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2016-2017-2018
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TREASURY LAWS AMENDMENT (ASIC GOVERNANCE) BILL 2018
EXPLANATORY MEMORANDUM
(Circulated by authority of the
Minister for Revenue and Financial Services, Minister for Women and Minister
Assisting the Prime Minister for the Public Service, the Hon Kelly O'Dwyer MP)
Table of contents
Glossary................................................................................................. 1
General outline and financial impact ...................................................... 3
Chapter 1 Additional Deputy Chairperson of ASIC ....................... 5
Chapter 2 Statement of Compatibility with Human Rights ............ 9
Glossary
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
Abbreviation Definition
ASIC Australian Securities and Investments
Commission
ASIC Act Australian Securities and Investments
Commission Act 2001
Bill Treasury Laws Amendment (ASIC
Governance) Bill 2018
1
General outline and financial impact
Overview
This Bill amends the ASIC Act to enable the Governor-General to appoint
a second Deputy Chairperson of ASIC.
Date of effect: The amendments apply from the day after the end of the
period of 14 days beginning on the day the Bill receives the Royal Assent.
Proposal announced: No
Financial impact: Nil
Human rights implications: This Bill does not raise any human rights
issues. See Statement of Compatibility with Human Rights -- Chapter 2.
Compliance cost impact: Nil
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Chapter 1
Additional Deputy Chairperson of ASIC
Outline of chapter
1.1 The chapter explains the amendments to the ASIC Act enabling
the Governor-General to appoint a second Deputy Chairperson of ASIC.
Context of amendments
1.2 ASIC enforces and regulates companies, financial services and
credit laws to protect consumers, investors and creditors. ASIC is an
independent Australian Government body, which has regulated financial
markets, securities, futures and corporations since January 1991.
1.3 ASIC is headed by a Commission consisting of between three
and eight members. The terms and conditions of the appointment of
members are set out in the ASIC Act, and members are appointed by the
Governor-General on the nomination of the relevant Minister. Currently,
one member must be appointed Chairperson and another member may be
appointed Deputy Chairperson.
1.4 To fulfil its role, ASIC needs to operate as effectively and
efficiently as possible, and for that it needs strong leadership and internal
governance. Given the breadth of ASIC's responsibilities, it is also crucial
that ASIC's leadership has the right mix of skills, knowledge and
experience.
1.5 Amending the ASIC Act to provide for two Deputy
Chairpersons will assist ASIC in operating as an effective and efficient
regulator. It will provide greater flexibility for the Commission to
determine how it undertakes its oversight and other governance functions.
1.6 Having a second Deputy Chairperson will also support ASIC in
engaging with its stakeholders to better communicate its role, its priorities
and how its resources are allocated.
Summary of new law
1.7 The ASIC Act currently provides that one ASIC member must
be appointed as Chairperson and another member may be appointed a
Deputy Chairperson.
5
Treasury Laws Amendment (ASIC Governance) Bill 2018
1.8 This Bill amends the ASIC Act to give the Governor-General
the discretion to appoint a second ASIC Deputy Chairperson. The
Governor-General's existing discretion to not appoint any Deputy
Chairperson is preserved.
1.9 Consistent with the existing requirements, only a full-time
member of ASIC can be appointed as a Deputy Chairperson of ASIC.
1.10 The Bill also makes amendments to provide operational
certainty to ASIC in the event that a second Deputy Chairperson is
appointed.
Comparison of key features of new law and current law
New law Current law
The Governor-General has the The Governor-General has the
discretion to appoint a maximum of discretion to appoint one full-time
two full-time ASIC members as ASIC member as the Deputy
Deputy Chairpersons. Chairperson.
Detailed explanation of new law
1.11 Schedule 1 of the Bill amends the ASIC Act to provide the
Governor-General with the discretion to appoint a second Deputy
Chairperson of ASIC. [Schedule 1, item 2, subsection 10(3) of the ASIC Act]
1.12 Consistent with the existing requirements, only a full-time
member of ASIC can be appointed as a Deputy Chairperson of ASIC.
[Schedule 1, item 2, subsection 10(2) of the ASIC Act]
1.13 Where the ASIC Chairperson is absent from a meeting and there
are two Deputy Chairpersons present, the Bill provides that the
Chairperson may nominate one of them to preside over the meeting.
Where only one of the Deputy Chairpersons is available, the Bill provides
for that Deputy Chairperson to preside at the meeting. [Schedule 1, item 3,
subsection 106(2) of the ASIC Act]
1.14 Where the Chairperson is absent and there are no Deputy
Chairpersons available for a particular meeting, the Bill preserves the
existing requirement for the members present to decide which of them
should preside over the meeting. [Schedule 1, item 3, subsection 106(3) of the
ASIC Act]
1.15 Existing section 118 of the ASIC Act, which allows for the
Minister to appoint an ASIC member to act as Deputy Chairperson, is
amended to make it clear that the Minister can appoint an ASIC member
to act as a Deputy Chairperson when:
6
Additional Deputy Chairperson of ASIC
• there are fewer than two persons appointed as a Deputy
Chairperson; or
• a Deputy Chairperson is absent or acting as the Chairperson.
[Schedule 1, item 8, section 118 of the ASIC Act]
1.16 The amendment to section 118 ensures that there is flexibility to
have an acting Deputy Chairperson when the position is vacant.
Consequential amendments
1.17 As a result of the amendments to provide for ASIC to have two
Deputy Chairpersons, a number of references to 'the Deputy Chairperson'
have been replaced with a reference to 'a Deputy Chairperson' so that the
provisions continue to operate when a second Deputy Chairperson is
appointed. The provisions amended in this way include:
• subsection 5(1) which provides for the definition of 'Deputy
Chairperson'; [Schedule 1, item 1, subsection 5(1) of the ASIC Act]
• section 109 which provides for the term of office for the
Chairperson and a Deputy Chairperson; [Schedule 1,
items 4 and 5, subsection 109(1) of the ASIC Act]
• section 110 which provides for the resignation of the
Chairperson or a Deputy Chairperson; and [Schedule 1, item 6,
section 110 of the ASIC Act]
• section 116 which provides for appointing an acting member.
[Schedule 1, item 7, paragraph 116(1)(c) of the ASIC Act]
1.18 Existing subsection 35(1) of the Foreign Evidence Act 1994 is
also amended to replace the reference to 'the Deputy Chairperson' with 'a
Deputy Chairperson' so that the provision continues to operate when a
second Deputy Chairperson is appointed. [Schedule 1, item 10, subsection 35(1)
of the Foreign Evidence Act 1994]
Application and transitional provisions
1.19 The amendments apply from the day after the end of the period
of 14 days beginning on the day the Bill receives Royal Assent. [Clause 2]
1.20 A transitional provision provides that the amendments in the Bill
do not affect any appointments applying immediately before the
commencement of the Bill. This ensures that these arrangements are not
disturbed until they are subsequently modified, terminated or cease to
apply. [Schedule 1, item 9, section 315 of the ASIC Act]
7
Chapter 2
Statement of Compatibility with Human
Rights
Prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011
Treasury Laws Amendment (ASIC Governance) Bill 2018
2.1 This Bill is compatible with the human rights and freedoms
recognised or declared in the international instruments listed in section 3
of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
2.2 This Bill provides for the Governor-General to appoint a second
Deputy Chairperson of ASIC.
Human rights implications
2.3 This Bill does not engage any of the applicable rights or
freedoms.
Conclusion
2.4 This Bill is compatible with human rights as it does not raise any
human rights issues.
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