Commonwealth of Australia Explanatory Memoranda

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FINANCIAL SECTOR LEGISLATION AMENDMENT BILL (NO. 2) 2002

2002 — 2003

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

SENATE

FINANCIAL SECTOR LEGISLATION AMENDMENT
BILL (NO. 2) 2002

SUPPLEMENTARY EXPLANATORY MEMORANDUM

(Circulated by authority of the Treasurer,
the Hon Peter Costello, MP)

Table of Contents

1
Outline

1.1 These amendments are to the Financial Sector Legislation Amendment Bill (No. 2) 2002. In particular to the Banking Act, the Corporations Act and the SRC Act.

1.2 The amendments are mostly minor or technical in nature.

1.3 The amendment to the Banking Act will clarify aspects of the implementation of the fit and proper test to be applied by APRA.

1.4 The amendment to the Corporations Act deletes an item, which has been superseded by other amendments to the Corporations Act.

1.5 The amendment to the SRC Act increases the time limit applying to disability benefit complaints from one to two years.

2
Abbreviations

2.1 The following abbreviations are used in this supplementary explanatory memorandum.

3
Financial Impact Statement

3.1 The proposed amendments have no financial impact.

4
Notes on amendments

Schedule 2 — Amendment of the Banking Act

Amendment 1 — new section 21

4.1 This amendment will assist the implementation of aspects of the fit and proper test which is being introduced into the Banking Act.

4.2 The effect of the amendment is to insert new subsections (1A) and (1B) into the new section 21, to clarify that when APRA is making an assessment as to whether to disqualify a director, senior manager or auditor of an ADI in terms of their fitness and propriety, it may take into account any of the criteria which will be listed in the Banking Regulations, or any other matters which it considers relevant. APRA will have, consistent with the need to make assessments considering the varying circumstances applicable to affected persons, discretion as to which criteria or matters it will take into account when making an assessment as to fitness and propriety.

5
Schedule 3 — Amendment of the Corporations Act

Amendment 2 — subsection 345(4)

5.1 This is a technical amendment to delete item 32 in Schedule 3 of the Bill, which sought to amend subsection 345(4) of Part 2N of the Corporations Act.

5.2 Subsection 345(4) in Part 2N.2 of the Corporations Act stated that a company’s obligation to submit certain notices ceased on the lodgment of their annual return, as long as the annual return covered the information required by the notice. Part 2N.1 was repealed and replaced by a new Chapter 2N as part of the Corporations Legislation Amendment Act 2003 (item 30 of Schedule 1), which came into effect on 1 July 2003. The new Chapter 2N deals with new information compliance requirements for companies and registered schemes.

6
Schedule 7 — Amendment of the SRC Act

Amendment 3 — subsections 14(6A)(6B)

6.1 This amendment deletes items 10 to 12 inclusive of Schedule 7 of the Bill, which deal with discretion, and replaces them with a new amendment to subsections 14(6A) and 14(6B) of the SRC Act.

6.2 The amendment will increase the time limit that applies to disability benefit complaints from one year to two years. This will allow greater certainty than the amendment currently in Schedule 7, which would confer on the Tribunal the discretion to waive the time limit under certain circumstances. An extension of the time limit is required to reflect the fact that the internal review process can take longer than the time currently allowed, particularly if numerous medical assessments are required.

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