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Financial Services Reform Bill 2001

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1998-1999-2000-2001

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

THE SENATE

 

 

Financial Services Reform Bill 2001

 

 

Schedule of the amendments made by the Senate

 

 

 

 

 

 

(1)     Govt (1) [Sheet DU288]

          Schedule 1, item 1, page 6 (lines 26 to 30), omit paragraph (d), substitute:

                     (d)  funds are able to be withdrawn or transferred from the facility on the instruction of, or by authority of, the depositor:

                              (i)  without any prior notice to the ADI that makes the facility available; or

                             (ii)  if the ADI that makes the facility available is included in a class of ADIs specified in regulations made for the purposes of this subparagraph—subject to a prior notice requirement that does not exceed the period specified in those regulations in relation to that class of ADIs;

                            whether or not the withdrawal or transfer will attract a reduction in the return generated for the depositor as mentioned in subparagraph (c)(i); and

(2)     Govt (2) [Sheet DU288]

          Schedule 1, item 1, page 8 (after line 8), after the definition of disqualified individual , insert:

execution-related telephone advice has the meaning given by subsection 946B(1).

(3)     Govt (3) [Sheet DU288]

          Schedule 1, item 1, page 8 (lines 14 and 15), omit “subsection 766B(1)”, substitute “section 766B”.

(4)     Govt (4) [Sheet DU288]

          Schedule 1, item 1, page 9 (after line 30), after the definition of general insurance product , insert:

holder , in relation to a financial product, means the person to whom the financial product was issued, or if it has (since issue) been disposed of to another person who has not themselves disposed of it, that other person (and hold has a corresponding meaning).

(5)     Govt (5) [Sheet DU288]

          Schedule 1, item 1, page 11 (line 2), omit “or (l)”.

(6)     Govt (6) [Sheet DU288]

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

relevant personal circumstances , in relation to advice provided or to be provided to a person in relation to a matter, are such of the person’s objectives, financial situation and needs as would reasonably be considered to be relevant to the advice.

(7)     Govt (7) [Sheet DU288]

          Schedule 1, item 1, page 17 (before line 1), after subsection (3), insert:

          (3A)  For the avoidance of doubt, none of the following are taken to give rise to the issue of a financial product to a person (the client ):

                     (a)  the client making a further contribution to a superannuation fund of which the client is already a member;

                     (b)  the client making a further deposit into an RSA maintained in the client’s name;

                     (c)  the client making a further payment under a life insurance investment product;

                     (d)  the client making a further deposit into a deposit product;

                     (e)  the client engaging in conduct specified in regulations made for the purposes of this paragraph in relation to a financial product already held by the client.

(8)     Govt (8) [Sheet DU288]

          Schedule 1, item 1, page 20 (line 30), omit “subsection (5) or (7)”, substitute “subsection (5), (6) or (7)”.

(9)     Govt (9) [Sheet DU288]

          Schedule 1, item 1, page 22 (lines 13 to 19), omit subsection (6), substitute:

Superannuation products and RSA products

             (6)  For the purposes of this Chapter:

                     (a)  if a financial product provided to a person is a superannuation product or an RSA product, the product is provided to the person as a retail client; and

                     (b)  if a financial service (other than the provision of a financial product) provided to a person who is not covered by subparagraph (c)(i) or (ii) relates to a superannuation product or an RSA product, the service is provided to the person as a retail client; and

                     (c)  if a financial service (other than the provision of a financial product) provided to a person who is:

                              (i)  the trustee of a superannuation fund, an approved deposit fund, a pooled superannuation trust or a public sector superannuation scheme (within the meaning of the Superannuation Industry (Supervision) Act 1993 ) that has net assets of at least $10 million; or

                             (ii)  an RSA provider (within the meaning of the Retirement Savings Accounts Act 1997 );

                            relates to a superannuation product or an RSA product, that does not constitute the provision of a financial service to the person as a retail client.

(10)   Govt (10) [Sheet DU288]

          Schedule 1, item 1, page 23 (line 33) to page 24 (line 5), omit notes 1, 2 and 3 to subsection (9), substitute:

Note 1:       There is no such presumption in relation to the provision of a product or service that is or relates to a general insurance product, a superannuation product or an RSA product. Whether or not such a product, or a service relating to such a product, was provided to a person as a retail client is to be resolved as provided in subsection (5) or (6), as the case requires.

Note 2:       In criminal proceedings, a defendant bears an evidential burden in relation to the matters in paragraphs (7)(a) to (d) (see subsection (8)).

(11)   Govt (11) [Sheet DU288]

          Schedule 1, item 1, page 30 (line 15), omit “may be still be”, substitute “may still be”.

(12)   Govt (12) [Sheet DU288]

          Schedule 1, item 1, page 30 (after line 33), after paragraph 764A(1)(b), insert:

                   (ba)  any of the following in relation to a managed investment scheme that is not a registered scheme, other than a scheme (whether or not operated in this jurisdiction) in relation to which none of paragraphs 601ED(1)(a), (b) and (c) are satisfied:

                              (i)  an interest in the scheme;

                             (ii)  a legal or equitable right or interest in an interest covered by subparagraph (i);

                            (iii)  an option to acquire, by way of issue, an interest or right covered by subparagraph (i) or (ii);

(13)   Govt (13) [Sheet DU288]

          Schedule 1, item 1, page 32 (lines 17 to 20), omit subparagraph (k)(ii), substitute:

                             (ii)  a contract to exchange one currency (whether Australian or not) for another that is to be settled immediately;

(14)   Govt (14) [Sheet DU288]

          Schedule 1, item 1, page 32 (lines 21 to 29), omit paragraph (l).

(15)   Govt (15) [Sheet DU288]

          Schedule 1, item 1, page 34 (lines 18 to 21), omit paragraph (m), substitute:

                    (m)  a contract to exchange one currency (whether Australian or not) for another that is to be settled immediately;

(16)   Govt (16) [Sheet DU288]

          Schedule 1, item 1, page 34 (lines 24 and 25), omit paragraph (o).

(17)   Govt (17) [Sheet DU288]

          Schedule 1, item 1, page 35 (lines 1 to 9), omit paragraph (s), substitute:

                      (s)  any of the following in relation to a managed investment scheme (whether or not operated in this jurisdiction) in relation to which none of paragraphs 601ED(1)(a), (b) and (c) are satisfied and that is not a registered scheme:

                              (i)  an interest in the scheme;

                             (ii)  a legal or equitable right or interest in an interest covered by subparagraph (i);

                            (iii)  an option to acquire, by way of issue, an interest or right covered by subparagraph (i) or (ii);

(18)   Govt (18) [Sheet DU288]

          Schedule 1, item 1, page 37 (line 5), omit “the provision of an exempt document”, substitute “the provision or giving of an exempt document or statement”.

(19)   Govt (19) [Sheet DU288]

          Schedule 1, item 1, page 37 (lines 12 to 15), omit paragraphs (3)(a) and (b), substitute:

                     (a)  the provider of the advice has considered one or more of the person’s objectives, financial situation and needs; or

                     (b)  a reasonable person might expect the provider to have considered one or more of those matters.

(20)   Govt (20) [Sheet DU288] ( As amended by Opp (1) [Sheet 2335] )

          Schedule 1, item 1, page 37 (lines 18 to 20), omit subsection (5), substitute:

             (5)  The following advice is not financial product advice:

                     (a)  advice given by a lawyer in his or her professional capacity, about matters of law, legal interpretation or the application of the law to any facts;

                     (b)  except as may be prescribed by the regulations—any other advice given by a lawyer in the ordinary course of activities as a lawyer, that is reasonably regarded as a necessary part of those activities;

                     (c)  except as may be prescribed by the regulations—advice given by a tax agent registered under Part VIIA of the Income Tax Assessment Act 1936 , that is given in the ordinary course of activities as such an agent and that is reasonably regarded as a necessary part of those activities.

             (6)  If:

                     (a)  in response to a request made by a person (the inquirer ) to another person (the provider ), the provider tells the inquirer the cost, or an estimate of the likely cost, of a financial product (for example, an insurance product); and

                     (b)  that cost or estimate is worked out, or said by the provider to be worked out, by reference to a valuation of an item (for example, a house or car to which an insurance policy would relate), being a valuation that the provider suggests or recommends to the inquirer;

the acts of telling the inquirer the cost, or estimated cost, and suggesting or recommending the valuation, do not, of themselves, constitute the making of a recommendation (or the provision of any other kind of financial product advice) relating to the financial product.

             (7)  If:

                     (a)  in response to a request made by a person (the inquirer ) to another person (the provider ), the provider tells the inquirer information about:

                              (i)  the cost of a financial product; or

                             (ii)  the rate of return on a financial product; or

                            (iii)  any other matter identified in regulations made for the purposes of this subparagraph; and

                     (b)  the request could also have been complied with (but was not also so complied with) by telling the inquirer equivalent information about one or more other financial products;

the act of telling the inquirer the information does not, of itself, constitute the making of a recommendation (or the provision of any other kind of financial product advice) in relation to the financial product referred to in paragraph (a).

             (8)  Subsections (5), (6) and (7) are not intended to affect, in any way, the determination of whether situations not covered by those subsections do, or do not, constitute the provision of financial product advice.

(21)   Govt (21) [Sheet DU288]

          Schedule 1, item 1, page 37 (lines 21 to 29), omit subsection (6), substitute:

             (9)  In this section:

exempt document or statement means:

                     (a)  a document prepared, or a statement given, in accordance with requirements of this Chapter, other than:

                              (i)  a Statement of Advice; or

                             (ii)  a document or statement of a kind prescribed by regulations made for the purposes of this subparagraph; or

                     (b)  any other document or statement of a kind prescribed by regulations made for the purposes of this paragraph.

(22)   Govt (22) [Sheet DU288]

          Schedule 1, item 1, page 37 (line 31), after “conduct”, insert “(whether engaged in as principal or agent)”.

(23)   Govt (23) [Sheet DU288]

          Schedule 1, item 1, page 38 (line 10), after “own behalf”, insert “(whether directly or through an agent or other representative)”.

(24)   Govt (24) [Sheet DU288]

          Schedule 1, item 1, page 38 (after line 12), after subsection (3), insert:

          (3A)  For the purposes of subsection (3), a person (the agent ) who deals in a product as an agent or representative of another person (the principal ) is not taken to deal in the product on the agent’s own behalf, even if that dealing, when considered as a dealing by the principal, is a dealing by the principal on the principal’s own behalf.

(25)   Govt (25) [Sheet DU288]

          Schedule 1, item 1, page 39 (after line 12), at the end of section 766D, add:

             (2)  Paragraph (1)(a) does not apply to a person stating prices at which they propose to acquire or dispose of financial products if:

                     (a)  the person is the issuer of the products; and

                     (b)  the products are superannuation products, managed investment products or financial products referred to in paragraph 764A(1)(ba) (which relates to unregistered managed investment schemes).

(26)   Govt (26) [Sheet DU288]

          Schedule 1, item 1, page 39 (lines 14 to 34), omit subsections 766E(1) and (2), substitute:

             (1)  For the purposes of this Chapter, a person (the provider ) provides a custodial or depository service to another person (the client ) if, under an arrangement between the provider and the client, or between the provider and another person with whom the client has an arrangement, (whether or not there are also other parties to any such arrangement), a financial product, or a beneficial interest in a financial product, is held by the provider in trust for, or on behalf of, the client or another person nominated by the client.

             (2)  The following provisions apply in relation to a custodial or depository service:

                     (a)  subject to paragraph (b), for the purposes of this Chapter, the time at which a custodial or depository service is provided is the time when the financial product or beneficial interest concerned is first held by the provider as mentioned in subsection (1);

                     (b)  for the purposes of Part 7.6, and of any other provisions of this Act prescribed by regulations made for the purposes of this paragraph, the continued holding of the financial product or beneficial interest concerned by the provider as mentioned in subsection (1) also constitutes the provision of a custodial or depository service.

Note:          Because of paragraph (a) (subject to regulations made for the purposes of paragraph (b)), the requirements of Part 7.7 relating to financial services disclosure need only be complied with before the product or interest is first held by the provider. However, because of paragraph (b), the provider will be subject to the licensing and related requirements of Part 7.6 for so long as they continue to hold the product or interest.

(27)   Govt (27) [Sheet DU288]

          Schedule 1, item 1, page 40 (line 4), after “registered scheme”, insert “, or the holding of the assets of a registered scheme”.

(28)   Govt (28) [Sheet DU288]

          Schedule 1, item 1, page 44 (after line 35), after subsection (8), insert:

          (8A)  Nothing in this section, other than subsections (7) and (8), excludes or limits the operation of subsection 601FB(2) in relation to the provisions of this Chapter or to proceedings under this Chapter.

(29)   Govt (29) [Sheet DU288]

          Schedule 1, item 1, page 46 (lines 5 to 9), omit the definition of clearing and settlement arrangements , substitute:

clearing and settlement arrangements , for transactions effected through a financial market, means arrangements for the clearing and settlement of those transactions. The arrangements may be part of the market’s operating rules or be separate from those operating rules.

(30)   Opp (1) [Sheet 2330 Revised]

          Schedule 1, item 1, page 48 (lines 5 to 9), omit paragraph (a), substitute:

                     (a)  to the extent that it is reasonably practicable to do so, do all things necessary to ensure that the market is a fair, orderly and transparent market; and

(31)   Govt (30) [Sheet DU288]

          Schedule 1, item 1, page 48 (line 19), omit “in”, substitute “on or in relation to”.

(32)   Govt (31) [Sheet DU288]

          Schedule 1, item 1, page 50 (line 35), omit “an individual”, substitute “a person”.

(33)   Govt (32) [Sheet DU288]

          Schedule 1, item 1, page 53 (lines 1 to 20), omit section 792G, substitute:

792G   Obligations to notify people about clearing and settlement arrangements in certain circumstances

             (1)  If, in relation to a category of transactions, being all transactions or a class of transactions effected through a licensed market, the market licensee:

                     (a)  does not have any clearing and settlement arrangements for transactions in that category; or

                     (b)  has clearing and settlement arrangements for transactions in that category, but they are not arrangements with the operator of a clearing and settlement facility for the clearing and settlement of such transactions through the facility;

the market licensee must, before a person becomes a participant in the market, give the person written advice:

                     (c)  if paragraph (a) applies—that the licensee does not have any clearing and settlement arrangements for transactions in that category, and that it is the responsibility of the parties to such transactions to make their own arrangements for the clearing and settlement of such transactions; or

                     (d)  if paragraph (b) applies—setting out particulars of the clearing and settlement arrangements for transactions in that category.

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

             (2)  Within a reasonable time before a market licensee ceases, in relation to a category of transactions, being all transactions or a class of transactions effected through a licensed market, to have clearing and settlement arrangements (the terminating arrangements ) with the operator of a particular clearing and settlement facility for the clearing and settlement of such transactions through the facility, the market licensee must give the participants in the market written advice:

                     (a)  if the terminating arrangements are not being replaced by any other clearing and settlement arrangements—that the licensee will no longer have clearing and settlement arrangements for that category of transactions, and that it will be the responsibility of the parties to such transactions to make their own arrangements for the clearing and settlement of such transactions; or

                     (b)  if the terminating arrangements are being replaced by new clearing and settlement arrangements—setting out particulars of the new arrangements.

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

(34)   Govt (33) [Sheet DU288]

          Schedule 1, item 1, page 62 (line 13), omit “in”, substitute “on or in relation to”.

(35)   Govt (34) [Sheet DU288]

          Schedule 1, item 1, page 77 (line 17), omit “an individual”, substitute “a person”.

(36)   Dem (1) [Sheet 2327 Revised 2]

          Schedule 1, item 1, page 100 (lines 1 to 3), omit paragraph 850B(b), substitute:

                     (b)  in relation to a body other than the Australian Stock Exchange Limited—if an approval of a higher percentage is in force under Subdivision B in relation to the body and in relation to the person, that higher percentage; or

                     (c)  in relation to the Australian Stock Exchange Limited—if the regulations prescribe a higher percentage in relation to the Australian Stock Exchange Limited in relation to the person, that higher percentage.



(37)   Dem (1A) [Sheet 2327 Revised 2]

          Schedule 1, item 1, page 100 (after line 3), at the end of section 850B, add:

             (2)  Regulations made for the purposes of paragraph (1)(c) may not take effect earlier than the day after the last day on which the regulations may be disallowed under section 48 of the Acts Interpretation Act 1901 .

(38)   Dem (2) [Sheet 2327 Revised 2]

          Schedule 1, item 1, page 102 (line 4), after “body”, insert “(other than the Australian Stock Exchange Limited)”.

(39)   Govt (35) [Sheet DU288]

          Schedule 1, item 1, page 112 (line 22), omit “ Record-keeping etc. ”, substitute “ Miscellaneous ”.

(40)   Govt (36) [Sheet DU288]

          Schedule 1, item 1, page 113 (after line 24), at the end of Part 7.4, add:

854B   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)  provide that this Part 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 declare that provisions of this Part are modified so that they apply (with or without further modifications) in relation to persons, bodies or situations to which they would not otherwise apply.

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

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

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

(41)   Govt (37) [Sheet DU288]

          Schedule 1, item 1, page 120 (lines 8 to 11), omit paragraph (c), substitute:

                     (c)  the operator of a clearing and settlement facility, if:

                              (i)  there are clearing and settlement arrangements (as defined in section 790A) for some or all transactions effected through the market; and

                             (ii)  those arrangements are with the operator of the facility; or

(42)   Govt (38) [Sheet DU288]

          Schedule 1, item 1, page 156 (lines 6 to 11), omit the definition of representative , substitute:

representative of a person means:

                     (a)  if the person is a financial services licensee:

                              (i)  an authorised representative of the licensee; or

                             (ii)  an employee or director of the licensee; or

                            (iii)  an employee or director of a related body corporate of the licensee; or

                            (iv)  any other person acting on behalf of the licensee; or

                     (b)  in any other case:

                              (i)  an employee or director of the person; or

                             (ii)  an employee or director of a related body corporate of the person; or

                            (iii)  any other person acting on behalf of the person.

(43)   Govt (39) [Sheet DU288]

          Schedule 1, item 1, page 157 (lines 3 to 12), omit paragraph (b), substitute:

                     (b)  the service is the issue, variation or disposal of a financial product by the person (the product provider ) pursuant to an arrangement (an intermediary authorisation ) between the product provider and a financial services licensee under which:

                              (i)  the financial services licensee, or their authorised representatives, may make offers to people to arrange for the issue, variation or disposal of financial products by the product provider; and

                             (ii)  the product provider is to issue, vary or dispose of financial products in accordance with such offers, if they are accepted;

                            provided that the offer pursuant to which the issue, variation or disposal is made was covered by the financial services licensee’s Australian financial services licence;

                   (ba)  the service is the entry into of an intermediary authorisation referred to in paragraph (b);

(44)   Opp (2) [Sheet 2330 Revised]

          Schedule 1, item 1, page 157 (lines 23 to 26), omit paragraph (e).

(45)   Govt (40) [Sheet DU288]

          Schedule 1, item 1, page 157 (after line 26), after paragraph (e), insert:

                    (ea)  the service is the provision of general advice and all of the following apply:

                              (i)  the advice is provided in a newspaper or periodical of which the person is the proprietor or publisher;

                             (ii)  the newspaper or periodical is generally available to the public otherwise than only on subscription;

                            (iii)  the sole or principal purpose of the newspaper or periodical is not the provision of financial product advice;



                   (eb)  the service is the provision of general advice and all of the following apply:

                              (i)  the advice is provided in the course of, or by means of, transmissions that the person makes by means of an information service (see subsection (6)), or that are made by means of an information service that the person owns, operates or makes available;

                             (ii)  the transmissions are generally available to the public;

                            (iii)  the sole or principal purpose of the transmissions is not the provision of financial product advice;

                    (ec)  the service is the provision of general advice and all of the following apply:

                              (i)  the advice is provided in sound recordings, video recordings, or data recordings;

                             (ii)  the person makes the recordings available to the public by supplying copies of them to the public and/or by causing the recordings (if they are sound recordings) to be heard by the public, causing the recordings (if they are video recordings) to be seen and heard by the public, or the contents of the recordings (if they are data recordings) to be displayed or reproduced for the public;

                            (iii)  the sole or principal purpose of the recordings is not the provision of financial product advice;

(46)   Govt (41) [Sheet DU288]

          Schedule 1, item 1, page 158 (lines 14 to 16), omit subparagraph (g)(ii), substitute:

                             (ii)  the service is one in relation to which APRA has regulatory or supervisory responsibilities;

(47)   Govt (42) [Sheet DU288]

          Schedule 1, item 1, page 159 (lines 11 to 16), omit subsection (5), substitute:

             (5)  The exemption under paragraph (2)(ea), (eb) or (ec), or an exemption under paragraph (2)(k) or (l), may apply unconditionally or subject to conditions:

                     (a)  in the case of the exemption under paragraph (2)(ea), (eb) or (ec), or an exemption under paragraph (2)(k)—specified in regulations made for the purposes of this paragraph; or

                     (b)  in the case of an exemption under paragraph (2)(l)—specified by ASIC in writing published in the Gazette .

             (6)  In this section:

information service means:

                     (a)  a broadcasting service; or

                     (b)  an interactive or broadcast videotext or teletext service or a similar service; or

                     (c)  an online database service or a similar service; or

                     (d)  any other service identified in regulations made for the purposes of this paragraph.



(48)   Govt (43) [Sheet DU288]

          Schedule 1, item 1, page 161 (after line 3), at the end of section 911B, add:

             (3)  If, as mentioned in paragraph (1)(d), the provider holds their own Australian financial services licence covering the provision of the service, then, for the purposes of the other provisions of this Chapter, the service is taken to be provided by the provider (and not by the principal) unless regulations made for the purposes of this subsection provide otherwise.

(49)   Opp (3) [Sheet 2330 Revised]

          Schedule 1, item 1, page 162 (lines 4 to 7), omit paragraph (a), substitute:

                     (a)  do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly; and

(50)   Govt (44) [Sheet DU288]

          Schedule 1, item 1, page 162 (lines 21 to 26), omit paragraph (g), substitute:

                     (g)  if those financial services are provided to persons as retail clients—have a dispute resolution system complying with subsection (2); and

(51)   Govt (45) [Sheet DU288]

          Schedule 1, item 1, page 162 (after line 30), at the end of section 912A, add:

             (2)  To comply with this subsection, a dispute resolution system must consist of:

                     (a)  an internal dispute resolution procedure that:

                              (i)  complies with standards, and requirements, made or approved by ASIC in accordance with regulations made for the purposes of this subparagraph; and

                             (ii)  covers complaints against the licensee made by retail clients in connection with the provision of all financial services covered by the licence; and

                     (b)  membership of one or more external dispute resolution schemes that:

                              (i)  is, or are, approved by ASIC in accordance with regulations made for the purposes of this subparagraph; and

                             (ii)  covers, or together cover, complaints (other than complaints that may be dealt with by the Superannuation Complaints Tribunal established by section 6 of the Superannuation (Resolution of Complaints) Act 1993 ) against the licensee made by retail clients in connection with the provision of all financial services covered by the licence.

             (3)  Regulations made for the purposes of subparagraph (2)(a)(i) or (2)(b)(i) may also deal with the variation or revocation of:

                     (a)  standards or requirements made by ASIC; or

                     (b)  approvals given by ASIC.



(52)   Govt (46) [Sheet DU288]

          Schedule 1, item 1, page 164 (line 31), omit “this Act”, substitute “the financial services laws”.

(53)   Govt (47) [Sheet DU288]

          Schedule 1, item 1, page 168 (lines 12 and 13), omit “significantly limiting or restricting the APRA body’s ability to carry on”, substitute “preventing the APRA body from being able to carry on”.

(54)   Govt (48) [Sheet DU288]

          Schedule 1, item 1, page 168 (lines 32 and 33), omit “significantly limiting or restricting the ADI’s ability to carry on”, substitute “preventing the ADI from being able to carry on”.

(55)   Govt (49) [Sheet DU288]

          Schedule 1, item 1, page 171 (after line 14), at the end of section 915B, add:

             (4)  ASIC may suspend or cancel an Australian financial services licence held by the trustees of a trust, by giving written notice to the trustees, if:

                     (a)  the trustees of the trust cease to carry on the financial services business; or

                     (b)  a trustee who is a natural person:

                              (i)  becomes an insolvent under administration; or

                             (ii)  is convicted of serious fraud; or

                            (iii)  becomes incapable of managing their affairs because of physical or mental incapacity; or

                     (c)  a trustee that is a body corporate becomes an externally-administered body corporate; or

                     (d)  the trustees lodge with ASIC an application for ASIC to do so, which is accompanied by the documents, if any, required by regulations made for the purposes of this paragraph.

Note 1:       For fees in respect of lodging applications, see Part 9.10.

Note 2:       If there is only one trustee, subsection (1) will apply (if the trustee is a natural person), and subsection (3) will apply (if the trustee is a body corporate).

(56)   Govt (50) [Sheet DU288]

          Schedule 1, item 1, page 173 (lines 14 to 28), omit subsection (1), substitute:

             (1)  If a financial services 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 ),

the following provisions apply:

                     (a)  ASIC cannot suspend or cancel the licensee’s licence if doing so would, in ASIC’s opinion, have the result of preventing the APRA body from being able to carry on all or any of its usual activities (being activities in relation to which APRA has regulatory or supervisory responsibilities), unless ASIC has first consulted APRA about the proposed action;

                     (b)  if ASIC suspends or cancels the licensee’s licence and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken.

(57)   Govt (51) [Sheet DU288]

          Schedule 1, item 1, page 174 (lines 1 and 2), omit “significantly limiting or restricting the ADI’s ability to carry on”, substitute “preventing the ADI from being able to carry on”.

(58)   Govt (52) [Sheet DU288]

          Schedule 1, item 1, page 175 (after line 7), after subsection 916A(3), insert:

          (3A)  A person must not give a purported authorisation if that purported authorisation is void to any extent under subsection (3).

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

(59)   Govt (53) [Sheet DU288]

          Schedule 1, item 1, page 175 (after line 15), after subsection 916B(2), insert:

          (2A)  A person must not give a purported authorisation if that purported authorisation is contrary to this section.

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

(60)   Govt (54) [Sheet DU288]

          Schedule 1, item 1, page 175 (line 20), at the end of subsection 916B(3), add “in writing given to the body corporate”.

(61)   Govt (55) [Sheet DU288]

          Schedule 1, item 1, page 175 (after line 25 ) , after subsection (5), insert:

          (5A)  If a licensee gives consent under subsection (3) to a body corporate, the licensee must keep a copy of the consent for 5 years after the day on which it ceases to have effect.

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

(62)   Govt (56) [Sheet DU288]

          Schedule 1, item 1, page 175 (after line 27), at the end of section 916B, add:

             (7)  An authorisation of an individual as mentioned in subsection (3) may be revoked at any time by:

                     (a)  the licensee; or

                     (b)  the body corporate that gave the individual the authorisation;

giving written notice to the individual.

             (8)  If a person revokes the authorisation of an individual under subsection (7), that person must inform, in writing, the other person who could have revoked the authorisation.

             (9)  To avoid doubt, an authorisation given as mentioned in subsection (3) is taken, for the purposes of sections 916C to 916F, to be given by the body corporate, not the licensee.

(63)   Govt (57) [Sheet DU288]

          Schedule 1, item 1, page 176 (lines 8 to 10), omit subsection 916C(3), substitute:

             (3)  A person must not give a purported authorisation if that purported authorisation is in breach of this requirement.

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

(64)   Govt (58) [Sheet DU288]

          Schedule 1, item 1, page 176 (after line 20), after subsection 916D(2), insert:

          (2A)  A person must not give a purported authorisation if that purported authorisation is given in breach of this requirement.

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

          (2B)  The requirement in subsection (1) does not prohibit a financial services licensee from being an authorised representative in circumstances covered by section 916E.

Note:          In a prosecution for an offence based on subsection (2A), a defendant bears an evidential burden in relation to the matters in this subsection. See subsection 13.3(3) of the Criminal Code .

(65)   Govt (59) [Sheet DU288]

          Schedule 1, item 1, page 177 (line 5), after “ ASIC ”, insert “ etc. ”.

(66)   Govt (60) [Sheet DU288]

          Schedule 1, item 1, page 177 (after line 11), after subsection 916F(1), insert:

          (1A)  A person who authorises an individual to provide a financial service on behalf of a financial services licensee as mentioned in section 916B must give the licensee written notice (in accordance with subsection (2)), within 10 business days of the individual being authorised to provide the financial service, if the licensee’s consent to the authorisation was given in respect of a specified class of individuals.

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

(67)   Govt (61) [Sheet DU288]

          Schedule 1, item 1, page 177 (lines 19 to 23), omit subsection (3), substitute:

             (3)  A person must notify ASIC, by lodging a written notice, within 10 business days if:

                     (a)  the person authorised a representative under section 916A or 916B and there is a change in any details relating to the representative that are required to be included under subsection (2); or

                     (b)  the person revokes the authorisation of a representative under section 916A or 916B.

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

(68)   Govt (62) [Sheet DU288]

          Schedule 1, item 1, page 181 (lines 5 to 15), omit subsection (3), substitute:

Financial service covered by multiple authorities: conduct within authority for one or more of them

             (3)  If:

                     (a)  the representative is the representative of more than one of the licensees in respect of a particular class of financial service; and

                     (b)  the conduct relates to that class of service; and

                     (c)  the conduct is within authority in relation to:

                              (i)  only one of those licensees (the authorising licensee ); or

                             (ii)  two or more of those licensees (the authorising licensees );

then:

                     (d)  if subparagraph (c)(i) applies—the authorising licensee is responsible for the conduct, as between that licensee and the client; or

                     (e)  if subparagraph (c)(ii) applies—the authorising licensees are jointly and severally responsible for the conduct, as between themselves and the client.

(69)   Opp (4) [Sheet 2330 Revised]

          Schedule 1, item 1, page 183 (line 3) to page 189 (line 23), omit Division 7.

(70)   Opp (5) [Sheet 2330 Revised]

          Schedule 1, item 1, page 193 (line 30), omit paragraph (d).

(71)   Govt (69) [Sheet DU288]

          Schedule 1, item 1, page 195 (line 10), omit “(ii)”, substitute “(iii)”.

(72)   Govt (70) [Sheet DU288]

          Schedule 1, item 1, page 204 (line 14), omit “and”.

(73)   Govt (71) [Sheet DU288]

          Schedule 1, item 1, page 209 (after line 4), after subsection (4), insert:

          (4A)  The regulations may define what constitutes a public forum for the purposes of subsection (4).



(74)   Govt (72) [Sheet DU288]

          Schedule 1, item 1, page 211 (lines 5 to 8), omit paragraph 941F(b), substitute:

                     (b)  the following conditions are satisfied:

                              (i)  there is a change in circumstances before the service is provided, and the Financial Services Guide does not contain the information it would be required to contain if it were given to a person immediately after that change;

                             (ii)  the fact that the Financial Services Guide does not contain the up to date information is materially adverse from the point of view of a reasonable person deciding, as a retail client, whether to proceed to be provided with the financial service;

(75)   Govt (73) [Sheet DU288]

          Schedule 1, item 1, page 212 (lines 24 to 33), omit paragraph (g), substitute:

                     (g)  if the providing entity provides execution-related telephone advice (see section 946B)—a statement in relation to which the following requirements are satisfied:

                              (i)  the statement must indicate that the client may request a record of execution-related telephone advice that is provided to them, if they have not already been provided with a record of that advice;

                             (ii)  the statement must set out particulars of how the client may request such a record;

                            (iii)  any limitations in those particulars on the time within which the client may request such a record must be consistent with any applicable requirements in regulations made for the purposes of this subparagraph or, if there are no such applicable requirements, must be such as to allow the client a reasonable opportunity to request a record of the advice; and

(76)   Govt (74) [Sheet DU288]

          Schedule 1, item 1, page 212 (lines 34 to 38), omit paragraph (h), substitute:

                     (h)  information about the dispute resolution system that covers complaints by persons to whom the providing entity provides financial services, and about how that system may be accessed; and

(77)   Govt (75) [Sheet DU288]

          Schedule 1, item 1, page 214 (after line 5), at the end of section 942B, add:

             (8)  If:

                     (a)  the Financial Services Guide includes a statement to the effect that a client may request a record of execution-related telephone advice; and

                     (b)  the client is provided with execution-related telephone advice to which that statement applies; and

                     (c)  the client has not already been provided with a record of that advice;

the providing entity must comply with a request made in accordance with that statement for a record of that advice.

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

(78)   Govt (76) [Sheet DU288]

          Schedule 1, item 1, page 215 (lines 18 to 28), omit paragraph (h), substitute:

                     (h)  if the providing entity, when acting as representative of the authorising licensee or any of the authorising licensees, provides execution-related telephone advice (see section 946B)—a statement in relation to which the following requirements are satisfied:

                              (i)  the statement must indicate that the client may request a record of execution-related telephone advice that is provided to them, if they have not already been provided with a record of that advice;

                             (ii)  the statement must set out particulars of how the client may request such a record;

                            (iii)  any limitations in those particulars on the time within which the client may request such a record must be consistent with any applicable requirements in regulations made for the purposes of this subparagraph or, if there are no such applicable requirements, must be such as to allow the client a reasonable opportunity to request a record of the advice; and

(79)   Govt (77) [Sheet DU288]

          Schedule 1, item 1, page 215 (lines 29 to 34), omit paragraph (i), substitute:

                      (i)  information about the dispute resolution system that covers complaints by persons to whom the providing entity provides financial services when acting as representative of the authorising licensee or any of the authorising licensees, and about how that system may be accessed; and

(80)   Govt (78) [Sheet DU288]

          Schedule 1, item 1, page 217 (after line 7), at the end of section 942C, add:

             (8)  If:

                     (a)  the Financial Services Guide includes a statement to the effect that a client may request a record of execution-related telephone advice; and

                     (b)  the client is provided with execution-related telephone advice to which that statement applies; and

                     (c)  the client has not already been provided with a record of that advice;

the providing entity must comply with a request made in accordance with that statement for a record of that advice.

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

(81)   Govt (79) [Sheet DU288]

          Schedule 1, item 1, page 222 (lines 5 to 15), omit subsection (1), substitute:

             (1)  The providing entity must only provide the advice to the client if:

                     (a)  the providing entity:

                              (i)  determines the relevant personal circumstances in relation to giving the advice; and

                             (ii)  makes reasonable inquiries in relation to those personal circumstances; and

                     (b)  having regard to information obtained from the client in relation to those personal circumstances, the providing entity has given such consideration to, and conducted such investigation of, the subject matter of the advice as is reasonable in all of the circumstances; and

                     (c)  the advice is appropriate to the client, having regard to that consideration and investigation.

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

(82)   Govt (80) [Sheet DU288]

          Schedule 1, item 1, page 223 (line 4), omit “the client”, substitute “the client’s relevant personal circumstances”.

(83)   Govt (81) [Sheet DU288]

          Schedule 1, item 1, page 223 (lines 12 and 13), omit “objectives, financial situation and needs”, substitute “relevant personal circumstances”.

(84)   Govt (82) [Sheet DU288]

          Schedule 1, item 1, page 223 (line 16), omit “objectives, financial situation and needs”, substitute “relevant personal circumstances”.

(85)   Govt (83) [Sheet DU288]

          Schedule 1, item 1, page 224 (lines 17 to 32), omit subsection (2), substitute:

             (2)  The providing entity does not have to give the client a Statement of Advice if, before the execution-related telephone advice is provided, the client agrees to a Statement of Advice not being given in respect of the advice, or advice of that kind.

(86)   Govt (84) [Sheet DU288]

          Schedule 1, item 1, page 225 (after line 3), after subsection (3), insert:

          (3A)  The providing entity must keep a record of the advice and, in doing so, must comply with any applicable requirements of regulations made for the purposes of this subsection.

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

Note 2:       For the client’s right to a record of the advice, see subsections 942B(8) and 942C(8).

(87)   Govt (85) [Sheet DU288]

          Schedule 1, item 1, page 225, lines 4 to 11, omit subsection (4).

(88)   Govt (86) [Sheet DU288]

          Schedule 1, item 1, page 225 (line 16), omit “(c)”, substitute “(b)”.

(89)   Govt (87) [Sheet DU288]

          Schedule 1, item 1, page 232 (line 6), omit “ financial situation and needs ”, substitute “ financial situation or needs ”.

(90)   Govt (88) [Sheet DU288]

          Schedule 1, item 1, page 232 (line 19), omit “financial situation and needs”, substitute “financial situation or needs”.

(91)   Opp (6) [Sheet 2330 Revised]

          Schedule 1, item 1, page 233 (lines 36 and 37), omit paragraph (1)(c).

(92)   Opp (7) [Sheet 2330 Revised]

          Schedule 1, item 1, page 234 (line 31) to page 238 (line 18), omit Division 5.

(93)   Opp (8) [Sheet 2330 Revised]

          Schedule 1, item 1, page 243 (line 12), omit “or a member of a declared professional body”.

(94)   Opp (9) [Sheet 2330 Revised]

          Schedule 1, item 1, page 244 (line 16), omit “or a member of a declared professional body”.

(95)   Govt (94) [Sheet DU288]

          Schedule 1, item 1, page 257 (after line 6), after subsection (3), insert:

          (3A)  For the purposes of paragraph (3)(c):

                     (a)  section 917C is taken to apply, despite section 917F; and

                     (b)  section 917D is taken not to apply.

(96)   Govt (95) [Sheet DU288]

          Schedule 1, item 1, page 259 (line 13), after “client”, insert “;”.

(97)   Govt (96) [Sheet DU288]

          Schedule 1, item 1, page 259 (line 14), omit subparagraph (iii), substitute:

                            (iii)  to the licensee in the licensee’s capacity as a person acting on behalf of the client.

(98)   Govt (97) [Sheet DU288]

          Schedule 1, item 1, page 263 (after line 8), at the end of Subdivision A, add:

981H   Money to which Subdivision applies taken to be held in trust

             (1)  Subject to subsections (2) and (3), money to which this Subdivision applies that is paid to the licensee:

                     (a)  by the client; or

                     (b)  by a person acting on behalf of the client; or

                     (c)  in the licensee’s capacity as a person acting on behalf of the client;

is taken to be held in trust by the licensee for the benefit of the client.

             (2)  Subsection (1) does not apply to money that the licensee and the client agree in writing is not held in trust by the licensee for the benefit of the client.

             (3)  The regulations may:

                     (a)  provide that subsection (1) does not apply in relation to money in specified circumstances; and

                     (b)  provide for matters relating to the taking of money to be held in trust (including, for example, terms on which the money is taken to be held in trust and circumstances in which it is no longer taken to be held in trust).

(99)   Govt (98) [Sheet DU288]

          Schedule 1, item 1, page 268 (line 14), omit “money”, substitute “property”.

(100) Opp (10) [Sheet 2330 Revised]

          Schedule 1, item 1, page 287 (line 9), at the end of subsection 992A(2), add “, or to offering of managed investment products, hawking of which is prohibited by section 992AA”.

(101) Opp (R11) [Sheet 2330 Revised]

Schedule 1, item 1, page 287 (after line 11), at the end of section 992A, add:

             (3)  A person must not make an offer to issue or sell a financial product (other than an offer to which subsection (1) applies) in the course of, or because of, unsolicited personal contact with another person unless the other person has been:

                     (a)  contacted only during the hours prescribed by the regulations and only if the person is not listed on the “No Contact/No Call” register in relation to the person making the contact; and

                     (b)  given an opportunity to:

                              (i)  register on a “No Contact/No Call” register maintained by the person making the contact at no cost to that person; and

                             (ii)  select the time and frequency of any future contacts; and

                     (c)  given a Product Disclosure Statement before becoming bound to acquire a financial product; and

                     (d)  clearly informed of the importance of using the information in the Product Disclosure Statement when making a decision to acquire a financial product; and

                     (e)  given the option of having the information in the Product Disclosure Statement read out to that person.

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

             (4)  In addition to other penalties for breaches of this section, a failure to comply with this section gives the other person a right of return and refund exercisable within 1 month after the expiry date of the relevant cooling-off period for the financial product, or one month and fourteen days in the event that no cooling-off period applies to the financial product, subject to the following provisions:

                     (a)  on the exercise of the right to return the product:

                              (i)  if the product is constituted by a legal relationship between the client and the issuer of the product—that relationship is, by force of this subsection, terminated with effect from that time without penalty to the client; and

                             (ii)  any contract for the acquisition of the product by the client is, by force of this subsection, terminated with effect from that time without penalty to the client;

                     (b)  the regulations may provide for consequences and obligations (in addition to those provided for in paragraph (a)) to apply if the right to return a financial product is exercised;

                     (c)  the regulations may do any or all of the following:

                              (i)  provide that a specified subclass of financial products that would otherwise be covered by this subsection is excluded from this subsection;

                             (ii)  provide additional requirements to be satisfied before this subsection applies in relation to a class or subclass of financial products;

                            (iii)  provide that this subsection does not apply in relation to the provision of a financial product in specified circumstances.

(102) Opp (R12) [Sheet 2330 Revised]

Schedule 1, item 1, page 287 (after line 11), after section 992A, insert:

992AA  Prohibition of hawking of managed investment products

             (1)  A person must not offer interests in managed investment schemes for issue or sale in the course of, or because of:

                     (a)  an unsolicited meeting with another person; or

                     (b)  an unsolicited telephone call to another person;

unless the offer is exempted under subsection (2).

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

             (2)  Subsection (1) does not apply to an offer of interests in managed investment schemes if:

                     (a)  the offer is not to a retail client;

                     (b)  the offer is an offer of interests in a listed managed investment scheme made by telephone by a financial services licensee; or

                     (c)  the offer is made to a client by a financial services licensee through whom the client has acquired or disposed of an interest in a managed investment scheme in the previous 12 months.

(103) Govt (99) [Sheet DU288]

          Schedule 1, item 1, page 292 (lines 3 to 6), omit section 1011A, substitute:

1011A   Jurisidictional scope of Division

             (1)  Subject to subsection (2), sections 1012A, 1012B and 1012C only apply in relation to offers and recommendations referred to in those sections that are received in this jurisdiction.

             (2)  Section 1012B also applies in relation to issues referred to in subparagraph 1012B(3)(a)(iii) that are madein this jurisdiction.

             (3)  The regulations may make provision dealing with the jurisdictional scope of some or all of the other provisions of this Division. The other provisions of this Division have effect subject to any such regulations.

(104) Opp (13) [Sheet 2330 Revised]

          Schedule 1, item 1, page 292 (lines 20 and 21), omit paragraph (e) of the definition of regulated person .

(105) Govt (100) [Sheet DU288]

          Schedule 1, item 1, page 301 (line 22) to page 302 (line 2), omit subsection (4).

(106) Govt (101) [Sheet DU288]

          Schedule 1, item 1, page 303 (lines 8 to 10), omit paragraphs (8)(a) and (b), substitute:

                     (a)  the financial product is a financial product described in paragraph 764A(1)(ba) (which relates to certain managed investment schemes that are not registered schemes); and

                     (b)  the holder of the office (by whatever name it is known), in relation to the managed investment scheme, that corresponds most closely to the office of responsible entity of a registered scheme is an exempt body; and

(107) Govt (102) [Sheet DU288]

          Schedule 1, item 1, page 303 (lines 14 and 15), omit “responsible entity of the scheme”, substitute “office holder referred to in paragraph (b)”.

(108) Govt (103) [Sheet DU288]

          Schedule 1, item 1, page 303 (line 17), omit “responsible entity of the scheme”, substitute “office holder referred to in paragraph (b)”.

(109) Govt (104) [Sheet DU288]

          Schedule 1, item 1, page 303 (after line 29), after subsection (9), insert:

Recommendation, issue or sale situation—client is associated with registered scheme

          (9A)  In a recommendation situation, an issue situation or a sale situation, the regulated person does not have to give the client a Product Disclosure Statement if:

                     (a)  the financial product is a managed investment product; and

                     (b)  the client is associated (within the meaning of subsection (9B)) with the scheme’s responsible entity.

          (9B)  For the purposes of subsection (9A), the client is associated with the scheme’s responsible entity if the client is:

                     (a)  an executive officer of the responsible entity or of a related body corporate; or

                     (b)  a spouse, parent, child, brother or sister of a person who is an executive officer of the responsible entity or a related body corporate; or

                     (c)  a body corporate controlled by a person referred to in paragraph (a) or (b).

(110) Govt (105) [Sheet DU288]

          Schedule 1, item 1, page 305 (line 29), omit “992A)”, substitute “992A”.

(111) Govt (106) [Sheet DU288]

          Schedule 1, item 1, page 311 (after line 8), after section 1012I, insert:

1012IA   Treatment of arrangements under which a person can instruct another person to acquire a financial product

Definitions

             (1)  In this section:

acquirer , in relation to a custodial arrangement, has the meaning given by the definition of custodial arrangement .

client , in relation to a custodial arrangement, has the meaning given by the definition of custodial arrangement .

custodial arrangement means an arrangement between a person (the provider ) and another person (the client ) (whether or not there are also other parties to the arrangement) under which:

                     (a)  the client is, or is entitled, to give an instruction that a particular financial product, or a financial product of a particular kind, is to be acquired; and

                     (b)  if the client gives such an instruction, a person (the acquirer ), being the provider or a person with whom the provider has or will have an arrangement, must (subject to any discretion they have to refuse) acquire the financial product, or a financial product of that kind; and

                     (c)  if the acquirer acquires the financial product, or a financial product of that kind, pursuant to an instruction given by the client, either:

                              (i)  the product is to be held on trust for the client or another person nominated by the client; or

                             (ii)  the client, or another person nominated by the client, is to have rights or benefits in relation to the product or a beneficial interest in the product, or in relation to, or calculated by reference to, dividends or other benefits derived from the product.

instruction includes a direction or request.

provider , in relation to a custodial arrangement, has the meaning given by the definition of custodial arrangement .

regulated acquisition means an acquisition of a financial product pursuant to an instruction by the client under a custodial arrangement, being an acquisition:

                     (a)  by way of issue by the issuer (the regulated person ); or

                     (b)  pursuant to a sale by a person (the regulated person ) in circumstances described in subsection 1012C(5), (6) or (8).

regulated person , in relation to a regulated acquisition of a financial product, has the meaning given by paragraph (a) or (b) (as the case requires) of the definition of regulated acquisition .

Obligation on provider to give client a PDS

             (2)  Before a regulated acquisition of a financial product occurs pursuant to an instruction given by the client under a custodial arrangement, the provider must give the client a Product Disclosure Statement for the product if a Product Disclosure Statement for the product would, if there were an equivalent direct acquisition by the client, be required by subsection 1012B(3) or 1012C(3) (see subsection (3) of this section) to be given to the client by the regulated person before that acquisition occurred. For this purpose, an equivalent direct acquisition is an acquisition that would occur if:

                     (a)  the product were instead being offered for issue or sale direct to the client by the regulated person for the same price (or for the appropriate proportion of that price, if the transaction for the regulated acquisition also covers other products); and

                     (b)  the circumstances of that issue or sale to the client were otherwise the same as those in which the regulated acquisition will occur.

Determining whether a PDS would have to be given for an equivalent direct acquisition

             (3)  The following provisions apply for the purpose of determining whether the regulated person would be required by subsection 1012B(3) or 1012C(3) to give the client a Product Disclosure Statement for the financial product:

                     (a)  the effect of the provisions referred to in subsection 1012B(5) or 1012C(10), as the case requires, as they have effect subject to the following paragraphs, must be taken into account;

                     (b)  subsections 1012D(1) and (2) apply as if references in those subsections to the regulated person’s belief in relation to a matter were instead references to the provider’s belief in relation to that matter;

                     (c)  subsections 1012D(2) and (3) apply as if references to the client already holding a financial product of the same kind also included a reference to a person already holding a financial product of the same kind as a result of an instruction given by the client under a custodial arrangement;

                     (d)  sections 1012E and 1012F are to be disregarded;

                     (e)  section 1012G has effect in accordance with subsection (4).

Modification of section 1012G

             (4)  The following provisions apply in relation to section 1012G:

                     (a)  in determining for the purposes of subsection (2) whether the regulated person would be required by subsection 1012B(3) or 1012C(3) to give the client a Product Disclosure Statement for the financial product, subsection 1012G(2) applies as if the reference to the client instructing the regulated person (in an issue situation) that they require the financial product to be provided or issued immediately, or by a specified time, were instead a reference to the client instructing the provider that they require the financial product to be acquired immediately, or by a specified time;

                     (b)  if, because of subsection 1012G(2) as it applies because of paragraph (a) of this subsection, the provider does not have to give the client a Product Disclosure Statement for a financial product before a regulated acquisition of the financial product occurs pursuant to an instruction given by the client under a custodial arrangement:

                              (i)  subsection 1012G(2) applies in relation to the provider, the client and the regulated acquisition as if the obligation it imposes to comply with subsection 1012G(3) were imposed on the provider; and

                             (ii)  subsection 1012G(3) applies in relation to the provider, the client and the regulated acquisition as if the reference to the regulated person were instead a reference to the provider, as if subparagraph 1012G(3)(b)(i) were omitted and as if the reference in subparagraph 1012G(3)(b)(ii) to the day on which the financial product was issued or sold to the client were instead a reference to the day on which the regulated acquisition occurs.

Modification of section 1013A

             (5)  Section 1013A applies in relation to a regulated acquisition as if:

                     (a)  paragraph 1013A(1)(b) also covered a Product Disclosure Statement that is required to be given by subsection (2) of this section in relation to an acquisition covered by paragraph (a) of the definition of regulated acquisition in subsection (1) of this section; and

                     (b)  paragraph 1013A(2)(b) also covered a Product Disclosure Statement that is required to be given by subsection (2) of this section in relation to an acquisition covered by paragraph (b) of the definition of regulated acquisition in subsection (1) of this section.

Provider is not an agent for the purposes of section 1015C

             (6)  For the purposes of the application of section 1015C in relation to a regulated acquisition, the provider in relation to the relevant custodial arrangement is taken not to be an agent of the client.

Provider is covered by sections 1015E, 1021F and 1021I

             (7)  Sections 1015E, 1021F and 1021I apply in relation to a regulated acquisition as if the references to a regulated person were instead references to the provider in relation to the relevant custodial arrangement.

Regulations may provide for other modifications

             (8)  The regulations may provide for other modifications of provisions of this Part that are to have effect in relation to regulated acquisitions.

(112) Govt (107) [Sheet DU288]

          Schedule 1, item 1, page 316 (lines 1 to 4), omit paragraph (g), substitute:

                     (g)  information about the dispute resolution system that covers complaints by holders of the product and about how that system may be accessed; and

(113) Govt (108) [Sheet DU288]

          Schedule 1, item 1, page 316 (line 15), at the end of subsection (1), add:

            ; and (k)  any other statements or information required by the regulations.

(114) Dem (3) [Sheet 2327 Revised 2] ( As amended by Opp (1) [Sheet 2337 Revised] )

          Schedule 1, item 1, page 316 (line 15), at the end of subsection (1), add:

             ; and (l)  if the product has an investment component—the extent to which labour standards or environmental, social or ethical considerations are taken into account in the selection, retention or realisation of the investment.

(115) Dem (4) [Sheet 2327 Revised 2]

          Schedule 1, item 1, page 316 (after line 31), after subsection (2), insert:

          (2A)  For the purposes of paragraph (1)(l), products which have an investment component include superannuation products, managed investment products and investment life insurance products.

(116) Dem (5) [Sheet 2327 Revised 2] ( As amended by Opp (2) [Sheet 2337 Revised] )

          Schedule 1, item 1, page 317 (after line 8), after section 1013D, insert:

1013DA  Information about ethical considerations etc.

                   ASIC may develop guidelines that must be complied with where a Product Disclosure Statement makes any claim that labour standards or environmental, social or ethical considerations are taken into account in the selection, retention or realisation of the investment.

(117) Govt (109) [Sheet DU288]

          Schedule 1, item 1, page 330 (line 3), at the end of subsection (2), add:

               ; or (f)  it is a restricted issue that occurs in a situation covered by regulations made for the purposes of this paragraph.



(118) Opp (14) [Sheet 2330 Revised]

          Schedule 1, item 1, page 337 (line 7), omit paragraph (1)(d).

(119) Govt (110) [Sheet DU288]

          Schedule 1, item 1, page 339 (line 22), after “managed investment product”, insert “that is an ED security”.

(120) Govt (111) [Sheet DU288]

          Schedule 1, item 1, page 339 (line 24), after “ managed investment products ”, insert “ that are ED securities ”.

(121) Govt (112) [Sheet DU288]

          Schedule 1, item 1, page 348 (after line 31), after subsection (2), insert:

          (2A)  Subject to subsections (2B) and (2C), the money is taken to be held in trust by the product provider for the benefit of the person who paid the money.

          (2B)  Subsection (2A) does not apply to money that the product provider and the person who paid the money agree in writing is not held in trust by the product provider for the benefit of the person.

          (2C)  The regulations may:

                     (a)  provide that subsection (2A) does not apply in relation to money in specified circumstances; and

                     (b)  provide for matters relating to the taking of money to be held in trust (including, for example, terms on which the money is taken to be held in trust and circumstances in which it is no longer taken to be held in trust).

(122) Govt (113) [Sheet DU288]

          Schedule 1, item 1, page 354 (lines 5 to 9), omit subsection (7), substitute:

Content of confirmation

             (7)  The confirmation of the transaction must give the holder the information that the responsible person reasonably believes the holder needs (having regard to the information the holder has received before the transaction) to understand the nature of the transaction.

(123) Govt (114) [Sheet DU288]

          Schedule 1, item 1, page 355 (lines 7 to 22), omit section 1017G, substitute:

1017G   Certain product issuers and regulated persons must meet appropriate dispute resolution requirements

             (1)  If:

                     (a)  particular financial products are, or have been, available for acquisition (whether by issue or sale) by a person or persons as retail clients; and

                     (b)  the issue or sale of those products is not covered by an Australian financial services licence;

both the issuer, and any regulated person obliged under subsection 1012C(5), (6) or (8) to give a retail client a Product Disclosure Statement for one or more of those financial products, must each have a dispute resolution system complying with subsection (2).

Note 1:       If the issue of particular financial products is covered by an Australian financial services licence, the requirement to have a dispute resolution system relating to the issue of the products is imposed by paragraph 912A(1)(g).

Note 2:       Failure to comply with this subsection is an offence (see subsection 1311(1)).

             (2)  To comply with this subsection, a dispute resolution system must consist of:

                     (a)  an internal dispute resolution procedure that:

                              (i)  complies with standards, and requirements, made or approved by ASIC in accordance with regulations made for the purposes of this subparagraph; and

                             (ii)  covers complaints, against the person required to have the system, made by retail clients in relation to financial services provided in relation to any of those products; and

                     (b)  membership of one or more external dispute resolution schemes that:

                              (i)  is, or are, approved by ASIC in accordance with regulations made for the purposes of this subparagraph; and

                             (ii)  covers, or together cover, complaints (other than complaints that may be dealt with by the Superannuation Complaints Tribunal established by section 6 of the Superannuation (Resolution of Complaints) Act 1993 ), against the person required to have the system, made by retail clients in relation to financial services provided in relation to any of those products.

             (3)  Regulations made for the purposes of subparagraph (2)(a)(i) or (2)(b)(i) may also deal with the variation or revocation of:

                     (a)  standards or requirements made by ASIC; or

                     (b)  approvals given by ASIC.

(124) Govt (115) [Sheet DU288]

          Schedule 1, item 1, page 361 (after line 21), after subsection (5), insert:

          (5A)  The regulations may specify other circumstances in which the right to return the product (and have money paid to acquire it repaid) cannot be exercised.

(125) Govt (116) [Sheet DU288]

          Schedule 1, item 1, page 361 (line 35), after “is to be”, insert “increased or”.



(126) Govt (117) [Sheet DU288]

          Schedule 1, item 1, page 362 (line 2), omit “ of managed investment products ”, substitute “ relating to certain managed investment schemes ”.

(127) Govt (118) [Sheet DU288]

          Schedule 1, item 1, page 362 (line 5), omit “managed investment product”, substitute “financial product described in paragraph 764A(1)(ba) (which relates to certain managed investment schemes that are not registered schemes)”.

(128) Govt (119) [Sheet DU288]

          Schedule 1, item 1, page 367 (line 7), omit “taken”, substitute “if the acquisition occurs in circumstances in which the party is required by a provision of this Part to have been given a Product Disclosure Statement for the product—taken”.

(129) Govt (120) [Sheet DU288]

          Schedule 1, item 1, page 387 (after line 20), after subsection (4), insert:

          (4A)  For the purposes of paragraph (4)(b):

                     (a)  section 917C is taken to apply, despite section 917F; and

                     (b)  section 917D is taken not to apply.

(130) Govt (121) [Sheet DU288]

          Schedule 1, item 1, page 392 (line 25), after paragraph 1041E(b), insert:

             ; and (c)  when the person makes the statement, or disseminates the information:

                              (i)  the person does not care whether the statement or information is true or false; or

                             (ii)  the person knows, or ought reasonably to have known, that the statement or information is false in a material particular or is materially misleading.

(131) Govt (122) [Sheet DU288]

          Schedule 1, item 1, page 392 (line 26), omit “ this section ”, substitute “ this subsection ”.

(132) Govt (123) [Sheet DU288]

          Schedule 1, item 1, page 392 (line 29), omit “ this section ”, substitute “ this subsection ”.



(133) Govt (124) [Sheet DU288]

          Schedule 1, item 1, page 392 (after line 31), at the end of section 1041E, add:

             (2)  For the purposes of the application of the Criminal Code in relation to an offence based on subsection (1), paragraph (1)(a) is a physical element, the fault element for which is as specified in paragraph (1)(c).

             (3)  For the purposes of an offence based on subsection (1), strict liability applies to subparagraphs (1)(b)(i), (ii) and (iii).

Note:          For strict liability , see section 6.1 of the Criminal Code .

(134) Govt (125) [Sheet DU288]

          Schedule 1, item 1, page 444 (after line 31), at the end of section 1074C, add:

             (3)  Nothing in subsection (1) or (2) confers a discretion to deal with a matter in the operating rules of a prescribed CS facility if there is an obligation under section 822A for that matter to be dealt with in those rules.

(135) Govt (126) [Sheet DU288]

          Schedule 1, item 1, page 460 (line 20), omit “ relating to financial products ”.

(136) Govt (128) [Sheet DU288]

          Schedule 1, item 1, page 461 (after line 11), before subsection (1), insert:

          (1A)  A person must not engage in conduct that results in the falsification of:

                     (a)  a book required to be kept by a provision of this Chapter; or

                     (b)  a register or any accounting or other record referred to in section 1101C.

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

(137) Govt (129) [Sheet DU288]

          Schedule 1, item 1, page 461 (line 16), omit “1101D”, substitute “1101C”.

(138) Govt (130) [Sheet DU288]

          Schedule 1, item 1, page 461 (line 32), after “subsection”, insert “(1A) or”.

(139) Govt (131) [Sheet DU288]

          Schedule 1, item 1, page 462 (after line 7), after section 1101G, insert:

1101GA   How Part 9.3 applies to books required to be kept by this Chapter etc.

             (1)  In this section:

Chapter 7 book means:

                     (a)  a book (by whatever name it is known) that a provision of this Chapter requires to be kept; or

                     (b)  a document lodged under, or for the purposes of, a provision of this Chapter; or

                     (c)  a book relating to the business carried on by a financial services licensee or an authorised representative of a financial services licensee; or

                     (d)  a register or accounting record referred to in section 1101C.

             (2)  Part 9.3 does not apply in relation to a Chapter 7 book except as provided in the following paragraphs:

                     (a)  section 1303 applies to a Chapter 7 book;

                     (b)  section 1305, and subsections 1306(5) and (6), apply to a Chapter 7 book as if references in section 1305 to a body corporate were instead references to a person;

                     (c)  regulations made for the purposes of this paragraph may provide that other provisions of Part 9.3 apply in relation to a Chapter 7 book, or a class of Chapter 7 books, with such modifications (if any) as are specified in the regulations.

(140) Govt (132) [Sheet DU288]

          Schedule 1, item 20, page 471 (line 6), omit “registered scheme”, substitute “managed investment scheme”.

(141) Govt (133) [Sheet DU288]

          Schedule 1, item 20, page 471 (line 33) to page 472 (line 4), omit paragraph (l).

(142) Govt (134) [Sheet DU288]

          Schedule 1, item 20, page 473 (lines 24 to 32), omit paragraph (l).

(143) Govt (135) [Sheet DU288]

          Schedule 1, item 20, page 475 (lines 1 to 3), omit subsection (3).

(144) Govt (136) [Sheet DU288]

          Schedule 1, item 20, page 476 (line 23) to page 477 (line 10), omit subsections (12) and (13), substitute:

Meaning of provide a custodial or depository service

           (12)  For the purposes of this section, a person (the provider ) provides a custodial or depository service to another person (the client ) if, under an arrangement between the provider and the client, or between the provider and another person with whom the client has an arrangement, (whether or not there are also other parties to any such arrangement), a financial product, or a beneficial interest in a financial product, is held by the provider in trust for, or on behalf of, the client or another person nominated by the client.

(145) Govt (137) [Sheet DU288]

          Schedule 1, item 20, page 477 (line 14), after “registered scheme”, insert “, or the holding of the assets of a registered scheme”.

(146) Govt (138) [Sheet DU288]

          Schedule 1, page 506 (after line 20), after item 252, insert:

252A  Section 9 (definition of on-market buy-back )

Repeal the definition, substitute:

on-market buy-back means a buy-back by a listed corporation on a prescribed financial market in the ordinary course of trading on that market.

(147) Govt (139) [Sheet DU288]

          Schedule 1, item 261, page 507 (line 30), after “APRA”, insert “, other than a trustee of a fund or trust referred to in any of subparagraphs (d)(i) to (iv)”.

(148) Govt (140) [Sheet DU288]

          Schedule 1, page 513 (after line 15), after item 302, insert:

302A  Section 9 (definition of trading day )

Repeal the definition, substitute:

trading day of a financial market means a day on which the market is open for trading in financial products.

(149) Govt (141) [Sheet DU288]

          Schedule 1, item 323, page 516 (line 1), omit “an option approved by a securities exchange as”.

(150) Govt (142) [Sheet DU288]

          Schedule 1, page 520 (after line 4), after item 357, insert:

357A  Section 350

Repeal the section, substitute:

350   Forms for documents to be lodged with ASIC

             (1)  A document that this Act requires to be lodged with ASIC in a prescribed form must:

                     (a)  if a form for the document is prescribed in the regulations:

                              (i)  be in the prescribed form; and

                             (ii)  include the information, statements, explanations or other matters required by the form; and

                            (iii)  be accompanied by any other material required by the form; or

                     (b)  if a form for the document is not prescribed in the regulations but ASIC has approved a form for the document:

                              (i)  be in the approved form; and

                             (ii)  include the information, statements, explanations or other matters required by the form; and

                            (iii)  be accompanied by any other material required by the form.

             (2)  A reference in this Act to a document that has been lodged (being a document to which subsection (1) applies), includes, unless a contrary intention appears, a reference to any other material lodged with the document as required by the relevant form.

             (3)  If:

                     (a)  this Act requires a document to be lodged with ASIC in a prescribed form; and

                     (b)  a provision of this Act either specifies, or provides for regulations to specify, information, statements, explanations or other matters that must be included in the document, or other material that must accompany the document;

that other provision is not taken to exclude or limit the operation of subsection (1) in relation to the prescribed form (and so the prescribed form may also require information etc. to be included in the form or material to accompany the form).

(151) Govt (143) [Sheet DU288]

          Schedule 1, page 523 (before line 1), after item 377, insert:

377A  Subsection 633(1) (table item 14)

Repeal the item, substitute:

 

14

The target must send a copy of the target’s statement (and any accompanying report) to the operator of each prescribed financial market on which the target’s securities are quoted.

To be done on the day the target’s statement is sent to the bidder

See also subsection (7)

(152) Govt (144) [Sheet DU288]

          Schedule 1, page 524 (before line 4), after item 382, insert:

382A  Paragraph 636(1)(g)

After “if any securities”, insert “(other than managed investment products)”.

382B  After paragraph 636(1)(g)

Insert:

                    (ga)  if any managed investment products are offered as consideration under the bid and the bidder is:

                              (i)  the responsible entity of the managed investment scheme; or

                             (ii)  a person who controls the responsible entity of the managed investment scheme;

                            all material that would be required by section 1013C to be included in a Product Disclosure Statement given to a person in an issue situation (within the meaning of section 1012B) in relation to those managed investment products;

(153) Govt (145) [Sheet DU288]

          Schedule 1, page 526 (after line 29), after item 398, insert:

398A  Paragraph 662B(1)(d)

Omit “securities exchange”, substitute “market operator”.

(154) Govt (146) [Sheet DU288]

          Schedule 1, page 533 (after line 3), after item 426, insert:

426A  Paragraph 724(1)(b)

Omit “stock market of a securities exchange”, substitute “financial market”.

(155) Govt (147) [Sheet DU288]

          Schedule 1, item 457, page 542 (after table item 265A), insert:

 

265AA

Subsection 916A(3A)

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

265AB

Subsection 916B(2A)

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

265AC

Subsection 916B(5A)

50 penalty units or imprisonment for 1 year, or both.

265AD

Subsection 916C(3)

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

265AE

Subsection 916D(2A)

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

(156) Govt (148) [Sheet DU288]

          Schedule 1, item 457, page 542 (after table item 265B), insert:

 

265BA

Subsection 916F(1A)

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

(157) Govt (149) [Sheet DU288]

          Schedule 1, item 457, page 543 (after table item 269A), insert:

 

269AA

Subsection 942B(8)

50 penalty units or imprisonment for 1 year, or both.

269AB

Subsection 942C(8)

50 penalty units or imprisonment for 1 year, or both.



(158) Govt (150) [Sheet DU288]

          Schedule 1, item 457, page 543 (after table item 270C), insert:

 

270CA

Subsection 946B(3A)

50 penalty units.

(159) Govt (151) [Sheet DU288]

          Schedule 1, item 457, page 543 (table item 271A), omit the table item.

(160) Opp (R15) [Sheet 2330 Revised]

          Schedule 1, item 457, page 546 (after table item 288C), insert:

 

288CA

Subsection 992A(3)

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

288CB

Subsection 992AA(1)

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

(161) Govt (152) [Sheet DU288]

          Schedule 1, item 457, page 548 (table item 299A), omit “ Section 1017G ”, substitute “ Subsection 1017G(1) ”.

(162) Govt (153) [Sheet DU288]

          Schedule 1, item 457, page 549 (after table item 307C), insert:

 

307CA

Subsection 1021M(1)

50 penalty units.

307CB

Subsection 1021M(3)

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

(163) Govt (154) [Sheet DU288]

          Schedule 1, item 457, page 549 (table item 308B), omit the table item.

(164) Govt (155) [Sheet DU288]

          Schedule 1, item 457, page 550 (table item 310C), omit “ Section 1041E ”, substitute “ Subsection 1041E(1) ”.



(165) Govt (156) [Sheet DU288]

          Schedule 1, page 550 (after table item 317B), insert:

 

317BA

Subsection 1101F(1A)

50 penalty units or imprisonment for 12 months, or both.

(166) Govt (157) [Sheet DU288]

          Schedule 3, page 565 (after line 22), after item 10, insert:

10A  Section 9 (definition of old Corporations Law )

Omit “Part 11.1”, substitute “Part 10.1”.

(167) Govt (158) [Sheet DU288]

          Schedule 3, item 29, page 571 (line 20), omit “for the purpose of discussing”, substitute “to discuss”.

(168) Govt (159) [Sheet DU288]

          Schedule 3, item 29, page 571 (after line 23), after subsection (1), insert:

          (1A)  If the recorder invites the holder to call the recorder to discuss the takeover bid (whether or not for some other purpose as well), then the recorder must make a clear sound recording of all telephone calls that:

                     (a)  the holder makes to the recorder during the bid period; and

                     (b)  are made by the holder to discuss the takeover bid (whether or not for some other purpose as well).

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

(169) Govt (160) [Sheet DU288]

          Schedule 3, item 29, page 571 (after line 28), at the end of section 648J, add:

             (3)  Subsection (1) or (1A) does not apply if the holder is a wholesale holder.

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

             (4)  A holder of securities is a wholesale holder if:

                     (a)  the value of the securities equals or exceeds the amount specified in the regulations made for the purposes of this paragraph; or

                     (b)  a qualified accountant has given the holder a certificate referred to in paragraph 761G(7)(c) within the preceding 6 months; or

                     (c)  the holder is a professional investor; or

                     (d)  the holder is a person, or a member of a class of persons, prescribed in the regulations made for the purposes of this paragraph.

(170) Govt (161) [Sheet DU288]

          Schedule 3, item 29, page 572 (line 2), omit “At the beginning of the telephone call the”, substitute “The”.

(171) Govt (162) [Sheet DU288]

          Schedule 3, item 30, page 578 (table item 201A), after “648J(1)”, insert “, (1A)”.

 

 

 

 

 

HARRY EVANS

Clerk of the Senate

 

 

The Senate

23 August 2001