
(ii) if subsection (3) applies—the transferee referred to in
that subsection serves a notice on the company requiring the company to remedy a
contravention of that subsection; and
(b) the company fails to remedy the contravention within 10 days after the
service of the notice; and
(c) the person entitled to have the documents delivered to him or her
applies to the Court for an order under this subsection;
the Court may make an order directing the company and any officer of the
company to remedy the contravention within such period as is specified in the
order.
(7) An order under subsection (6) may provide that all costs of, and
incidental to, the application are to be borne by:
(a) the company; or
(b) any officer of the company who was involved in the
contravention;
in such proportions as the Court thinks just and reasonable.
If shares not held jointly
(1) If a shareholder who does not own shares jointly dies, the company
will recognise only the personal representative of the deceased shareholder as
being entitled to the deceased shareholder’s interest in the
shares.
(2) If the personal representative gives the directors the information
they reasonably require to establish the representative’s entitlement to
be registered as holder of the shares:
(a) the personal representative may:
(i) by giving a written and signed notice to the company, elect to be
registered as the holder of the shares; or
(ii) by giving a completed transfer form to the company, transfer the
shares to another person; and
(b) the personal representative is entitled, whether or not
registered as the holder of the shares, to the same rights as the deceased
shareholder.
(3) On receiving an election under subparagraph (2)(a)(i), the
company must register the personal representative as the holder of the
shares.
(4) A transfer under subparagraph (2)(a)(ii) is subject to the same
rules (for example, about entitlement to transfer and registration of transfers)
as apply to transfers generally.
If shares held jointly
(5) If a shareholder who owns shares jointly dies, the company will
recognise only the survivor as being entitled to the deceased
shareholder’s interest in the shares. The estate of the deceased
shareholder is not released from any liability in respect of the
shares.
(1) If a person entitled to shares because of the bankruptcy of a
shareholder gives the directors the information they reasonably require to
establish the person’s entitlement to be registered as holder of the
shares, the person may:
(a) by giving a written and signed notice to the company, elect to
be registered as the holder of the shares; or
(b) by giving a completed transfer form to the company, transfer
the shares to another person.
(2) On receiving an election under paragraph (1)(a), the company must
register the person as the holder of the shares.
(3) A transfer under paragraph (1)(b) is subject to the same rules
(for example, about entitlement to transfer and registration of transfers) as
apply to transfers generally.
(4) This section has effect subject to the Bankruptcy Act
1966.
(1) If:
(a) because of the Bankruptcy Act 1966, a share in a company, being
part of the property of a bankrupt, vests in the trustee of the bankrupt’s
estate; and
(b) the bankrupt is the registered holder of that share;
this section applies whether or not the trustee has been registered as the
holder of the share.
(2) On producing such information as the company’s directors
properly require, the trustee is entitled to:
(a) the same dividends and other benefits; and
(b) the same rights, for example, but without limitation, rights in
relation to:
(i) meetings of the company; or
(ii) documents, including notices of such meetings; or
(iii) voting; or
(iv) inspection of the company’s records;
as the bankrupt would be entitled to if he or she were not a
bankrupt.
(3) The trustee has the same rights:
(a) to transfer the share; and
(b) to require a person to do an act or give a consent in connection with
completing or registering a transfer of the share;
as the bankrupt would have if he or she were not a bankrupt.
(4) If the trustee transfers the share, the transfer is as valid as if the
trustee had been registered as the holder of the share when the trustee executed
the instrument of transfer.
(5) A person or body whose consent or approval is required for the
transfer of shares in the company must not unreasonably withhold consent or
approval for the transfer of the share by the trustee.
(6) If:
(a) the company’s constitution requires:
(i) the share to be offered for purchase to a member of the company;
or
(ii) an invitation to buy the share to be issued to such a member;
and
(b) as at the end of a reasonable period after the trustee so offers the
share, or so issues such an invitation, no such member has agreed to buy the
share from the trustee at a reasonable price;
the trustee may sell and transfer the share to a person other than such a
member.
(7) A provision of the company’s constitution is void as against the
trustee in so far as, apart from this section, it would affect rights attached
to the share:
(a) because the bankrupt is a bankrupt; or
(b) because of some event that led to the bankrupt becoming, or that
indicated that the bankrupt was about to become, or might be about to become, a
bankrupt; or
(c) for reasons including a reason referred to in paragraph (a) or
(b).
(8) Nothing in this section limits the generality of anything else in
it.
(9) This section has effect despite anything in the company’s
constitution.
(1) If a person entitled to shares because of the mental incapacity of a
shareholder gives the directors the information they reasonably require to
establish the person’s entitlement to be registered as the holder of the
shares:
(a) the person may:
(i) by giving a written and signed notice to the company, elect to be
registered as the holder of the shares; or
(ii) by giving a completed transfer form to the company, transfer the
shares to another person; and
(b) the person is entitled, whether or not registered as the holder
of the shares, to the same rights as the shareholder.
(2) On receiving an election under subparagraph (1)(a)(i), the
company must register the person as the holder of the shares.
(3) A transfer under subparagraph (1)(a)(ii) is subject to the same
rules (for example, about entitlement to transfer and registration of transfers)
as apply to transfers generally.
(1) In this section:
share, in relation to a body corporate, means a share in the
body that is registered in a register kept in this jurisdiction.
(2) A trustee, executor or administrator of the estate of a dead person
who was the registered holder of a share in a corporation may be registered as
the holder of that share as trustee, executor or administrator of that
estate.
(3) A trustee, executor or administrator of the estate of a dead person
who was entitled in equity to a share in a corporation may, with the consent
of:
(a) the corporation; and
(b) the registered holder of that share;
be registered as the holder of that share as trustee, executor or
administrator of that estate.
(4) If:
(a) a person (the administrator) is appointed, under a law
of a State or Territory relating to the administration of the estates of persons
who, through mental or physical infirmity, are incapable of managing their
affairs, to administer the estate of a person who is so incapable; and
(b) the incapable person is the registered holder of a share in a
corporation;
the administrator may be registered as the holder of that share as
administrator of that estate.
(5) If:
(a) a person (the administrator) is appointed, under a law
of a State or Territory relating to the administration of the estates of a
person who, through mental or physical infirmity, are incapable of managing
their affairs, to administer the estate of a person who is so incapable;
and
(b) the incapable person is entitled in equity to a share in a
corporation;
the administrator may, with the consent of the corporation and of the
registered holder of that share, be registered as the holder of the share as
administrator of that estate.
(6) If:
(a) by virtue of the Bankruptcy Act 1966, a share in a body
corporate, being the property of a bankrupt, vests in the Official Trustee in
Bankruptcy; and
(b) the bankrupt is the registered holder of that share;
the Official Trustee may be registered as the holder of that share as the
Official Trustee in Bankruptcy.
(7) If:
(a) by virtue of the Bankruptcy Act 1966, a share in a body
corporate, being the property of a bankrupt, vests in the Official Trustee in
Bankruptcy; and
(b) the bankrupt is entitled in equity to that share;
the Official Trustee may, with the consent of the body and of the
registered holder of that share, be registered as the holder of that share as
the Official Trustee in Bankruptcy.
(8) A person registered under subsection (2), (3), (4), (5), (6) or
(7), is, while registered as mentioned in that subsection:
(a) subject to the same liabilities in respect of the share as those to
which he, she or it would have been subject if the share had remained, or had
been, as the case requires, registered in the name of the dead person, the
incapable person or the bankrupt, as the case may be; and
(b) subject to no other liabilities in respect of the share.
(9) Shares in a corporation registered in a register and held by a trustee
in respect of a particular trust may, with the consent of the corporation, be
marked in the register in such a way as to identify them as being held in
respect of the trust.
(10) Except as provided in this section and section 169:
(a) no notice of a trust, whether express, implied or constructive, must
be entered on a register kept in this jurisdiction or be receivable by ASIC;
and
(b) no liabilities are affected by anything done under a preceding
subsection of this section or under section 169; and
(c) nothing so done affects the body corporate concerned with notice of a
trust.
(11) A person must, within one month after beginning to hold shares in a
proprietary company as trustee for, or otherwise on behalf of or on account of,
a body corporate, serve on the company notice in writing that the person so
holds the shares.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) A person transferring shares remains the holder of the shares until
the transfer is registered and the name of the person to whom they are being
transferred is entered in the register of members in respect of the
shares.
(2) The directors are not required to register a transfer of shares in the
company unless:
(a) the transfer and any share certificate have been lodged at the
company’s registered office; and
(b) any fee payable on registration of the transfer has been paid;
and
(c) the directors have been given any further information they
reasonably require to establish the right of the person transferring the shares
to make the transfer.
(3) The directors may refuse to register a transfer of shares in the
company if:
(a) the shares are not fully-paid; or
(b) the company has a lien on the shares.
(4) The directors may suspend registration of transfers of shares in the
company at the times and for the periods they determine. The periods of
suspension must not exceed 30 days in any one calendar year.
The directors of a proprietary company may refuse to register a transfer
of shares in the company for any reason.
(1) If, upon registration of a transfer of shares in a company, the
transferee would hold non-beneficially particular shares (the relevant
shares), being all or any of the shares to which the transfer relates,
the transferee must only lodge the instrument of transfer with the company for
registration of the transfer if the instrument of transfer includes a notice
that:
(a) contains a statement to the effect that, upon registration of the
transfer, the transferee will hold the relevant shares non-beneficially;
and
(b) sets out particulars of the relevant shares; and
(c) is signed by or on behalf of the transferee.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The fact that a person has failed to comply with subsection (1)
does not affect the validity of the registration of a transfer of shares in a
company.
(3) If:
(a) an instrument of transfer of shares in a company includes a notice of
the kind referred to in paragraph (1)(c) and is lodged with the company for
registration of the transfer; and
(b) upon registration of the transfer, the transferee holds beneficially
particular shares (in this subsection called the relevant shares),
being all or any of the shares particulars of which are set out in the
notice;
then, before the end of 14 days beginning on registration of the transfer,
the transferee must, whether or not the transferee begins before the end of that
period to hold all or any of the relevant shares non-beneficially, give to the
company a notice that:
(c) sets out the name and address of the transferee; and
(d) contains a statement to the effect that, as from registration of the
transfer, the transferee holds the relevant shares beneficially; and
(e) sets out particulars of the relevant shares; and
(f) is signed by or on behalf of the transferee.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) If:
(a) an instrument of transfer of shares in a company is lodged with the
company for registration of the transfer; and
(b) upon registration of the transfer, the transferee holds
non-beneficially particular shares (in this subsection called the relevant
shares), being all or any of the shares to which the instrument of
transfer relates (other than, in a case in which the instrument of transfer
includes a notice of the kind referred to in paragraph (1)(c), the shares
particulars of which are set out in the notice);
then, before the end of 14 days beginning on registration of the transfer,
the transferee must, whether or not the transferee begins before the end of that
period to hold any of the relevant shares beneficially, give to the company a
notice that:
(c) sets out the name and address of the transferee; and
(d) contains a statement to the effect that, as from registration of the
transfer, the transferee holds the relevant shares non-beneficially;
and
(e) sets out particulars of the relevant shares; and
(f) is signed by or on behalf of the transferee.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(5) If:
(a) at a particular time, a person holds beneficially shares in a company;
and
(b) immediately after that time, the person holds non-beneficially
particular shares (in this subsection called the relevant shares),
being all or any of the shares referred to in paragraph (a);
then, before the end of 14 days beginning at that time, the person must,
whether or not the person recommences before the end of that period to hold any
of the relevant shares beneficially, give to the company a notice
that:
(c) sets out the name and address of the person; and
(d) contains a statement to the effect that, after that time, the person
holds the relevant shares non-beneficially; and
(e) specifies that time and sets out particulars of the relevant shares;
and
(f) is signed by or on behalf of the person.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(6) If:
(a) at a particular time, a person holds non-beneficially shares in a
company; and
(b) immediately after that time, the person holds beneficially particular
shares (in this subsection called the relevant shares), being all
or any of the shares referred to in paragraph (a);
then, before the end of 14 days beginning at that time, the person must,
whether or not the person recommences before the end of that period to hold any
of the relevant shares non-beneficially, give to the company a notice
that:
(c) sets out the name and address of the person; and
(d) contains a statement to the effect that, after that time, the person
holds the relevant shares beneficially; and
(e) specifies that time and sets out particulars of the relevant shares;
and
(f) is signed by or on behalf of the person.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(7) In proceedings under, or for an offence based on a provision of, this
section, a person is, unless the contrary is established, presumed to have been
aware at a particular time of a circumstance of which an employee or agent of
the person, being an employee or agent having duties or acting in relation to
the transfer to, or ownership by, the person of a share or shares in the company
concerned, was aware at that time.
(8) For the purposes of this section and of section 169:
(a) if, at a particular time, a person:
(i) holds shares in a capacity other than that of sole beneficial owner;
or
(ii) without limiting the generality of subparagraph (i), holds
shares as trustee for, as nominee for, or otherwise on behalf of or on account
of, another person;
the first-mentioned person is taken to hold the shares non-beneficially
at that time; and
(b) a person who holds shares at a particular time is taken to hold the
shares beneficially at that time unless the person holds the shares
non-beneficially at that time.
(1) This Division applies to the following securities:
(a) shares in a company;
(b) debentures of a company;
(c) managed investment products prescribed by regulations made for the
purposes of this paragraph;
(d) options (whether existing or future, and whether contingent or not) to
acquire, by way of issue, a security referred to in paragraph (a), (b) or
(c) (whether or not on payment of any money or for any other
consideration);
(e) securities declared by ASIC under section 1073E to be securities
to which the regulations apply.
(2) This Division applies to a managed investment product as if:
(a) references to a company were instead references to the responsible
entity of the registered scheme; and
(b) references to the constitution of a company were instead references to
the constitution of the registered scheme; and
(c) references to members of a company were instead references to members
of the registered scheme.
In this Division, unless the contrary intention appears:
transfer of a financial product means:
(a) a change in the ownership of the financial product; or
(b) if the financial product is a right—the renunciation and
transfer of the right.
transfer document for the transfer of a financial product
means a document, or electronic message or other electronic communication, by
which the financial product is transferred.
This Division applies to the following as if they were
companies:
(a) a body corporate (other than a company) that:
(i) is incorporated in a State or Territory in this jurisdiction;
and
(ii) is prescribed by regulations made for the purposes of this
subparagraph;
(b) an unincorporated society, association or body, that:
(i) is formed or established in a State or Territory in this jurisdiction;
and
(ii) is included in the official list of a licensed market; and
(iii) is prescribed by regulations made for the purposes of this
paragraph.
(1) The regulations may make provision in relation to transfers of
securities that are not effected through a prescribed CS facility.
Regulations may make provision in relation to the transfer of
securities
(2) The regulations may specify:
(a) the way in which a security may be transferred, including:
(i) the forms (if any) to be used; and
(ii) what amounts to a proper or sufficient transfer of a security;
and
(b) the legal effect of a proper or sufficient transfer of a security;
and
(c) the rights, liabilities and obligations of a person in relation to the
transfer of a security, including the rights, liabilities and obligations
of:
(i) the transferor and transferee; and
(ii) any other person involved in the transfer; and
(d) the circumstances in which a person will be taken to be involved in
the transfer of a security for the purposes of the regulations; and
(e) the circumstances in which a person is required not to register, or
give effect to, a transfer.
Sufficient transfer
(3) Without limiting paragraph (2)(a), the regulations may:
(a) specify the requirements for a document to be a sufficient transfer of
a security; and
(b) provide that a document meeting specified requirements may be
used:
(i) as a proper instrument of transfer for the purposes of
section 1071B; and
(ii) as an instrument of transfer for the purposes of any other law or
instrument governing or relating to the security.
Rights and liabilities in relation to transfer
(4) Without limiting paragraph (2)(c), the regulations may provide
that a person:
(a) is taken to have:
(i) agreed to do, to accept or to be bound by a particular thing;
or
(ii) done a particular thing; or
(iii) given particular warranties; or
(iv) done particular things on behalf of another person; or
(b) is taken to be authorised to do particular things on behalf of another
person; or
(c) is taken to be bound by a particular act; or
(d) is liable to indemnify another person against particular loss or
damage; or
(e) is entitled to assume a particular matter without inquiry.
Person involved in transfer
(5) Without limiting paragraph (2)(d), the regulations may provide
for any of the following to be taken to be involved in a transfer of
securities:
(a) a person who carries on a financial services business and who arranges
for the transfer; and
(b) a person who operates a financial market on which the securities are
sold; and
(c) a person who operates a licensed CS facility through which the
securities are transferred; and
(d) a company with which the transfer is lodged for registration;
and
(e) an associate of a person who is involved in the transfer.
The regulations may specify the circumstances in which a person will be
taken to be an associate of another person for the purposes of the
regulations.
Offences
(6) Without limiting subsection (2), the regulations may provide for
offences in relation to:
(a) the use, or purported use, of a stamp of a person who:
(i) carries on a financial services business; or
(ii) operates a financial market; or
(iii) operates a clearing and settlement facility; or
(b) the execution of a document, or the transmission of an electronic
message or other electronic communication, that may be used as a sufficient
transfer under this Division; or
(c) the lodgment of a transfer document or title document for a security
with the issuer of the security; or
(d) the use of identifying codes in relation to transfers of
securities.
Jurisdiction
(7) The regulations may apply to conduct engaged in in this jurisdiction
or elsewhere.
(1) ASIC may, by writing, declare that:
(a) particular securities; or
(b) a particular class of securities;
are securities to which this Division, and regulations made for the
purposes of section 1073D, apply.
(2) ASIC may specify in the declaration modifications of the regulations
that are to have effect in relation to the application of this Division and the
regulations to the securities, or the class of securities, to which the
declaration relates.
(3) A declaration under subsection (1) has effect
accordingly.
(4) ASIC must cause a copy of a declaration under subsection (1) to
be published in the Gazette.
(5) If conduct (including an omission) of a person would not have
constituted an offence if a particular declaration under subsection (1) had
not been made, that conduct does not constitute an offence unless, before the
conduct occurred (in addition to complying with the gazettal requirement of
subsection (4)):
(a) the text of the declaration was made available by ASIC on the
Internet; or
(b) ASIC gave written notice setting out the text of the declaration to
the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with before
the conduct occurred.
(1) This section deals with the effect of the provisions of:
(a) this Division; and
(b) the regulations made for the purposes of this Division.
(2) The provisions apply in relation to a transfer of securities despite
anything to the contrary in:
(a) this Act (other than this Division); or
(b) another law, or instrument, relating to the transfer of the
securities.
(3) Except as provided in the provisions, the provisions do not affect the
terms and conditions on which securities are sold.
(4) Nothing in the provisions affects any right of the issuer of a
security to refuse:
(a) to acknowledge or register a person as the holder of a security;
or
(b) to issue a security to a person;
on a ground other than an objection to the form of document, or electronic
message or other electronic communication, that is lodged with or sent to the
issuer and purports to transfer the security to the person.
(5) The registration of a transfer, or the issue, of a security by means
of a transfer effected in accordance with regulations made for the purposes of
this Division does not breach any law, constitution, trust deed or other
instrument relating to financial products.
(6) Nothing in the provisions prevents or affects the use of:
(a) any other form of transfer of securities; or
(b) any other mode of executing a document transferring
securities;
that is otherwise permitted by law.
(7) A transfer of a security by or to a trustee or legal representative
may be effected by means of a transfer in accordance with regulations made for
the purposes of this Division. The transfer may be so effected despite the means
required by any law or the provisions of the instrument (if any) creating, or
having effect in relation to, the trust or will under which the trustee or legal
representative is appointed.
(8) In subsection (7):
legal representative means:
(a) the executor, original or by representation, of a will of a dead
person; or
(b) the administrator of the estate of a dead person.
Nothing in this Division applies to a financial product that is of a
kind, or within a class, prescribed by regulations made for the purposes of this
section.
In this Division, unless the contrary intention appears:
transfer of a financial product has the meaning given by
section 1073B.
transfer document for the transfer of a financial product has
the meaning given by section 1073B.
(1) The operating rules of a prescribed CS facility may deal with the
transfer of financial products through the facility.
(2) Without limiting subsection (1), the operating rules of a
prescribed CS facility may deal with the way in which a financial product may be
transferred, including specifying:
(a) the financial products that may be transferred through the facility;
and
(b) how financial products are transferred through the facility;
and
(c) the person or body (if any) authorised to determine whether a transfer
substantially complies with the operating rules of the facility.
(1) If a transfer of a financial product is effected:
(a) through a prescribed CS facility; and
(b) in accordance with the operating rules of the facility;
the transfer is valid and effective for the purposes of any law or
instrument governing or relating to the way in which the financial product may
be transferred.
(2) For the purposes of this section, the transfer of a financial product
is taken to be, and always to have been, effected in accordance with the
operating rules of a prescribed CS facility if the person or body authorised to
do so under those rules determines that the transfer substantially complies with
those rules.
Transfers that regulations may deal with
(1) The regulations may make provision in relation to transfers of
financial products effected:
(a) through a prescribed CS facility; and
(b) in accordance with the operating rules of the facility.
Regulations may make provision in relation to the transfer of financial
products
(2) The regulations may specify:
(a) the legal effect of a transfer of a financial product through the
facility in accordance with its operating rules; and
(b) the rights, liabilities and obligations of a person in relation to the
transfer of a financial product through the facility, including the rights,
liabilities and obligations of:
(i) the transferor and transferee; and
(ii) any other person involved in the transfer; and
(c) the circumstances in which a person will be taken to be involved in
the transfer of a financial product for the purposes of the regulations;
and
(d) the circumstances in which a person is required not to register, or
give effect to, a transfer through the facility; and
(e) the circumstances in which a person is required not to refuse or fail
to register, or give effect to, a transfer through the facility; and
(f) the circumstances in which a transfer through the facility will be
taken to have been made in accordance with the rules of a prescribed CS
facility; and
(g) the circumstances in which a person will be taken to be the holder of
a financial product for the purposes of:
(i) a meeting; or
(ii) paying or transferring money or property to a person because the
person holds or held a financial product; or
(iii) issuing a financial product to a person because the person holds or
held a financial product; or
(iv) conferring a right on a person because the person holds or held a
financial product.
Rights and liabilities in relation to transfer
(3) Without limiting paragraph (2)(b), the regulations may provide
that a person:
(a) is taken to have:
(i) agreed to do, to accept or to be bound by a particular thing;
or
(ii) done a particular thing; or
(iii) given particular warranties; or
(iv) done particular things on behalf of another person; or
(b) is taken to be authorised to do particular things on behalf of another
person (even if the person has died); or
(c) is taken to be bound by a particular act; or
(d) is liable to indemnify another person against particular loss or
damage; or
(e) is entitled to assume a particular matter without inquiry.
Person involved in transfer
(4) Without limiting paragraph (2)(c), the regulations may provide
for any of the following to be taken to be involved in a transfer of a financial
product:
(a) a person who carries on a financial services business and who arranges
for the transfer;
(b) a person who operates a financial market on which the financial
product is sold;
(c) a person who operates a licensed CS facility through which the product
is transferred;
(d) the issuer of the product;
(e) an associate of a person who is involved in the transfer.
The regulations may specify the circumstances in which a person will be
taken to be an associate of another person for the purposes of the
regulations.
Offences
(5) Without limiting subsection (2), the regulations may provide for
offences in relation to:
(a) the lodgment of a transfer document or title document for a financial
product with the issuer of the product; or
(b) the use of identifying codes in relation to transfers of financial
products; or
(c) contraventions of the operating rules of a prescribed CS
facility.
Civil liability
(6) The regulations may also:
(a) provide for the liability of a person who contravenes the operating
rules of a prescribed CS facility to compensate a person for loss or damage the
person suffers because of the conduct engaged in in contravention of those
rules; and
(b) specify the period within which an action for compensation must be
begun.
(7) The regulations do not affect a liability that a person has under any
other law.
Jurisdiction
(8) The regulations may apply to conduct engaged in in this jurisdiction
or elsewhere.
If:
(a) a person contravenes the certificate cancellation provisions of a
prescribed CS facility in relation to the transfer of a particular financial
product through the facility; and
(b) the issuer of the financial product is not involved in the
contravention;
the issuer is not liable to an action or other proceeding for damages in
relation to the person’s contravention.
(1) This section deals with the effect of the provisions of:
(a) this Division; and
(b) the regulations made for the purposes of this Division.
(2) The provisions apply in relation to a transfer of financial products
despite anything to the contrary in:
(a) this Act (other than this Division); or
(b) another law, or instrument, relating to the transfer of the financial
products.
(3) Except as provided in the provisions, the provisions do not affect the
terms and conditions on which financial products are sold.
(4) Nothing in the provisions (other than in regulations made for the
purpose of paragraph 1074E(2)(e)) affects any right of the issuer of a financial
product to refuse:
(a) to acknowledge or register a person as the holder of a financial
product; or
(b) to issue a financial product to a person;
on a ground other than an objection to the form of document, or electronic
message or other electronic communication, that is lodged with or sent to the
issuer and purports to transfer the financial product to the person.
(5) The registration of a transfer, or the issue, of a financial product
by means of a transfer effected in accordance with the operating rules of a
prescribed CS facility does not breach any law, constitution, trust deed or
other instrument relating to financial products.
(6) Nothing in the provisions (other than in regulations made for the
purpose of paragraph 1074E(2)(d)) prevents or affects the use of:
(a) any other form of transfer of financial products; or
(b) any other mode of executing a document transferring financial
products;
that is otherwise permitted by law.
(7) A transfer of a financial product by or to a trustee or legal
representative may be effected by means of a transfer in accordance with the
operating rules of a prescribed CS facility despite any law or the provisions of
the instrument (if any) creating, or having effect in relation to, the trust or
will under which the trustee or legal representative is appointed.
(8) In subsection (7):
legal representative means:
(a) the executor, original or by representation, of a will of a dead
person; or
(b) the administrator of the estate of a dead person.
(1) ASIC may:
(a) exempt specified financial products, or a specified class of financial
products, from a provision of this Part; or
(b) declare that this Part applies to specified financial products, or a
specified class of financial products, as if specified provisions were omitted,
modified or varied as specified in the declaration.
(2) ASIC’s power to grant an exemption or make a declaration under
this section may be exercised in relation to financial products, or a class of
financial products, only if ASIC is satisfied that:
(a) if the exemption were granted or the declaration were made, the
interests of the holders of those financial products, or of financial products
in that class, would continue to have adequate protection; and
(b) the granting of the exemption or the making of the declaration would
make the transfer of those financial products, or of financial products in that
class, more efficient.
(3) The exemption or declaration may:
(a) apply to all or specified provisions of this Part; and
(b) apply to all persons, specified persons, or a specified class of
persons; and
(c) relate to all financial products, specified financial products or a
specified class of financial products; and
(d) relate to any other matter generally or as specified.
(4) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an exemption applies must
comply with the condition. The Court may order the person to comply with the
condition in a specified way. Only ASIC may apply to the Court for the
order.
(5) The exemption or declaration must be in writing and ASIC must publish
notice of it in the Gazette.
(6) If conduct (including an omission) of a person would not have
constituted an offence if a particular declaration under paragraph (1)(b)
had not been made, that conduct does not constitute an offence unless, before
the conduct occurred (in addition to complying with the gazettal requirement of
subsection (5)):
(a) the text of the declaration was made available by ASIC on the
Internet; or
(b) ASIC gave written notice setting out the text of the declaration to
the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with before
the conduct occurred.
(7) For the purposes of this section, the provisions of this
Part include:
(a) regulations made for the purposes of this Part; and
(b) definitions in this Act or the regulations as they apply to references
in:
(i) this Part; or
(ii) regulations made for the purposes of this Part; and
(c) any provisions of Part 10.2 (transitional provisions) that relate
to provisions of this Part.
(1) A person has qualified privilege in respect of the giving of any
information to ASIC that the person is required to give under this Chapter or
regulations made for the purposes of this Chapter.
(2) A person or body that is:
(a) a market licensee; or
(b) a CS facility licensee; or
(c) a person acting under an arrangement to supervise a licensed market or
licensed facility; or
(d) a foreign person or body responsible for the supervision of the
operation in a foreign country of a financial market or clearing and settlement
facility;
also has qualified privilege in respect of the giving of any information to
ASIC in connection with the performance or exercise of ASIC’s functions or
powers under, or in relation to, this Chapter or regulations made for the
purposes of this Chapter.
(3) A person or body that has qualified privilege under
subsection (1) or (2) in respect of conduct is also not liable for any
action based on breach of confidence in relation to that conduct.
(1) A market licensee, or CS facility licensee, has qualified privilege in
respect of actions (including the giving of information) done in connection
with:
(a) the performance, or purported performance, of the licensee’s
obligations under this Act; or
(b) the exercise or performance, or purported exercise or performance, of
the licensee’s powers, functions or obligations under the operating rules
of the market or facility concerned, if the licensee believes, on reasonable
grounds, that the action is necessary:
(i) in the case of a market licensee—to ensure the market operates
in a fair, orderly and transparent way; or
(ii) in the case of a CS facility licensee—to ensure the
facility’s services are provided in a fair and effective manner or to
reduce systemic risk in the provision of those services.
(2) A market licensee, or CS facility licensee, has qualified privilege in
respect of the giving of information:
(a) to the operator of a financial market (regardless of where the market
is operated) for the purpose of assisting the operator to ensure that market
operates in a fair, orderly and transparent way; or
(b) to the operator of a clearing and settlement facility (regardless of
where the facility is operated) for the purpose of assisting the operator to
ensure that facility’s services are provided in a fair and effective
manner or to reduce systemic risk.
(3) Despite subsections (1) and (2), a market licensee does not have
qualified privilege in respect of the giving of information if:
(a) an entity included on the market’s official list gave the
information to the licensee under a provision of this Act or of the
market’s operating rules; and
(b) this Act, or those rules, expressly or impliedly authorised the entity
to limit the purposes for which it gave the information to the licensee;
and
(c) when giving the information to the licensee, the entity limited those
purposes as so authorised; and
(d) the giving of the information by the licensee is not solely for one or
more of the limited purposes.
(4) The protections given by this section apply to the giving of
information whether or not the recipient of the information has an interest in
the information.
A person has qualified privilege in respect of the giving of information
if:
(a) the person gives the information to any of the following persons or
bodies:
(i) a market licensee;
(ii) a CS facility licensee;
(iii) a person acting under an arrangement to supervise a licensed market
or licensed CS facility;
(iv) a foreign person or body responsible for the supervision of the
operation in a foreign country of a financial market or clearing and settlement
facility; and
(b) the information is in relation to a contravention or suspected
contravention of this Act or the operating rules of the market or facility
concerned.
The protections given by this Division to a person or body in respect of
conduct extend to officers, employees and representatives of the person or
body.
(1) ASIC may, on application, approve codes of conduct that relate to any
aspect of the activities of:
(a) financial services licensees; or
(b) authorised representatives of financial services licensees;
or
(c) issuers of financial products;
being activities in relation to which ASIC has a regulatory responsibility.
The approval must be in writing.
(2) ASIC may, on application, approve a variation of an approved code of
conduct. The approval must be in writing.
(3) ASIC must not approve a code of conduct, or a variation of a code of
conduct, unless it is satisfied that:
(a) the code, or the code as proposed to be varied, is not inconsistent
with this Act or any other law of the Commonwealth under which ASIC has
regulatory responsibilities; and
(b) it is appropriate to approve the code, having regard to:
(i) the ability of the applicant to ensure that persons who hold out that
they comply with the code will comply with the code as in force from time to
time; and
(ii) the desirability of codes of conduct being harmonised to the greatest
extent possible.
(4) ASIC may revoke an approval of a code of conduct:
(a) on application by the person who applied for the approval;
or
(b) if ASIC is no longer satisfied as mentioned in
subsection (3).
The revocation must be in writing.
Court’s power to make orders in relation to certain
contraventions
(1) The Court may make such order, or orders, as it thinks fit
if:
(a) on the application of ASIC, it appears to the Court that a
person:
(i) has contravened a provision of this Chapter, or any other law relating
to dealing in financial products or providing financial services; or
(ii) has contravened a condition of an Australian market licence,
Australian CS facility licence or Australian financial services licence;
or
(iii) has contravened a provision of the operating rules of a licensed
market or of a licensed CS facility; or
(iv) has contravened a condition imposed under section 918D on a
declaration of a declared professional body; or
(v) has contravened a condition on an exemption from the requirement to
hold an Australian market licence or an Australian CS facility licence;
or
(vi) is about to do an act with respect to dealing in financial products
or providing a financial service that, if done, would be such a contravention;
or
(b) on the application of a market licensee, it appears to the Court that
a person has contravened the operating rules of a licensed market operated by
the licensee; or
(c) on the application of a CS facility licensee, it appears to the Court
that a person has contravened a provision of the operating rules of a licensed
CS facility operated by the licensee; or
(d) on the application of a person aggrieved by an alleged contravention
by another person of a provision of the operating rules of a licensed market, it
appears to the Court that:
(i) the other person did contravene the provision or condition;
and
(ii) the applicant is aggrieved by the contravention.
However, the Court can only make such an order if the Court is satisfied
that the order would not unfairly prejudice any person.
Note: For examples of orders the Court could make, see
subsection (4).
(2) For the purposes of paragraph (1)(d), if a body corporate
contravenes a provision of the operating rules of a licensed market, a person
who holds financial products of the body corporate that are able to be traded on
the licensed market is taken to be a person aggrieved by the
contravention.
(3) Subsection (2) does not limit the circumstances in which a person
may be aggrieved by a contravention for the purposes of
paragraph (1)(d).
Examples of orders the Court may make
(4) Without limiting subsection (1), some examples of orders the
Court may make under subsection (1) include:
(a) an order restraining a person from carrying on a business, or doing an
act or classes of acts, in relation to financial products or financial services,
if the person has persistently contravened, or is continuing to
contravene:
(i) a provision or provisions of this Chapter; or
(ii) a provision or provisions of any other law relating to dealing in
financial products or providing financial services; or
(iii) a condition on an Australian market licence, Australian CS
facility licence or Australian financial services licence; or
(iv) a condition imposed under section 918D on a declaration of a
declared professional body; or
(v) a condition of an exemption from a requirement to hold an Australian
market licence or Australian CS facility licence; or
(vi) a provision of the operating rules of a licensed market or of a
licensed CS facility; or
(b) an order giving directions about complying with a provision of the
operating rules of a licensed market or of a licensed CS facility to a person
(or the directors of the body corporate, if the person is a body corporate) who
contravened the provision; and
(c) an order requiring a person to disclose to the public or to specified
persons, in accordance with the order, specified information that the person to
whom the order is directed possesses or to which that person has access, if the
person:
(i) contravened a provision of the operating rules of a licensed market or
a condition relating to the disclosure or provision of information; or
(ii) was involved in such a contravention; and
(d) an order requiring a person to publish advertisements in accordance
with the order at that person’s expense, if the person:
(i) contravened a provision of the operating rules of a licensed market,
or a condition relating to the disclosure or provision of information;
or
(ii) was involved in such a contravention; and
(e) an order restraining a person from acquiring, disposing of or
otherwise dealing with any financial products that are specified in the order;
and
(f) an order restraining a person from providing any financial services
that are specified in the order; and
(g) an order appointing a receiver of property (see subsection (9))
of a financial services licensee; and
(h) an order declaring a contract relating to financial products or
financial services to be void or voidable; and
(i) an order directing a person to do or refrain from doing a specified
act, if that order is for the purpose of securing compliance with any other
order under this section; and
(j) any ancillary order considered to be just and reasonable in
consequence of the making of an order under any of the preceding provisions of
this subsection.
Interim orders
(5) Before considering an application to the Court under
subsection (1), the Court may make an interim order of the kind applied for
to apply pending the determination of the application, if in the opinion of the
Court it is desirable to do so.
(6) However, if ASIC, a market licensee or a CS facility licensee applies
for an order under subsection (1), the Court must not require the
applicant, or any other person, to give any undertakings as to damages as a
condition of making an interim order under subsection (5).
Power to give notice of applications
(7) Before making an order under subsection (1), the Court may do
either or both of the following:
(a) direct that notice of the application be given to such persons as it
thinks fit;
(b) direct that notice of the application be published in such manner as
it thinks fit.
Powers of receivers appointed under Court orders
(8) A person appointed by order of the Court under subsection (1) as
a receiver of the property (see subsection (9)) of a financial services
licensee:
(a) may require the financial services licensee to:
(i) deliver to the person any property of which the person has been
appointed receiver; or
(ii) give to the person all information concerning that property that may
reasonably be required; and
(b) may acquire and take possession of any property of which the person
has been appointed receiver; and
(c) may deal with any property that the person has acquired, or of which
the person has taken possession, in any way in which the financial services
licensee might lawfully have dealt with the property; and
(d) has such other powers in respect of the property as the Court
specifies in the order.
Meaning of property
(9) In this section:
property, in relation to a financial services licensee,
includes:
(a) money; or
(b) financial products; or
(c) documents of title to financial products; or
(d) other property;
entrusted to, or received on behalf of, any other person by the financial
services licensee or another person in the course of, or in connection with, a
financial services business carried on by the financial services
licensee.
Duty to comply with order
(10) A person must not, without reasonable excuse, contravene:
(a) an order under this section; or
(b) a requirement imposed under paragraph (8)(a) or (8)(d) by a
receiver appointed by order of the Court under subsection (1).
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Power to rescind or vary order
(11) The Court may rescind or vary an order made by it under this section
or suspend the operation of such an order.
Registers
(1) A person who is required by a provision of this Chapter to keep a
register in relation to a business carried on by the person must preserve it for
5 years after the day on which the last entry was made in the
register.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Financial records
(2) A person who is required by a provision of this Chapter to keep any
financial record in relation to a business carried on by the person must
preserve it for 7 years after the transactions covered by the record are
completed.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Other records
(3) A person who is required by a provision of this Chapter or the
regulations to keep any other record must preserve it for 5 years after the day
on which the last entry was made in the record.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Exceptions
(4) Registers and records must be preserved in accordance with this
section (even if the person stops carrying on the business to which they relate
during the period for which they must be preserved), unless:
(a) the regulations provide that those documents, or a class to which they
belong, need not be preserved; and
(b) any conditions specified in or under those regulations have been
complied with.
Note: A defendant bears an evidential burden in relation to
the matters in this subsection. See subsection 13.3(3) of the Criminal
Code.
ASIC may destroy or otherwise dispose of any document that is lodged
under, or for the purposes of, a provision of this Chapter if:
(a) ASIC is of the opinion that it is no longer necessary or desirable to
retain it; and
(b) it has been in the possession of ASIC for such period as is specified
in the regulations, either generally or in relation to a particular document or
class of documents.
(1) A person must not:
(a) conceal, destroy, mutilate or alter a book:
(i) relating to the business carried on by a financial services licensee
or an authorised representative of such a licensee; or
(ii) required under a provision of this Chapter to be kept by a market
licensee, a CS facility licensee, a financial services licensee or an authorised
representative of a financial services licensee; or
(b) send such a book out of this jurisdiction.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) In any proceedings against a person for an offence based on
subsection (1), it is a defence if the person did not act with intent
to:
(a) defraud; or
(b) defeat the objects of this Chapter; or
(c) prevent, delay or obstruct the carrying out of an examination,
investigation or audit, or the exercise of a power, under this
Chapter.
Note: A defendant bears an evidential burden in relation to
the matters in subsection (2). See subsection 13.3(3) of the Criminal
Code.
(1) If matter that is used, or intended to be used, in connection
with:
(a) the keeping of a book required to be kept by a provision of this
Chapter; or
(b) a register or any accounting or other record referred to in
section 1101D;
is recorded or stored in an illegible form by means of a mechanical device,
an electronic device or any other device, a person must not:
(c) record or store by means of that device matter that the person knows
to be false in a material particular or materially misleading; or
(d) destroy, remove or falsify matter that is recorded or stored by means
of that device, or has been prepared for the purpose of being recorded or
stored, or for use in compiling other matter to be recorded or stored, by means
of that device; or
(e) fail to record or store matter by means of that device, with intent to
falsify any entry made or intended to be compiled, wholly or in part, from that
matter.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) In any proceedings against a person for an offence based on
subsection (1), it is a defence if it is proved that the person acted
honestly and that in all the circumstances the act or omission constituting the
offence should be excused.
Note: A defendant bears an evidential burden in relation to
the matters in subsection (2). See subsection 13.3(3) of the Criminal
Code.
A person required by a provision of this Chapter to keep a book or record
must take reasonable precautions for guarding against falsification of the book
or record and for facilitating discovery of any falsification.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) Subject to subsection (2), a failure to comply with any
requirement of this Chapter (including requirements in regulations made for the
purposes of this Chapter) does not affect the validity or enforceability of any
transaction, contract or other arrangement.
(2) Subsection (1) has effect subject to any express provision to the
contrary in:
(a) this Chapter; or
(b) regulations made for the purposes of another provision of this
Chapter; or
(c) regulations referred to in subsection (3).
(3) Regulations made for the purposes of this subsection may provide that
a failure to comply with a specified requirement referred to in
subsection (1) has a specified effect on the validity or enforceability of
a transaction, contract or arrangement.
Despite any law of a State or Territory in this jurisdiction about gaming
and wagering:
(a) a person may enter into a contract that is a financial product;
and
(b) the contract is valid and enforceable.
The Minister may delegate any of the Minister’s powers under this
Chapter to:
(a) ASIC; or
(b) a member of ASIC (within the meaning of section 9 of the
Australian Securities and Investments Commission Act 2001); or
(c) a staff member (within the meaning given by subsection 5(1) of that
Act) who is an SES employee (within the meaning of section 34 of the
Public Service Act 1999) or who holds an office or position that is at a
level equivalent to that of an SES employee.
Part 2—Consequential
amendments
Australian Securities and
Investments Commission Act 2001
2 Title
Omit “Companies and Securities Advisory Committee”,
substitute “Corporations and Markets Advisory
Committee”.
3 Paragraph 1(1)(c)
Omit “Companies and Securities Advisory Committee”, substitute
“Corporations and Markets Advisory Committee”.
4 Paragraph 1(1)(c)
Omit “the securities markets and futures markets”, substitute
“financial products and financial markets”.
5 Paragraph 1(1)(d)
Omit “Parliamentary Joint Committee on Corporations and
Securities”, substitute “Parliamentary Joint Committee on
Corporations and Financial Services”.
6 At the end of
section 4
Add:
(2) Without limiting paragraph (1)(c), if an external Territory is
prescribed, regulations prescribing the external Territory may
provide:
(a) that only some of the provisions of this Act apply in the external
Territory; and
(b) that provisions that apply in the external Territory only apply in
specified circumstances.
7 Subsection 5(1)
Insert:
CAMAC means the Corporations and Markets Advisory
Committee.
8 Subsection 5(1) (definition of
CASAC)
Repeal the definition.
9 Subsection 5(1) (definition of
Convenor)
Omit “CASAC”, substitute “CAMAC”.
10 Subsection 5(1)
Insert:
financial product:
(a) in Division 2 of Part 2—has the meaning given by
section 12BAA; and
(b) in the other provisions of this Act—has the same meaning as it
has in Chapter 7 of the Corporations Act.
11 Subsection 5(1)
Insert:
financial service:
(a) in Division 2 of Part 2—has the meaning given by
section 12BAB; and
(b) in the other provisions of this Act—has the same meaning as it
has in Chapter 7 of the Corporations Act.
12 Subsection 5(1) (paragraph (b) of the
definition of meeting)
Omit “CASAC”, substitute “CAMAC”.
13 Subsection 5(1) (definition of
member)
Omit “CASAC” (wherever occurring), substitute
“CAMAC”.
14 Subsection 5(1) (definition of
Parliamentary Committee)
Omit “Securities”, substitute “Financial
Services”.
15 Subsection 5(2)
Repeal the subsection, substitute:
(2) Unless the contrary intention appears:
(a) an expression that:
(i) is used, but not defined, in this Act; and
(ii) is defined in section 761A of the Corporations Act (regardless
of whether it is also defined in another section of that Act);
has the same meaning in this Act as in section 761A of the
Corporations Act; and
(b) an expression that:
(i) is used, but not defined, in this Act; and
(ii) is not defined in section 761A of the Corporations Act;
and
(ii) is used in the Corporations Act;
has the same meaning in this Act as in the Corporations Act.
16 Subsection 9(4)
Omit all the words from and including “following fields”,
substitute:
following fields, namely:
(a) business;
(b) administration of companies;
(c) financial markets;
(d) financial products and financial services;
(e) law;
(f) economics;
(g) accounting.
17 Paragraphs 12A(1)(a) and
(b)
Repeal the paragraphs.
18 Subsection 12BA(1) (definition of
financial product)
Repeal the definition, substitute:
financial product has the meaning given by
section 12BAA.
19 Subsection 12BA(1) (definition of
financial service)
Repeal the definition, substitute:
financial service has the meaning given by
section 12BAB.
20 After section 12BA
Insert:
General definition of financial product
(1) Subject to subsection (8), for the purposes of this Division, a
financial product is a facility through which, or through the
acquisition of which, a person does one or more of the following:
(a) makes a financial investment (see subsection (4));
(b) manages financial risk (see subsection (5));
(c) makes non-cash payments (see subsection (6)).
(2) Subject to subsection (8), for the purposes of this Division, a
particular facility that is of a kind through which people commonly make
financial investments, manage financial risks or make non-cash payments is a
financial product even if that facility is acquired by a
particular person for some other purpose.
(3) A facility does not cease to be a financial product merely
because:
(a) the facility has been acquired by a person other than the person to
whom it was originally issued; and
(b) that person, in acquiring the product, was not making a financial
investment or managing a financial risk.
Meaning of makes a financial investment
(4) For the purposes of this section, a person (the
investor) makes a financial investment if:
(a) the investor gives money or money’s worth (the
contribution) to another person and any of the following
apply:
(i) the other person uses the contribution to generate a financial return,
or other benefit, for the investor;
(ii) the investor intends that the other person will use the contribution
to generate a financial return, or other benefit, for the investor (even if no
return or benefit is in fact generated);
(iii) the other person intends that the contribution will be used to
generate a financial return, or other benefit, for the investor; and
(b) the investor has no day-to-day control over the use of the
contribution to generate the return or benefit.
Note 1: Examples of actions that constitute making a
financial investment under this subsection are:
(a) a person paying money to a company for the issue to the
person of shares in the company (the company uses the money to generate
dividends for the person and the person, as a shareholder, does not have control
over the day-to-day affairs of the company); or
(b) a person contributing money to acquire interests in a
registered scheme from the responsible entity of the scheme (the scheme uses the
money to generate financial or other benefits for the person and the person, as
a member of the scheme, does not have day-to-day control over the operation of
the scheme).
Note 2: Examples of actions that do not constitute making a
financial investment under this subsection are:
(a) a person purchasing real property or bullion (while the
property or bullion may generate a return for the person, it is not a return
generated by the use of the purchase money by another person);
or
(b) a person giving money to a financial services
licensee who is to use it to purchase shares for the person (while the
purchase of the shares will be a financial investment made by the person, the
mere act of giving the money to the licensee will not of itself constitute
making a financial investment).
Meaning of manages a financial risk
(5) For the purposes of this section, a person manages financial
risk if they:
(a) manage the financial consequences to them of particular circumstances
happening; or
(b) avoid or limit the financial consequences of fluctuations in, or in
the value of, receipts or costs (including prices and interest rates).
Note 1: Examples of actions that constitute managing a
financial risk are:
(a) taking out insurance; or
(b) hedging a liability by acquiring a futures contract or
entering into a currency swap.
Note 2: An example of an action that does not constitute
managing a financial risk is employing a security firm (while that is a way of
managing the risk that thefts will happen, it is not a way of managing the
financial consequences if thefts do occur).
Meaning of makes non-cash payments
(6) For the purposes of this section, a person makes non-cash
payments if they make payments, or cause payments to be made, otherwise
than by the physical delivery of Australian currency in the form of notes and/or
coins.
Note: Examples of actions that constitute making non-cash
payments are:
(a) making payments by means of a facility for direct debit
of a deposit account; or
(b) making payments by means of a facility for the use of
cheques; or
(c) making payments by means of a purchased payment
facility within the meaning of the Payment Systems (Regulation) Act 1998,
such as a smart card; or
(d) making payments by means of traveller’s cheques in
Australian currency.
Specific things that are financial products (subject to
subsection (8))
(7) Subject to subsection (8), the following are financial
products for the purposes of this Division:
(a) a security;
(b) any of the following in relation to a registered scheme:
(i) an interest in the scheme;
(ii) a legal or equitable right or interest in an interest covered by
subparagraph (i);
(iii) an option to acquire, by way of issue, an interest or right covered
by subparagraph (i) or (ii);
(c) a derivative;
(d) a contract of insurance (see subsection (9)) (except health
insurance provided as part of a health insurance business as defined by
subsection 67(4) of the National Health Act 1953);
(e) a life policy, or a sinking fund policy, within the meaning of the
Life Insurance Act 1995, that is not a contract of insurance (see
subsection (9));
(f) a beneficial interest in a superannuation fund (as defined by
section 10 of the Superannuation Industry (Supervision) Act
1993);
(g) an RSA (retirement savings account) within the meaning of the
Retirement Savings Accounts Act 1997;
(h) any deposit-taking facility made available by an ADI (within the
meaning of the Banking Act 1959) in the course of its banking
business (within the meaning of that Act), other than an RSA (RSAs are covered
by paragraph (g));
(i) a debenture, stock or bond issued or proposed to be issued by a
government;
(j) a foreign exchange contract;
(k) a credit facility (within the meaning of the regulations);
(l) any of the following:
(i) an interest in a managed investment scheme operated outside this
jurisdiction that section 601ED of the Corporations Act would require to be
registered if it was operated in this jurisdiction;
(ii) a legal or equitable right or interest in an interest covered by
subparagraph (i);
(iii) an option to acquire, by way of issue, an interest or right covered
by subparagraph (i) or (ii);
(m) anything declared by the regulations to be a financial product for the
purposes of this subsection.
Note: Even though something is expressly excluded from one
of these paragraphs, it may still be a financial product (subject to
subsection (8)) either because:
(a) it is covered by another of these paragraphs;
or
(b) it is covered by the general definition in
subsection (1).
Specific things that are not financial products
(8) Despite anything else in this section, the following are not
financial products for the purposes of this Division:
(a) an excluded security;
(b) health insurance provided as part of a health insurance business (as
defined in subsection 67(4) of the National Health Act 1953);
(c) State insurance or Northern Territory insurance, including insurance
entered into by:
(i) a State or the Northern Territory; and
(ii) some other insurer;
as joint insurers;
(d) a facility:
(i) that is an approved RTGS system for the purposes of the Payment
Systems and Netting Act 1998; or
(ii) for the transmission and reconciliation of non-cash payments (see
subsection (6)), and the establishment of final positions, for settlement
through an approved RTGS system within the meaning of the Payment Systems and
Netting Act 1998;
(e) a facility that is a designated payment system for the purposes of the
Payment Systems (Regulation) Act 1998;
(f) a facility for the exchange and settlement of non-cash payments (see
subsection (6)) between providers of non-cash payment facilities;
(g) a facility that is:
(i) a financial market; or
(ii) a clearing and settlement facility; or
(iii) a payment system operated as part of a clearing and settlement
facility;
(h) so much of an arrangement as is not a derivative within the meaning of
the Corporations Act because of paragraph 761D(3)(a) of that Act;
(i) an arrangement that is not a derivative within the meaning of the
Corporations Act because of paragraph 761D(3)(b) of that Act;
(j) an arrangement that is not a derivative within the meaning of the
Corporations Act because of subsection 761D(4) of that Act;
(k) any of the following:
(i) an interest in something that is not a managed investment scheme
within the meaning of the Corporations Act because of paragraph (c), (e),
(f), (k), (l) or (m) of the definition of managed investment scheme
in section 9 of that Act;
(ii) a legal or equitable right or interest in an interest covered by
subparagraph (i);
(iii) an option to acquire, by way of issue, an interest or right covered
by subparagraph (i);
(l) any of the following:
(i) an interest in a managed investment scheme operated outside this
jurisdiction that section 601ED of the Corporations Act would not require
to be registered if it was operated in this jurisdiction;
(ii) a legal or equitable right or interest in an interest covered by
subparagraph (i);
(iii) an option to acquire, by way of issue, an interest or right covered
by subparagraph (i) or (ii);
(m) a deposit-taking facility that is used for State banking;
(n) equipment or infrastructure by which something else that is a
financial product is provided;
(o) a funeral benefit;
(p) a facility, interest or other thing declared by regulations made for
the purposes of this subsection not to be a financial product.
(9) For the purpose of paragraphs (7)(d) and (e), contract of
insurance includes:
(a) a contract that would ordinarily be regarded as a contract of
insurance even if some of its provisions are not by way of insurance;
and
(b) a contract that includes provisions of insurance in so far as those
provisions are concerned, even if the contract would not ordinarily be regarded
as a contract of insurance.
When does a person provide a financial service?
(1) For the purposes of this Division, subject to paragraph (2)(b), a
person provides a financial service if they:
(a) provide financial product advice (see subsection (5));
or
(b) deal in a financial product (see subsection (7)); or
(c) make a market for a financial product (see subsection (11));
or
(d) operate a registered scheme; or
(e) provide a custodial or depository service (see subsection (12));
or
(f) operate a financial market (see subsection (15)) or clearing and
settlement facility (see subsection (17)); or
(g) provide a service that is otherwise supplied in relation to a
financial product; or
(h) engage in conduct of a kind prescribed in regulations made for the
purposes of this paragraph.
(2) The regulations may set out:
(a) the circumstances in which persons facilitating the provision of a
financial service (for example, by publishing information) are taken also to
provide that service; or
(b) the circumstances in which persons are taken to provide, or are taken
not to provide, a financial service.
(3) To avoid doubt, a person’s conduct is not the provision of a
financial service if it is done in the course of work of a kind
ordinarily done by clerks or cashiers.
(4) For the purposes of this section, a person is not operating a
registered scheme merely because:
(a) they are acting as an agent or employee of another person;
or
(b) they are taking steps to wind up the scheme.
Meaning of financial product advice
(5) For the purposes of this section, financial
product advice means a recommendation or a statement of opinion, or a
report of either of those things, that:
(a) is intended to influence a person or persons in making a decision in
relation to a particular financial product or class of financial products, or an
interest in a particular financial product or class of financial products;
or
(b) could reasonably be regarded as being intended to have such an
influence;
but does not include anything in:
(c) a document prepared in accordance with requirements of
Chapter 7 of the Corporations Act, other than a document of a kind
prescribed by regulations made for the purposes of this paragraph; or
(d) any other document of a kind prescribed by regulations made for the
purposes of this paragraph.
(6) Advice given by a lawyer in his or her professional capacity about
matters of law, legal interpretation or the application of the law to any facts
is not financial product advice.
Meaning of dealing
(7) For the purposes of this section, the following conduct constitutes
dealing in a financial product:
(a) applying for or acquiring a financial product;
(b) issuing a financial product;
(c) in relation to securities or managed investment
interests—underwriting the securities or interests;
(d) varying a financial product;
(e) disposing of a financial product.
(8) Arranging for a person to engage in conduct referred to in
subsection (7) is also dealing in a financial product, unless
the actions concerned amount to providing financial product advice.
(9) A person is taken not to deal in a financial product if
the person deals in the product on their own behalf, unless:
(a) the person is an issuer of financial products; and
(b) the dealing is in relation to one or more of those products.
(10) The regulations may prescribe conduct that is taken not to be
dealing in a financial product.
Meaning of makes a market for a financial product
(11) For the purposes of this section, a person makes a
market for a financial product if:
(a) either through a facility, at a place or otherwise, the person
regularly states the prices at which they propose to acquire or dispose of
financial products on their own behalf; and
(b) other persons have a reasonable expectation that they will be able to
regularly effect transactions at the stated prices; and
(c) the actions of the person do not, or would not if they happened
through a facility or at a place, constitute operating a financial market
because of the effect of paragraph (16)(a).
Meaning of provide a custodial or depository
service
(12) For the purposes of this section, a person provides a custodial
or depository service if:
(a) under an arrangement with a person (the client), they
have possession or control of assets of the client in connection with the person
providing a financial product to the client; and
(b) they carry out one or more of the following functions:
(i) settling a transaction relating to the assets;
(ii) collecting or distributing dividends or other pecuniary benefits
derived from the assets;
(iii) paying tax or other costs associated with the assets;
(iv) exercising rights (for example, voting rights) attached to or derived
from the assets;
(v) any other function necessary or incidental to the safeguard or
administration of the assets.
(13) A person also provides a custodial or depository
service if:
(a) they agree, or undertake, to provide a custodial or depository service
as mentioned in subsection (12); or
(b) they arrange for someone else to provide a client with a custodial or
depository service as mentioned in subsection (12).
(14) However, the following conduct does not constitute providing a
custodial or depository service:
(a) the operation of a clearing and settlement facility;
(b) the operation of a registered scheme;
(c) the operation of a regulated superannuation fund, an approved deposit
fund or a pooled superannuation trust (within the meaning of the
Superannuation Industry (Supervision) Act 1993);
(d) the provision of services to a related body corporate;
(e) any other conduct of a kind prescribed by regulations made for the
purposes of this paragraph.
Meaning of financial market
(15) For the purposes of this section, a financial market is
a facility through which:
(a) offers to acquire or dispose of financial products are regularly made
or accepted; or
(b) offers or invitations are regularly made to acquire or dispose of
financial products that are intended to result or may reasonably be expected to
result, directly or indirectly, in:
(i) the making of offers to acquire or dispose of financial products;
or
(ii) the acceptance of such offers.
(16) However, the following conduct does not constitute operating a
financial market for the purposes of this section:
(a) a person making or accepting offers or invitations to acquire or
dispose of financial products on the person’s own behalf, or on behalf of
one party to the transaction only;
(b) conducting treasury operations between related bodies
corporate;
(c) conducting an auction of forfeited shares;
(d) any other conduct of a kind prescribed by regulations made for the
purposes of this paragraph.
Meaning of clearing and settlement facility
(17) For the purposes of this section, a clearing and settlement
facility is a facility that provides a regular mechanism for the parties
to transactions relating to financial products to meet obligations to each other
that:
(a) arise from entering into the transactions; and
(b) are of a kind prescribed by regulations made for the purposes of this
paragraph.
(18) However, the following conduct does not constitute operating a
clearing and settlement facility for the purposes of this
section:
(a) an ADI (within the meaning of the Banking Act 1959) acting in
the ordinary course of its banking business;
(b) a person acting on their own behalf, or on behalf of one party to a
transaction only;
(c) a person who provides financial services to another person dealing
with the other person’s accounts in the ordinary course of the first
person’s business activities;
(d) the actions of a participant in a clearing and settlement facility who
has taken on the delivery or payment obligations, in relation to a particular
financial product, of another person who is a party to a transaction relating to
a financial product;
(e) conducting treasury operations between related bodies
corporate;
(f) operating a facility:
(i) that is an approved RTGS system within the meaning of the Payment
Systems and Netting Act 1998; or
(ii) for the transmission and reconciliation of non-cash payments, and the
establishment of final positions, for settlement through an approved RTGS system
within the meaning of the Payment Systems and Netting Act 1998;
(g) operating a facility that is a designated payment system for the
purposes of the Payment Systems (Regulation) Act 1998;
(h) operating a facility for the exchange and settlement of non-cash
payments between providers of non-cash payment facilities;
(i) any other conduct of a kind prescribed by regulations made for the
purposes of this paragraph.
21 Subsection 12DA(1A)
Repeal the subsection, substitute:
(1A) Conduct:
(a) that contravenes:
(i) section 670A of the Corporations Act (misleading or deceptive
takeover document); or
(ii) section 728 of the Corporations Act (misleading or deceptive
fundraising document); or
(b) in relation to a disclosure document or statement within the meaning
of section 953A of the Corporations Act; or
(c) in relation to a disclosure document or statement within the meaning
of section 1022A of the Corporations Act;
does not contravene subsection (1). For this purpose, conduct
contravenes the provision even if the conduct does not constitute an offence, or
does not lead to any liability, because of the availability of a
defence.
22 Subsection 12DB(2)
Repeal the subsection, substitute:
(2) Conduct:
(a) that contravenes:
(i) section 670A of the Corporations Act (misleading or deceptive
takeover document); or
(ii) section 728 of the Corporations Act (misleading or deceptive
fundraising document); or
(b) in relation to a disclosure document or statement within the meaning
of section 953A of the Corporations Act; or
(c) in relation to a disclosure document or statement within the meaning
of section 1022A of the Corporations Act;
does not contravene subsection (1). For this purpose, conduct
contravenes the provision even if the conduct does not constitute an offence, or
does not lead to any liability, because of the availability of a
defence.
23 Section 12DC
Omit “security” (wherever occurring), substitute
“financial product”.
Note: The heading to section 12DC is altered by
omitting “securities” and substituting “financial
products”.
24 Subsection 12DD(2)
After “securities”, insert “(within the meaning of
Chapter 6 of the Corporations Act)”.
25 Subsection 12DK(5)
Omit “securities” (wherever occurring), substitute
“financial products”.
Note: The heading to section 12DK is altered by
omitting “securities” and substituting “financial
products”.
26 Paragraph 12DK(6)(c)
Omit “security” (wherever occurring), substitute
“financial product”.
27 Subdivision F of Division 2 of
Part 2
Repeal the Subdivision.
28 Subparagraph
13(1)(b)(ii)
Omit “securities or futures contracts”, substitute
“financial products”.
29 Subparagraph
14(2)(b)(ii)
Omit “, securities or futures contracts”, substitute “or
financial products”.
30 Paragraphs 14(2)(d) and
(e)
Repeal the paragraphs, substitute:
(d) dealing in financial products;
31 Paragraph 14(2)(f)
Omit “stock market or futures market”, substitute
“financial market”.
32 Paragraph 14(2)(g)
Omit “clearing house facilities for a futures market”,
substitute “a clearing and settlement facility”.
33 Paragraph 14(2)(j)
Repeal the paragraph, substitute:
(j) the giving of advice, analyses or reports about financial
products;
34 At the end of subsection
14(2)
Add:
; (k) the provision of compensation arrangements for a financial
market.
35 Subparagraph 28(c)(ii)
Omit “, securities or futures contracts”, substitute “or
financial products”.
36 Paragraph 31(1)(a)
Repeal the paragraph, substitute:
(a) the operator of a financial market or clearing and settlement
facility; or
37 Paragraph 31(1)(b)
Omit “a securities exchange”, substitute “the operator of
a financial market or clearing and settlement facility”.
38 Paragraph 31(1)(c)
Repeal the paragraph, substitute:
(c) a person who either carries on or has carried on (either alone or
together with any other person or persons) a financial services business, or who
is a representative of such a person; or
39 Paragraph 31(1)(f)
Omit “securities”, substitute “financial
products”.
Note: The heading to section 31 is altered by omitting
“securities” and substituting “financial
products”.
40 Paragraph 31(1)(g)
Omit “securities exchange”, substitute “financial market
or clearing and settlement facility”.
41 Paragraph 31(1)(h)
Omit “securities”, substitute “financial
products”.
42 Paragraph 31(1)(j)
Omit “securities”, substitute “financial
products”.
43 Paragraph 31(1)(m)
Omit “securities”, substitute “financial
products”.
44 Paragraph 31(1)(m)
Omit “dealer or investment adviser”, substitute “person
who either carries on or has carried on (either alone or together with any other
person or persons) a financial services business, or who is a representative of
such a person”.
45 Subsection 31(2)
Omit “securities” (wherever occurring), substitute
“financial products”.
46 Section 32
Repeal the section.
47 Paragraph 33(b)
Omit “, and 32(1)(j) to (p), inclusive”.
48 Subsection 34(3)
Omit “32,”.
49 Division 4 of Part 3
(heading)
Repeal the heading, substitute:
50 Section 40
Omit “or 44”.
51 Subparagraph 40(c)(ii)
Omit “, securities or futures contracts”, substitute “or
financial products”.
52 Subsection 41(1)
Omit “dealer”, substitute “a person who carries on a
financial services business”.
53 Subsection 41(1)
Omit “securities”, substitute “financial
products”.
Note: The heading to section 41 is altered by omitting
“securities” and substituting “financial
products”.
54 Before paragraph
41(1)(a)
Insert:
(aa) whether the acquisition or disposal was effected on another
person’s behalf and, if so:
(i) the name of the other person; and
(ii) the nature of the instructions given to the person who carries on a
financial services business in relation to the dealing; or
55 Paragraph 41(1)(a)
Omit “, or on whose behalf, the securities were acquired”,
substitute “the financial products were acquired”.
56 Paragraph 41(1)(b)
Omit “, or on whose behalf, the securities were disposed of”,
substitute “the financial products were disposed”.
57 Subsection 41(2)
Omit “securities” (wherever occurring), substitute
“financial products”.
58 Subsection 41(3)
Omit “conducts a stock market”, substitute “operates a
financial market”.
59 Subsection 41(3)
Omit “securities on that stock market”, substitute
“financial products on that financial market”.
60 At the end of
section 41
Add:
(4) ASIC may require an operator of a clearing and settlement facility to
disclose to ASIC, in relation to a dealing in financial products, the names of
any participants in the clearing and settlement facility who were concerned in
any act or omission in relation to the dealing.
(5) Information required to be disclosed under this section need only be
disclosed to the extent to which it is known to the person required to make the
disclosure.
Note: In criminal proceedings, a defendant bears an
evidential burden in relation to the matters in
subsection (5).
61 Paragraph 43(1)(a)
Omit “securities of a body corporate, a power under
section 775”, substitute “a financial product issued by a body
corporate, a power under section 794D”.
Note: The heading to section 43 is altered by omitting
“securities” and substituting “financial
products”.
62 Paragraph 43(1)(b)
Omit “845, or Division 2 of Part 7.11”, substitute
“991F, or Division 2 of Part 7.10”.
63 Paragraph 43(1)(b)
Omit “securities of”, substitute “financial products
issued by”.
64 Paragraph 43(1)(d)
Omit “securities of a body corporate”, substitute
“financial products issued by a body corporate”.
65 Subsection 43(2)
Omit “securities of the body”, substitute “financial
products issued by the body”.
66 Paragraph 43(3)(a)
Omit “securities of the body”, substitute “financial
products issued by the body”.
67 Paragraph 43(3)(b)
Omit “dealer, an investment adviser, or a securities representative
of a person”, substitute “person who carries on or has carried on
(either alone or together with any other person or persons) a financial services
business, or a representative of such a person”.
68 Paragraph 43(3)(b)
Omit “such securities”, substitute “such financial
products”.
69 Subparagraph 43(3)(c)(i)
Omit “dealer or investment adviser”, substitute “person
who carries on or has carried on a financial services business, or a
representative of such a person”.
70 Subparagraph
43(3)(c)(ii)
Omit “securities”, substitute “financial
products”.
71 Paragraph 43(3)(e)
Omit “dealer or investment adviser”, substitute “person
who carries on or has carried on (either alone or together with any other person
or persons) a financial services business, or a representative of such a
person”.
72 Paragraph 43(3)(e)
Omit “securities”, substitute “financial
products”.
73 Section 44
Repeal the section.
74 Section 46
Repeal the section.
75 Subsection 63(2)
Omit “41, 42, 43, 44, 45 or 46”, substitute “41 or
43”.
76 Paragraphs 71(b) and (c)
Repeal the paragraphs, substitute:
(b) financial products;
77 Section 73
Omit “securities” (wherever occurring), substitute
“financial products”.
Note: The heading to section 73 is altered by omitting
“securities” and substituting “financial
products”.
78 At the end of
section 73
Add:
; (h) an order requiring a specified person to dispose of specified
derivatives, or to dispose of specified derivatives in a specified
manner.
(2) An order under subsection (1) does not prejudice or affect a
right of an operator of a financial market or clearing and settlement
facility:
(a) to cause or enter into a transaction that causes a derivative to be
closed out; or
(b) to cause to be registered in a person’s name, or to register in
a person’s name, a derivative that was previously registered in another
person’s name.
79 Section 74
Repeal the section.
80 Subsection 75(4)
Omit “securities” (wherever occurring), substitute
“financial products”.
81 Paragraph 80(1)(b)
Omit “, and 32(1)(j) to (p), inclusive”.
82 Paragraph 111(1)(e)
Omit “section 125; or”, substitute
“section 125.”.
83 Paragraph 111(1)(f)
Repeal the paragraph.
84 Paragraph 123(1)(b)
Omit “(including securities, futures contracts or other financial
products)”, substitute “(including financial
products)”.
85 Subsection 123(3)
Repeal the subsection, substitute:
(3) In disclosing an indirect pecuniary interest in financial products,
the member must identify the particular products.
86 Subsections 127(1B) to
(1E)
Repeal the subsections.
87 Paragraph 127(4)(a)
Omit “CASAC”, substitute “CAMAC”.
88 Subparagraph
127(4B)(a)(ii)
Omit “business rules, or the listing rules (if any),”,
substitute “operating rules”.
89 Paragraph 127(4C)(a)
Omit “stock market or a futures market”, substitute
“financial market”.
90 Paragraph 127(4C)(b)
Repeal the paragraph, substitute:
(b) is a body corporate that holds an Australian CS facility
licence.
91 After subsection 127(5)
Insert:
(5B) Regulations made for the purpose of this section may specify uses of
information and disclosures of information that are authorised uses and
authorised disclosures for the purposes of this section.
92 Subsection 127(6)
Omit “(1B), (1C), (1D), (1E),”.
93 Subsection 127(6)
Omit “and (4B)”, substitute “, (4B) and
(5)”.
94 Division 3 of
Part 7
Repeal the Division.
95 Paragraph 135(1)(b)
Omit “CASAC”, substitute “CAMAC”.
96 Subsection 138(3)
Repeal the subsection.
97 Part 9 (heading)
Repeal the heading, substitute:
98 Section 146
Omit “CASAC”, substitute “CAMAC”.
Note: The heading to section 146 is altered by omitting
“CASAC” and substituting
“CAMAC”.
99 Subsection 146 (note 1)
Before “was”, insert “(under its previous name of the
Companies and Securities Advisory Committee)”.
100 Subsection 147(1)
Omit “CASAC”, substitute “CAMAC”.
101 Subsection 147(3)
Omit “CASAC”, substitute “CAMAC”.
102 Subsection 147(4)
Omit all the words from and including “following fields”,
substitute:
following fields, namely:
(a) business;
(b) administration of companies;
(c) financial markets;
(d) financial products and financial services;
(e) law;
(f) economics;
(g) accounting.
103 Paragraph 147(5)(b)
Omit “CASAC”, substitute “CAMAC”.
104 Section 148
Omit “CASAC’s”, substitute
“CAMAC’s”.
105 Paragraph 148(d)
Omit “, securities or the futures industry”, substitute
“or a segment of the financial products and financial services
industry”.
106 Paragraph 148(e)
Omit “securities markets or futures markets”, substitute
“financial markets”.
107 Section 154
Omit “CASAC” (wherever occurring), substitute
“CAMAC”.
Note: The heading to section 154 is altered by omitting
“CASAC” and substituting
“CAMAC”.
108 Section 155
Omit “CASAC” (wherever occurring), substitute
“CAMAC”.
109 Subsection 156(1)
Omit “CASAC’s”, substitute
“CAMAC’s”.
110 Subsection 156(3)
Omit “CASAC” (wherever occurring), substitute
“CAMAC”.
111 Subsection 156(4)
Omit “CASAC”, substitute “CAMAC”.
112 Section 157
Omit “CASAC” (wherever occurring), substitute
“CAMAC”.
113 Section 158
Omit “CASAC” (wherever occurring), substitute
“CAMAC”.
Note: The heading to section 158 is altered by omitting
“CASAC” and substituting
“CAMAC”.
114 Section 159
Omit “CASAC” (wherever occurring), substitute
“CAMAC”.
Note: The heading to section 159 is altered by omitting
“CASAC” and substituting
“CAMAC”.
115 Section 160
Omit “CASAC’s”, substitute
“CAMAC’s”.
Note: The heading to section 160 is altered by omitting
“CASAC’s” and substituting
“CAMAC’s”.
116 Paragraphs 160(a) and
(b)
Omit “CASAC”, substitute “CAMAC”.
117 Subsection 161(1)
Omit “CASAC’s”, substitute
“CAMAC’s”.
Note: The heading to section 161 is altered by omitting
“CASAC’s” and substituting
“CAMAC’s”.
118 Paragraphs 161(1)(a) and
(b)
Omit “CASAC”, substitute “CAMAC”.
119 Subsections 161(3) and
(4)
Omit “CASAC”, substitute “CAMAC”.
120 Subsection 161(5)
Omit “CASAC” (wherever occurring), substitute
“CAMAC”.
121 Subsection 161(5)
Omit “CASAC’s”, substitute
“CAMAC’s”.
122 Subsections 161(6) and
(7)
Omit “CASAC”, substitute “CAMAC”.
123 Subsection 163(1)
Omit “CASAC” (wherever occurring), substitute
“CAMAC”.
124 Subsection 165(1)
Omit “CASAC”, substitute “CAMAC”.
125 Section 166
Omit “CASAC” (wherever occurring), substitute
“CAMAC”.
Note: The heading to section 166 is altered by omitting
“CASAC” and substituting
“CAMAC”.
126 Section 167
Omit “CASAC” (wherever occurring), substitute
“CAMAC”.
127 Subsection 168(1)
Omit “CASAC”, substitute “CAMAC”.
128 Subsection 168(1)
Omit “CASAC’s”, substitute
“CAMAC’s”.
129 Subsection 168(2)
Omit “CASAC” (wherever occurring), substitute
“CAMAC”.
130 Subsection 172(4)
Omit all the words from and including “following fields”,
substitute:
following fields, namely:
(a) business;
(b) administration of companies;
(c) financial markets;
(d) financial products and financial services;
(e) law;
(f) economics;
(g) accounting.
131 Paragraph 172(4A)(a)
Omit all the words from and including “following fields”,
substitute:
following fields, namely:
(i) business;
(ii) administration of companies;
(iii) financial markets;
(iv) financial products and financial services;
(v) law;
(vi) economics;
(vii) accounting; and
132 Paragraph 178(1)(d)
Repeal the paragraph.
133 Section 186
Repeal the section, substitute:
Division 2 of Part 7 applies in relation to the Panel as if a
reference in section 127 to ASIC included a reference to the
Panel.
134 Part 14 (heading)
Repeal the heading, substitute:
135 Paragraphs 243D(a) to
(k)
Repeal the paragraphs, substitute:
(a) to ASIC; or
(b) to a market licensee; or
(c) to a CS facility licensee; or
(d) to an operator of a market exempted under section 791C of the
Corporations Act; or
(e) to an operator of a clearing and settlement facility exempted under
section 820C of the Corporations Act; or
(f) in accordance with conditions imposed on an Australian market licence
under section 796A of the Corporations Act; or
(g) in accordance with conditions imposed on a CS facility licence under
section 825A of the Corporations Act; or
(h) in accordance with conditions on an exemption made under
section 791C of the Corporations Act from the requirement to hold an
Australian market licence; or
(i) in accordance with conditions on an exemption made under
section 820C of the Corporations Act from the requirement to hold an
Australian CS facility licence; or
(j) as prescribed by regulations made for the purposes of this
paragraph.
136 Paragraph 244(2)(a)
Omit “, 73 or 74”, substitute “or 73”.
137 Section 246
Omit “CASAC” (wherever occurring), substitute
“CAMAC”.
138 Title
Omit “, securities, the futures industry”.
139 At the end of subsection
5(1)
Add:
; and (d) also, for the purposes of the application of a provision of
Chapter 7 or an associated provision (see subsection (10))—any
external Territory in which the provision applies because of subsection (9)
(but only to the extent provided for in that subsection).
140 Subsections 5(2) to (6)
Repeal the subsections, substitute:
(2) Throughout this Act, this jurisdiction therefore
consists of:
(a) either:
(i) the whole of Australia (if all the States are referring States);
or
(ii) Australia (other than any State that is not a referring State) if one
or more States are not referring States; and
(b) also, when used in or in relation to a provision of
Chapter 7 or an associated provision (see subsection (10))—any
external Territory in which the provision applies because of subsection (9)
(but only to the extent provided for in that subsection).
Operation in this jurisdiction
(3) Each provision of this Act applies in this jurisdiction.
Operation outside this jurisdiction
(4) Subject to subsection (8), each provision of this Act also
applies, according to its tenor, in relation to acts and omissions outside this
jurisdiction.
141 Subsection 5(7)
Omit “This Act”, substitute “Each provision of this
Act”.
142 At the end of
section 5
Add:
Expanded application of provisions of Chapter 7 and associated
provisions
(9) The regulations may provide that, in specified circumstances, a
specified external Territory is included in this jurisdiction for
the purposes of a specified provision of Chapter 7 (the applicable
provision). If the regulations do so:
(a) the applicable provision applies in that external Territory in those
circumstances; and
(b) the associated provisions (see subsection (10)) in relation to
the applicable provision apply in that external Territory in relation to the
applicable provision as so applying.
Meaning of associated provisions
(10) For the purposes of this section, the associated
provisions in relation to a provision of Chapter 7 are:
(a) the provisions of Chapters 1, 9 (including the provisions of
Division 2 of Part 9.4 that create offences and of Part 9.4B that
allow for pecuniary penalty orders) and 10 as they apply or have effect in
relation to, or for the purposes of, the provision; and
(b) any regulations or other instruments (including any that create
offences or allow for pecuniary penalty orders) made under this Act for the
purposes of any of the provisions covered by paragraph (a); and
(c) if regulations made for the purposes of subsection (9) have been
made in relation to the provision—any other provisions of this Act, or any
regulations or other instruments made under this Act (including any that create
offences or allow for pecuniary penalty orders), specified in those
regulations.
143 Subsection 5A(4)
Repeal the subsection, substitute:
(4) A provision of Chapter 7 only binds the Crown in a particular
capacity in circumstances (if any) specified in the regulations.
144 Subsection 5A(5)
Repeal the subsection, substitute:
(5) Nothing in this Act makes the Crown in any right liable to a pecuniary
penalty or to be prosecuted for an offence.
145 Subsection 7(2)
Repeal the subsection, substitute:
(2) However, interpretation provisions relevant only to Chapter 7 are
to be found at the beginning of that Chapter.
146 Section 9 (definition of
acquire)
Repeal the definition.
147 Section 9 (definition of adjustment
agreement)
Repeal the definition.
148 Section 9 (definition of admit to
quotation)
Repeal the definition, substitute:
admit to quotation: financial products are admitted to
quotation on a market if the market operator has given unconditional
permission for quotation of the financial products on the market.
149 Section 9 (definition of
agreement)
Repeal the definition, substitute:
agreement, in Chapter 6 or 7, means a relevant
agreement.
150 Section 9 (definition of approved
foreign bank)
Repeal the definition.
151 Section 9 (definition of approved
securities organisation)
Repeal the definition.
152 Section 9 (definition of
acquire)
Repeal the definition, substitute:
acquire, in relation to financial products, when used in a
provision outside Chapter 7, has the same meaning as it has in
Chapter 7.
153 Section 9 (definition of arbitrage
transaction)
Repeal the definition, substitute
arbitrage transaction means a purchase or sale of financial
products effected in the ordinary course of trading on a financial market
together with an offsetting sale or purchase of those financial products
effected at the same time, or at as nearly the same time as practicable, in the
ordinary course of trading on another financial market for the purpose of
obtaining a profit from the difference between the prices of those financial
products in the 2 financial markets.
154 Section 9 (definition of
assets)
Repeal the definition, substitute
assets, in relation to a financial services licensee, means
all the licensee’s assets (whether or not used in connection with the
licensee’s Australian financial services licence).
155 Section 9 (definition of
ASX)
Repeal the definition.
156 Section 9
Insert:
Australian CS facility licence, when used in a provision
outside Chapter 7, has the same meaning as it has in
Chapter 7.
157 Section 9
Insert:
Australian financial services licence, when used in a
provision outside Chapter 7, has the same meaning as it has in
Chapter 7.
158 Section 9
Insert:
Australian market licence, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
159 Section 9 (definition of
banker’s books)
Repeal the definition.
160 Section 9 (definition of banning
order)
Repeal the definition.
161 Section 9 (note to the definition of
bidder)
Repeal the note, substitute:
Note: A person who announces a bid on behalf of another
person is not making the bid, the other person is making the
bid.
162 Section 9 (paragraph (b) of the
definition of bid period)
Omit “securities exchange”, substitute “financial
market”.
163 Section 9 (definition of
Board)
Repeal the definition, substitute:
Board, when used in Part 9.2, means the Companies
Auditors and Liquidators Disciplinary Board.
164 Section 9 (definition of bought
position)
Repeal the definition.
165 Section 9 (definition of
Chapter 8 agreement)
Repeal the definition.
166 Section 9 (definition of
Chapter 8 obligation)
Repeal the definition.
167 Section 9 (definition of
Chapter 8 right)
Repeal the definition.
168 Section 9 (paragraph (a) of the
definition of class)
Repeal the paragraph.
169 Section 9
Insert:
clearing and settlement facility, when used in a provision
outside Chapter 7, has the same meaning as it has in
Chapter 7.
170 Section 9 (definition of clearing
house)
Repeal the definition.
171 Section 9 (definition of clearing
house facilities)
Repeal the definition.
172 Section 9 (definition of
client)
Repeal the definition.
173 Section 9 (definition of
clients’ segregated account)
Repeal the definition.
174 Section 9 (definition of close
out)
Repeal the definition.
175 Section 9 (definition of
commodity)
Repeal the definition.
176 Section 9 (definition of commodity
agreement)
Repeal the definition.
177 Section 9 (definition of
conduct)
Repeal the definition.
178 Section 9 (definition of
contributing member)
Repeal the definition.
179 Section 9
Insert:
corporation/scheme civil penalty provision has the meaning
given by section 1317DA.
180 Section 9 (paragraph (b) of the
definition of date)
Omit “securities exchange”, substitute “financial
market”.
181 Section 9 (definition of
dealer)
Repeal the definition.
182 Section 9 (definition of dealers
licence)
Repeal the definition.
183 Section 9
Insert:
dealing, in relation to financial products, when used in a
provision outside Chapter 7, has the same meaning as it has in
Chapter 7.
184 Section 9
Insert:
declared professional body when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
185 Section 9 (definition of
defalcation)
Repeal the definition.
186 Section 9
Insert:
derivative, when used in a provision outside Chapter 7,
has the same meaning as it has in Chapter 7.
187 Section 9 (definition of
discretionary account)
Repeal the definition.
188 Section 9
Insert:
dispose, in relation to financial products, when used in a
provision outside Chapter 7, has the same meaning as it has in
Chapter 7.
189 Section 9 (definition of document of
title)
Repeal the definition.
190 Section 9 (definition of eligible
commodity agreement)
Repeal the definition.
191 Section 9 (definition of eligible
exchange-traded option)
Repeal the definition.
192 Section 9 (definition of eligible
securities conduct)
Repeal the definition.
193 Section 9 (second sentence of the
definition of enter into)
Repeal the sentence.
194 Section 9 (definition of
Exchange)
Repeal the definition.
195 Section 9 (definition of exchange
member)
Repeal the definition.
196 Section 9 (definition of Exchange
subsidiary)
Repeal the definition.
197 Section 9 (definition of exchange
traded option)
Repeal the definition.
198 Section 9 (definition of exempt
broker)
Repeal the definition.
199 Section 9 (definition of exempt
dealer)
Repeal the definition.
200 Section 9 (definition of exempt
futures market)
Repeal the definition.
201 Section 9 (definition of exempt
investment adviser)
Repeal the definition.
202 Section 9 (definition of exempt
stock market)
Repeal the definition.
203 Section 9 (definition of fidelity
fund)
Repeal the definition.
204 Section 9
Insert:
financial market, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
205 Section 9
Insert:
financial product, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
206 Section 9
Insert:
financial service, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
207 Section 9
Insert:
financial services business, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
208 Section 9
Insert:
financial services civil penalty provision has the meaning
given by section 1317DA.
209 Section 9
Insert:
financial services licensee, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
210 Section 9 (definition of
Fund)
Repeal the definition.
211 Section 9 (definition of futures
advice business)
Repeal the definition.
212 Section 9 (definition of futures
adviser)
Repeal the definition.
213 Section 9 (definition of futures
advisers licence)
Repeal the definition.
214 Section 9 (definition of futures
association)
Repeal the definition.
215 Section 9 (definition of futures
broker)
Repeal the definition.
216 Section 9 (definition of futures
brokers licence)
Repeal the definition.
217 Section 9 (definition of futures
broking business)
Repeal the definition.
218 Section 9 (definition of futures
contract)
Repeal the definition.
219 Section 9 (definition of futures
exchange)
Repeal the definition.
220 Section 9 (definition of futures
law)
Repeal the definition.
221 Section 9 (definition of futures
licence)
Repeal the definition.
222 Section 9 (definition of futures
licensee)
Repeal the definition.
223 Section 9 (definition of futures
market)
Repeal the definition.
224 Section 9 (definition of futures
option)
Repeal the definition.
225 Section 9 (definition of futures
organisation)
Repeal the definition.
226 Section 9 (definition of futures
report)
Repeal the definition.
227 Section 9 (definition of futures
representative)
Repeal the definition.
228 Section 9 (definition of information
service)
Repeal the definition.
229 Section 9 (definition of inside
information)
Repeal the definition.
230 Section 9 (definition of
insolvent)
Omit “and, in Part 7.10, has a meaning affected by
section 922”.
231 Section 9 (definition of invalid
futures authority)
Repeal the definition.
232 Section 9 (definition of invalid
securities authority)
Repeal the definition.
233 Section 9 (definition of investment
advice business)
Repeal the definition.
234 Section 9 (definition of investment
adviser)
Repeal the definition.
235 Section 9 (definition of investment
advisers licence)
Repeal the definition.
236 Section 9 (at the end of the definition
of issue)
Add:
Note: When issue is used in Chapter 7 in
relation to a financial product it has a meaning affected by
section 761E.
237 Section 9 (definition of liquidating
trade)
Repeal the definition.
238 Section 9 (definition of
liquidator)
Omit “Chapters 7 and 8”, substitute
“Chapter 7”.
239 Section 9 (definition of
listed)
Omit “securities exchange”, substitute “prescribed
financial market operated in this jurisdiction”.
240 Section 9 (definition of listed
corporation)
Repeal the definition, substitute:
listed corporation means a body corporate that is included in
an official list of a prescribed financial market.
241 Section 9 (definition of listing
rules)
Repeal the definition, substitute:
listing rules, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
242 Section 9
Insert:
market traded option means an option declared by an operator
of a prescribed financial market to be a market traded option.
243 Section 9 (paragraphs (b), (c) and
(d) of the definition of member)
Repeal the paragraphs.
244 Section 9 (definition of member
firm)
Repeal the definition.
245 Section 9 (definition of member
organisation)
Repeal the definition.
246 Section 9 (definition of minimum
holding buy-back)
Omit “securities exchange”, substitute “financial
market”.
247 Section 9 (definition of
non-broker)
Repeal the definition.
248 Section 9 (definition of
non-dealer)
Repeal the definition.
249 Section 9 (definition of
of)
Omit “securities”, substitute “financial
products”.
250 Section 9
Insert:
offence based on a particular provision of this Act means,
unless a contrary intention appears:
(a) if that provision creates an offence—an offence against that
provision, or an offence against section 1314 that relates to that
provision; or
(b) if section 1311 creates an offence relating to that
provision—an offence against section 1311 or 1314 that relates to
that provision.
251 Section 9 (definition of
on)
Omit “stock market or futures market”, substitute
“financial market”.
252 Section 9 (definition of
on-market)
Repeal the definition, substitute:
on-market: a transaction of any kind is an on-market
transaction if it is effected on a prescribed financial market and is:
(a) an on-market transaction as defined in the rules governing the
operation of the market; or
(b) if those rules do not define on-market transactions—effected in
the ordinary course of trading on the market.
253 Section 9
Insert:
operated in this jurisdiction, when used in a provision
outside Chapter 7, has the same meaning as it has in
Chapter 7.
254 Section 9
Insert:
operating rules, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
255 Section 9 (definition of option
contract)
Repeal the definition.
256 Section 9 (definition of own
account)
Repeal the definition.
257 Section 9
Insert:
participant, when used in a provision outside Chapter 7,
has the same meaning as it has in Chapter 7.
258 Section 9 (definition of
party)
Repeal the definition, substitute:
party, in relation to a transaction that has been completed,
given effect to, or terminated, includes a person who was a party to the
transaction.
259 Section 9
Insert:
prescribed financial market means a financial market that is
prescribed by regulations made for the purposes of this definition.
260 Section 9 (definition of
price)
Repeal the definition.
261 Section 9
Insert:
professional investor means a person in relation to whom one
or more of the following paragraphs apply:
(a) the person is a financial services licensee;
(b) the person is a body regulated by APRA;
(c) the person is a body registered under the Financial Corporations
Act 1974;
(d) the person is the trustee of:
(i) a superannuation fund; or
(ii) an approved deposit fund; or
(iii) a pooled superannuation trust; or
(iv) a public sector superannuation scheme;
within the meaning of the Superannuation Industry (Supervision) Act
1993 and the fund, trust or scheme has net assets of at least $10
million;
(e) the person controls at least $10 million (including any amount held by
an associate or under a trust that the person manages);
(f) the person is a listed entity, or a related body corporate of a listed
entity;
(g) the person is an exempt public authority;
(h) the person is a body corporate, or an unincorporated body,
that:
(i) carries on a business of investment in financial products, interests
in land or other investments; and
(ii) for those purposes, invests funds received (directly or indirectly)
following an offer or invitation to the public, within the meaning of
section 82, the terms of which provided for the funds subscribed to be
invested for those purposes;
(i) the person is a foreign entity that, if established or
incorporated in Australia, would be covered by one of the preceding
paragraphs.
262 Section 9 (definition of proper
authority)
Repeal the definition.
263 Section 9 (definition of proper SCH
transfer)
Repeal the definition.
264 Section 9 (subparagraph (a)(ii) of
the definition of public company)
Omit “securities exchange”, substitute “prescribed
financial market”.
265 Section 9 (paragraph (a) of the
definition of publish)
After “periodical,”, insert “on the
Internet,”.
266 Section 9 (definition of
quotation)
Repeal the definition, substitute:
quotation, in relation to financial products or in relation
to a financial market, includes the displaying or providing, on a financial
market, of information concerning:
(a) if offers to dispose of, purchase or exchange the financial product at
particular prices, or for particular consideration, are made or accepted on that
financial market—those prices or that consideration; or
(b) if offers or invitations are made on that financial market, being
offers or invitations that are intended, or may reasonably be expected, to
result in the making or acceptance of offers to dispose of, purchase or exchange
the financial products at particular prices, or for particular
consideration—those prices or that consideration; or
(c) in any case—the price at which, or the consideration for which,
particular persons, or particular classes of persons, propose, or may reasonably
be expected, to dispose of, purchase or exchange the financial
products.
267 Section 9 (definition of quoted
right)
Repeal the definition.
268 Section 9 (definition of quoted
security)
Repeal the definition, substitute:
quoted security means a security that is listed for quotation
on a prescribed financial market.
269 Section 9 (definition of recognised
futures exchange)
Repeal the definition.
270 Section 9
Insert:
relevant financial market, for a listed company, or listed
registered scheme, means:
(a) the prescribed financial market on which the company or scheme is
listed; or
(b) if the company or scheme is listed on 2 or more prescribed financial
markets—each of those markets.
271 Section 9
Insert:
relevant market operator, for a listed company, or listed
registered scheme, means:
(a) if there is only one relevant financial market for the company or
scheme—the operator of that relevant financial market; or
(b) if there is 2 or more relevant financial markets for the company or
scheme—each of the operators of each of those relevant financial
markets.
272 Section 9 (definition of relevant
securities exchange)
Repeal the definition.
273 Section 9 (definition of
representative)
Repeal the definition.
274 Section 9 (definition of responsible
officer)
Repeal the definition, substitute:
responsible officer, in relation to a body corporate that
applies for a licence, means an officer of the body who would perform duties in
connection with the holding of the licence.
275 Section 9 (definition of same
kind)
Repeal the definition.
276 Section 9 (definition of
SCH)
Repeal the definition.
277 Section 9 (definition of SCH
business rules)
Repeal the definition.
278 Section 9 (definition of SCH
certificate cancellation provisions)
Repeal the definition.
279 Section 9 (definition of SCH
participant)
Repeal the definition.
280 Section 9 (definition of
SCH-regulated transfer)
Repeal the definition.
281 Section 9 (definition of SCH
subregister)
Repeal the definition.
282 Section 9 (definition of
section 770A stock market)
Repeal the definition.
283 Section 9 (definition of securities
adviser)
Repeal the definition.
284 Section 9 (definition of securities
business)
Repeal the definition.
285 Section 9 (definition of securities
clearing house)
Repeal the definition.
286 Section 9 (definition of securities
exchange)
Repeal the definition.
287 Section 9 (definition of securities
law)
Repeal the definition.
288 Section 9 (definition of securities
licence)
Repeal the definition.
289 Section 9 (definition of securities
licensee)
Repeal the definition.
290 Section 9 (definition of securities
recommendation)
Repeal the definition.
291 Section 9 (definition of securities
report)
Repeal the definition.
292 Section 9 (definition of securities
representative)
Repeal the definition.
293 Section 9 (definition of
SEGC)
Repeal the definition.
294 Section 9 (definition of sold
position)
Repeal the definition.
295 Section 9 (definition of sole
trader)
Repeal the definition.
296 Section 9 (definition of
standardised agreement)
Repeal the definition.
297 Section 9 (definition of stock
exchange)
Repeal the definition.
298 Section 9 (definition of stock
market)
Repeal the definition.
299 Section 9 (subparagraph (a)(ii) of
the definition of substantial holding)
Omit “exchange traded”, substitute “market
traded”.
300 Section 9 (definition of
suspend)
Repeal the definition.
301 Section 9 (at the end of the definition
of this jurisdiction)
Add:
; and (d) also, for the purposes of the application of a provision of
Chapter 7 or an associated provision (as defined in
section 5)—any external Territory in which the provision applies
because of subsection 5(9) (but only to the extent provided for in that
subsection).
302 Section 9 (definition of
trade)
Repeal the definition, substitute:
trade, in relation to financial products, in relation to a
financial market, includes:
(a) make or accept on that financial market an offer to dispose of,
acquire or exchange the financial products; and
(b) make on that financial market an offer or invitation that is intended,
or may reasonably be expected, to result in the making or acceptance of an offer
to dispose of, acquire or exchange the financial products.
303 Section 9 (definition of trading
floor)
Repeal the definition.
304 Section 9 (definition of
unauthorised futures market)
Repeal the definition.
305 Section 9 (definition of
unauthorised stock market)
Repeal the definition.
306 Section 13
Omit “securities business” (wherever occurring), substitute
“financial services business”.
307 Section 14
Repeal the section.
308 Paragraph 16(1)(b)
Repeal the paragraph, substitute:
(b) one, a client, gives specific instructions to the other, whose
ordinary business includes dealing in financial products, to acquire financial
products on the client’s behalf in the ordinary course of that
business;
309 Subsection 16(2)
Omit “or 14(b) or (e)”.
310 Section 17
Repeal the section, substitute:
A reference to an associate, in relation to an entity (other than a body
corporate) that carries on a financial services business, is, if 2 or more
persons constitute the entity, a reference to an associate of any of those
persons.
311 Division 4 of
Part 1.2
Repeal the Division.
312 Sections 51, 54, 55, 56 and
61
Repeal the sections.
313 Section 64
Omit “section 51 or”.
314 Sections 67, 68, 71, 72, 72A, 73, 77,
84, 87 and 88
Repeal the sections.
315 Paragraph 92(1)(ca)
Repeal the paragraph.
316 Paragraph 92(1)(d)
Omit “or”.
317 Paragraph 92(1)(e)
Repeal the paragraph.
318 Subsection 92(1)
Omit “but does not include a futures contract or an excluded
security.”, substitute:
but does not include:
(f) a derivative (as defined in Chapter 7), other than an option to
acquire by way of transfer a security covered by paragraph (a), (b), (c) or
(d); or
(g) an excluded security.
319 Subsection 92(1) (note)
Repeal the note, substitute:
Note: A derivative does not include an option to acquire a
security by way of issue (see the combined effect of paragraph 761D(3)(c),
paragraph 764A(1)(a) and paragraph (d) of the definition of
security in section 761A).
320 Paragraph 92(2)(ca)
Repeal the paragraph.
321 Subsection 92(2)
Omit “but does not include a futures contract or an excluded
security.”, substitute:
but does not include:
(e) a derivative (as defined in Chapter 7), other than an option to
acquire by way of transfer a security covered by paragraph (a), (b), (c) or
(d); or
(f) an excluded security.
Note: A derivative does not include an option to acquire a
security by way of issue (see the note to subsection (1)).
322 Subsection 92(2A)
Repeal the subsection.
323 Subsection 92(3) (second
sentence)
Repeal the sentence, substitute:
It does not cover:
(f) a derivative (as defined in Chapter 7), other than an option to
acquire by way of transfer a security covered by paragraph (a), (b), (c) or
(d); or
(g) an option approved by a securities exchange as a market traded
option.
Note: A derivative does not include an option to acquire a
security by way of issue (see the note to subsection (1)).
324 Subsection 92(3)
Omit “exchange traded option”, substitute “market traded
option”.
325 Subsection 92(3) (note)
Omit “and sections 9 and 72 define futures
contract”.
326 At the end of
section 92
Add:
(4) In Chapter 6D securities has the meaning given by
section 700 and in Chapter 7 security has the meaning
given by section 761A.
327 Section 92A
Repeal the section.
328 Sections 93 and 94
Repeal the sections.
329 Section 95A
Repeal the section.
330 Section 97
Repeal the section.
331 Paragraph 103(2)(a)
Omit “, 601CD or of Chapter 8”, substitute “or
601CD”.
332 At the end of subsection
103(2)
Add:
Note: Section 1101H provides that a failure to comply
with requirements of Chapter 7 generally does not affect the validity or
enforceability of any transaction, contract or other
arrangement.
333 Section 141 (table items 35, 36,
37, 38 and 39)
Repeal the items, substitute:
|
|
Transfer of shares |
|
|
35 |
Transmission of shares on death |
1072A |
|
36 |
Transmission of shares on bankruptcy |
1072B |
|
37 |
Transmission of shares on mental incapacity |
1072D |
|
38 |
Registration of transfers |
1072F |
|
39 |
Additional general discretion for directors of proprietary companies to
refuse to register transfers |
1072G |
334 Subsection 170(3)
Omit “has been granted official quotation by a securities
exchange”, substitute “is listed for quotation on a prescribed
financial market”.
335 Subsection 205G(1)
Omit “securities exchange”, substitute “market
operator”.
Note: The heading to section 205G is altered by
omitting “securities exchange” and substituting
“market operator”.
336 Subsections 205G(3) and
(4)
Omit “exchange”, substitute “relevant market
operator”.
337 Subsection 205G(5)
Omit “exchange” (wherever occurring), substitute
“relevant market operator”.
338 Subsection 205G(6)
Omit “securities exchange”, substitute “market
operator”.
339 Paragraph 206C(1)(a)
After “contravened a”, insert
“corporation/scheme”.
340 Subsection 206C(1)
(note)
Repeal the note.
341 Subsection 220(2)
Repeal the subsection, substitute:
(2) If the company is listed, ASIC may consult with the relevant market
operator for the purposes of giving comments to the company.
342 Subsection 249CA(2)
Repeal the subsection, substitute:
(2) This section only applies to a company that is listed.
343 Subsection 249HA(2)
Repeal the subsection, substitute:
(2) This section only applies to a company that is listed.
344 Subsection 250BA(2)
Repeal the subsection, substitute:
(2) This section only applies to a company that is listed.
345 Subsection 251AA(2)
Omit “the Exchange” (first occurring), substitute “the
operator of each market on which financial products of the company are
listed”.
346 Subsection 251AA(2)
Omit “the Exchange” (second occurring), substitute “the
relevant market operator”.
347 Subsection 251AA(3)
Repeal the subsection, substitute:
(3) This section only applies to a company that is listed.
348 Section 253F
Omit “stock market of a stock exchange” (wherever occurring),
substitute “prescribed financial market”.
349 Subsection 257B(6)
Omit “at an official meeting of a securities exchange in Australia in
the ordinary course of trading on a stock market of that exchange”,
substitute “on a prescribed financial market in the ordinary course of
trading on that market”.
350 Subsection 257B(7)
Repeal the subsection, substitute:
(7) A buy-back by a company (whether listed or not) is also an on-market
buy-back if it results from an offer made in the ordinary course of trading in a
financial market outside Australia which ASIC declares in writing to be an
approved overseas financial market for the purposes of this subsection. A
buy-back by a listed company is an on-market buy-back under this subsection only
if an offer to buy-back those shares is also made on a prescribed financial
market at the same time.
351 Subsection 257H(2)
Omit “deal in”, substitute “dispose of”.
352 Subsection 300(11)
(note)
Omit “the ASX”, substitute “a relevant market
operator”.
353 Subsection 300(12)
Omit “stock market of a securities exchange”, substitute
“prescribed financial market”.
354 Subsection 300A(2)
Repeal the subsection, substitute:
(2) This section only applies to a company that is listed.
355 Paragraph 323DA(1)(c)
Repeal the paragraph, substitute:
(c) a financial market in a foreign country if that financial market is
prescribed by regulations made for the purposes of this paragraph;
356 Subsection 323DA(1)
Omit “to the Exchange”, substitute “to each relevant
market operator, if the company is listed”.
357 Subsection 323DA(2)
Repeal the subsection.
358 Subsection 601ED(2)
Repeal the subsection, substitute:
(2) A managed investment scheme does not have to be registered if all the
issues of interests in the scheme that have been made would not have required
the giving of a Product Disclosure Statement under Division 2 of
Part 7.9 if the scheme had been registered when the issues were
made.
359 Section 601FA
Omit “a dealers licence”, substitute “an Australian
financial services licence”.
Note: The heading to section 601FA is altered by
omitting “dealers licence” and substituting
“Australian financial services licence”.
360 Subparagraph
601FD(1)(f)(ii)
Omit “dealers licence”, substitute “Australian financial
services licence”.
361 Paragraph 601MB(1)(b)
Repeal the paragraph, substitute:
(b) a person (the offeror) fails to comply with
Division 2 of Part 7.9 when offering an interest in a registered
scheme for subscription or issuing an invitation to subscribe for an interest in
a registered scheme;
362 Paragraph 601PA(2)(b)
Omit “Chapter 6D”, substitute “Division 2 of
Part 7.9”.
363 Paragraph 609(1)(a)
Omit “providing financial services”, substitute “the
provision of financial accommodation by any means”.
364 Subsection 609(3)
Omit “securities dealer”, substitute “financial services
licensee”.
Note: The heading to subsection 609(3) is altered by
omitting “securities dealer” and substituting
“financial services licensee”.
365 Subsection 609(3)
Omit “securities business”, substitute “financial
services business”.
366 Paragraph 609(6)(a)
Omit “exchange traded option”, substitute “market traded
option”.
Note: The heading to subsection 609(6) is replaced by the
heading “Market traded options and
derivatives”.
367 Paragraph 609(6)(b)
Omit “futures contract”, substitute
“derivative”.
368 After subsection 609(9)
Insert:
Clearing and settlement facilities
(9A) The operator of a clearing and settlement facility (within the
meaning of Chapter 7) does not have a relevant interest in securities
merely because of its provision of facilities for the settlement of
transactions.
369 Section 611 (table
item 6)
Repeal the item, substitute:
|
6 |
Nature of acquirer An acquisition that results from the exercise by a person of a power, or
appointment as a receiver, or receiver and manager, under a mortgage, charge or
other security if: |
370 Section 611 (table
item 14)
Repeal the item, substitute:
|
14 |
Acquisition through listed company An acquisition that results from another acquisition of relevant interests
in voting shares in a body corporate included in the official list of: |
371 Subsection 618(2)
Omit “securities exchange”, substitute “financial
market”.
372 Subsection 621(2)
Omit “the stock market of a securities exchange”, substitute
“a prescribed financial market”.
373 Paragraph 625(3)(b)
Omit “stock market of a securities exchange”, substitute
“financial market”.
374 Paragraph 630(5)(b)
Omit “securities exchange”, substitute “market
operator”.
375 Section 632
(overview)
Omit
“*[exchange]”
(wherever occurring), substitute
“*[market]”.
376 Subsection 633(1) (table
item 5)
Repeal the item, substitute:
|
5 |
The bidder must send a copy of the bidder’s statement and offer
document to the operator of each prescribed financial market on which the
target’s securities are quoted. |
To be done on the day the bidder’s statement is sent to the
target See also subsection (5). |
377 Subsection 633(1) (table
item 8)
Repeal the item, substitute:
|
8 |
The bidder must send a notice that offers have been sent as required by
item 6 to the operator of each prescribed financial market on which the
target’s securities are quoted. |
To be done on the day all offers have been sent as required by
item 6 |
378 Paragraph 633(4)(a)
Omit “securities exchange”, substitute “market
operator”.
379 Section 634
(overview)
Omit “the exchange” (wherever occurring), substitute “the
market”.
380 Section 634
(overview)
Omit “* exchange”
(wherever occurring), substitute “*
market”.
381 Section 635 (table items 2 to
6)
Repeal the items, substitute:
|
2 |
The bidder must have the bid announced to the relevant financial
market. |
|
|
3 |
The bidder must send a copy of the bidder’s statement to the relevant
market operator |
To be done on the day the announcement is made |
|
4 |
The bidder must send to the target: |
To be done on the day the announcement is made |
|
5 |
The bidder must lodge with ASIC: |
To be done on the day the announcement is made |
|
6 |
The bidder must send to each holder of bid class securities (other than the
bidder): |
Within 14 days after the announcement is made. Sections 648B and 648C provide for the manner in which documents
may be sent to holders. |
382 Section 635 (table items 10 to
14)
Repeal the items, substitute:
|
10 |
The target must send a copy of the target’s statement to the relevant
market operator. |
Within 14 days after the announcement is made |
|
11 |
The target must send to the bidder: |
To be done on the day the target sends a copy of the target’s
statement to the relevant market operator |
|
12 |
The target must lodge with ASIC: |
To be done on the day the target sends a copy of the target’s
statement to the relevant market operator |
|
13 |
The target must send each holder of bid class securities: |
Within 14 days after the announcement is made. Sections 648B and 648C provide for the manner in which documents
may be sent to holders. |
|
14 |
The bidder must make offers for the securities under the bid through the
relevant financial market. |
To be done on the next day after the end of the 14 day period referred to
in item 13. If the bidder does not make the offers at that time, the bidder contravenes
this section. Item 2 of the table in section 611 covers offers made by the
bidder on market during the 14 day period between the announcement and the
making of the offers under the bid |
383 Paragraph 647(3)(b)
Omit “each relevant securities exchange that has a stock
market”, substitute “the operator of each prescribed financial
market”.
384 Paragraph 648E(2)(b)
Omit “securities exchange”, substitute “financial
market”.
385 Paragraph 648H(a)
Omit “business rules or listing rules of a securities
exchange”, substitute “operating rules of a financial
market”.
386 Section 649B
Omit “securities exchange”, substitute “financial
market”.
387 Subsection 649C(1)
Omit “securities exchange” (wherever occurring), substitute
“financial market”.
388 Subsection 649C(1)
Omit “the exchange”, substitute “the
market”.
389 Paragraph 649C(2)(a)
Omit “securities exchange”, substitute “market
operator”.
390 Subsection 650E(3)
Repeal the subsection, substitute:
(3) A notice under paragraph (2)(a) must:
(a) comply with the conditions specified in regulations made for the
purposes of this paragraph; or
(b) if no such regulations are made—be in writing.
391 Paragraphs 650E(4)(a) and
(b)
Repeal the paragraphs, substitute:
(a) take any actions that are specified in regulations made for the
purposes of this paragraph in relation to the return of those securities;
or
(b) if no such regulations are made—give the bidder any transfer
documents needed to effect the return of the securities.
392 Paragraph 650E(5)(a)
Repeal the paragraph, substitute:
(a) take any actions that are specified in regulations made for the
purposes of this paragraph in relation to the withdrawal of acceptance;
and
393 Paragraph 650F(3)(a)
Omit “securities exchange”, substitute “market
operator”.
394 Subsection 652C(3)
Omit “securities exchange”, substitute “market
operator”.
395 Paragraph 653A(b)
Repeal the paragraph, substitute:
(b) regulations made for the purposes of this paragraph set out any
requirements for the manner in which the acceptance of the offer, so far as it
relates to those securities, must be complied with;
396 Subsection 653B(4)
Repeal the subsection, substitute:
(4) A notice under subsection (3) must:
(a) comply with the conditions specified in regulations made for the
purposes of this paragraph that provide for the manner of giving the notice;
or
(b) if no such regulations are made—be in writing.
397 Paragraph 661B(1)(d)
Omit “securities exchange”, substitute “market
operator”.
398 Subsection 661C(4)
Repeal the subsection, substitute:
(4) The election must:
(a) comply with the conditions specified in regulations made for the
purposes of this paragraph that provide for the manner of making the election;
or
(b) if no such regulations are made—be in writing.
399 Paragraph 663B(1)(d)
Omit “securities exchange”, substitute “market
operator”.
400 Paragraph 664C(2)(d)
Omit “securities exchange”, substitute “market
operator”.
401 Paragraph 664E(3)(d)
Omit “securities exchange”, substitute “market
operator”.
402 Paragraph 665B(1)(e)
Omit “securities exchange”, substitute “market
operator”.
403 Subsection 671B(1)
Omit “securities exchange”, substitute “market
operator”.
Note: The heading to section 671B is altered by
omitting “securities exchange” and substituting
“market operator”.
404 Subsection 671B(2)
(note)
Omit “exchange”, substitute “market”.
405 Subsection 671B(3)
(note)
Omit “exchange”, substitute “market”.
406 Subsection 671B(5)
Omit “a stock exchange approved under section 769”,
substitute “a prescribed financial market”.
407 Paragraph 671B(6)(b)
Omit “securities exchange”, substitute “financial
market”.
408 Subsection 671B(7)
Omit “exchange”, substitute “market”.
409 Subsection 700(1)
Repeal the subsection, substitute:
(1) In this Chapter, securities has the same meaning as it
has in Chapter 7.
410 Section 701
Repeal the section.
411 At the end of
Part 6D.1
Add:
Nothing that the operator of a clearing and settlement facility (within
the meaning of Chapter 7) does in the course of, or in connection with,
providing facilities for the settlement of transactions constitutes, for the
purposes of this Chapter:
(a) an offer of securities for subscription or purchase; or
(b) an invitation to subscribe for or buy securities.
412 Subparagraph
707(2)(b)(ii)
Omit “stock market of a securities exchange”, substitute
“relevant financial market”.
413 Subparagraph
707(5)(a)(ii)
Omit “stock market of a securities exchange”, substitute
“relevant financial market on which they were quoted”.
414 Subsection 708(6)
Repeal the subsection.
415 Subsection 708(8) (note
2)
Repeal the note, substitute:
Note 2: A financial services licensee has obligations under
Division 3 of Part 7.7 when providing financial advice. ASIC has a
power under section 915C to suspend or cancel a licensee’s
licence.
416 Paragraph 708(10)(a)
Omit “licensed dealer”, substitute “financial services
licensee”.
417 Paragraph 708(10)(b)
Omit “dealer”, substitute “licensee”.
418 Paragraph 708(10)(c)
Omit “dealer”, substitute “licensee”.
419 Paragraph 708(10)(c)
Omit “dealer’s”, substitute
“licensee’s”.
420 Paragraph 708(10)(d)
Omit “dealer”, substitute “licensee”.
421 Subsection 708(11)
Repeal the subsection, substitute:
Professional investors
(11) An offer of securities does not need disclosure to investors under
this Part if it is made to a professional investor (as defined in
section 9).
422 Paragraph 710(3)(e)
Omit “stockbroker to the issue or sale if they participate in any way
in the preparation of the prospectus”, substitute “a person named in
the prospectus as a financial services licensee involved in the issue or
sale”.
423 Paragraph 711(4)(c)
Repeal the paragraph.
424 Paragraph 711(4)(e)
Repeal the paragraph, substitute:
(e) an underwriter (but not a sub-underwriter) to the issue or sale or a
financial services licensee named in the prospectus as a financial services
licensee involved in the issue or sale.
425 Subsection 711(5)
Repeal the subsection, substitute:
Quotation of securities
(5) If the prospectus for an offer of securities states or implies that
the securities will be able to be traded on a financial market (whether in
Australia or elsewhere), the prospectus must state that:
(a) the securities have been admitted to quotation on that financial
market; or
(b) an application for admission of the securities to quotation on that
financial market has been made to the operator of that market; or
(c) an application for admission of the securities to quotation on that
financial market will be made to the operator of that market within 7 days after
the date of the prospectus.
Note 1: Paragraph 724(1)(b) gives times within which the
person should seek and obtain admission to quotation.
Note 2: Subsection 716(1) requires the prospectus to be
dated.
426 Subsection 723(3)
Omit “stock market of a securities exchange”, substitute
“financial market”.
427 Section 726
Repeal the section, substitute:
A person must not offer securities of a body that has not been formed or
does not exist if the offer would need disclosure to investors under
Part 6D.2 if the body did exist. This is so even if it is proposed to form
or incorporate the body.
428 Paragraph 734(7)(a)
Omit “securities exchange”, substitute “market
operator”.
429 Subparagraph
1274(2)(a)(ia)
Repeal the subparagraph, substitute:
(ia) a document lodged under a provision of Chapter 7 (other than
section 675 or subsection 792C(1)); or
430 Subsection 1308(8)
Omit “a securities licence or futures licence”, substitute
“an Australian CS facility licence, Australian financial services licence,
Australian market licence or an application to become a declared professional
body under section 918A”.
431 Paragraph 1309(1)(c)
Repeal the paragraph, substitute:
(c) an operator of a financial market (whether the market is operated in
Australia or elsewhere) or an officer of such a market;
432 Paragraph 1309(2)(c)
Repeal the paragraph, substitute:
(c) an operator of a financial market (whether the market is operated in
Australia or elsewhere) or an officer of such a market;
433 Subsection 1309(5)
Repeal the subsection.
434 After paragraph
1311(1A)(d)
Insert:
(da) Chapter 6CA;
(db) Chapter 7;
435 After paragraph
1317C(gc)
Insert:
(gd) a decision of the Minister under Division 1 of Part 7.4;
or
(ge) a decision of ASIC under section 1101A; or
436 Before
section 1317E
Insert in Part 9.4B:
In this Act:
corporation/scheme civil penalty provision means a provision
referred to in subsection 1317E(1), other than a financial services civil
penalty provision.
financial services civil penalty provision means a
provision referred to in any of paragraphs 1317E(1)(jb) to (jg).
437 Before paragraph
1317E(1)(k)
Insert:
(jb) section 1041A (market manipulation);
(jc) subsection 1041B(1) (false trading and market
rigging—creating a false or misleading appearance of active trading
etc.);
(jd) subsection 1041C(1) (false trading and market
rigging—artificially maintaining etc. market price);
(je) section 1041D (dissemination of information about illegal
transactions);
(jf) subsection 1043A(1) (insider trading);
(jg) subsection 1043A(2) (insider trading);
438 Subsection 1317E(1)
(note)
After “or”, insert “(in the case of a corporation/scheme
civil penalty provision)”.
439 Paragraph 1317E(2)(e)
Before “the corporation”, insert “if the contravention is
of a corporation/scheme civil penalty provision—”.
440 After paragraph
1317G(1)(a)
Insert:
(aa) the contravention is of a corporation/scheme civil penalty provision;
and
Note: The following heading to subsection 1317G(1) is
inserted “Corporation/scheme civil penalty
provisions”.
441 After subsection
1317G(1)
Insert:
Financial services civil penalty provisions
(1A) A Court may order a person to pay the Commonwealth a pecuniary
penalty of up to $200,000 if:
(a) a declaration of contravention by the person has been made under
section 1317E; and
(b) the contravention is of a financial services civil penalty provision;
and
(c) the contravention:
(i) materially prejudices the interests of acquirers or disposers of the
relevant financial products; or
(ii) materially prejudices the issuer of the relevant financial products
or, if the issuer is a corporation or scheme, the members of that corporation or
scheme; or
(iii) is serious.
Note: The following heading to subsection 1317G(1) is
inserted “Penalty a civil debt etc.”.
442 Paragraph 1317H(1)(a)
After “contravened a”, insert
“corporation/scheme”.
Note: The heading to section 1317H is altered by adding
at the end “—corporation/scheme civil penalty
provisions”.
443 After
section 1317H
Insert:
Compensation for damage suffered
(1) A Court may order a person (the liable person) to
compensate another person (including a corporation), or a registered scheme, for
damage suffered by the person or scheme if:
(a) the liable person has contravened a financial services civil penalty
provision; and
(b) the damage resulted from the contravention.
The order must specify the amount of compensation.
Damage includes profits
(2) In determining the damage suffered by a person or scheme for the
purposes of making a compensation order, include profits made by any person
resulting from the contravention.
Damage to scheme includes diminution of value of scheme
property
(3) In determining the damage suffered by a registered scheme for the
purposes of making a compensation order, include any diminution in the value of
the property of the scheme.
(4) If the responsible entity for a registered scheme is ordered to
compensate the scheme, the responsible entity must transfer the amount of the
compensation to the scheme property. If anyone else is ordered to compensate the
scheme, the responsible entity may recover the compensation on behalf of the
scheme.
Recovery of damage
(5) A compensation order may be enforced as if it were a judgment of the
Court.
444 After subsection
1317J(3)
Insert:
Compensation order relating to financial services civil penalty
provision—any other person who suffers damage may apply
(3A) Any other person who suffers damage in relation to a contravention,
or alleged contravention, of a financial services civil penalty provision may
apply for a compensation order under section 1317HA.
445 At the end of
section 1317P
Add:
; or (e) an order has been made against the person by ASIC under
section 920A (banning orders) or by the Court under section 921A
(disqualification by Court).
446 Subsection 1323(1)
Omit “securities, futures contracts” (wherever occurring),
substitute “financial products”.
Note: The heading to section 1323 is altered by
omitting “securities, futures contracts or property”, and
substituting “financial products or other
property”.
447 Paragraph 1323(1)(g)
Omit “securities from” (wherever occurring), substitute
“financial products from”.
448 Section 1324A
Omit “or 6D or Part 7.11”, substitute “, 6CA or 6D
or Part 7.10”.
449 Section 1324B
Omit “or 6D or Part 7.11”, substitute “, 6CA or 6D
or Part 7.10”.
450 Section 1325
Omit “or 6D or Part 7.11” (wherever occurring), substitute
“, 6CA or 6D or Part 7.10”.
451 Paragraph 1325A(2)(b)
Omit “securities are to be quoted on a stock market of a securities
exchange”, substitute “securities will be able to be traded on a
financial market”.
452 Subparagraph
1325B(1)(b)(ii)
Omit “securities exchange”, substitute “market
operator”.
453 Paragraphs 1364(2)(n), (p), (q) and
(r)
Repeal the paragraphs.
454 Paragraph 1364(2)(w)
Omit “$1,000”, substitute “50 penalty
units”.
455 Section 1368
Omit “, 7 or 8”, (wherever occurring), substitute “or
7”.
Note: The heading to section 1368 is altered by
omitting “, 7 or 8” and substituting “or
7”.
456 Schedule 2
Repeal the Schedule.
457 Schedule 3 (table items 246 to
331)
Repeal the items, substitute:
|
246A |
Subsection 791A(1) |
500 penalty units or imprisonment for 5 years, or both. |
|
246B |
Subsection 791B(1) |
500 penalty units or imprisonment for 5 years, or both. |
|
246C |
Subsection 792B(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
247A |
Subsection 792B(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
247B |
Subsection 792B(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
247C |
Subsection 792B(4) |
100 penalty units or imprisonment for 2 years, or both. |
|
248A |
Subsection 792B(5) |
100 penalty units or imprisonment for 2 years, or both. |
|
248B |
Subsection 792C(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
248C |
Subsection 792D(1) |
25 penalty units or imprisonment for 6 months, or both. |
|
249A |
Section 792E |
100 penalty units or imprisonment for 2 years, or both. |
|
249B |
Subsection 792F(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
249C |
Subsection 792F(2) |
50 penalty units. |
|
250A |
Subsection 792F(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
250B |
Subsection 792G(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
250C |
Subsection 792G(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
250D |
Section 792I |
50 penalty units. |
|
251A |
Subsection 793D(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
251B |
Subsection 794B(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
251C |
Subsection 794D(3) |
100 penalty units for each day, or part of a day, in respect of which the
offence is committed. |
|
252A |
Subsection 794E(2) |
100 penalty units for each day, or part of a day, in respect of which the
offence is committed. |
|
252B |
Subsection 798C(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
252C |
Subsection 798C(6) |
100 penalty units or imprisonment for 2 years, or both. |
|
253A |
Subsection 798D(4) |
100 penalty units or imprisonment for 2 years, or both. |
|
253B |
Subsection 820A(1) |
500 penalty units or imprisonment for 5 years, or both. |
|
253C |
Subsection 820B(1) |
500 penalty units or imprisonment for 5 years, or both. |
|
254A |
Subsection 821B(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
254B |
Subsection 821B(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
254C |
Subsection 821B(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
255A |
Subsection 821B(4) |
100 penalty units or imprisonment for 2 years, or both. |
|
255B |
Subsection 821C(1) |
25 penalty units or imprisonment for 6 months, or both. |
|
255C |
Section 821D |
25 penalty units or imprisonment for 6 months, or both. |
|
256A |
Subsection 821E(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
256B |
Subsection 821E(2) |
50 penalty units. |
|
256C |
Subsection 821E(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
257A |
Subsection 822D(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
257B |
Subsection 823B(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
257C |
Subsection 823D(5) |
100 penalty units for each day, or part of a day, in respect of which the
offence is committed. |
|
257D |
Subsection 823E(3) |
100 penalty units for each day, or part of a day, in respect of which the
offence is committed. |
|
258A |
Section 850C |
400 penalty units or imprisonment for 4 years, or both. |
|
258B |
Subsection 851D(8) |
100 penalty units or imprisonment for 2 years, or both. |
|
258C |
Subsection 852B(2) |
400 penalty units or imprisonment for 4 years, or both. |
|
259A |
Subsection 853F(1) |
500 penalty units or imprisonment for 5 years, or both. |
|
259B |
Subsection 853F(2) |
500 penalty units or imprisonment for 5 years, or both. |
|
259C |
Subsection 854A(5) |
100 penalty units or imprisonment for 2 years, or both. |
|
260A |
Subsection 892B(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
260B |
Subsection 892B(4) |
200 penalty units or imprisonment for 5 years, or both. |
|
260C |
Subsection 892H(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
261A |
Subsection 892H(2) |
200 penalty units or imprisonment for 5 years, or both. |
|
261B |
Subsection 892H(3) |
200 penalty units or imprisonment for 5 years, or both. |
|
261C |
Subsection 892H(6) |
50 penalty units or imprisonment for 1 year, or both. |
|
262A |
Subsection 892H(7) |
50 penalty units or imprisonment for 1 year, or both. |
|
262B |
Subsection 892K(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
262C |
Subsection 911A(1) |
200 penalty units or imprisonment for 2 years, or both. |
|
263A |
Subsection 911B(1) |
200 penalty units or imprisonment for 2 years, or both. |
|
263B |
Section 911C |
50 penalty units or imprisonment for 1 year, or both. |
|
263C |
Subsection 912C(3) |
25 penalty units or imprisonment for 6 months, or both. |
|
264A |
Subsection 912D(1) |
50 penalty units or imprisonment for 1 year, or both. |
|
264B |
Subsection 912D(2) |
50 penalty units or imprisonment for 1 year, or both. |
|
264C |
Subsection 912E(1) |
25 penalty units or imprisonment for 6 months, or both. |
|
265A |
Subsection 912F(1) |
10 penalty units. |
|
265B |
Subsection 916F(1) |
25 penalty units or imprisonment for 6 months, or both. |
|
265C |
Subsection 916F(3) |
25 penalty units or imprisonment for 6 months, or both. |
|
266A |
Subsection 916G(2) |
50 penalty units or imprisonment for 1 year, or both. |
|
266B |
Subsection 916G(3) |
50 penalty units or imprisonment for 1 year, or both. |
|
266C |
Subsection 919B(4) |
25 penalty units or imprisonment for 6 months, or both. |
|
267A |
Subsection 919C(1) |
50 penalty units or imprisonment for 1 year, or both. |
|
267B |
Subsection 919C(2) |
50 penalty units or imprisonment for 1 year, or both. |
|
267C |
Subsection 919C(3) |
50 penalty units or imprisonment for 1 year, or both. |
|
268A |
Section 919D |
25 penalty units or imprisonment for 6 months, or both. |
|
268B |
Subsection 920C(2) |
25 penalty units or imprisonment for 6 months, or both. |
|
268C |
Subsection 923A(1) |
10 penalty units for each day, or part of a day, in respect of which the
offence is committed. |
|
269A |
Subsection 923B(1) |
10 penalty units for each day, or part of a day, in respect of which the
offence is committed. |
|
269B |
Section 942E |
100 penalty units or imprisonment for 2 years, or both. |
|
269C |
Section 943F |
100 penalty units or imprisonment for 2 years, or both. |
|
270A |
Subsection 945A(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
270B |
Subsection 945A(3) |
200 penalty units or imprisonment for 5 years, or both. |
|
270C |
Subsection 945B(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
271A |
Subsection 946B(4) |
50 penalty units or imprisonment for 1 year, or both. |
|
271B |
Subsection 949A(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
271C |
Subsection 949A(5) |
200 penalty units or imprisonment for 5 years, or both. |
|
272A |
Subsection 949B(2) |
50 penalty units or imprisonment for 1 year, or both. |
|
272B |
Subsection 949B(4) |
50 penalty units or imprisonment for 1 year, or both. |
|
272C |
Section 950B |
200 penalty units or imprisonment for 5 years, or both. |
|
273A |
Subsection 950C(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
273B |
Subsection 952C(1) |
50 penalty units. |
|
273C |
Subsection 952C(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
274A |
Subsection 952D(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
274B |
Subsection 952D(2) |
200 penalty units or imprisonment for 5 years, or both. |
|
274C |
Subsection 952E(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
275A |
Subsection 952E(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
275B |
Subsection 952F(2) |
200 penalty units or imprisonment for 5 years, or both. |
|
275C |
Subsection 952F(3) |
200 penalty units or imprisonment for 5 years, or both. |
|
276A |
Subsection 952F(4) |
200 penalty units or imprisonment for 5 years, or both. |
|
276B |
Subsection 952G(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
276C |
Subsection 952G(4) |
100 penalty units or imprisonment for 2 years, or both. |
|
277A |
Subsection 952G(6) |
100 penalty units or imprisonment for 2 years, or both. |
|
277B |
Section 952H |
200 penalty units or imprisonment for 5 years, or both. |
|
277C |
Subsection 952I(1) |
10 penalty units. |
|
278A |
Subsection 952I(2) |
10 penalty units. |
|
278B |
Subsection 952I(3) |
10 penalty units. |
|
278C |
Subsection 952I(4) |
10 penalty units. |
|
279A |
Subsection 952J(1) |
10 penalty units. |
|
279B |
Section 952K |
200 penalty units or imprisonment for 5 years, or both. |
|
279C |
Subsection 952L(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
280A |
Subsection 952L(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
280B |
Subsection 952L(3) |
200 penalty units or imprisonment for 5 years, or both. |
|
280C |
Section 952M |
200 penalty units or imprisonment for 5 years, or both. |
|
281A |
Subsection 982C(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
281B |
Subsection 982C(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
281C |
Section 982D |
25 penalty units or imprisonment for 6 months, or both. |
|
282A |
Section 983C |
25 penalty units or imprisonment for 6 months, or both. |
|
282B |
Subsection 984B(1) |
(a) if the offence relates only to a contravention of requirements referred
to in paragraph 984B(1)(a)—50 penalty units; (b) otherwise—100 penalty units or imprisonment for 2 years, or
both. |
|
282C |
Subsection 988A(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
283A |
Subsection 989B(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
283B |
Subsection 989B(2) |
200 penalty units or imprisonment for 5 years, or both. |
|
283C |
Subsection 989B(3) |
200 penalty units or imprisonment for 5 years, or both. |
|
284A |
Subsection 990B(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
284B |
Subsection 990B(2) |
200 penalty units or imprisonment for 5 years, or both. |
|
284C |
Subsection 990B(6) |
25 penalty units or imprisonment for 6 months, or both. |
|
285A |
Subsection 990D(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
285B |
Subsection 990D(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
285C |
Paragraph 990F(a) |
100 penalty units or imprisonment for 2 years, or both. |
|
286A |
Subsection 990I(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
286B |
Subsection 990K(1) |
50 penalty units or imprisonment for 1 year, or both. |
|
286C |
Subsection 991B(2) |
25 penalty units or imprisonment for 6 months, or both. |
|
287A |
Subsection 991E(1) |
25 penalty units or imprisonment for 6 months, or both. |
|
287B |
Subsection 991E(3) |
25 penalty units or imprisonment for 6 months, or both. |
|
287C |
Subsection 991F(1) |
25 penalty units or imprisonment for 6 months, or both. |
|
288A |
Subsection 991F(2) |
25 penalty units or imprisonment for 6 months, or both. |
|
288B |
Subsection 991F(3) |
25 penalty units or imprisonment for 6 months, or both. |
|
288C |
Subsection 992A(1) |
25 penalty units or imprisonment for 6 months, or both. |
|
289A |
Subsection 993B(1) |
50 penalty units. |
|
289B |
Subsection 993B(3) |
200 penalty units or imprisonment for 5 years, or both. |
|
289C |
Subsection 993C(1) |
50 penalty units. |
|
290A |
Subsection 993C(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
290B |
Subsection 993D(1) |
50 penalty units. |
|
290C |
Subsection 993D(3) |
200 penalty units or imprisonment for 5 years, or both. |
|
291A |
Subsection 1012H(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
291B |
Subsection 1013I(4) |
100 penalty units or imprisonment for 2 years, or both. |
|
291C |
Subsection 1013K(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
292A |
Subsection 1013K(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
292B |
Subsection 1015B(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
292C |
Subsection 1015D(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
293A |
Subsection 1015D(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
293B |
Subsection 1015D(4) |
100 penalty units or imprisonment for 2 years, or both. |
|
293C |
Subsection 1015E(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
294A |
Subsection 1016A(2) |
200 penalty units or imprisonment for 5 years, or both. |
|
294B |
Subsection 1016A(3) |
200 penalty units or imprisonment for 5 years, or both. |
|
294C |
Subsection 1016B(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
295A |
Section 1016C |
100 penalty units or imprisonment for 2 years, or both. |
|
295B |
Subsection 1016D(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
295C |
Paragraph 1016D(2)(d) |
100 penalty units or imprisonment for 2 years, or both. |
|
296A |
Subsection 1016E(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
296B |
Subsection 1017B(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
296C |
Subsection 1017C(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
297A |
Subsection 1017C(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
297B |
Subsection 1017C(5) |
100 penalty units or imprisonment for 2 years, or both. |
|
297C |
Subsection 1017D(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
298A |
Subsection 1017E(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
298B |
Subsection 1017E(4) |
100 penalty units or imprisonment for 2 years, or both. |
|
298C |
Subsection 1017F(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
299A |
Section 1017G |
100 penalty units or imprisonment for 2 years, or both. |
|
299B |
Subsection 1018A(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
299C |
Subsection 1018A(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
300A |
Subsection 1018B(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
300B |
Subsection 1020A(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
300C |
Subsection 1020B(2) |
(a) for a first offence—25 penalty units or imprisonment for 6
months, or both; (b) for a further offence—100 penalty units or imprisonment for 2
years, or both. |
|
301A |
Subsection 1020B(5) |
25 penalty units or imprisonment for 6 months, or both. |
|
301B |
Subsection 1020B(6) |
25 penalty units or imprisonment for 6 months, or both. |
|
301C |
Subsection 1020C(5) |
10 penalty units for each day during all or part of which the contravention
continues. |
|
302A |
Subsection 1020E(8) |
100 penalty units or imprisonment for 2 years, or both. |
|
302B |
Subsection 1020E(9) |
100 penalty units or imprisonment for 2 years, or both. |
|
302C |
Subsection 1021C(1) |
50 penalty units. |
|
303A |
Subsection 1021C(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
303B |
Subsection 1021D(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
303C |
Subsection 1021D(2) |
200 penalty units or imprisonment for 5 years, or both. |
|
304A |
Subsection 1021E(1) |
100 penalty units or imprisonment for 2 years, or both. |
|
304B |
Subsection 1021E(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
304C |
Subsection 1021F(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
305A |
Section 1021G |
200 penalty units or imprisonment for 5 years, or both. |
|
305B |
Subsection 1021H(1) |
10 penalty units. |
|
305C |
Subsection 1021I(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
306A |
Subsection 1021J(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
306B |
Subsection 1021J(2) |
100 penalty units or imprisonment for 2 years, or both. |
|
306C |
Subsection 1021J(3) |
100 penalty units or imprisonment for 2 years, or both. |
|
307A |
Subsection 1021K(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
307B |
Subsection 1021L(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
307C |
Subsection 1021L(2) |
200 penalty units or imprisonment for 5 years, or both. |
|
308A |
Section 1021N |
100 penalty units or imprisonment for 2 years, or both. |
|
308B |
Subsection 1021O(3) |
200 penalty units or imprisonment for 5 years, or both. |
|
308C |
Subsection 1021O(1) |
50 penalty units or imprisonment for 6 months, or both. |
|
309A |
Subsection 1021O(3) |
200 penalty units or imprisonment for 5 years, or both. |
|
309B |
Section 1041A |
200 penalty units or imprisonment for 5 years, or both. |
|
309C |
Subsection 1041B(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
310A |
Subsection 1041C(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
310B |
Section 1041D |
200 penalty units or imprisonment for 5 years, or both. |
|
310C |
Section 1041E |
200 penalty units or imprisonment for 5 years, or both. |
|
311A |
Subsection 1041F(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
311B |
Subsection 1041G(1) |
200 penalty units or imprisonment for 5 years, or both. |
|
311C |
Subsection 1043A(1) |
2,000 penalty units or imprisonment for 5 years, or both. |
|
312A |
Subsection 1043A(2) |
|
|
Subsection 1070B(1) |
10 penalty units. |
|
|
312C |
Subsection 1070C(1) |
10 penalty units. |
|
313A |
Subsection 1070D(3) |
10 penalty units. |
|
313B |
Subsection 1071B(2) |
10 penalty units. |
|
313C |
Section 1071E |
10 penalty units. |
|
314A |
Subsection 1072E(11) |
10 penalty units. |
|
314B |
Subsection 1072H(1) |
10 penalty units. |
|
314C |
Subsection 1072H(3) |
10 penalty units. |
|
315A |
Subsection 1072H(4) |
10 penalty units. |
|
315B |
Subsection 1072H(5) |
10 penalty units. |
|
315C |
Subsection 1072H(6) |
10 penalty units. |
|
316A |
Subsection 1101B(10) |
100 penalty units or imprisonment for 2 years, or both. |
|
316B |
Subsection 1101C(1) |
50 penalty units or imprisonment for 12 months, or both. |
|
316C |
Subsection 1101C(2) |
50 penalty units or imprisonment for 12 months, or both. |
|
317A |
Subsection 1101C(3) |
50 penalty units or imprisonment for 12 months, or both. |
|
317B |
Subsection 1101E(1) |
50 penalty units or imprisonment for 12 months, or both. |
|
317C |
Subsection 1101F(1) |
50 penalty units or imprisonment for 12 months, or both. |
|
318A |
Section 1101G |
50 penalty units or imprisonment for 12 months, or both. |
458 Subclause 29(8) of
Schedule 4
Omit “stock market of a securities exchange”, substitute
“prescribed financial market”.
459 Paragraph 32(1)(h) of
Schedule 4
Omit “securities market of a stock exchange”, substitute
“prescribed financial market”.
1 Section 9 (paragraph (a) of the
definition of continuous disclosure notice)
Repeal the paragraph, substitute:
(a) a document used to notify a market operator of information
relating to a body under provisions of the market’s listing rules referred
to in subsection 674(1); or
2 Section 9 (paragraph (b) of the
definition of continuous disclosure notice)
Omit “1001B”, substitute “675”.
3 Section 9
Insert:
listing market, in relation to a listed disclosing entity,
has the meaning given by subsection 111AE(1) or (1A).
4 Section 9 (definition of listing
rules)
Repeal the definition, substitute:
listing rules of a financial market, when used in a provision
outside Chapter 7, has the same meaning as it has in
Chapter 7.
5 Section 9
Insert:
managed investment product, when used in a provision outside
Chapter 7, has the same meaning as it has in Chapter 7.
6 Section 9
Insert:
Product Disclosure Statement, when used in a provision
outside Chapter 7, has the same meaning as it has in
Chapter 7.
7 Section 9
Insert:
Supplementary Product Disclosure Statement, when used in a
provision outside Chapter 7, has the same meaning as it has in
Chapter 7.
8 Subsection 92(3)
Omit “6 to 6D (inclusive)”, substitute “ 6 to 6CA
(inclusive) and Part 1.2A”.
9 Paragraph 111AD(1)(a)
After “111AF,”, insert “111AFA,”.
10 Subsection 111AE(1)
Repeal the subsection, substitute:
(1) If:
(a) a body corporate is, with its agreement, consent or acquiescence,
included in the official list of a prescribed financial market; and
(b) the market’s listing rules (according to their terms) apply to
the body in relation to a class (which may be some or all) of securities issued
by the body;
securities issued by the body in that class are ED
securities, and that market is a listing market in
relation to that body.
(1A) If:
(a) an undertaking to which interests in a registered scheme relates is,
with the agreement, consent or acquiescence of the responsible entity, included
in the official list of a prescribed financial market; and
(b) the market’s listing rules (according to their terms) apply to
the undertaking in relation to a class (which may be some or all) of managed
investment products that relate to the scheme;
managed investment products in that class that relate to the scheme are
ED securities, and that market is a listing market
in relation to the undertaking.
Note: The heading to section 111AE is replaced by the
heading “Securities of body or undertaking that is included in a
licensed market’s official list”.
11 Subsection 111AE(2)
Omit “Subsection (1) does”, substitute
“Subsections (1) and (1A) do”.
12 Paragraph 111AE(2)(b)
Repeal the paragraph, substitute:
(b) the only securities issued by the body that would otherwise be ED
securities because of subsection (1) or (1A) are debentures;
and”.
13 Subsection 111AE(3)
Omit “Subsection (1) does”, substitute
“Subsections (1) and (1A) do”.
14 Section 111AF
After “debentures”, insert “or managed investment
products”.
Note The heading to section 111AF is altered by
inserting “(except debentures and managed investment
products)” after “Securities”.
15 After section 111AF
Insert:
Managed investment products in a class of managed investment products
issued by a body are ED securities if 100 or more people hold
managed investment products in that class as a result of offers that gave rise
to obligations to give Product Disclosure Statements (whether or not all in the
same terms) under Chapter 7.
16 Subsection 111AH(1)
After “111AF”, insert “, 111AFA”.
Note: The heading to section 111AH is altered by
inserting “, 111AFA” after
“111AF”.
17 Subsection 111AH(2)
After “111AF”, insert “, 111AFA”.
18 Subsection 111AP(1)
Omit “1001A and 1001B”, substitute “674 and
675”.
19 Subsections 111AP(2) and
(3)
Repeal the subsections.
20 After section 111AQ
Insert in Division 3 of Part 1.2A:
Obligations that apply to disclosing entities can be taken into account
in deciding what information should be included in a Product Disclosure
Statement—see paragraph 1013F(2)(d).
21 Paragraph 111AR(1)(d)
Omit “1001A and 1001B”, substitute “674 and
675”.
22 Section 256E (table
item 4)
Repeal the item, substitute:
|
4 |
Chapter 6CA |
continuous disclosure provisions Under this Chapter a disclosing entity is required to disclose information
about its securities that is material and not generally available. |
23 Section 257J (table
item 8)
Repeal the item, substitute:
|
8 |
Chapter 6CA |
continuous disclosure provisions Under this Chapter a disclosing entity is required to disclose information
about its securities that is material and not generally available. |
24 After Chapter 6C
Insert:
Obligation to disclose in accordance with listing rules
(1) Subsection (2) applies to a listed disclosing entity if
provisions of the listing rules of a listing market in relation to that entity
require the entity to notify the market operator of information about specified
events or matters as they arise for the purpose of the operator making that
information available to participants in the market.
(2) If:
(a) this subsection applies to a listed disclosing entity; and
(b) the entity has information that those provisions require the entity to
notify to the market operator; and
(c) that information:
(i) is not generally available; and
(ii) is information that a reasonable person would expect, if it were
generally available, to have a material effect on the price or value of ED
securities of the entity;
the entity must notify the market operator of that information in
accordance with those provisions.
Note 1: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Note 2: This subsection is also a civil penalty provision
(see section 1317E). For relief from liability to a civil penalty relating
to this subsection, see section 1317S.
(3) For the purposes of the application of subsection (2) to a listed
disclosing entity that is an undertaking to which interests in a registered
scheme relate, the obligation of the entity to notify the market operator of
information is an obligation of the responsible entity.
(4) Nothing in subsection (2) is intended to affect or limit the
situations in which action can be taken (otherwise than by way of a prosecution
for an offence based on subsection (2)) in respect of a failure to comply
with provisions referred to in subsection (1).
Obligation to make provisions of listing rules available
(5) If the listing rules of a listing market in relation to a listed
disclosing entity contain provisions of a kind referred to in
subsection (1), the market operator must ensure that those provisions are
available, on reasonable terms, to:
(a) the entity; or
(b) if the entity is an undertaking to which interests in a registered
scheme relate—the undertaking’s responsible entity.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) This section applies to:
(a) a listed disclosing entity if:
(i) there is only one listing market in relation to the entity and the
listing rules of that market do not contain provisions of a kind referred to in
subsection 674(1); or
(ii) there is more than one listing market in relation to the entity and
none of those markets have listing rules that contain provisions of a kind
referred to in subsection 674(1); or
(b) an unlisted disclosing entity.
(2) If the disclosing entity becomes aware of information:
(a) that is not generally available; and
(b) that a reasonable person would expect, if it were generally available,
to have a material effect on the price or value of ED securities of the entity;
and
(c) either:
(i) if those securities are not managed investment products—the
information is not required to be included in a supplementary disclosure
document or a replacement disclosure document in relation to the entity;
or
(ii) if those securities are managed investment products—the
information has not been included in a Product Disclosure Statement, or a
Supplementary Product Disclosure Statement, a copy of which has been lodged with
ASIC; and
(d) regulations made for the purposes of this paragraph do not provide
that disclosure under this section is not required in the
circumstances;
the disclosing entity must, as soon as practicable, lodge a document with
ASIC containing the information.
Note 1: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Note 2: This subsection is also a civil penalty provision
(see section 1317E). For relief from liability to a civil penalty relating
to this subsection, see section 1317S.
(3) For the purposes of the application of this section to a disclosing
entity that is an undertaking to which interests in a registered scheme
relate:
(a) the entity is aware of information if, and only if, the responsible
entity is aware of the information; and
(b) the obligation of the entity to lodge a document under
subsection (2) is an obligation of the responsible entity.
(1) This section has effect for the purposes of sections 674 and
675.
(2) Information is generally available if:
(a) it consists of readily observable matter; or
(b) without limiting the generality of paragraph (a), both of the
following subparagraphs apply:
(i) it has been made known in a manner that would, or would be likely to,
bring it to the attention of persons who commonly invest in securities of a kind
whose price or value might be affected by the information; and
(ii) since it was so made known, a reasonable period for it to be
disseminated among such persons has elapsed.
(3) Information is also generally available if it consists of deductions,
conclusions or inferences made or drawn from either or both of the
following:
(a) information referred to in paragraph (2)(a);
(b) information made known as mentioned in
subparagraph (2)(b)(i).
For the purposes of sections 674 and 675, a reasonable person would
be taken to expect information to have a material effect on the price or value
of ED securities of a disclosing entity if the information would, or would be
likely to, influence persons who commonly invest in securities in
deciding whether to acquire or dispose of the ED securities.
The Criminal Code applies to an offence based on subsection
674(2), 674(5) or 675(2).
Note 1: Chapter 2 of the Criminal Code sets out
the general principles of criminal responsibility.
Note 2: For the meaning of offence based on a
provision, see the definition in section 9.
25 Paragraph 713(2)(b)
Repeal the paragraph.
26 Paragraph 713(3)(a)
Omit “or scheme”.
27 Subparagraphs 713(4)(a)(i), (ii) and
(iii)
Omit “or scheme”.
28 Paragraph 713(5)(a)
Omit “listing rules of the securities exchange to which the notice
was given”, substitute “listing rules of the prescribed financial
market whose operator was given the notice”.
29 Subsection 713(6)
Omit “or scheme” (wherever occurring).
30 After paragraph
713(6)(a)
Insert:
(aa) subsection 674(2) or 675(2);
31 Paragraph 713(6)(d)
Repeal the paragraph.
32 Subsection 1274(2A)
Repeal the subsection, substitute:
(2A) For the purposes of subsections (2) and (5), a document given to
ASIC by a market operator (whether or not pursuant to a provision of this Act)
that contains information that the market operator has made available to
participants in the market is taken to be a document lodged with ASIC.
Note: For example, a document given to ASIC for the purposes
of subsection 792C(1) will be covered by this subsection.
33 At the end of subsection
1274(5)
Add:
Note: See also subsection (2A) for when certain
documents are taken to have been lodged with ASIC.
34 After paragraph
1317E(1)(j)
Insert:
(ja) subsection 674(2) or 675(2) (continuous disclosure);
35 Schedule 3 (after table
item 229)
Insert:
|
229A |
Subsection 674(2) |
200 penalty units or imprisonment for 5 years, or both. |
|
229B |
Subsection 674(5) |
100 penalty units or imprisonment for 2 years, or both. |
|
229C |
Subsection 675(2) |
200 penalty units or imprisonment for 5 years, or both. |
Part 1—Technical
and other minor amendments
Australian Securities and
Investments Commission Act 2001
1 Paragraph 1(1)(d)
Omit “Corporations and Securities Panel”, substitute
“Takeovers Panel”.
2 Subsection 5(1) (definition of
Panel)
Omit “Corporations and Securities Panel”, substitute
“Takeovers Panel”.
3 Part 10 (heading)
Repeal the heading, substitute:
4 Subsection 172(1) (at the end of the
note)
Add:
It was renamed by the Financial Services Reform Act
2001.
5 Subsection 6(3)
Repeal the subsection.
6 Section 9 (definition of Advisory
Committee)
Repeal the definition.
7 Section 9 (definition of appropriate
dealer)
Repeal the definition.
8 Section 9 (definition of
associate)
Repeal the definition, substitute:
associate has the meaning given by sections 10 to
17.
9 Section 9 (paragraph (b) of the
definition of continuously quoted securities)
Repeal the paragraph, substitute:
(b) are securities of an entity in relation to which the following
subparagraphs are satisfied:
(i) no exemption under section 111AS or 111AT, or modification under
section 111AV, covered the entity, or any person as director or auditor of
the entity, at any time in that 12 months; and
(ii) no exemption under paragraph 741(1)(a), or declaration under
paragraph 741(1)(b), relating to a provision that is a disclosing entity
provision for the purposes of Division 4 of Part 1.2A covered the
entity, or any person as director or auditor of the entity, at any time
in that 12 months; and
(iii) no order under section 340 or 341 covered the entity, or any
person as director or auditor of the entity, at any time in that 12
months;
10 Section 9 (definition of nominee
corporation)
Repeal the definition.
11 Section 9 (definition of
Panel)
Omit “Corporations and Securities Panel”, substitute
“Takeovers Panel”.
12 Section 9 (definition of qualified
accountant)
Repeal the definition, substitute:
qualified accountant has the meaning given by
section 88B.
13 Section 9 (definition of
subscriber)
Repeal the definition.
14 Section 9 (paragraph (b) of the
definition of substantial holding)
Omit “takeover period”, substitute “bid
period”.
15 Section 12
Repeal the section, substitute:
(1) Despite anything else in this Part (other than subsection 16(1)), for
the purposes of Chapters 6, 6A, 6B and 6C, a person (the first
person) is an associate of another person (the second
person) if, and only if, one or more of the following paragraphs
applies:
(a) the second person is a body corporate and the first person
is:
(i) a body corporate the second person controls; or
(ii) a body corporate that controls the second person; or
(iii) a body corporate that is controlled by an entity that controls the
second person;
(b) the first person is a person with whom the second person has, or
proposes to enter into, a relevant agreement for the purpose of controlling or
influencing the composition of the second person’s board or the conduct of
the second person’s affairs;
(c) the first person is a person with whom the second person is acting, or
proposing to act, in concert in relation to the second person’s
affairs.
(2) If a definition of an expression:
(a) applies for the purposes of any or all of Chapters 6, 6A, 6B and
6C (whether or not it also applies for other purposes); and
(b) the definition uses the word associate;
then, the word associate when used in the definition as so applying has the
meaning given by subsection (1).
Note: So, for example, in the definition of
substantial holding in section 9, the reference to associates
of a person is, in the context of a reference in Chapter 6, 6A, 6B or 6C to
a substantial holding, a reference to persons who are associates as defined in
subsection (1).
16 Section 13
Omit “and relates to a matter that is not of a kind referred to in
paragraph 12(1)(a), (b) or (c)”.
17 After section 88A
Insert:
(1) For the purposes of this Act, a qualified accountant is
a person covered by a declaration in force under subsection (2).
(2) ASIC may, in writing, declare that all members of a specified
professional body, or all persons in a specified class of members of a specified
professional body, are qualified accountants for the purposes of this
Act.
(3) ASIC may, in writing, vary or revoke a declaration made under
subsection (2).
18 Paragraph 111AF(a)
Omit “or”, substitute “and”.
19 Paragraph 111AH(1)(a)
Omit “, 601CZB or 1070”, substitute “or
601CZB”.
20 Subsection 610(2) (note)
Omit “Corporations and Securities Panel”, substitute
“Takeovers Panel”.
21 Subsection 650B(2)
Omit “The person is entitled to receive the improved consideration
immediately, or immediately after the exercise of the
election.”.
22 After subsection 650B(2)
Insert:
(2A) The person is entitled to receive the improved consideration
immediately, subject to the following paragraphs:
(a) if the time for payment of the consideration in accordance with
subsection 620(2) has not yet occurred, the person is not entitled to receive
the improved consideration until that time;
(b) if the person has to make an election before being entitled to the
improved consideration, the person is not entitled to receive the improved
consideration until the later of:
(i) the time when the election is made; and
(ii) the time applicable under paragraph (a).
23 Division 2 of Part 6.10
(heading)
Repeal the heading, substitute:
24 Section 664B
After “and”, insert “, subject to
subsection (2),”.
25 At the end of
section 664B
Add:
(2) The 90% holder may pay different amounts for the securities in the
class acquired if the differences are attributable to either or both of the
following:
(a) the fact that there are differences in the accrued dividend or
distribution entitlements of the securities;
(b) the fact that there are differences in the amounts paid up, or that
remain unpaid, on the securities.
26 Subsections 670C(2) and
(3)
Omit “takeover period”, substitute “bid period or
objection period”.
27 Paragraph 708(13)(a)
Omit “company” (wherever occurring), substitute
“body”.
Note: The heading to section 720 “Consents for
issue offers” is omitted.
Part 2—Telephone
monitoring during takeovers
28 Section 9 (at the end of the definition
of books)
Add:
; but does not include an index or recording made under Subdivision D of
Division 5 of Part 6.5.
29 At the end of Division 5 of
Part 6.5 of Chapter 6
Add:
(1) The bidder or target (the recorder) must make a clear
sound recording of all telephone calls the recorder makes during the bid
period:
(a) to a person (the holder) who holds:
(i) securities in the bid class; or
(ii) if the bid extends to securities that come to be in the bid class due
to the conversion of or exercise of rights attached to other
securities—those other securities;
(b) for the purpose of discussing the takeover bid (whether or not for
some other purpose as well).
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) A person who is involved in a contravention of subsection (1)
contravenes this subsection.
Note 1: Section 79 defines
involved.
Note 2: A contravention of this subsection is an offence
(see subsection 1311(1)).
At the beginning of the telephone call the recorder must notify the
holder that the call is being recorded for the purposes of this Act.
Note: The recorder will commit an offence under the
Telecommunications (Interception) Act 1979 if the recorder fails to
notify the holder.
The recorder must mark the medium in which the recording is stored so as
to identify:
(a) the parties to the conversation; and
(b) the date and time it was made.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
(1) The recorder must create an index (in electronic form or otherwise) of
all recordings made by the recorder in relation to the takeover bid.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The index must state in relation to each recording:
(a) the parties to the conversation; and
(b) the time and date the recording was made; and
(c) the exact place where the recording is being stored; and
(d) any other matter required by the regulations to be stated in the
index.
(3) The following (the recording custodian) must maintain
the index:
(a) if paragraph (b) or (c) does not apply—the
recorder;
(b) if the recorder has been wound up—each person who was a director
of the recorder immediately before it was wound up;
(c) any other person who is required by the regulations to do
so.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Index
(1) If the recording custodian has a registered office, the custodian must
keep the index at that office.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The recording custodian must securely keep the index in a manner that
protects it from:
(a) misuse and loss; and
(b) unauthorised access, modification and disclosure.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) The recording custodian must keep the index in the way prescribed by
regulations made for the purposes of this subsection.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Recording
(4) The recording custodian must store the recording at the place
specified in the index.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(5) To avoid doubt, the recording custodian may change the place where the
recording is stored.
Note: If the recording custodian changes the place where the
recording is stored, the custodian must update the index under section 648M
to state the new storage place of the recording.
(6) The recording custodian must securely store the recording in a manner
that protects it from:
(a) misuse, loss and modification; and
(b) unauthorised access and disclosure.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(7) The recording custodian must store the recording in the way prescribed
by regulations made for the purposes of this subsection.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(1) The recording custodian must keep the index and recording for 12
months after the end of the bid period or such longer period as is determined by
ASIC in writing.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) ASIC must notify the recording custodian in writing of a determination
it makes under subsection (1).
(3) The recording custodian must destroy the index and recording on the
day after the last day they are required to be kept under
subsection (1).
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Index
(1) The recording custodian must not use, or disclose the contents of, the
entries in the index if it is not necessary to do so for the purpose of ensuring
compliance with the Corporations legislation.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The recording custodian must not allow another person to look at the
entries in the index if subsection (3) does not require the custodian to do
so.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(3) The recording custodian must, for the purpose of ensuring compliance
with the Corporations legislation, allow:
(a) if the recording custodian is not the recorder—the recorder, or
a person authorised in writing by the recorder, to look at the entries in the
index; and
(b) the holder who was party to the telephone call, or a person authorised
in writing by the holder, to look at the entry in the index that relates to the
recording of the call; and
(c) if Division 3 of Part 3 of the Australian Securities and
Investments Commission Act 2001 requires the custodian to allow ASIC to see
the entries in the index—ASIC; and
(d) if the court has made an order (including an order to produce the
index in court) requiring the custodian to allow a person or persons to see the
entries in the index, or a specific entry in the index—that person or
those persons to look at the entries or the specific entry.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) A person who has looked at an entry in the index must not use, or
disclose the contents of, the entry if it is not necessary to do so for the
purpose of ensuring compliance with the Corporations legislation.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(5) The recording custodian must not give possession of the index to
another person if:
(a) the court does not order the custodian to do so; and
(b) Division 3 of Part 3 of the Australian Securities and
Investments Commission Act 2001 does not require the custodian to do
so.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Recording
(6) The recording custodian must not use, or disclose the contents of, the
recording if it is not necessary to do so for the purpose of ensuring compliance
with the Corporations legislation.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(7) The recording custodian must not allow another person to listen to the
recording if subsection (8) does not require the custodian to do
so.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(8) The recording custodian must, for the purpose of ensuring compliance
with the Corporations legislation, allow the following persons to listen to the
recording:
(a) if the recording custodian is not the recorder—the recorder, or
a person authorised in writing by the recorder;
(b) the holder who was party to the telephone call, or a person authorised
in writing by the holder;
(c) if Division 3 of Part 3 of the Australian Securities and
Investments Commission Act 2001 requires the custodian to allow ASIC to
listen to the recording—ASIC;
(d) if the court has made an order (including an order to produce the
recording in court) requiring the custodian to allow a person or persons to
listen to the recording—that person or those persons.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(9) A person who has listened to the recording must not use, or disclose
the contents of, the recording if it is not necessary to do so for the purpose
of ensuring compliance with the Corporations legislation.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(10) The recording custodian must not give possession of the recording to
another person if:
(a) the court does not order the custodian to do so; and
(b) Division 3 of Part 3 of the Australian Securities and
Investments Commission Act 2001 does not require the custodian to do
so.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Regulations
(11) The regulations may prescribe the way in which the recording
custodian is to allow a person to access the index or recording under this
section, and may allow the custodian to require a person to pay a reasonable fee
for such access.
Court powers
(12) The court may make an order requiring the recording
custodian:
(a) to allow a person to look at the entries, or a specific entry, in the
index; or
(b) to allow a person to listen to the recording; or
(c) to require the custodian to produce the index or recording in court;
or
(d) to require the custodian to give possession of the index or recording
to another person.
(1) A person must not make a copy of an entry in the index or the
recording if the person is not authorised to do so under Division 3 of
Part 3 of the Australian Securities and Investments Commission Act
2001.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The recording custodian must not allow a person to make a copy of an
entry in the index or the recording if the person is not authorised to do so
under Division 3 of Part 3 of the Australian Securities and
Investments Commission Act 2001.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Index
(1) A person must not alter or interfere with the index other than for the
purpose of maintaining it under section 648M.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(2) The recording custodian must not allow a person to alter or interfere
with the index other than for the purpose of maintaining it under
section 648M.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
Recording
(3) A person must not alter or interfere with the recording.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
(4) The recording custodian must not allow a person to alter or interfere
with the recording.
Note: Failure to comply with this subsection is an offence
(see subsection 1311(1)).
The index and recording is a book for the purposes of
Division 3 of Part 3, and section 67, of the Australian
Securities and Investments Commission Act 2001.
The Criminal Code applies to all offences based on the provisions
of this Subdivision.
Note 1: Chapter 2 of the Criminal Code sets out
the general principles of criminal responsibility.
Note 2: For the meaning of offence based on a
provision, see the definition in section 9.
30 Schedule 3 (after table
item 201)
Insert:
|
201A |
Subsections 648J(1) and (2) |
50 penalty units or imprisonment for 6 months, or both. |
|
201B |
Section 648L |
50 penalty units. |
|
201C |
Subsections 648M(1) and (3) |
50 penalty units. |
|
201D |
Subsection 648N(1) |
50 penalty units. |
|
201E |
Subsection 648N(2) |
50 penalty units or imprisonment for 6 months, or both. |
|
201F |
Subsections 648N(3) and (4) |
50 penalty units. |
|
201G |
Subsection 648N(6) |
50 penalty units or imprisonment for 6 months, or both. |
|
201H |
Subsection 648N(7) |
50 penalty units. |
|
201J |
Subsections 648P(1) and (3) |
50 penalty units. |
|
201K |
Subsections 648Q(1), (2), (3), (4), (5), (6), (7), (8), (9) and
(10) |
50 penalty units. |
|
201L |
Subsections 648R(1) and (2) |
50 penalty units or imprisonment for 6 months, or both. |
|
201M |
Subsections 648S(1), (2), (3) and (4) |
100 penalty units or imprisonment for 2 years, or both. |