Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Australian Securities and Investments Commission Bill 2001

Part 7 Preventing conflicts of interest and misuse of information

Division 1 Disclosure of interests

123   Members to disclose certain interests to Minister

             (1)  A member must, in accordance with this section, disclose to the Minister:

                     (a)  any direct or indirect pecuniary interest that the member has or acquires in:

                              (i)  a body corporate carrying on business in Australia; or

                             (ii)  a business in Australia; and

                     (b)  any direct or indirect pecuniary interest that the member has or acquires in interests (including securities, futures contracts or other financial products) regulated by ASIC; and

                     (c)  any agreement, understanding or expectation that the member will:

                              (i)  resume a previous business relationship (whether or not that relationship existed immediately before the member’s appointment); or

                             (ii)  enter into a new business relationship;

                            when the member ceases to be a member; and

                     (d)  any severance arrangement or ongoing financial arrangement that takes account of an agreement, understanding or expectation that must be disclosed under paragraph (c).

             (2)  For the purpose of paragraph (1)(b), interests are regulated by ASIC if ASIC has a function or power in relation to any aspect of the acquisition, holding, disposal or provision of the interests, or of interests of that kind.

             (3)  In disclosing an indirect pecuniary interest in securities, futures contracts or other financial products, the member must identify the particular securities, futures contracts or products.

             (4)  Paragraphs (1)(c) and (d) apply to agreements or understandings entered into, or expectations arising, before or after the member’s appointment.

             (5)  Paragraph (1)(c) does not require a member to disclose an expectation to enter into a new business relationship unless the member can identify the other party, or one or more other parties, to the relationship. Disclosure is required whether or not the field of business or legal nature of the relationship has been determined.

             (6)  A disclosure under this section must be made in writing.

124   Members to disclose certain interests to Chairperson

             (1)  This section has effect where a member:

                     (a)  is to take part, or is taking part, in determining a matter before ASIC; and

                     (b)  has or acquires a direct or indirect pecuniary interest, or a direct or indirect interest of any other kind, that could conflict with the proper performance of the member’s functions in relation to determining the matter.

             (2)  If the member is not the Chairperson, the member must disclose the interest to the Chairperson.

             (3)  If the member is not the Chairperson and the Chairperson becomes aware that the member has the interest, the Chairperson must:

                     (a)  if the Chairperson considers that the member should not take part, or not continue to take part, as the case requires, in determining the matter—direct the member accordingly; or

                     (b)  in any other case—cause the member’s interest to be disclosed to the persons concerned in the matter.

             (4)  The member must comply with a direction under paragraph (3)(a).

             (5)  If the member is the Chairperson, he or she must cause his or her interest to be disclosed to the persons concerned in the matter.

             (6)  Subject to subsection (4), the member must not take part, or continue to take part, as the case requires, in determining the matter unless everyone concerned in it consents to the member so taking part.

             (7)  Sections 27F to 27L of the Commonwealth Authorities and Companies Act 1997 do not apply to members.

125   Notification of interests to ASIC

             (1)  This section has effect where a person, in the course of:

                     (a)  performing functions or services as a staff member (otherwise than as a person appointed or engaged under the Public Service Act 1999 ); or

                     (b)  performing a function, or exercising a power, as an ASIC delegate; or

                     (c)  performing functions or services by way of assisting an ASIC delegate;

is required to consider a matter in which the person has a direct or indirect pecuniary or other interest that could involve a conflict with the proper performance or exercise by the person of those functions, services or powers.

             (2)  The person must forthwith give to ASIC a written notice:

                     (a)  stating that he or she is required to consider the matter and has an interest in it; and

                     (b)  setting out particulars of the interest.

             (3)  The person must do whatever is necessary to avoid the conflict referred to in subsection (1).

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

126   Defence

                   It is a defence to a prosecution of a person for a contravention of section 125 if it is established that when the person was required to consider the matter he or she was not aware of a fact or thing whose existence obliged him or her to comply with that section in relation to the matter.



 

Division 2 Confidentiality

127   Confidentiality

             (1)  ASIC must take all reasonable measures to protect from unauthorised use or disclosure information:

                     (a)  given to it in confidence in or in connection with the performance of its functions or the exercise of its powers under the corporations legislation (other than the excluded provisions); or

                     (b)  that is protected information.

          (1A)  Disclosing summaries of information or statistics derived from information is authorised use and disclosure of the information provided that information relating to any particular person cannot be found out from those summaries or statistics.

          (1B)  Disclosing:

                     (a)  the names of entities that are RSA providers or RSA institutions for the purposes of the RSA Act; or

                     (b)  the addresses at which business relating to entities referred to in paragraph (a) is conducted; or

                     (c)  any other information that is reasonably necessary to enable members of the public to contact a person who performs functions in relation to an RSA (within the meaning of the RSA Act);

is authorised use and disclosure of the information.

          (1C)  Disclosing any or all of the following information about an RSA provider is authorised use and disclosure of the information:

                     (a)  whether or not the RSA provider has lodged a return under section 44 of the RSA Act in respect of a particular year of income;

                     (b)  whether or not a notice, or a particular kind of notice, has been given under section 92 of the RSA Act in relation to an RSA provider in respect of a particular year of income.

          (1D)  Disclosing:

                     (a)  the names of:

                              (i)  superannuation funds, approved deposit funds and pooled superannuation trusts that are superannuation entities for the purposes of the SIS Act; or

                             (ii)  superannuation entities that are non-complying superannuation funds or non-complying approved deposit funds, or are not pooled superannuation trusts, as the case may be, in relation to a specified year of income for the purposes of Part IX of the Income Tax Assessment Act; or

                            (iii)  superannuation funds and approved deposit funds that are eligible roll-over funds for the purposes of Part 24 of the SIS Act; and

                     (b)  the addresses at which business relating to funds or trusts referred to in paragraph (a) is conducted; and

                     (d)  any other information that is reasonably necessary to enable members of the public to contact a person who performs functions in relation to a superannuation entity (within the meaning of the SIS Act);

is authorised use and disclosure of the information.

           (1E)  Disclosing any or all of the following information about a fund, scheme or trust (of a type referred to in subsection (1D)) is authorised use and disclosure of the information:

                     (a)  whether or not the trustee of the fund, scheme or trust has lodged a return under section 36 of the SIS Act in respect of a particular year of income;

                     (b)  whether or not a decision has been made by APRA to give a notice, or a particular kind of notice, in relation to the fund, scheme or trust under section 40 of the SIS Act in relation to a particular year of income;

                     (c)  whether or not a notice or a particular kind of notice has been given by APRA or ASIC under section 40 or 254 of the SIS Act in relation to the fund, scheme or trust, in respect of a particular year of income;

                     (d)  in the case of a superannuation fund—whether or not the trustee of the fund has told APRA that the trustee is willing to accept a particular kind of contribution.

             (2)  For the purposes of subsection (1), the disclosure of information as required or permitted by a law of the Commonwealth or a prescribed law of a State or internal Territory is taken to be authorised use and disclosure of the information.

          (2A)  Disclosing information to one of the following is authorised use and disclosure of the information:

                     (a)  the Minister;

                     (b)  the Secretary of the Department for the purpose of advising the Minister, or an officer authorised for that purpose;

                     (c)  APRA.

             (3)  For the purposes of subsection (1), the disclosure of information by a person for the purposes of:

                     (a)  performing the person’s functions as:

                              (i)  a member, staff member or ASIC delegate; or

                             (ii)  a person who is acting as a member or staff member or who is authorised to perform or exercise a function or power of, or on behalf of, ASIC; or

                     (b)  the performance of functions or services by the person by way of assisting an ASIC delegate;

is taken to be authorised use and disclosure of the information.

             (4)  Where the Chairperson is satisfied that particular information:

                     (a)  will enable or assist an agency, being CASAC, the Panel, the Disciplinary Board, the Review Board or any other agency within the meaning of the Freedom of Information Act 1982 , to perform or exercise any of the agency’s functions or powers; or

                    (aa)  will enable or assist:

                              (i)  the Australian Bureau of Criminal Intelligence; or

                             (ii)  the Australian Financial Institutions Commission; or

                            (iii)  the Superannuation Complaints Tribunal;

                            to perform any of its functions or powers; or

                    (ab)  will enable or assist an officer of the Commonwealth Attorney-General’s Department who is in the office known as the Office of Law Enforcement Co-ordination to perform any of his or her functions or powers; or

                     (b)  will enable or assist the government, or an agency, of a State or Territory to perform a function or exercise a power; or

                     (c)  will enable or assist a government, or an agency, of a foreign country to perform a function, or exercise a power, conferred by a law in force in that foreign country; or

                     (d)  will enable or assist a prescribed professional disciplinary body to perform one of its functions;

the disclosure of the information to the agency, government or disciplinary body by a person whom the Chairperson authorises for the purpose is taken to be authorised use and disclosure of the information.

          (4A)  The Chairperson may impose conditions to be complied with in relation to information disclosed under subsection (4).

          (4B)  The disclosure of information to a body corporate specified in regulations under subsection (4C) (including a body corporate that is a foreign company) is authorised use and disclosure of the information if:

                     (a)  the Chairperson is satisfied that the information will enable or assist the body corporate to monitor compliance with, enforce, or perform functions or exercise powers under:

                              (i)  the Corporations Act; or

                          (iaa)  the business law of a State that is not in this jurisdiction; or

                            (ia)  the business law of a foreign country; or

                             (ii)  the business rules, or the listing rules (if any), of the body corporate; and

                     (b)  the disclosure is by a person authorised by the Chairperson for the purpose.

          (4C)  The regulations may specify a body corporate for the purposes of subsection (4B) if, and only if, the body corporate:

                     (a)  conducts a stock market or a futures market; or

                     (b)  is the securities clearing house or a clearing house for a futures exchange.

          (4D)  The Chairperson may impose conditions to be complied with by a body corporate and its officers, employees and agents in relation to information disclosed to the body corporate under subsection (4B).

           (4E)  A person must comply with a condition imposed under subsection (4D).

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

        (4EA)  If ASIC discloses information to a disciplinary body under paragraph (4)(d), the body or a member of the body:

                     (a)  must not disclose the information to any other person; and

                     (b)  must not use the information for any purpose other than for deciding whether or not to take disciplinary or other action or for taking that action.

Penalty:  Imprisonment for 2 years.

           (4F)  If information is disclosed to a body corporate under subsection (4B), the body corporate, or an officer, employee or agent of the body corporate, must not, without the written consent of the Chairperson:

                     (a)  disclose the information to a person who is not an officer, employee or agent of the body corporate; or

                     (b)  use the information otherwise than for the purpose of monitoring compliance with, enforcing, or performing functions or exercising powers under:

                              (i)  the Corporations Act; or

                          (iaa)  the business law of a State that is not in this jurisdiction; or

                            (ia)  the business law of a foreign country; or

                             (ii)  the business rules, or the listing rules (if any), of the body corporate.

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

             (5)  The Chairperson may delegate all or any of his or her functions and powers under subsection (4), (4A), (4B), (4D) or (4F) to a member or staff member.

             (6)  Nothing in any of subsections (1A), (1B), (1C), (ID), (IE), (2), (2A), (3), (4) and (4B) limits:

                     (a)  anything else in any of those subsections; or

                     (b)  what may otherwise constitute, for the purposes of subsection (1), authorised use or disclosure of information.

             (9)  In this section:

Income Tax Assessment Act means the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997.

protected information means information disclosed or obtained, or a document given or produced, (whether before or after the commencement of this section), for the purposes of a function in section 12A and relating to the affairs of:

                     (a)  a body or person regulated by ASIC; or

                     (b)  a body corporate (including a body corporate that has ceased to exist) that has at any time been, or is, related (within the meaning of the Corporations Act) to a body regulated by ASIC; or

                     (c)  a person who has been, is, or proposes to be, a customer of a body or person regulated by ASIC;

other than information that has already been lawfully made available to the public from other sources.

RSA Act means the Retirement Savings Accounts Act 1997.

SIS Act means the Superannuation Industry (Supervision) Act 1993.



 

Division 3 Restrictions on dealing in futures contracts

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

                   Where:

                     (a)  because of being, or having at any time been, or acting as, or having at any time acted as, a member or staff member; or

                     (b)  because of being, or having at any time been, an ASIC delegate; or

                     (c)  in the course of assisting, or because of assisting, or having at any time assisted, an ASIC delegate;

a person has acquired information that is not generally available but that, if it were, would be likely to affect materially the price for dealing in a futures contract, the person must not deal in, or procure another person to deal in, that futures contract or a futures contract of the same kind as that futures contract.

Penalty:  200 penalty units or imprisonment for 5 years, or both.

129   Compensation to other parties where section 128 contravened

             (1)  A person who contravenes section 128 is liable to compensate any other party to the transaction for any loss sustained by that party because of any difference between the price at which the dealing in the futures contract took place and the price at which it would be likely to have taken place if the information had been generally available.

             (2)  Subsection (1) does not affect any other liability of a person who contravenes section 128.

130   Amount of compensation

             (1)  Where a person is liable under section 129 to compensate another person for a loss in relation to a transaction, the amount of the compensation is:

                     (a)  if the first-mentioned person has already been found by a court to be liable under section 129 to pay an amount or amounts to a person or persons in relation to the transaction—the amount of that loss less the amount, or the sum of the amounts, that the first-mentioned person has been so found to be liable to pay; or

                     (b)  in any other case—the amount of that loss.

             (2)  For the purposes of subsection (1), the onus of establishing that the transaction in relation to which a person is liable to pay compensation is the same as the transaction in relation to which the person has already been found liable to pay an amount or amounts lies on that person.

131   Limitation of actions

                   An action under section 129 is not maintainable more than 2 years after the day on which the transaction was completed.

132   ASIC may sue

                   ASIC may, if it considers that it is in the public interest to do so, bring an action under section 129 in the name, and for the benefit, of a person.