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Australian Securities and Investments Commission Bill 2001

 

 

 

 

Australian Securities and Investments Commission Act 2001

 

No. 51, 2001



 

 

 

 

Australian Securities and Investments Commission Act 2001

 

No. 51, 2001

 

 

 

 

An Act to provide for the Australian Securities and Investments Commission, a Companies and Securities Advisory Committee and certain other bodies, and for other purposes

   

   

   



Contents

Part 1—Preliminary                                                                                                                1

Division 1—Objects                                                                                                       1

1............ Objects................................................................................................ 1

Division 2—Citation                                                                                                       3

1A......... Short title............................................................................................ 3

Division 3—Commencement and application                                                   4

2............ Commencement.................................................................................. 4

4............ Application of this Act...................................................................... 4

Division 4—Interpretation                                                                                          5

5............ Interpretation...................................................................................... 5

5A......... Application of Acts Interpretation Act 1901 ..................................... 11

6............ Giving information............................................................................ 11

Part 2—Australian Securities and Investments Commission and consumer protection in relation to financial services                                                                                                                     13

Division 1—Australian Securities and Investments Commission       13

8............ ASIC is a body corporate................................................................. 13

9............ Membership..................................................................................... 13

10.......... Chairperson and Deputy Chairperson............................................. 14

11.......... Corporations legislation functions and powers and other functions and powers conferred by the States and Territories.......................................................................................................... 14

12.......... Directions by Minister..................................................................... 16

12A....... Other functions and powers............................................................. 17

Division 2—Unconscionable conduct and consumer protection in relation to financial  services            19

Subdivision A—Application                                                                                      19

12AA.... Constitutional operation of Division................................................ 19

12AC.... Division extends to some conduct outside Australia........................ 21

12AD.... Application of Division to Commonwealth and Commonwealth authorities         21

12AE..... Saving of other laws and remedies.................................................... 23

Subdivision B—Interpretation                                                                                 23

12BA.... Interpretation.................................................................................... 23

12BB..... Misleading representations............................................................... 27

12BC..... Consumers........................................................................................ 28

12BD.... Acquisition, supply and re-supply.................................................. 30

12BE..... Application of Division in relation to leases and licences of land and buildings     31

Subdivision C—Unconscionable conduct                                                               31

12CA.... Unconscionable conduct within the meaning of the unwritten law of the States and Territories            31

12CB..... Unconscionable conduct................................................................... 31

Subdivision D—Consumer protection                                                                    33

12DA.... Misleading or deceptive conduct...................................................... 33

12DB.... False or misleading representations.................................................. 33

12DC.... False representations and other misleading or offensive conduct in relation to securities that involve interests in land.......................................................................................................... 34

12DD.... Cash price to be stated in certain circumstances.............................. 35

12DE..... Offering gifts and prizes................................................................... 35

12DF..... Certain misleading conduct in relation to financial services.............. 35

12DG.... Bait advertising................................................................................. 35

12DH.... Referral selling.................................................................................. 36

12DI...... Accepting payment without intending or being able to supply as ordered             37

12DJ..... Harassment and coercion.................................................................. 37

12DK.... Pyramid selling of securities............................................................. 37

12DL..... Unsolicited debit cards..................................................................... 40

12DM... Assertion of right to payment for unsolicited financial services...... 41

12DN.... Application of provisions of Division to prescribed information providers           42

Subdivision E—Conditions and warranties in consumer transactions            44

12EA..... Conflict of laws................................................................................ 44

12EB..... Application of provisions not to be excluded or modified............... 44

12EC..... Limitation of liability for breach of certain conditions or warranties 45

12ED..... Warranties in relation to the supply of financial services................ 46

Subdivision F—Alternative dispute resolution                                                     47

12FA..... Industry codes to be approved by ASIC......................................... 47

Subdivision G—Enforcement and remedies                                                          48

12GA.... Interpretation.................................................................................... 48

12GB.... Offences against Subdivision D........................................................ 49

12GC.... Enforcement and recovery of certain fines....................................... 51

12GD.... Injunctions........................................................................................ 53

12GE..... Order to disclose information or publish advertisement.................. 54

12GF..... Actions for damages......................................................................... 55

12GG.... Finding in proceedings to be evidence.............................................. 55

12GH.... Conduct by directors, employees or agents..................................... 56

12GI...... Defences........................................................................................... 57

12GJ..... Jurisdiction of courts........................................................................ 58

12GK.... Transfer of matters........................................................................... 59

12GL..... Transfer of certain proceedings to Family Court............................. 61

12GM... Other orders...................................................................................... 62

12GN.... Power of Court to prohibit payment or transfer of money or other property       66

12GO.... Enforcement of undertakings—Secretary of the Department.......... 68

Subdivision H—Miscellaneous                                                                                69

12HA.... Relationship of this Subdivision to Part 3........................................ 69

12HB.... Disclosure of documents by ASIC................................................... 69

12HC.... Prosecutions..................................................................................... 70

12HD.... Jurisdiction of Court to make declarations and orders..................... 71

Part 3—Investigations and information-gathering                                              72

Division 1—Investigations                                                                                       72

13.......... General powers of investigation....................................................... 72

14.......... Minister may direct investigations................................................... 72

15.......... Investigation after report of receiver or liquidator............................ 73

16.......... Interim report on investigation......................................................... 74

17.......... Final report on investigation............................................................. 74

18.......... Distribution of report....................................................................... 75

Division 2—Examination of persons                                                                   76

19.......... Notice requiring appearance for examination.................................... 76

20.......... Proceedings at examination............................................................... 76

21.......... Requirements made of examinee....................................................... 76

22.......... Examination to take place in private................................................. 77

23.......... Examinee’s lawyer may attend......................................................... 77

24.......... Record of examination...................................................................... 78

25.......... Giving to other persons copies of record......................................... 78

26.......... Copies given subject to conditions................................................... 79

27.......... Record to accompany report............................................................ 79

Division 3—Inspection of books                                                                           80

28.......... When certain powers may be exercised............................................ 80

29.......... ASIC may inspect books without charge......................................... 80

30.......... Notice to produce books about affairs of body corporate or registered scheme     81

31.......... Notice to produce books about securities........................................ 81

32.......... Notice to produce books about futures contracts............................ 82

32A....... Notice to produce books about financial services............................ 83

33.......... Notice to produce documents in person’s possession..................... 83

34.......... ASIC may authorise persons to require production of books.......... 84

35.......... Application for warrant to seize books not produced..................... 84

36.......... Grant of warrant............................................................................... 85

37.......... Powers where books produced or seized......................................... 86

38.......... Powers where books not produced.................................................. 87

39.......... Power to require person to identify property of body corporate.... 88

39A....... ASIC may give copy of book relating to registered scheme to another person       88

Division 4—Requirements to disclose information about securities or futures contracts           89

40.......... When certain powers may be exercised............................................ 89

41.......... Acquisitions and disposals of securities........................................... 89

43.......... Exercise of certain powers of ASIC in relation to securities............ 90

44.......... Dealings in futures contracts............................................................ 92

46.......... Exercise of certain powers of ASIC in relation to futures contracts 92

47.......... Disclosures to take place in private.................................................. 93

48.......... Lawyer of person making disclosure may attend............................. 94

Division 5—Proceedings after an investigation                                            95

49.......... ASIC may cause prosecution to be begun........................................ 95

50.......... ASIC may cause civil proceeding to be begun.................................. 96

Division 6—Hearings                                                                                                  97

51.......... Power to hold hearings..................................................................... 97

52.......... General discretion to hold hearing in public or private..................... 97

53.......... Request by person appearing at hearing that it take place in public 97

54.......... Certain hearings to take place in private........................................... 98

55.......... ASIC may restrict publication of certain material............................ 98

56.......... Who may be present when hearing takes place in private................ 98

57.......... Involvement of person entitled to appear at hearing........................ 99

58.......... Power to summon witnesses and take evidence............................... 99

59.......... Proceedings at hearings................................................................... 100

60.......... ASIC to take account of evidence and submissions....................... 101

61.......... Reference to Court of question of law arising at hearing................ 101

62.......... Protection of members etc.............................................................. 102

Division 7—Offences                                                                                                 103

63.......... Non-compliance with requirements made under this Part.............. 103

64.......... False information............................................................................ 103

65.......... Obstructing person acting under this Part...................................... 104

66.......... Contempt of ASIC......................................................................... 104

67.......... Concealing books relevant to investigation..................................... 105

68.......... Self-incrimination............................................................................ 105

69.......... Legal professional privilege............................................................ 106

70.......... Powers of Court where non-compliance with Part........................ 107

Division 8—ASIC’s powers where non-compliance with Part             108

71.......... Orders by ASIC.............................................................................. 108

72.......... Orders in relation to securities of a body corporate....................... 108

73.......... Orders in relation to securities generally........................................ 109

74.......... Orders in relation to futures contracts............................................ 109

75.......... Orders under this Division............................................................. 110

Division 9—Evidentiary use of certain material                                          112

76.......... Statements made at an examination: proceedings against examinee 112

77.......... Statements made at an examination: other proceedings.................. 112

78.......... Weight of evidence admitted under section 77............................... 113

79.......... Objection to admission of statements made at examination........... 114

80.......... Copies of, or extracts from, certain books...................................... 115

81.......... Report under Division 1................................................................. 116

82.......... Exceptions to admissibility of report............................................. 116

83.......... Material otherwise admissible........................................................ 117

Division 10—Miscellaneous                                                                                  118

84.......... Requirement made of a body corporate.......................................... 118

85.......... Evidence of authority..................................................................... 118

86.......... Giving documents to natural persons............................................. 118

87.......... Place and time for production of books.......................................... 119

88.......... Application of Crimes Act and Evidence Act................................ 119

89.......... Allowances and expenses............................................................... 119

90.......... Expenses of investigation under Division 1.................................... 120

91.......... Recovery of expenses of investigation........................................... 120

92.......... Compliance with Part..................................................................... 121

93.......... Effect of Part.................................................................................. 121

93AA.... Enforcement of undertakings.......................................................... 121

Part 3A—Enforceable undertakings in relation to registered schemes 123

93A....... Undertakings by responsible entity............................................... 123

Part 4—ASIC’s business                                                                                                 125

Division 1—General                                                                                                   125

94.......... Arrangement of ASIC’s business................................................... 125

95.......... ASIC to establish offices................................................................ 125

96.......... Regional Commissioners................................................................. 125

Division 2—Divisions of ASIC                                                                             126

97.......... ASIC may establish Division......................................................... 126

98.......... Effect of direction establishing Division......................................... 126

99.......... ASIC may reconstitute Division.................................................... 126

100........ Effect of reconstituting Division.................................................... 127

101........ Multiple Divisions......................................................................... 127

Division 3—Delegation by ASIC                                                                         128

102........ Delegation....................................................................................... 128

Division 4—Meetings of ASIC                                                                             130

103........ Convening of meetings.................................................................... 130

104........ Approved methods of communication........................................... 130

105........ Quorum........................................................................................... 130

106........ Who is to preside at meetings......................................................... 131

107........ Procedure at meetings..................................................................... 131

Part 5—ASIC’s members                                                                                                132

Division 1—Terms and conditions                                                                     132

108........ Term of office as member............................................................... 132

109........ Term of office as Chairperson or Deputy Chairperson................. 132

110........ Resignation..................................................................................... 132

111........ Termination of appointment.......................................................... 133

112........ Remuneration and allowances etc................................................... 134

113........ Leave of absence............................................................................. 134

114........ Superannuation arrangements......................................................... 135

115........ Other terms and conditions............................................................ 135

Division 2—Acting appointments                                                                       136

116........ Acting members.............................................................................. 136

117........ Acting Chairperson......................................................................... 136

118........ Acting Deputy Chairperson........................................................... 137

119........ Limitation on appointments to act during vacancy........................ 137

Division 3—Delegation by members                                                                 138

119A..... Delegation by members.................................................................. 138

Part 6—ASIC’s staff                                                                                                          139

120........ Staff................................................................................................ 139

121........ Consultants etc............................................................................... 139

122........ Staff seconded to ASIC.................................................................. 139

Part 7—Preventing conflicts of interest and misuse of information        141

Division 1—Disclosure of interests                                                                   141

123........ Members to disclose certain interests to Minister......................... 141

124........ Members to disclose certain interests to Chairperson................... 142

125........ Notification of interests to ASIC................................................... 143

126........ Defence........................................................................................... 143

Division 2—Confidentiality                                                                                     144

127........ Confidentiality................................................................................ 144

Division 3—Restrictions on dealing in futures contracts                       150

128........ Certain persons not to deal on the basis of certain information..... 150

129........ Compensation to other parties where section 128 contravened..... 150

130........ Amount of compensation............................................................... 150

131........ Limitation of actions....................................................................... 151

132........ ASIC may sue................................................................................. 151

Part 8—Finance                                                                                                                     152

Division 1—General                                                                                                   152

133........ Payments to ASIC by Commonwealth.......................................... 152

134........ ASIC’s money................................................................................ 152

135........ How ASIC’s money to be applied................................................. 152

137........ Limitation on contracts and leases.................................................. 154

138........ Extra matters to be included in annual report................................. 154

139........ Liability to taxation........................................................................ 155

Division 2—Trust property                                                                                    156

140........ ASIC may accept property on trust.............................................. 156

141........ Trust money to be paid into bank account..................................... 156

142........ How trust property to be applied.................................................. 156

Part 9—The Companies and Securities Advisory Committee                    157

Division 1—General                                                                                                   157

146........ CASAC is a body corporate........................................................... 157

147........ Membership................................................................................... 157

148........ Functions........................................................................................ 158

149........ Term of office as member............................................................... 158

150........ Resignation..................................................................................... 159

151........ Termination of appointment.......................................................... 159

152........ Remuneration and allowances etc................................................... 159

153........ Meetings......................................................................................... 159

154........ CASAC to inform itself in any manner.......................................... 160

155........ Publication of advice or recommendations..................................... 160

Division 2—Staff and finance                                                                                 161

156........ Staff................................................................................................ 161

157........ Consultants etc............................................................................... 161

158........ Staff seconded to CASAC.............................................................. 161

159........ Payments to CASAC by Commonwealth...................................... 162

160........ CASAC’s money............................................................................ 162

161........ How CASAC’s money to be applied............................................. 162

163........ Limitation on contracts and leases.................................................. 163

165........ Liability to taxation........................................................................ 163

166........ CASAC may accept property on trust.......................................... 164

167........ Trust money to be paid into bank account..................................... 164

168........ How trust property to be applied.................................................. 164

Part 10—The Corporations and Securities Panel                                              165

Division 1—General                                                                                                   165

172........ Membership................................................................................... 165

173........ President......................................................................................... 166

174........ Functions and powers of Panel...................................................... 166

175........ Term of office as member............................................................... 166

176........ Term of office as President............................................................. 166

177........ Resignation..................................................................................... 167

178........ Termination of appointment.......................................................... 167

179........ Remuneration and allowances......................................................... 167

180........ Leave of absence............................................................................. 168

181........ Other terms and conditions............................................................ 168

182........ Acting President............................................................................. 168

183........ Annual report................................................................................. 168

Division 2—Conduct of Panel’s business                                                       170

184........ Constitution of Panel in relation to particular matters................... 170

185........ Disclosure of interests by members............................................... 171

186........ Application of Divisions 2 and 3 of Part 7.................................... 172

Division 3—Panel proceedings                                                                            173

187........ Interpretation.................................................................................. 173

188........ Power to conduct proceedings........................................................ 173

190........ Panel may restrict publication of certain material.......................... 173

192........ Power to summon witnesses and take evidence............................. 174

193........ Quorum........................................................................................... 175

194........ Legal representation in proceedings before the Panel..................... 175

195........ Procedure........................................................................................ 175

197........ Protection of members etc.............................................................. 176

198........ Non-compliance with requirements made under section 192......... 176

199........ False evidence................................................................................. 176

200........ Contempt of Panel.......................................................................... 177

201........ Powers of Court where non-compliance with section 192............. 177

201A..... Undertakings to the Panel............................................................... 178

Part 11—Companies Auditors and Liquidators Disciplinary Board       179

Division 1—Constitution of Disciplinary Board                                          179

203........ Membership of Disciplinary Board............................................... 179

204........ Functions and powers of Disciplinary Board................................ 179

205........ Term of office................................................................................. 180

206........ Resignation from office................................................................... 180

207........ Termination of appointment.......................................................... 180

208........ Acting Chairperson......................................................................... 180

209........ Appointment of deputies............................................................... 181

210........ Meetings......................................................................................... 181

211........ Disclosure of interests.................................................................... 182

212........ Remuneration and allowances......................................................... 182

213........ Confidentiality................................................................................ 183

214........ Annual report................................................................................. 183

Division 2—Hearings by Disciplinary Board                                                185

215........ Definition........................................................................................ 185

216........ Hearings.......................................................................................... 185

217........ Power to summon witnesses and take evidence............................. 187

218........ Proceedings at hearings................................................................... 187

219........ Failure of witnesses to attend and answer questions..................... 188

220........ Contempt of Disciplinary Board.................................................... 190

221........ Protection of members etc.............................................................. 190

222........ Hearings taken to be judicial proceedings....................................... 191

223........ Costs............................................................................................... 191

Part 12—Accounting standards                                                                                    194

224........ Main objects of this Part................................................................ 194

Division 1—The Australian financial reporting system                           195

225........ Functions and powers of the Financial Reporting Council............ 195

226........ The Australian Accounting Standards Board................................. 196

227........ AASB’s functions and powers....................................................... 197

Division 2—Accounting standards                                                                     199

228........ Purposive interpretation of standards............................................ 199

229........ Generic and specific standards....................................................... 199

230........ Comparative amounts..................................................................... 200

231........ Cost/benefit analysis...................................................................... 200

232........ FRC views...................................................................................... 200

233........ International accounting standards................................................. 201

234........ Validity of accounting standards.................................................... 201

Division 3—Administrative provisions                                                            202

Subdivision A—The Financial Reporting Council                                             202

235A..... Membership of FRC...................................................................... 202

235B..... Annual report................................................................................. 202

235C..... Procedure........................................................................................ 203

Subdivision B—The Australian Accounting Standards Board                       203

236A..... Procedure........................................................................................ 203

236B..... Appointment of members of the AASB........................................ 204

236C..... Resignation and termination of appointment................................. 204

236D..... Acting appointments...................................................................... 206

Subdivision C—Confidentiality                                                                             207

237........ Confidentiality................................................................................ 207

Subdivision D—Financial matters                                                                        207

238........ Application of money.................................................................... 207

Part 14—The Parliamentary Joint Committee on Corporations and Securities       208

241........ Membership................................................................................... 208

242........ Powers and proceedings................................................................. 209

243........ Duties............................................................................................. 209

Part 15—Miscellaneous                                                                                                   211

243B..... Offences committed partly in and partly out of the jurisdiction... 211

243D..... Financial transaction reports.......................................................... 211

244........ Review by Administrative Appeals Tribunal of certain decisions. 212

244A..... Notice of reviewable decision and review rights............................. 212

245........ Validity of certain actions............................................................... 213

246........ Liability for damages...................................................................... 213

247........ Duplicate seals................................................................................ 214

248........ Judicial notice of ASIC’s seal and members’ signatures................. 214

251........ The regulations............................................................................... 215

Part 16—Transition from the old ASIC legislation                                           216

Division 1—Preliminary                                                                                           216

253........ Object of Part................................................................................. 216

254........ Definitions...................................................................................... 217

255........ Relationship of Part with State validation Acts............................. 221

256........ References to things taken or deemed to be the case etc................ 222

257........ Existence of several versions of the old ASIC legislation does not result in this Part operating to take the same thing to be done several times under the new ASIC legislation etc.............. 223

258........ Penalty units in respect of pre-commencement conduct remain at $100                223

259........ Ceasing to be a referring State does not affect previous operation of this Part       224

Division 2—Carrying over bodies established etc. or persons appointed under the old ASIC Act       225

260........ Division has effect subject to Division 7 regulations..................... 225

261........ Carrying over bodies established under the old ASIC Act............. 225

262........ Carrying over the Chairman and Deputy Chairman of the Financial Reporting Council        225

Division 3—Carrying over the old ASIC Regulations                             226

263........ Division has effect subject to Division 7 regulations..................... 226

264........ Old ASIC Regulations continue to have effect............................... 226

Division 4—Court proceedings and orders                                                   227

265........ Division has effect subject to Division 7 regulations..................... 227

266........ Definitions...................................................................................... 227

267........ Treatment of court proceedings under or related to the old ASIC legislation—proceedings other than federal ASIC proceedings..................................................................................... 229

268........ Treatment of court proceedings under or related to the old ASIC legislation—federal ASIC proceedings             231

269........ References to proceedings and orders in the new ASIC legislation 232

Division 5—Functions and powers of ASIC                                                  235

270........ Division has effect subject to Division 7 regulations..................... 235

271........ Non-federal proceedings etc........................................................... 235

272........ NCSC’s functions and powers....................................................... 236

Division 6—General transitional provisions relating to other things done etc. under the old ASIC legislation                                                                                               237

273........ Provisions in this Division have effect subject to the other Divisions 237

274........ Provisions of this Division may have an overlapping effect.......... 238

275........ Things done by etc. carried over provisions continue to have effect 238

276........ Creation of equivalent rights and liabilities to those that existed before the commencement under carried over provisions of the old ASIC legislation............................................ 240

277........ Creation of equivalent rights and liabilities to those that existed before the commencement under repealed provisions of the old ASIC legislation.................................................................. 241

278........ Old ASIC legislation time limits continue to run............................ 242

279........ Preservation of significance etc. of events or circumstances.......... 243

280........ References in the new ASIC legislation generally include references to events, circumstances or things that happened or arose before the commencement..................................................... 244

281........ References in the new ASIC legislation to that legislation or the new corporations legislation generally include references to corresponding provisions of the old ASIC legislation or old corporations legislation       245

282........ Carrying over references to corresponding previous laws or relevant previous laws              246

283........ References to ASIC legislation in instruments............................... 246

284........ Old transitional provisions continue to have their effect............... 247

Division 7—Regulations dealing with transitional matters                   250

285........ Regulations may deal with transitional matters.............................. 250

 



Australian Securities and Investments Commission Act 2001

No. 51, 2001

 

 

 

An Act to provide for the Australian Securities and Investments Commission, a Companies and Securities Advisory Committee and certain other bodies, and for other purposes

[ Assented to 28 June 2001 ]

The Parliament of Australia enacts: