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Financial Services Reform Bill 2001

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1998-1999-2000-2001

 

The Parliament of the

Commonwealth of Australia

 

HOUSE OF REPRESENTATIVES

 

Financial Services Reform Bill 2001

 

 

(1)     Schedule 1, item 1, page 7 (after line 18), after the definition of certificate cancellation provisions , insert:

class , in relation to financial products or financial services, has a meaning affected by regulations made for the purposes of section 761CA.

[Chapter 7—meaning of “class” and “kind”]

(2)     Schedule 1, item 1, page 8 (after line 12), after the definition of financial product advice , insert:

financial product advice law means:

                     (a)  a provision of Chapter 7 that covers conduct relating to the provision of financial product advice (whether or not it also covers other conduct), but only in so far as it covers conduct relating to the provision of financial product advice; or

                     (b)  a provision of Chapter 9 as it applies in relation to a provision referred to in paragraph (a); or

                     (c)  a provision of Division 2 of Part 2 of the ASIC Act that covers conduct relating to the provision of financial product advice (whether or not it also covers other conduct), but only in so far as it covers conduct relating to the provision of financial product advice; or

                     (d)  any other Commonwealth, State or Territory legislation that covers conduct relating to the provision of financial product advice (whether or not it also covers other conduct), but only in so far as it covers conduct relating to the provision of financial product advice.

[Chapter 7—meaning of “financial product advice law”]

(3)     Schedule 1, item 1, page 8 (after line 20), after the definition of Financial Services Guide , insert:

financial services law means:

                     (a)  a provision of this Chapter or of Chapter 5C, 6, 6A, 6B, 6C or 6D; or

                     (b)  a provision of Chapter 9 as it applies in relation to a provision referred to in paragraph (a); or

                     (c)  a provision of Division 2 of Part 2 of the ASIC Act; or

                     (d)  any other Commonwealth, State or Territory legislation that covers conduct relating to the provision of financial services (whether or not it also covers other conduct), but only in so far as it covers conduct relating to the provision of financial services.

[Chapter 7—meaning of “financial services law”]

(4)     Schedule 1, item 1, page 8 (lines 27 to 32), omit the definition of funeral benefit , substitute:

funeral benefit means a benefit that consists of the provision of funeral, burial or cremation services, with or without the supply of goods connected with such services.

[Chapter 7—meaning of “funeral benefit”]

(5)     Schedule 1, item 1, page 9 (after line 13), after the definition of issuer , insert:

kind , in relation to financial products or financial services, has a meaning affected by regulations made for the purposes of section 761CA.

[Chapter 7—meaning of “class” and “kind”]

(6)     Schedule 1, item 1, page 11 (lines 6 to 12), omit the definition of participant , substitute:

participant :

                     (a)  in relation to a clearing and settlement facility, means a person who is allowed to directly participate in the facility under the facility’s operating rules and, when used in any of the following provisions, also includes a recognised affiliate in relation to the facility:

                              (i)  paragraph 821B(2)(b);

                             (ii)  section 822B;

                            (iii)  subsection 915F(2);

                            (iv)  any other provisions prescribed by regulations made for the purposes of this subparagraph; and

                     (b)  in relation to a financial market, means a person who is allowed to directly participate in the market under the market’s operating rules and, when used in any of the following provisions, also includes a recognised affiliate in relation to the market:

                              (i)  paragraph 792B(2)(b);

                             (ii)  section 793B;

                            (iii)  section 883A;

                            (iv)  subsection 915F(2);

                             (v)  paragraphs 923B(3)(a) and (b);

                            (vi)  any other provisions prescribed by regulations made for the purposes of this subparagraph.

[Chapter 7—meaning of “participant”]

(7)     Schedule 1, item 1, page 11 (line 14), after “partnerships)”, insert “and section 761FA (which deals with multiple trustees)”.

[Chapter 7—treatment of multiple trustees]

(8)     Schedule 1, item 1, page 11 (after line 26), after the definition of provide , insert:

recognised affiliate , in relation to a clearing and settlement facility or a financial market, means a person who is:

                     (a)  recognised by the operating rules of the facility or market as a suitably qualified affiliate of the facility or market; and

                     (b)  involved in the carrying on of a financial services business (including as an employee, director or in some other capacity).

[Chapter 7—meaning of “participant”]

(9)     Schedule 1, item 1, page 13 (after line 5), after section 761C, insert:

761CA   Meaning of class and kind of financial products and financial services

                   The regulations may include provisions identifying, or providing for the identification of, what constitutes a class or kind of financial products or financial services for the purposes of a provision or provisions of this Chapter.

[Chapter 7—meaning of “class” and “kind”]

(10)   Schedule 1, item 1, page 17 (after line 16), after section 761F, insert:

761FA   Meaning of person —generally includes multiple trustees

             (1)  This section applies in relation to a trust while the trust continues to have:

                     (a)  2 or more trustees; or

                     (b)  a single trustee who was a trustee of the trust at a time when it had 2 or more trustees.

             (2)  Subject to subsections (3) and (4), during a period while this section applies to a trust, this Chapter applies to the trust as if the trustee or trustees of the trust from time to time during the period constituted a single legal entity (the notional entity ) that remained the same for the duration of that period.

Note:          So, for example, while this section applies to a trust, a licence granted under this Chapter to the trustees of the trust will continue in force, despite a change in the persons who are the trustees.

             (3)  During any period or part of a period while this section applies to a trust and the trust has 2 or more trustees, this Chapter applies to the trustees as mentioned in subsection (2), but it applies with the following changes:

                     (a)  obligations that would be imposed on the notional entity are imposed instead on each trustee, but may be discharged by any of the trustees;

                     (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 notional entity is taken (whether for the purposes of criminal or civil liability) to have been a contravention by each trustee 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 trustee).

             (4)  During any period or part of a period while this section applies to a trust and the trust has only one trustee, this Chapter applies to the trustee as mentioned in subsection (2), but it applies with the following changes:

                     (a)  obligations that would be imposed on the notional entity are imposed instead on that single trustee;

                     (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 notional entity is taken (whether for the purposes of criminal or civil liability) to have been a contravention by that single trustee.

             (5)  Subsections (2), (3) and (4) 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.

[Chapter 7—treatment of multiple trustees]

(11)   Schedule 1, item 1, page 19 (line 33), omit “$2.5 million”, substitute “the amount specified in regulations made for the purposes of this subparagraph”.

[Chapter 7—regulations to specify amounts for 761G(7)(c)]

(12)   Schedule 1, item 1, page 19 (line 35), omit “$250,000”, substitute “the amount specified in regulations made for the purposes of this subparagraph”.

[Chapter 7—regulations to specify amounts for 761G(7)(c)]

(13)   Schedule 1, item 1 page 21 (after line 2), after subsection (10), insert:

Regulations and paragraph (7)(c)

        (10A)  In addition to specifying amounts for the purposes of subparagraphs (7)(c)(i) and (ii), the regulations may do either or both of the following:

                     (a)  deal with how net assets referred to in subparagraph (7)(c)(i) are to be determined and valued, either generally or in specified circumstances;

                     (b)  deal with how gross income referred to in subparagraph (7)(c)(ii) is to be calculated, either generally or in specified circumstances.

[Chapter 7—regulations to specify amounts for 761G(7)(c)]

(14)   Schedule 1, item 1, page 21 (line 23), after “ regulations ”, insert “ or other instruments ”.

[Chapter 7—coverage of 761H]

(15)   Schedule 1, item 1, page 21 (line 27), after “regulations”, insert “, or other instruments,”.

[Chapter 7—coverage of 761H]

(16)   Schedule 1, item 1, page 21 (after line 29), at the end of section 761H, add:

             (2)  Subsection (1) has effect as if provisions in Part 10.2 (transitional provisions) that relate to matters dealt with in this Chapter were part of this Chapter.

[Chapter 7—coverage of 761H]

(17)   Schedule 1, item 1, page 32 (line 1), omit “equipment or infrastructure”, substitute “physical equipment or physical infrastructure”.

[Chapter 7—765A exemption for equipment and infrastructure]

(18)   Schedule 1, item 1, page 33 (lines 13 to 15), omit everything from and including paragraph (1)(b) to the end of subsection (1), substitute:

                     (b)  could reasonably be regarded as being intended to have such an influence.

However, the provision of an exempt document is not to be taken to be a provision of financial product advice.

[Chapter 7—clarification of 766B]

(19)   Schedule 1, item 1, page 37 (line 11), before “conducting”, insert “a person, being the holder of a licence under an Australian law relating to the licensing of auctioneers,”.

[Chapter 7—767A forfeited shares auction exemption limited to licensed auctioneers]

(20)   Schedule 1, item 1, page 38 (lines 13 to 22), omit paragraphs (f) and (g).

[Chapter 7—limiting exclusion of payment systems from list in 768A]

(21)   Schedule 1, item 1, page 62 (after line 15), at the end of subsection (4), add:

Note:          If compensation arrangements in relation to the market are approved under Division 3 of Part 7.5, there must also be conditions as required by subsection 882A(4) or paragraph 882B(4)(b).

[Chapter 7—796A and conditions relating to compensation arrangements]

(22)   Schedule 1, item 1, page 62 (lines 16 to 20), omit subsection (5).

[Chapter 7—796A and conditions relating to compensation arrangements]

(23)   Schedule 1, item 1, page 67 (after line 5), at the end of subsection (2), add:

Note:          For fees in respect of ASIC performing functions under such arrangements, see Part 9.10.

[Chapter 7—fees for ASIC’s functions under 798C arrangements]

(24)   Schedule 1, item 1, page 71 (lines 17 to 20), omit paragraph (a), substitute:

                    (aa)  to the extent that it is reasonably practicable to do so:

                              (i)  comply with standards determined under section 827D; and

                             (ii)  do all other things necessary to reduce systemic risk; and

                     (a)  to the extent that it is reasonably practicable to do so, do all things necessary to ensure that the facility’s services are provided in a fair and effective way; and

[Chapter 7—role of the Reserve Bank]

(25)   Schedule 1, item 1, page 74 (after line 4), after section 821B, insert:

821BA   Obligation to notify Reserve Bank of certain matters

             (1)  A CS facility licensee must give written notice to the Reserve Bank of Australia (the Reserve Bank ), as soon as practicable, if:

                     (a)  the licensee becomes aware that it has failed to comply with standards determined under section 827D, or is likely to fail to comply with such standards; or

                     (b)  the licensee becomes aware that it may no longer be able to meet, or has breached, its obligation under subparagraph 821A(aa)(ii).

Note:          Failure to comply with this subsection is an offence (see subsection 1311(1)).

             (2)  If the Reserve Bank considers it appropriate to do so, the Reserve Bank may give the Minister advice about the matter.

[Chapter 7—role of the Reserve Bank]

(26)   Schedule 1, item 1, page 74 (line 5), omit “ ASIC ”.

[Chapter 7—role of the Reserve Bank]

(27)   Schedule 1, item 1, page 74 (after line 5), after the heading to section 821C, insert:

ASIC

[Chapter 7—role of the Reserve Bank]

(28)   Schedule 1, item 1, page 74 (after line 13), at the end of section 821C, add:

Reserve Bank

             (3)  A CS facility licensee must give such assistance to the Reserve Bank of Australia (the Reserve Bank ), or a person authorised by the Reserve Bank, as the Reserve Bank or the authorised person reasonably requests in relation to the performance of the Reserve Bank’s functions under this Part.

Note:          Failure to comply with this subsection is an offence (see subsection 1311(1)).

             (4)  Such assistance may include showing the Reserve Bank the licensee’s books or giving the Reserve Bank other information.

[Chapter 7—role of the Reserve Bank]

(29)   Schedule 1, item 1, page 78 (lines 21 and 22), omit “obligation mentioned in paragraph 821A(a))”, substitute “obligations mentioned in paragraphs 821A(aa) and (a))”.

[Chapter 7—role of the Reserve Bank]

(30)   Schedule 1, item 1, page 78 (line 28), omit “ and ASIC ”, substitute” , ASIC and the Reserve Bank ”.

[Chapter 7—role of the Reserve Bank]

(31)   Schedule 1, item 1, page 79 (line 26), after “Chapter”, insert “(other than its obligation under paragraph 821A(aa))”.

[Chapter 7—role of the Reserve Bank]

(32)   Schedule 1, item 1, page 80 (line 2), at the end of subsection (3), add “and a copy of the written report to the Reserve Bank of Australia”.

[Chapter 7—role of the Reserve Bank]

(33)   Schedule 1, item 1, page 80 (after line 18), after section 823C, insert:

823CA   Reserve Bank to assess licensee’s compliance

             (1)  At least once each year, the Reserve Bank of Australia (the Reserve Bank ) must do an assessment of how well each CS facility licensee is complying with its obligation under paragraph 821A(aa). In doing the assessment, the Reserve Bank may take account of any information and reports that it thinks appropriate, including information and reports from an overseas regulatory authority.

             (2)  As soon as practicable after doing an assessment under this section, the Reserve Bank must give a written report on the assessment to the Minister and a copy of the written report to ASIC.

             (3)  If an assessment, or part of an assessment, relates to any other person’s affairs to a material extent, the Reserve Bank 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.

             (4)  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, the Reserve Bank 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.

             (5)  Either the Minister or the Reserve Bank may cause the written report on an assessment, or part of the report on an assessment, to be printed and published.

[Chapter 7—role of the Reserve Bank]

(34)   Schedule 1, item 1, page 82 (lines 17 to 19), omit all the words after “direction,”, substitute:

in writing, to take:

                     (a)  specified measures to comply with the whole or a part of a standard determined under section 827D; or

                     (b)  any other action that ASIC considers will reduce systemic risk in the provision of the facility’s services.

[Chapter 7—role of the Reserve Bank]

(35)   Schedule 1, item 1, page 82 (after line 25), after subsection (3), insert:

          (3A)  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.

[Chapter 7—Court may order compliance with 823E conditions]

(36)   Schedule 1, item 1, page 82 (after line 31), at the end of section 823E, add:

             (7)  Before giving, varying or revoking the direction, ASIC must consult the Reserve Bank of Australia. However, a failure to consult the Reserve Bank of Australia does not invalidate the direction, variation or revocation.

             (8)  The Reserve Bank of Australia may at any time request ASIC to make a direction under this section. However, ASIC is not required to comply with the request.

[Chapter 7—role of the Reserve Bank]

(37)   Schedule 1, item 1, page 84 (line 29), after “ASIC”, insert “and the Reserve Bank of Australia”.

[Chapter 7—role of the Reserve Bank]

(38)   Schedule 1, item 1, page 91 (line 3), at the end of paragraph (h), add “ or the Reserve Bank of Australia”.

[Chapter 7—role of the Reserve Bank]

(39)   Schedule 1, item 1, page 91 (line 19), omit “ASIC and the authority that is”, substitute “ASIC, the Reserve Bank of Australia and the authority, or authorities, that are”.

[Chapter 7—role of the Reserve Bank]

(40)   Schedule 1, item 1, page 91 (after line 27), at the end of Division 4, add:

827C   Reserve Bank may give advice to Minister

                   The Reserve Bank of Australia may give advice to the Minister in relation to any matter concerning clearing and settlement facilities.

Note:          In some cases, the Minister must have regard to the Reserve Bank’s advice: see paragraph 827A(2)(h).

[Chapter 7—role of the Reserve Bank]

(41)   Schedule 1, item 1, page 91, after proposed section 827C, at the end of Division 4, add:

827D   Reserve Bank may determine financial stability standards

             (1)  The Reserve Bank of Australia (the Reserve Bank ) may, in writing, determine standards for the purposes of ensuring that CS facility licensees conduct their affairs in a way that causes or promotes overall stability in the Australian financial system.

             (2)  The standards are to be complied with by:

                     (a)  all CS facility licensees; or

                     (b)  a specified class of CS facility licensees, in the case of a standard that is expressed to apply only in relation to that class.

             (3)  Before the Reserve Bank determines a standard, it must consult with:

                     (a)  the CS facility licensees that will be required to comply with the standard; and

                     (b)  ASIC.

             (4)  A standard may impose different requirements to be complied with in different situations or in respect of different activities.

             (5)  A standard:

                     (a)  comes into force:

                              (i)  unless subparagraph (ii) applies—on the day on which the determination of the standard is made; or

                             (ii)  if that determination specifies a later day as the day on which the standard comes into force—on the day so specified; and

                     (b)  continues in force until it is revoked.

             (6)  The Reserve Bank may vary a standard in writing. Before it does so, it must consult with:

                     (a)  the CS facility licensees that will be required to comply with the standard if it is varied as proposed; and

                     (b)  ASIC.

             (7)  If the Reserve Bank determines or varies a standard, it must, as soon as practicable:

                     (a)  cause a notice advising of the determination of the standard, or of the variation of the standard, and summarising the purpose and effect of the standard or variation, to be published in the Gazette ; and

                     (b)  make the text of the notice available on the Internet; and

                     (c)  give a copy of the standard, or of the variation, to the following:

                              (i)  each CS facility licensee to which the standard applies;

                             (ii)  the Minister;

                            (iii)  ASIC.

             (8)  The Reserve Bank may revoke a standard in writing. Before it does so, it must consult with ASIC.

             (9)  If the Reserve Bank revokes a standard, it must, as soon as practicable:

                     (a)  cause a notice advising of the revocation of the standard to be published in the Gazette ; and

                     (b)  make the text of the notice available on the Internet; and

                     (c)  give notice of the revocation of the standard to the following:

                              (i)  each CS facility licensee to which the standard applied;

                             (ii)  the Minister;

                            (iii)  ASIC.

           (10)  The Reserve Bank must take reasonable steps to ensure that copies of the current text of the standards are available for inspection and purchase.

[Chapter 7—role of the Reserve Bank]

(42)   Schedule 1, item 1, page 100 (lines 9 to 17), omit paragraph (a), substitute:

                     (a)  in a case where the body’s specification time occurs at the same time as the commencement of this section—the person holding the percentage of voting power in the body immediately before the specification time did not, to any extent, constitute a contravention of previous law (see subsection (3)); and

[Chapter 7—deemed approval for pre-specification holdings]

(43)   Schedule 1, item 1, page 100 (line 18), before “on the body’s”, insert “whether the body’s specification time occurs at the same time as, or after, the commencement of this section—”.

[Chapter 7—deemed approval for pre-specification holdings]

(44)   Schedule 1, item 1, page 126 (line 20), omit “be”, substitute “been”.

[Chapter 7—correction of error in 888E(3)]

(45)   Schedule 1, item 1, page 126 (line 25), before “ SEGC ”, insert “ The ”.

[Chapter 7—references to “the” SEGC]

(46)   Schedule 1, item 1, page 126 (line 30), omit “that does not constitute”, substitute “neither the allowance of the claim, nor any other act done by SEGC as a result of allowing the claim, constitutes”.

[Chapter 7—actions covered by 888G]

(47)   Schedule 1, item 1, page 127 (line 11), omit “on”, substitute “in”.

[Chapter 7—correction of error in 888H(3)]

(48)   Schedule 1, item 1, page 127 (line 26), before “ SEGC ”, insert “ The ”.

[Chapter 7—references to “the” SEGC]

(49)   Schedule 1, item 1, page 128 (line 7), after “SEGC”, insert “and the members of its board”.

[Chapter 7—ambit of 888J qualified privilege]

(50)   Schedule 1, item 1, page 129 (line 1), before “ SEGC ”, insert “ The ”.

[Chapter 7—references to “the” SEGC]

(51)   Schedule 1, item 1, page 136 (lines 3 and 4), omit paragraph 890A(3)(b), substitute:

                     (b)  each of the other members of the body corporate is a market licensee; and

[Chapter 7—eligibility for nomination under 890A as SEGC]

(52)   Schedule 1, item 1, page 136 (lines 5 and 6), omit “eligible exchanges”, substitute “market licensees”.

[Chapter 7—eligibility for nomination under 890A as SEGC]

(53)   Schedule 1, item 1, page 136 (lines 27 to 31), omit subsection (4).

[Chapter 7—eligibility for nomination under 890A as SEGC]

(54)   Schedule 1, item 1, page 136 (line 34), before “SEGC”, insert “the”.

[Chapter 7—references to “the” SEGC]

(55)   Schedule 1, item 1, page 136 (line 35), after “by”, insert “or under”.

[Chapter 7—correction of error in 890B(1)]

(56)   Schedule 1, item 1, page 139 (line 10), before “ NGF ”, insert “ the ”.

[Chapter 7—references to “the” NGF]

(57)   Schedule 1, item 1, page 142 (line 29), omit “ financial products, ”.

[Chapter 7—correction of error in 892D heading]

(58)   Schedule 1, item 1, page 143 (line 4), at the end of subsection (1), add “, or that the relevant authority considers are necessary for the purpose of exercising the subrogated rights and remedies it has in relation to a claim (see section 892F)”.

[Chapter 7—892D powers of relevant authority in relation to subrogated rights]

(59)   Schedule 1, item 1, page 147 (after line 34), at the end of Part 7.5, add:

Division 6 Miscellaneous

893A   Exemptions and modifications by regulations

             (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 market or class of financial markets from all or specified provisions of this Part; or

                     (c)  provide that this Part applies in relation to a person or a financial market, or a class of persons or financial markets, as if specified provisions were omitted, modified or varied as specified in the regulations.

             (2)  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 7.2 that refer to provisions of this Part; and

                     (c)  any provisions of Part 10.2 (transitional provisions) that relate to provisions of this Part.

[Chapter 7—Part 7.5 exemptions and modifications]

(60)   Schedule 1, item 1, page 149 (line 20), omit “provided incidentally to”, substitute “, or is provided incidentally to,”.

[Chapter 7—911A licence requirement]

(61)   Schedule 1, item 1, page 151 (after line 10), at the end of section 911A, add:

             (5)  An exemption under paragraph (2)(k) or (l) 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.

[Chapter 7—conditions for 911A(2)(k) and (l) exemptions]

(62)   Schedule 1, item 1, page 151 (line 22), after “director”, insert “, or authorised representative,”.

[Chapter 7—persons covered by 911B(1)(a)]

(63)   Schedule 1, item 1, page 151 (line 25), after “director”, insert “, or authorised representative,”.

[Chapter 7—persons covered by 911B(1)(a)]

(64)   Schedule 1, item 1, page 154 (line 3), omit “competently and honestly”, substitute “efficiently, honestly and fairly”.

[Chapter 7—912A efficiency etc. requirement]

(65)   Schedule 1, item 1, page 154 (lines 5 to 9), omit paragraph (c), substitute:

                     (c)  comply with the financial services laws; and

                    (ca)  take reasonable steps to ensure that its representatives comply with the financial services laws; and

[Chapter 7—912A compliance with law obligation]

(66)   Schedule 1, item 1, page 154 (lines 27 to 30), omit paragraph (i) (including the note).

[Chapter 7—912A compliance with law obligation]

(67)   Schedule 1, item 1, page 155 (after line 27), after subsection 912C(1), insert:

          (1A)  Notices under subsection (1):

                     (a)  may be sent out at any time; and

                     (b)  may be sent to one or more particular licensees, or to each licensee in one or more classes of licensee, or to all licensees; and

                     (c)  may all require the same information, or may contain differences as to the information they require.

[Chapter 7—912C statements]

(68)   Schedule 1, item 1, page 157 (after line 24), after paragraph (c), insert

                    (ca)  the applicant has provided ASIC with any additional information requested by ASIC in relation to matters that, under this section, can be taken into account in deciding whether to grant the licence; and

[Chapter 7—913B power to request additional information]

(69)   Schedule 1, item 1, page 158 (line 1), after “not a”, insert “single”.

[Chapter 7—treatment of multiple trustees]

(70)   Schedule 1, item 1, page 158 (line 6), after “partnership”, insert “or the trustees of a trust”.

[Chapter 7—treatment of multiple trustees]

(71)   Schedule 1, item 1, page 158 (line 7), after “partners”, insert “or trustees”.

[Chapter 7—treatment of multiple trustees]

(72)   Schedule 1, item 1, page 159 (line 18), omit “However,”.

[Chapter 7—no hearing requirement for initial imposition of 914A conditions]

(73)   Schedule 1, item 1, page 159 (after line 23), at the end of subsection (3), add:

This subsection does not apply to ASIC imposing conditions when a licence is granted.

[Chapter 7—no hearing requirement for initial imposition of 914A conditions]

(74)   Schedule 1, item 1, page 159 (line 24) to page 160 (line 12), omit subsections (4) and (5), substitute:

             (4)  If the licensee, or a related body corporate, is a body (the APRA body ) regulated by APRA, other than an ADI (within the meaning of the Banking Act 1959 ), then the following provisions apply:

                     (a)  ASIC cannot:

                              (i)  impose, vary or revoke a condition on the licence that, in ASIC’s opinion, has or would have the result of significantly limiting or restricting the APRA body’s ability to carry on all or any of its usual activities (being activities in relation to which APRA has regulatory or supervisory responsibilities); or

                             (ii)  vary a condition so that it would, in ASIC’s opinion, become a condition that would have a result as described in subparagraph (i);

                            unless ASIC has first consulted APRA about the proposed action;

                     (b)  if ASIC imposes, varies or revokes a condition on the licence and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken.

             (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)  subject to paragraphs (b) and (c), the powers that ASIC would otherwise have under this section:

                              (i)  to impose, vary or revoke a condition on the licence that, in ASIC’s opinion, has or 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 the Banking Act 1959 ); or

                             (ii)  to vary a condition so that it would, in ASIC’s opinion, become a condition that would have a result as described in subparagraph (i);

                            are instead powers of the Minister;

                     (b)  the following provisions apply in relation to a power to which paragraph (a) applies:

                              (i)  the procedures for the exercise of the power are the same as would apply if ASIC could exercise the power, except that the Minister must not exercise the power unless he or she has first considered advice from ASIC on the proposed action, being advice given after ASIC has consulted APRA about the proposed action;

                             (ii)  ASIC (rather than the Minister) must still conduct any hearing required under paragraph (3)(a) and receive any submissions under paragraph (3)(b);

                     (c)  if ASIC imposes, varies or revokes a condition on the licence and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken.

          (5A)  A failure to comply with a requirement of subsection (4) or (5) to consult or inform APRA about, or to consider advice from ASIC about, an imposition, variation or revocation of a condition does not invalidate the action taken.

[Chapter 7—licensing of bodies regulated by APRA]

(75)   Schedule 1, item 1, page 162 (line 13), omit paragraph (a), substitute:

                     (a)  the licensee has not complied with their obligations under section 912A;

                    (aa)  ASIC has reason to believe that the licensee will not comply with their obligations under section 912A;

[Chapter 7—action under 915C for breach of obligations]

(76)   Schedule 1, item 1, page 164 (lines 7 to 30), omit section 915I, substitute:

915I   Special procedures for APRA-regulated bodies

             (1)  If:

                     (a)  a financial services licensee is a body regulated by APRA, other than an ADI (within the meaning of the Banking Act 1959 ); or

                     (b)  a related body corporate of a financial services licensee is a body (the APRA body ) regulated by APRA, other than an ADI (within the meaning of the Banking Act 1959 ), and cancellation or suspension of the licensee’s licence would, in ASIC’s opinion, have the result of significantly limiting or restricting the APRA body’s ability to carry on all or any of its usual activities (being activities in relation to which APRA has regulatory or supervisory responsibilities);

ASIC cannot suspend or cancel the licensee’s licence, or subsequently revoke a suspension to which this subsection applied, unless ASIC has first consulted APRA about the proposed action.

             (2)  If:

                     (a)  a financial services licensee is an ADI (within the meaning of the Banking Act 1959 ); or

                     (b)  a related body corporate of a financial services licensee is an ADI (within the meaning of the Banking Act 1959 ), and cancellation or suspension of the licensee’s licence would, in ASIC’s opinion, 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 the Banking Act 1959 );

the following provisions have effect:

                     (c)  subject to paragraph (d), the powers that ASIC would otherwise have under this Subdivision to cancel or suspend the licensee’s licence, or to subsequently revoke a suspension to which this subsection applied, are instead powers of the Minister;

                     (d)  the procedures for the exercise of a power to which paragraph (c) applies are the same as would apply if ASIC could exercise the power, except that the Minister must not exercise the power unless he or she has first considered advice from ASIC on the proposed action, being advice given after ASIC has consulted APRA about the proposed action;

                     (e)  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).

             (3)  A failure to comply with a requirement of subsection (1) or (2) to consult or inform APRA about, or to consider advice from ASIC about, a cancellation or suspension, or a revocation of a suspension, of a licence does not invalidate the action taken.

[Chapter 7—licensing of bodies regulated by APRA]

(77)   Schedule 1, item 1, page 167 (line 16), omit “give ASIC”, substitute “lodge with ASIC a”.

[Chapter 7—916F notices]

(78)   Schedule 1, item 1, page 174 (lines 33 and 34), omit paragraph (c), substitute:

                     (c)  the body has not complied with its obligations under section 919A; or

                     (d)  ASIC has reason to believe that the body will not comply with its obligations under section 919A; or

                     (e)  a member of the body has not complied with a financial product advice law.

[Chapter 7—action under 918C for non-compliance with law]

(79)   Schedule 1, item 1, page 176 (lines 18 to 22), omit paragraph 919A(b), substitute:

                     (b)  take reasonable steps to ensure that its members comply with the financial product advice laws; and

[Chapter 7—919A compliance with law obligation]

(80)   Schedule 1, item 1, page 177 (line 9), omit “Act”, substitute “Chapter”.

[Chapter 7—919A compliance with law obligation]

(81)   Schedule 1, item 1, page 179 (lines 25 to 27), omit subsection (4), substitute:

             (4)  A person is not entitled to do the things mentioned in subsection (3) unless they have paid any fees that are:

                     (a)  required by the body; and

                     (b)  consistent with any applicable limits imposed by regulations made for the purposes of this subsection.

[Chapter 7—919E fees for register inspection]

(82)   Schedule 1, item 1 page 180 (lines 9 to 11), omit paragraph (b), substitute:

                     (b)  the person has not complied with their obligations under section 912A; or

                   (ba)  ASIC has reason to believe that the person will not comply with their obligations under section 912A; or

                   (bb)  the person becomes an insolvent under administration; or

[Chapter 7—action under 920A for breach of obligations]

(83)   Schedule 1, item 1, page 180 (lines 15 to 17), omit paragraph (e), substitute:

                     (e)  the person has not complied with a financial services law; or

                      (f)  ASIC has reason to believe that the person will not comply with a financial services law.

[Chapter 7—action under 920A for breach of obligations]

(84)   Schedule 1, item 1, page 184 (lines 11 and 12), omit “The fees must not be such as to amount to taxation.”.

[Chapter 7—922B fees for register inspection]

(85)   Schedule 1, item 1, page 186 (line 35), after “by the person”, insert “, or by a person in relation to whom they are a representative”.

[Chapter 7—923B and representatives]

(86)   Schedule 1, item 1, page 196 (line 20), omit “911(2)(j)”, substitute “911A(2)(j)”.

[Chapter 7—correction or error in 940C(6)]

(87)   Schedule 1, item 1, page 203 (after line 34), after subsection (6), insert:

          (6A)  The information included in the Financial Services Guide must be worded and presented in a clear, concise and effective manner.

[Chapter 7—942B clarity requirement]

(88)   Schedule 1, item 1, page 206 (after line 34), after subsection (6), insert:

          (6A)  The information included in the Financial Services Guide must be worded and presented in a clear, concise and effective manner.

[Chapter 7—942C clarity requirement]

(89)   Schedule 1, item 1, page 218 (after line 4), at the end of section 947B, add:

             (6)  The statements and information included in the Statement of Advice must be worded and presented in a clear, concise and effective manner.

[Chapter 7—947B clarity requirement]

(90)   Schedule 1, item 1, page 219 (after line 33), at the end of section 947C, add:

             (6)  The statements and information included in the Statement of Advice must be worded and presented in a clear, concise and effective manner.

[Chapter 7—947C clarity requirement]

(91)   Schedule 1, item 1, page 257 (line 21), omit “money”, substitute “property”.

[Chapter 7—984A property of clients]

(92)   Schedule 1, item 1, page 261 (line 17), omit “subsection (3)”, substitute “subsection (2)”.

[Chapter 7—correction of error in 988A]

(93)   Schedule 1, item 1, page 279 (line 2), omit “ requirements ”.

[Chapter 7—correction of error in heading to 993C]

(94)   Schedule 1, item 1, page 282 (line 10), omit “911(2)(j)”, substitute “911A(2)(j)”.

[Chapter 7—correction or error in 1011B]

(95)   Schedule 1, item 1, page 284 (line 7), omit “ offers ”, substitute “ situations ”.

[Chapter 7—correction of error in heading to 1012B]

(96)   Schedule 1, item 1, page 284 (lines 23 and 24), omit the heading to subsection (3), substitute:

The main issue situations

[Chapter 7—correction of error in heading to 1012B(3)]

(97)   Schedule 1, item 1, page 287 (line 20) to page 288 (line 30), omit subsections (6) to (9), substitute:

Sale amounting to indirect issue

             (6)  This subsection covers the circumstances in which:

                     (a)  the offer is made within 12 months after the issue of the financial product; and

                     (b)  the product was issued without a Product Disclosure Statement for the product being prepared; and

                     (c)  either:

                              (i)  the issuer issued the product with the purpose of the person to whom it was issued selling or transferring the product, or granting, issuing or transferring interests in, or options or warrants over, the product; or

                             (ii)  the person to whom the product was issued acquired it with the purpose of selling or transferring the product, or granting, issuing or transferring interests in, or options or warrants over, the product.

The purpose test in subsection (6)

             (7)  For the purposes of subsection (6):

                     (a)  a financial product is taken to be:

                              (i)  issued with the purpose referred to in subparagraph (6)(c)(i); or

                             (ii)  acquired with the purpose referred to in subparagraph (6)(c)(ii);

                            if there are reasonable grounds for concluding that the product was issued or acquired with that purpose (whether or not there were or may have been other purposes for the issue or acquisition); and

                     (b)  without limiting paragraph (a), a financial product is taken to be:

                              (i)  issued with the purpose referred to in subparagraph (6)(c)(i); or

                             (ii)  acquired with the purpose referred to in subparagraph (6)(c)(ii);

                            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, unless it is proved that the circumstances of the issue and the subsequent sale or offer are not such as to give rise to reasonable grounds for concluding that the product was issued or acquired with that purpose.

Sale amounting to indirect off-market sale by controller

             (8)  This subsection covers the circumstances in which:

                     (a)  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

                     (b)  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

                     (c)  a Product Disclosure Statement was not prepared by, or on behalf of, the controller before the sale of the product by the controller; and

                     (d)  either:

                              (i)  the controller sold the product with the purpose of the person to whom it was sold selling or transferring the product, or granting, issuing or transferring interests in, or options or warrants over, the product; or

                             (ii)  the person to whom the controller sold the product acquired it with the purpose of selling or transferring the product, or granting, issuing or transferring interests in, or options or warrants over, the product.

Note:          See section 50AA for when a person controls a body.

The purpose test in subsection (8)

             (9)  For the purposes of subsection (8):

                     (a)  a financial product is taken to be:

                              (i)  sold with the purpose referred to in subparagraph (8)(d)(i); or

                             (ii)  acquired with the purpose referred to in subparagraph (8)(d)(ii);

                            if there are reasonable grounds for concluding that the product was sold or acquired with that purpose (whether or not there were or may have been other purposes for the sale or acquisition); and

                     (b)  without limiting paragraph (a), a financial product is taken to be:

                              (i)  sold with the purpose referred to in subparagraph (8)(d)(i); or

                             (ii)  acquired with the purpose referred to in subparagraph (8)(d)(ii);

                            if the financial product, or any financial product of the same kind that was sold by the controller at the same time, is subsequently sold, or offered for sale, within 12 months after issue, unless it is proved that the circumstances of the initial sale and the subsequent sale or offer are not such as to give rise to reasonable grounds for concluding that the product was sold or acquired (in the initial sale) with that purpose.

[Chapter 7—sales covered by 1012C(6) and (8)]

(98)   Schedule 1, item 1, page 289 (line 22), after “or has”, insert “, and knows that they have,”.

[Chapter 7—circumstances of 1012D(2) exemption]

(99)   Schedule 1, item 1, page 289 (line 29), omit “(11)”, substitute “(10)”.

[Chapter 7—1012D correction of subsection (11) reference]

(100) Schedule 1, item 1, page 292 (line 25), omit “is the same as”, substitute “is of the same kind as”.

[Chapter 7—correction of error in 1012D(10)]

(101) Schedule 1, item 1, page 296 (line 37), omit “(h)”, substitute “(g)”.

[Chapter 7—1012G(3) information]

(102) Schedule 1, item 1, page 298 (line 4), omit “ employer ”, substitute “ applicant ”.

[Chapter 7—situations to which 1012I applies]

(103) Schedule 1, item 1, page 298 (line 7), omit “employer’s employees must give the employer”, substitute “applicant’s employees must give the applicant”.

[Chapter 7—situations to which 1012I applies]

(104) Schedule 1, item 1, page 298 (lines 10 to 15), omit subsection (2), substitute:

             (2)  If:

                     (a)  a person (the applicant ) applies for the issue of an RSA product to the employee; and

                     (b)  the applicant has not previously applied to the RSA provider for the issue to any employee of an RSA product of the same kind;

the person (the issuer ) who is to issue the RSA product to the employee must, at or before the time when the RSA product is issued to the employee, give the applicant a Product Disclosure Statement in accordance with this Division for the RSA product.

          (2A)  If:

                     (a)  a trustee (the applicant ), under Part 24 of the Superannuation Industry (Supervision) Act 1993 , applies on behalf of a person for the issue of an interest in a relevant superannuation entity; and

                     (b)  the applicant has not previously applied under that Part for the issue of an interest in that entity on behalf of any person;

the person (the issuer ) who is to issue the interest to the person must, at or before the time when the interest is issued to the person, give the applicant a Product Disclosure Statement in accordance with this Division for the interest.

          (2B)  If:

                     (a)  a trustee (the applicant ), under Part 9 of the Retirement Savings Accounts Act 1997 , applies on behalf of a person for the issue of an interest in a relevant superannuation entity; and

                     (b)  the applicant has not previously applied under that Part for the issue of an interest in that entity on behalf of any person;

the person (the issuer ) who is to issue the interest to the person must, at or before the time when the interest is issued to the person, give the applicant a Product Disclosure Statement in accordance with this Division for the interest.

[Chapter 7—situations to which 1012I applies]

(105) Schedule 1, item 1, page 298 (line 16), omit “employer”, substitute “applicant”.

[Chapter 7—situations to which 1012I applies]

(106) Schedule 1, item 1, page 298 (line 17), omit “or (2)”, substitute “(2), (2A) or (2B)”.

[Chapter 7—situations to which 1012I applies]

(107) Schedule 1, item 1, page 298 (line 18), omit “employer”, substitute “applicant”.

[Chapter 7—situations to which 1012I applies]

(108) Schedule 1, item 1, page 298 (after line 23), at the end of subsection (3), add:

Note:          Information in a Supplementary Product Disclosure Statement is taken to be contained in the Product Disclosure Statement it supplements (see section 1014D).

[Chapter 7—inclusion in 1012I of note about Supplementary PDSs]

(109) Schedule 1, item 1, page 298 (line 24), omit “employer”, substitute “applicant”.

[Chapter 7—situations to which 1012I applies]

(110) Schedule 1, item 1, page 298 (line 25), omit “or (2)”, substitute “(2), (2A) or (2B)”.

[Chapter 7—situations to which 1012I applies]

(111) Schedule 1, item 1, page 298 (lines 27 to 29), omit subsection (5), substitute:

             (5)  In this section:

                     (a)  terms used in subsection (1) that are defined for the purposes of the Superannuation Industry (Supervision) Act 1993 have the same meanings as in that Act; and

                     (b)  terms used in subsection (2) that are defined for the purposes of the Retirement Savings Accounts Act 1997 have the same meanings as in that Act; and

                     (c)  relevant superannuation entity has the same meaning as in section 1016A of this Act.

[Chapter 7—meaning of terms in 1012I(1)]

(112) Schedule 1, item 1, page 307 (lines 1 and 2), omit “lodgment of a copy of the Product Disclosure Statement with ASIC”, substitute “date of the Product Disclosure Statement”.

[Chapter 7—1013I requirements for PDSs]

(113) Schedule 1, item 1, page 307 (lines 5 and 6), omit “lodgment of a copy of the Product Disclosure Statement with ASIC”, substitute “date of the Product Disclosure Statement”.

[Chapter 7—1013I requirements for PDSs]

(114) Schedule 1, item 1, page 309 (line 29), after “update”, insert “, or add to,”.

[Chapter 7—1014A description of what a SPDS is]

(115) Schedule 1, item 1, page 310 (line 3), before “Product”, insert “Supplementary”.

[Chapter 7—correction of error in 1014B]

(116) Schedule 1, item 1, page 310 (line 32), after “person”, insert “(the client )”.

[Chapter 7—correction of error in 1014E]

(117) Schedule 1, item 1, page 311 (line 6), omit “giving the person”, substitute “giving the client”.

[Chapter 7—correction of error in 1014E]

(118) Schedule 1, item 1, page 311 (line 7), omit “person”, substitute “client”.

[Chapter 7—correction of error in 1014E]

(119) Schedule 1, item 1, page 311 (line 11), after “1013K”, insert “, and subsections 1013C(3) to (7),”.

[Chapter 7—provisions applied to a SPDS by 1014F]

(120) Schedule 1, item 1, page 313 (line 9), omit “911(2)(j)”, substitute “911A(2)(j)”.

[Chapter 7—correction of error in 1015C(3)]

(121) Schedule 1, item 1, page 313 (line 31), omit “notify ASIC”, substitute “lodge a notice with ASIC advising”.

[Chapter 7—1015D notice to be lodged with ASIC]

(122) Schedule 1, item 1, page 313 (line 32), after “as soon as practicable”, insert “, and in any event within 5 business days,”.

[Chapter 7—time for giving 1015D notice]

(123) Schedule 1, item 1, page 315 (line 3) to page 316 (line 5), omit section 1016A, substitute:

1016A   Provisions relating to use of application forms

             (1)  In this section:

eligible application , in relation to a restricted issue or restricted sale of a relevant financial product, means an application that satisfies the following requirements:

                     (a)  the application is made using an application form; and

                     (b)  the application form used to apply for the product:

                              (i)  was included in, or accompanied, a Product Disclosure Statement given to the applicant that contained all the information that would have been required to be contained in a Product Disclosure Statement for the product given at the time of the making of the application; or

                             (ii)  was copied, or directly derived, by the applicant from a form referred to in subparagraph (i); and

                     (c)  all other applicable requirements (if any) in regulations made for the purposes of this paragraph are satisfied in relation to the application.

Note:          Information in a Supplementary Product Disclosure Statement is taken to be contained in the Product Disclosure Statement it supplements (see section 1014D).

relevant financial product means:

                     (a)  a managed investment product; or

                     (b)  a superannuation product; or

                     (c)  an investment life insurance product; or

                     (d)  an RSA product; or

                     (e)  a financial product of a kind specified in regulations made for the purposes of this paragraph.

relevant superannuation entity means a superannuation entity of a kind specified in regulations made for the purposes of this definition.

restricted issue means an issue of a relevant financial product to a person as a retail client, other than an issue covered by either of the following paragraphs:

                     (a)  an issue in a situation, or pursuant to an offer made in a situation, to which a subsection, other than subsection (1), of section 1012D applies; or

                     (b)  an issue in a situation, or pursuant to an offer made in a situation, to which section 1012E or 1012F applies.

restricted sale means a sale of a relevant financial product pursuant to an offer that:

                     (a)  is of a kind described in subsection 1012C(3) or (4); and

                     (b)  is not made in a situation to which a subsection, other than subsection (1), of section 1012D applies.

RSA provider has the same meaning as in the Retirement Savings Accounts Act 1997 .

standard employer-sponsor has the same meaning as in the Superannuation Industry (Supervision) Act 1993 .

standard employer-sponsored fund has the same meaning as in the Superannuation Industry (Supervision) Act 1993 .

standard employer-sponsored member has the same meaning as in the Superannuation Industry (Supervision) Act 1993 .

superannuation entity has the same meaning as in the Superannuation Industry (Supervision) Act 1993 .

             (2)  A person (the issuer or seller )must only make a restricted issue or a restricted sale of a relevant financial product to a person (the recipient ) if:

                     (a)  the issue or sale is made pursuant to an eligible application made to the issuer or seller by the recipient; or

                     (b)  it is a restricted issue in relation to which the following conditions are satisfied:

                              (i)  the financial product is an interest in a relevant superannuation entity;

                             (ii)  the interest is issued pursuant to an application made to the issuer by a standard employer-sponsor of the entity on the recipient’s behalf;

                            (iii)  if the application is the first application for the issue of a superannuation interest made to the issuer by the standard employer-sponsor on behalf of any person—the application is an eligible application; or

                     (c)  it is a restricted issue in relation to which the following conditions are satisfied:

                              (i)  the financial product is an interest in a relevant superannuation entity;

                             (ii)  the interest is issued pursuant to an application made to the issuer by another trustee under Part 24 of the Superannuation Industry (Supervision) Act 1993 on the recipient’s behalf;

                            (iii)  if the application is the first application under Part 24 of that Act made to the issuer by the other trustee on behalf of any person—the application is an eligible application; or

                     (d)  it is a restricted issue in relation to which the following conditions are satisfied:

                              (i)  the financial product is an interest in a relevant superannuation entity;

                             (ii)  the interest is issued pursuant to an application made to the issuer by an RSA provider under Part 9 of the Retirement Savings Accounts Act 1997 on the recipient’s behalf;

                            (iii)  if the application is the first application under Part 9 of that Act made to the issuer by the RSA provider on behalf of any person—the application is an eligible application; or

                     (e)  it is a restricted issue in relation to which the following conditions are satisfied:

                              (i)  the financial product is an RSA product;

                             (ii)  the interest is issued pursuant to an application made to the issuer by an employer (within the meaning of the Retirement Savings Accounts Act 1997 ) of the recipient;

                            (iii)  if the application is the first application for the issue of an RSA product of that kind made to the issuer by the employer on behalf of any person—the application is an eligible application;

                            (iv)  all other applicable requirements (if any) in regulations made for the purposes of this subparagraph are satisfied in relation to the application.

Note:          Failure to comply with this subsection is an offence (see subsection 1311(1)).

             (3)  The trustee of a relevant superannuation entity must only permit a person to become a standard employer-sponsor of the entity if:

                     (a)  the person applied to become a standard employer-sponsor of the entity using an application form; and

                     (b)  the application form used to apply to become a standard employer-sponsor:

                              (i)  was included in, or accompanied, a Product Disclosure Statement given to the person that contained all the information that would have been required to be contained in a Product Disclosure Statement for an interest in the entity given at the time of the making of the application; or

                             (ii)  was copied, or directly derived, by the person from a form referred to in subparagraph (i).

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)).

             (4)  The regulations may:

                     (a)  provide for defences to offences based on subsection (2) or (3); and

                     (b)  provide for additional offences relating to the receipt or non-receipt of applications or application forms.

Note 1:       A defendant bears an evidential burden in relation to a defence. See subsection 13.3(3) of the Criminal Code .

Note 2:       For the limit on penalties for offences against the regulations, see paragraph 1364(2)(w).

[Chapter 7—licensing of bodies regulated by APRA]

(124) Schedule 1, item 1, page 322 (line 19), omit “911(2)(j)”, substitute “911A(2)(j)”.

[Chapter 7—correction or error in 1017A(1)]

(125) Schedule 1, item 1, page 329 (after line 24), at the end of subsection (9), add:

relevant sub-plan , in relation to a superannuation product or an RSA product, has the meaning given by the regulations.

[Chapter 7—meaning of relevant sub-plan in 1017C]

(126) Schedule 1, item 1, page 331 (after line 25), after section 1017D, insert:

1017DA   Trustees of superannuation entities—regulations may specify additional obligations to provide information

             (1)  The regulations may:

                     (a)  require the trustee of a superannuation entity to do all or any of the following:

                              (i)  provide information to the holder of a superannuation product (being an interest in that entity) with information relating to the management, financial condition and investment performance of the entity and/or of any relevant sub-plan (within the meaning of section 1017C);

                             (ii)  provide information to the holder or former holder of a superannuation product (being an interest in that entity), or to any other person to whom benefits under the product are payable, with information relating to his or her benefit entitlements;

                            (iii)  provide information to the holder of a superannuation product (being an interest in the entity) with information about arrangements for dealing with inquiries and/or complaints relating to the product; or

                     (b)  require an RSA provider to do either or both of the following:

                              (i)  provide information to the holder or former holder of an RSA product provided by the RSA provider, or to any other person to whom benefits under the product are payable, with information relating to his or her benefit entitlements;

                             (ii)  provide information to the holder of an RSA product provided by the RSA provider with information about arrangements for dealing with inquiries and/or complaints relating to the product.

             (2)  Without limiting subsection (1), regulations made for the purposes of that subsection may deal with all or any of the following:

                     (a)  what information is to be provided;

                     (b)  when information is to be provided;

                     (c)  how information is to be provided.

             (3)  The trustee of a superannuation entity, or an RSA provider, must provide information in accordance with any applicable requirements of regulations made for the purposes of subsection (1).

Note:          Failure to comply with this subsection is an offence (see subsection 1311(1)).

             (4)  In this section:

RSA provider has the same meaning as in the Retirement Savings Accounts Act 1997 .

superannuation entity has the same meaning as in the Superannuation Industry (Supervision) Act 1993 .

[Chapter 7—new 1017DA]

(127) Schedule 1, item 1, page 336 (line 30), omit “if the holder agrees”, substitute “subject to subsection (5A)”.

[Chapter 7—1017F confirmation methods]

(128) Schedule 1, item 1, page 336 (after line 37), after subsection (5), insert:

When confirmation may be provided by means of a standing facility

          (5A)  Confirmation may only be provided by means of a facility as mentioned in paragraph (5)(b) if:

                     (a)  the holder concerned has agreed that confirmation of transactions involving the product may be provided by means of the facility; or

                     (b)  the holder concerned:

                              (i)  has, in accordance with the applicable requirements (if any) in regulations made for the purposes of this subparagraph, been informed, by or on behalf of the responsible person, about the facility and its availability to the holder as a means of obtaining confirmation of transactions involving the product; and

                             (ii)  has not advised the responsible person that the holder does not agree to use the facility as a means of obtaining such confirmations.

[Chapter 7—1017F confirmation methods]

(129) Schedule 1, item 1, page 354 (lines 5 to 8), omit paragraph (c), substitute:

                     (c)  provide that this Part applies as if specified provisions were omitted, modified or varied as specified in the regulations.

[Chapter 7—1020G modification powers]

(130) Schedule 1, item 1, page 374 (lines 18 to 21), omit subsection (1) (but not the notes), substitute:

             (1)  A person must not (whether in this jurisdiction or elsewhere) enter into, or engage in, a fictitious or artificial transaction or device if that transaction or device results in:

                     (a)  the price for trading in financial products on a financial market operated in this jurisdiction being maintained, inflated or depressed; or

                     (b)  fluctuations in the price for trading in financial products on a financial market operated in this jurisdiction.

[Chapter 7—clarification of 1041C(1)]

(131) Schedule 1, item 1, page 376 (after line 30), at the end of section 1041F, add:

             (3)   This section applies in relation to the following conduct as if that conduct were dealing in financial products:

                     (a)  applying to become a standard employer-sponsor (within the meaning of the Superannuation Industry (Supervision) Act 1993 ) of a superannuation entity (within the meaning of that Act);

                     (b)  permitting a person to become a standard employer-sponsor (within the meaning of the Superannuation Industry (Supervision) Act 1993 ) of a superannuation entity (within the meaning of that Act);

                     (c)  applying, on behalf of an employee (within the meaning of the Retirement Savings Accounts Act 1997 ), for the employee to become the holder of an RSA product.

[Chapter 7—coverage of 1041F]

(132) Schedule 1, item 1, page 377 (lines 26 to 29), omit subparagraph (iv), substitute:

                            (iv)  applying to become a standard employer-sponsor (within the meaning of the Superannuation Industry (Supervision) Act 1993 ) of a superannuation entity (within the meaning of that Act);

                             (v)  permitting a person to become a standard employer-sponsor (within the meaning of the Superannuation Industry (Supervision) Act 1993 ) of a superannuation entity (within the meaning of that Act);

                            (vi)  a trustee of a superannuation entity (within the meaning of the Superannuation Industry (Supervision) Act 1993 ) dealing with a beneficiary of that entity as such a beneficiary;

                           (vii)  a trustee of a superannuation entity (within the meaning of the Superannuation Industry (Supervision) Act 1993 ) dealing with an employer-sponsor (within the meaning of that Act), or an associate (within the meaning of that Act) of an employer-sponsor, of that entity as such an employer-sponsor or associate;

                          (viii)  applying, on behalf of an employee (within the meaning of the Retirement Savings Accounts Act 1997 ), for the employee to become the holder of an RSA product;

                            (ix)  an RSA provider (within the meaning of the Retirement Savings Accounts Act 1997 ) dealing with an employer (within the meaning of that Act), or an associate (within the meaning of that Act) of an employer, who makes an application, on behalf of an employee (within the meaning of that Act) of the employer, for the employee to become the holder of an RSA product, as such an employer;

                             (x)  carrying on negotiations, or making arrangements, or doing any other act, preparatory to, or in any way related to, an activity covered by any of subparagraphs (i) to (ix).

[Chapter 7—coverage of 1041H]

(133) Schedule 1, item 1, page 380 (after line 8), after the definition of information , insert:

inside information means information in relation to which the following paragraphs are satisfied:

                     (a)  the information is not generally available;

                     (b)  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.

[Chapter 7—revision of 1043A]

(134) Schedule 1, item 1, page 380 (after line 12), at the end of section 1042A, add:

relevant Division 3 financial products , in relation to particular inside information, means the Division 3 financial products referred to in paragraph (b) of the definition of inside information .

[Chapter 7—revision of 1043A]

(135) Schedule 1, item 1, page 383 (line 20) to page 384 (line 37), omit section 1043A, substitute:

1043A   Prohibited conduct by person in possession of inside information

             (1)  Subject to this Subdivision, if:

                     (a)  a person (the insider ) possesses inside information; and

                     (b)  the insider knows, or ought reasonably to know, that the matters specified in paragraphs (a) and (b) of the definition of inside information in section 1042A are satisfied in relation to the information;

the insider must not (whether as principal or agent):

                     (c)  apply for, acquire, or dispose of, relevant Division 3 financial products, or enter into an agreement to apply for, acquire, or dispose of, relevant Division 3 financial products; or

                     (d)  procure another person to apply for, acquire, or dispose of, relevant Division 3 financial products, or enter into an agreement to apply for, acquire, or dispose of, relevant Division 3 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 inside information; and

                     (b)  the insider knows, or ought reasonably to know, that the matters specified in paragraphs (a) and (b) of the definition of inside information in section 1042A are satisfied in relation to the information; and

                     (c)  relevant Division 3 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, or ought reasonably to know, that the other person would or would be likely to:

                     (d)  apply for, acquire, or dispose of, relevant Division 3 financial products, or enter into an agreement to apply for, acquire, or dispose of, relevant Division 3 financial products; or

                     (e)  procure another person to apply for, acquire, or dispose of, relevant Division 3 financial products, or enter into an agreement to apply for, acquire, or dispose of, relevant Division 3 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.

             (3)  For the purposes of the application of the Criminal Code in relation to an offence based on subsection (1) or (2):

                     (a)  paragraph (1)(a) is a physical element, the fault element for which is as specified in paragraph (1)(b); and

                     (b)  paragraph (2)(a) is a physical element, the fault element for which is as specified in paragraph (2)(b).

[Chapter 7—revision of 1043A]

(136) Schedule 1, item 1, page 398 (lines 4 and 5), omit “managed investment product”, substitute “interest in a registered scheme”.

[Chapter 7—1070A references to interests in registered schemes]

(137) Schedule 1, item 1, page 399 (lines 18 to 21), omit subsection (1), substitute:

             (1)  This section applies to the following securities:

                     (a)  shares in a company;

                     (b)  debentures of a company;

                     (c)  interests in a registered scheme.

[Chapter 7—1070D references to interests in registered schemes]

(138) Schedule 1, item 1, page 399 (line 22), omit “a managed investment product”, substitute “an interest in a registered scheme”.

[Chapter 7—1070D references to interests in registered schemes]

(139) Schedule 1, item 1, page 401 (line 15), omit “ Division ”, substitute “ Subdivision ”.

[Chapter 7—correction of error in 1071A]

(140) Schedule 1, item 1, page 401 (line 16), omit “Division”, substitute “Subdivision”.

[Chapter 7—correction of error in 1071A]

(141) Schedule 1, item 1, page 401 (line 19), omit “managed investment products”, substitute “interests in a registered scheme”.

[Chapter 7—1071A references to interests in registered schemes]

(142) Schedule 1, item 1, page 401 (line 20), omit “Division”, substitute “Subdivision”.

[Chapter 7—correction of error in 1071A]

(143) Schedule 1, item 1, page 401 (line 20), omit “a managed investment product”, substitute “an interest in a registered scheme”.

[Chapter 7—1071A references to interests in registered schemes]

(144) Schedule 1, item 1, page 420 (line 7), omit “managed investment products prescribed”, substitute “interests in a registered scheme, being interests that are covered”.

[Chapter 7—1073A references to interests in registered schemes]

(145) Schedule 1, item 1, page 420 (line 9), omit “options”, substitute “rights”.

[Chapter 7—1073A to refer to “rights” rather than “options”]

(146) Schedule 1, item 1, page 420 (line 15), omit “a managed investment product”, substitute “an interest in a registered scheme”.

[Chapter 7—1073A references to interests in registered schemes]

(147) Schedule 1, item 1, page 424 (after line 2), at the end of subsection (1), add:

Note:          The securities in respect of which a declaration under this subsection may be made are not limited to those covered by paragraphs 1073A(1)(a) to (d).

[Chapter 7—clarification of effect of 1073E]

(148) Schedule 1, item 1, page 426 (lines 3 to 7), omit section 1074A, substitute:

1074A   Financial products to which this Division applies

                   This Division only applies in relation to particular financial products and a prescribed CS facility if regulations made for the purposes of this section provide that all financial products, or a class of financial products that includes the financial products, are financial products to which this Division applies in relation to the prescribed CS facility (whether or not they are also products to which this Division applies in relation to other prescribed CS facilities).

[Chapter 7—new version of 1074A]

(149) Schedule 1, item 1, page 432 (line 31) to page 433 (line 2), omit subsection (7), substitute:

             (7)  For the purposes 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.

[Chapter 7—provisions to which 1075A applies]

(150) Schedule 1, item 1, page 436 (line 7), omit “having regard to”, substitute “having regard to the following matters, and to any other matters that ASIC considers are relevant”.

[Chapter 7—matters relevant for 1101A approvals]

(151) Schedule 1, item 1, page 436 (lines 28 and 29), omit subparagraph 1101B(1)(a)(iii), substitute:

                            (iii)  has contravened a provision of the operating rules, or the compensation rules (if any), of a licensed market or of the operating rules of a licensed CS facility; or

[Chapter 7—inclusion of references to compensation rules in 1101B]

(152) Schedule 1, item 1, page 437 (line 5), after “operating rules”, insert “, or the compensation rules (if any),”.

[Chapter 7—inclusion of references to compensation rules in 1101B]

(153) Schedule 1, item 1, page 437 (line 13), after “operating rules”, insert “, or the compensation rules (if any),”.

[Chapter 7—inclusion of references to compensation rules in 1101B]

(154) Schedule 1, item 1, page 438 (lines 12 and 13), omit subparagraph (vi), substitute:

                            (vi)  a provision of the operating rules, or the compensation rules (if any), of a licensed market or of the operating rules of a licensed CS facility; or

[Chapter 7—inclusion of references to compensation rules in 1101B]

(155) Schedule 1, item 1, page 438 (line 15), omit “operating rules of a licensed market or of”, substitute “operating rules, or the compensation rules (if any), of a licensed market or of the operating rules of”.

[Chapter 7—inclusion of references to compensation rules in 1101B]

(156) Schedule 1, item 1, page 439 (line 30), omit “subsection (9)”, substitute “subsection (12)”.

[Chapter 7—inclusion of references to compensation rules in 1101B]

(157) Schedule 1, item 1, page 440 (lines 11 to 21), omit subsection (9).

[Chapter 7—inclusion of references to compensation rules in 1101B]

(158) Schedule 1, item 1, page 440 (after line 32), at the end of section 1101B, add:

           (12)  In this section:

compensation rules has the same meaning as in Part 7.5.

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.

[Chapter 7—inclusion of references to compensation rules in 1101B]

(159) Schedule 1, item 6, page 445 (after line 25), after subsection (2), insert:

             (3)  If:

                     (a)  an external Territory is prescribed; and

                     (b)  in a provision of this Act that applies (either generally or in particular circumstances) in the external Territory, there is:

                              (i)  a reference to “Australia” or “this jurisdiction”; or

                             (ii)  a reference to a term the definition of which includes a reference to “Australia” or “this jurisdiction”;

then, unless a contrary intention appears, the reference to “Australia” or “this jurisdiction” in that provision as so applying, or in that definition as applying for the purposes of that provision as so applying, includes a reference to that external Territory.

[section 4—external Territories]

(160) Schedule 1, page 445 (before line 26), before item 7, insert:

6A  Subsection 5(1) (definition of Australia )

Repeal the definition, substitute:

Australia has a meaning affected by subsection 4(3).

[subsection 5(1)—external Territories]

(161) Schedule 1, page 446 (after line 18), after item 11, insert:

11A  Subsection 5(1) (definition of foreign country )

Repeal the definition, substitute:

foreign country includes:

                     (a)  a part of a foreign country; and

                     (b)  when used in a provision of this Act that does not apply (either generally or in particular circumstances) to a particular external Territory—that external Territory (but only to the extent that the provision does not apply in that external Territory).

[subsection 5(1)—external Territories]

(162) Schedule 1, page 446 (after line 25), after item 14, insert:

14A  Subsection 5(1) (definition of Territory )

Repeal the definition, substitute:

Territory has the meaning given by the following paragraphs:

                     (a)  a reference in a provision of this Act to a Territory covers the Capital Territory and the Northern Territory;

                     (b)  if the reference is in a provision of this Act that applies (either generally or in particular circumstances) to a particular external Territory—the reference also covers that external Territory, but only to the extent that the provision applies in that external Territory;

                     (c)  if the reference is to a Territory in a geographical sense—the reference also covers, for each Territory that the reference covers because of paragraph (a) or (b), to the same extent that the reference covers the Territory, that Territory’s coastal sea.

14B  Subsection 5(1)

Insert:

this jurisdiction means:

                     (a)  each referring State (including its coastal sea); and

                     (b)  the Capital Territory (including the coastal sea of the Jervis Bay Territory); and

                     (c)  the Northern Territory (including its coastal sea).

Its meaning is also affected by subsection 4(3) (relating to external Territories).

[subsection 5(1)—external Territories]

(163) Schedule 1, item 20, page 458 (lines 11 to 20), omit paragraphs (f) and (g).

[section 12BAB—limiting exclusion of payment systems]

(164) Schedule 1, item 52, page 462 (lines 17 to 19), omit the item, substitute:

52  Subsection 41(1)

Omit “dealer” (wherever occurring), substitute “person who carries on a financial services business”.

[subsection 41(1)—correction of error in item 52 amendment]

(165) Schedule 1, page 466 (after line 11), after item 81, insert:

81A  Paragraph 95(1)(a)

After “Territory”, insert “(other than an external Territory)”.

[section 95—external Territories]

(166) Schedule 1, page 466 (after line 24), after item 86, insert:

86A  At the end of subsection 127(2A)

Add:

                   ; (d)  the Reserve Bank of Australia.

[section 127—role of the Reserve Bank]

(167) Schedule 1, item 91, page 467 (line 11), omit “(5B)”, substitute “(5A)”.

[section 127—correction of error in item 91 amendment]

(168) Schedule 1, item 99, page 468 (lines 7 to 9), omit the item, substitute:

99  Section 146 (note 1)

Omit “CASAC was”, substitute “CAMAC was (under its previous name of the Companies and Securities Advisory Committee)”.

[section 146—correction of error in item 99 amendment]

(169) Schedule 1, page 468 (before line 10), before item 100, insert:

99A  Section 146 (note 2)

Omit “CASAC”, substitute “CAMAC”.

[section 146—updating references to CASAC]

(170) Schedule 1, item 143, page 475 (line 1), after “Chapter”, insert “6CA or”.

[section 5A—binding the Crown]

(171) Schedule 1, item 146, page 475 (lines 11 and 12), omit the item, substitute:

146  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.

[section 9—definition of acquire]

(172) Schedule 1, item 152, page 475 (line 27) to page 476 (line 3), omit the item.

[section 9—definition of acquire]

(173) Schedule 1, item 257, page 486 (lines 15 and 16), omit the definition of participant , substitute:

participant , when used in a provision (the relevant provision ) outside Chapter 7 in relation to a clearing and settlement facility or a financial market, has the same meaning as it has in Chapter 7 in relation to a clearing and settlement facility or a financial market, except that it does not include a reference to a recognised affiliate (within the meaning of that Chapter) in relation to such a facility or market unless regulations for the purposes of this definition provide that, in the relevant provision, it does include a recognised affiliate.

[section 9—meaning of “participant”]

(174) Schedule 1, page 507 (after line 14), after item 412, insert:

412A  Subsection 707(3)

Omit all the words from and including “if the body issued the securities” to and including the end of paragraph (b), substitute:

                   if:

                     (a)  the body issued the securities without disclosure to investors under this Part; and

                     (b)  either:

                              (i)  the body issued the securities with the purpose of the person to whom they were issued selling or transferring the securities, or granting, issuing or transferring interests in, or options over, them; or

                             (ii)  the person to whom the securities were issued acquired them with the purpose of selling or transferring the securities, or granting, issuing or transferring interests in, or options over, them;

412B  Subsection 707(4)

Repeal the subsection, substitute:

The purpose test in subsection (3)

             (4)  For the purposes of subsection (3):

                     (a)  securities are taken to be:

                              (i)  issued with the purpose referred to in subparagraph (3)(b)(i); or

                             (ii)  acquired with the purpose referred to in subparagraph (3)(b)(ii);

                            if there are reasonable grounds for concluding that the securities were issued or acquired with that purpose (whether or not there may have been other purposes for the issue or acquisition); and

                     (b)  without limiting paragraph (a), securities are taken to be:

                              (i)  issued with the purpose referred to in subparagraph (3)(b)(i); or

                             (ii)  acquired with the purpose referred to in subparagraph (3)(b)(ii);

                            if any of the securities are subsequently sold, or offered for sale, within 12 months after issue, unless it is proved that the circumstances of the issue and the subsequent sale or offer are not such as to give rise to reasonable grounds for concluding that the securities were issued or acquired with that purpose.

[707—sales covered by 707(3) and (5)]

(175) Schedule 1, page 507 (after line 17), after item 413, insert:

413A  Paragraph 707(5)(c)

Repeal the paragraph, substitute:

                     (c)  either:

                              (i)  the controller sold the securities with the purpose of the person to whom they were sold selling or transferring the securities, or granting, issuing or transferring interests in, or options over, them; or

                             (ii)  the person to whom the securities were sold acquired them with the purpose of selling or transferring the securities, or granting, issuing or transferring interests in, or options over, them;

413B  Subsection 707(6)

Repeal the subsection, substitute:

The purpose test in subsection (5)

             (6)  For the purposes of subsection (5):

                     (a)  securities are taken to be:

                              (i)  sold with the purpose referred to in subparagraph (5)(c)(i); or

                             (ii)  acquired with the purpose referred to in subparagraph (5)(c)(ii);

                            if there are reasonable grounds for concluding that the securities were sold or acquired with that purpose (whether or not there may have been other purposes for the sale or acquisition); and

                     (b)  without limiting paragraph (a), securities are taken to be:

                              (i)  sold with the purpose referred to in subparagraph (5)(c)(i); or

                             (ii)  acquired with the purpose referred to in subparagraph (5)(c)(ii);

                            if any of the securities are subsequently sold, or offered for sale, within 12 months after their sale by the controller, unless it is proved that the circumstances of the initial sale and the subsequent sale or offer are not such as to give rise to reasonable grounds for concluding that the securities were sold or acquired (in the initial sale) with that purpose.

[707—sales covered by 707(3) and (5)]

(176) Schedule 1, page 507 (after line 19), after item 414, insert:

414A  Subparagraph 708(8)(c)(i)

Omit “$2.5 million”, substitute “the amount specified in regulations made for the purposes of this subparagraph”.

414B  Subparagraph 708(8)(c)(ii)

Omit “$25 0,0 00”, substitute “the amount specified in regulations made for the purposes of this subparagraph”.

[section 708—regulations to specify amounts for 708(8)(c)]

(177) Schedule 1, page 507 (after line 24), after item 415, insert:

415A  After subsection 708(9)

Insert:

          (9A)  In addition to specifying amounts for the purposes of subparagraphs (8)(c)(i) and (ii), the regulations may do either or both of the following:

                     (a)  deal with how net assets referred to in subparagraph (8)(c)(i) are to be determined and valued, either generally or in specified circumstances;

                     (b)  deal with how gross income referred to in subparagraph (8)(c)(ii) is to be calculated, either generally or in specified circumstances.

[section 708—regulations to specify amounts for 708(8)(c)]

(178) Schedule 1, page 509 (after line 23), after item 428, insert:

428A  At the end of Chapter 6D

Add:

Part 6D.5 Miscellaneous

   

742   Exemptions and modifications by regulations

             (1)  The regulations may:

                     (a)  exempt a person or class of persons from all or specified provisions of this Chapter; or

                     (b)  exempt a security or class of securities from all or specified provisions of this Chapter; or

                     (c)  provide that this Chapter applies 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 Chapter are modified so that they apply (with or without further modifications) in relation to persons, securities, financial products or situations to which they would not otherwise apply; or

                     (b)  declare that provisions of this Chapter 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 Chapter.

             (3)  For the purpose of this section, the provisions of this Chapter include:

                     (a)  definitions in this Act, or in the regulations, as they apply to references in this Chapter; and

                     (b)  any provisions of Part 10.2 (transitional provisions) that relate to provisions of this Chapter.

[new section 742—Chapter 6D exemptions and modifications by regulations]

(179) Schedule 1, item 457, page 516 (after table item 255A), insert:

255AA

Subsection 821BA(1)

100 penalty units or imprisonment for 2 years, or both.

[Schedule 3—role of the Reserve Bank]

(180) Schedule 1, item 457, page 516 (after table item 255B), insert:

255BA

Subsection 821C(3)

25 penalty units or imprisonment for 6 months, or both.

[Schedule 3—role of the Reserve Bank]

(181) Schedule 1, item 457, page 523 (after table item 297C), insert:

297CA

Subsection 1017DA(3)

50 penalty units.

[Schedule 3—new 1017DA]

(182) Schedule 1, page 526 (after line 6), at the end of the Schedule, add:

Reserve Bank Act 1959

460  Subsection 5(1) (definition of payments system policy )

Repeal the definition, substitute:

payments system policy means policy for the purposes of the Bank’s functions or powers under:

                     (a)  the Payment Systems (Regulation) Act 1998 ; and

                     (b)  the Payment Systems and Netting Act 1998 ; and

                     (c)  Part 7.3 of the Corporations Act 2001 .

461  Subsection 10(2)

Omit “and the Payment Systems and Netting Act 1998 ”, substitute “, the Payment Systems and Netting Act 1998 and Part 7.3 of the Corporations Act 2001 ”.

462  At the end of subsection 10B(3)

Add:

             ; and (c)  the powers and functions of the Bank under Part 7.3 of the Corporations Act 2001 are exercised in a way that, in the Board’s opinion, will best contribute to the overall stability of the financial system.

463  At the end of Division 3 of Part IIIA

Add:

25M   Payments System Board’s report to the Minister

             (1)  The Payments System Board must, as soon as practicable after 30 June in each year, prepare and give to the Minister a report that:

                     (a)  describes the standards determined under section 827D of the Corporations Act 2001 during the financial year ending on that 30 June; and

                     (b)  describes any variations made to standards determined under that section that were in force during the financial year ending on that 30 June; and

                     (c)  describes any revocations of standards determined under that section that were in force for part of the financial year ending on that 30 June; and

                     (d)  discusses developments in the clearing and settlement industry during the financial year ending on that 30 June that are relevant to Australia’s financial stability.

             (2)  Section 34C of the Acts Interpretation Act 1901 does not apply in relation to a report under subsection (1).

464  Subsection 79A(1) (definition of protected document )

Omit all the words after paragraph (c), substitute:

It also includes a document given or produced under, or for the purposes of, the performance or exercise of the functions or powers of the Reserve Bank under Part 7.3 of the Corporations Act 2001 . It does not however include any document to the extent that it contains information that has already been lawfully made available to the public from other sources.

465  Subsection 79A(1) (definition of protected information )

Omit all the words after paragraph (c), substitute:

It also includes information disclosed or obtained in the course of, or for the purposes of, the performance or exercise of the functions or powers of the Reserve Bank under Part 7.3 of the Corporations Act 2001 . It does not however include any information that has already been lawfully made available to the public from other sources.

466  Subsection 79A(2)

After “the Banking Act 1959 ,”, insert “Part 7.3 of the Corporations Act 2001 ,”.

467  After subsection 79A(6)

Insert:

          (6A)  Subsection (2) does not prohibit a person from disclosing protected information, or producing a protected document, to the Australian Securities and Investments Commission if the person is satisfied that the disclosure of the information, or the production of the document, to that body will assist it to perform its functions or exercise its powers under Part 7.3 of the Corporations Act 2001 .

          (6B)  Subsection (2) does not prohibit a person from:

                     (a)  disclosing protected information that is information disclosed or obtained in the course of, or for the purposes of, the performance or exercise of the functions or powers of the Reserve Bank under Part 7.3 of the Corporations Act 2001 ; or

                     (b)  producing a protected document that is a document given or produced under, or for the purposes of, the performance or exercise of the functions or powers of the Reserve Bank under Part 7.3 of the Corporations Act 2001 ;

if the disclosure or production is:

                     (c)  to the Minister; or

                     (d)  to the Secretary of the Department for the purpose of advising the Minister, or to an officer of the Department authorised by the Secretary for the purpose of advising the Minister.

468  Subsection 79A(8)

After “the Banking Act 1959 ,”, insert “Part 7.3 of the Corporations Act 2001 ,”.

469  After subsection 79A(9)

Insert:

          (9A)  For the avoidance of doubt, information or a document that, as permitted by subsection 127(2A) of the Australian Securities and Investments Commission Act 2001 , is disclosed to the Bank does not become, because of that disclosure, protected information or a protected document.

[sections 5, 10, 10B and 79A—role of the Reserve Bank]

(183) Schedule 3, page 539 (after line 1), after item 14, insert:

14A  Section 9 (definition of voting power )

Omit “company”, substitute “body or managed investment scheme”.

[section 9—meaning of “associate”]

(184) Schedule 3, item 15, page 539 (lines 4 to 32), omit section 12, substitute:

12   References in Chapters 6 to 6C, and other references relating to voting power and takeovers etc.

             (1)  Subject to subsection 16(1), but despite anything else in this Part, this section applies for the purposes of interpreting a reference to an associate (the associate reference ), in relation to a designated body, if:

                     (a)  the reference occurs in a provision of Chapter 6, 6A, 6B or 6C; or

                     (b)  the reference occurs in a provision outside those Chapters that relates to any of the following matters:

                              (i)  the extent, or restriction, of a power to exercise, or to control the exercise of, the votes attached to voting shares in the designated body;

                             (ii)  the primary person’s voting power in the designated body;

                            (iii)  relevant interests in securities in the designated body;

                            (iv)  a substantial holding in the designated body;

                             (v)  a takeover bid for securities in the designated body;

                            (vi)  the compulsory acquisition, or compulsory buy-out, of securities in the designated body.

             (2)  For the purposes of the application of the associate reference in relation to the designated body, a person (the second person ) is an associate of the primary person if, and only if, one or more of the following paragraphs applies:

                     (a)  the primary person is a body corporate and the second person is:

                              (i)  a body corporate the primary person controls; or

                             (ii)  a body corporate that controls the primary person; or

                            (iii)  a body corporate that is controlled by an entity that controls the primary person;

                     (b)  the second person is a person with whom the primary person has, or proposes to enter into, a relevant agreement for the purpose of controlling or influencing the composition of the designated body’s board or the conduct of the designated body’s affairs;

                     (c)  the second person is a person with whom the primary person is acting, or proposing to act, in concert in relation to the designated body’s affairs.

             (3)  For the purposes of the application of this section in relation to a designated body that is a managed investment scheme:

                     (a)  a reference to controlling or influencing the composition of the designated body’s board is taken to be a reference to controlling or influencing:

                              (i)  if the scheme is a registered scheme—whether a particular company becomes or remains the scheme’s responsible entity; or

                             (ii)  if the scheme is not a registered scheme—whether a particular person is appointed, or remains appointed, to the office (by whatever name it is known) in relation to the scheme that corresponds most closely to the office of responsible entity of a registered scheme; and

                     (b)  a reference to voting shares in the designated body is taken to be a reference to voting interests in the managed investment scheme.

             (4)  In relation to a matter relating to securities in a designated body, a person may be an associate of the body and the body may be an associate of the person.

             (5)  In this section:

designated body means:

                     (a)  a body; or

                     (b)  a managed investment scheme.

[section 12—meaning of “associate”]

(185) Schedule 3, page 540 (after line 15), after item 19, insert:

19A  Section 610

Omit “body corporate” (wherever occurring), substitute “designated body”.

Note:       The heading to section 610 is altered by omitting “ body corporate ” and substituting “ body or managed investment scheme ”.

Note:       The heading to subsection 610(1) is altered by omitting “ body corporate ” and substituting “ body or managed investment scheme ”.

[section 610—meaning of “associate”]

(186) Schedule 3, page 540 (after line 18), after item 20, insert:

20A  At the end of section 610

Add:

When a designated body is a managed investment scheme

             (5)  For the purposes of the application of this section in relation to a designated body that is a managed investment scheme:

                     (a)  a reference to voting shares in the designated body is taken to be a reference to voting interests in the scheme; and

                     (b)  a reference to the election of directors of the designated body is taken to be a reference to:

                              (i)  if the scheme is a registered scheme—the appointment of a responsible entity for the scheme; or

                             (ii)  if the scheme is not a registered scheme—the appointment of a person to the office (by whatever name it is known) in relation to the scheme that corresponds most closely to the office of responsible entity of a registered scheme; and

                     (c)  a reference to the designated body’s constitution is taken to be a reference to the scheme’s constitution.

Meaning of designated body

             (6)  In this section:

designated body means:

                     (a)  a body; or

                     (b)  a managed investment scheme.

[section 610—meaning of “associate”]

(187) Schedule 3, page 540 (before line 19), before item 21, insert:

20B  Subsection 629(2)

Omit all the words after “merely because” (including the note), substitute “of paragraph 12(2)(a)”.

[section 629—meaning of “associate”]