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Financial Sector Legislation Amendment (Review of Prudential Decisions) Bill 2008

Schedule 1 Court power of disqualification etc.

Part 1 Amendments commencing on Royal Assent

Banking Act 1959

1  At the end of subsection 17(2)

Add:

               ; or (c)  either:

                              (i)  for a person who is a disqualified person only because he or she was disqualified under section 21—is disqualified from being or acting as an auditor of the ADI; or

                             (ii)  otherwise—is a disqualified person.

2  Subsections 19(1) and (2)

Repeal the subsections, substitute:

             (1)  A person commits an offence if:

                     (a)  the person is a disqualified person; and

                     (b)  the person is or acts as one of the following:

                              (i)  a director or senior manager of an ADI (other than a foreign ADI);

                             (ii)  a senior manager of the Australian operations of a foreign ADI;

                            (iii)  a director or senior manager of an authorised NOHC;

                            (iv)  an auditor of an ADI or an authorised NOHC; and

                     (c)  for a person who is a disqualified person only because he or she was disqualified under section 21—the person is disqualified from being or acting as that director, senior manager or auditor (as the case requires).

Penalty:  Imprisonment for 2 years.

             (2)  A person commits an offence if:

                     (a)  the person is a disqualified person; and

                     (b)  the person is or acts as one of the following:

                              (i)  a director or senior manager of an ADI (other than a foreign ADI);

                             (ii)  a senior manager of the Australian operations of a foreign ADI;

                            (iii)  a director or senior manager of an authorised NOHC;

                            (iv)  an auditor of an ADI or an authorised NOHC; and

                     (c)  for a person who is a disqualified person only because he or she was disqualified under section 21—the person is disqualified from being or acting as that director, senior manager or auditor (as the case requires).

Penalty:  60 penalty units.

3  Subsections 19(4) and (5)

Repeal the subsections, substitute:

             (4)  A body corporate commits an offence if:

                     (a)  a person is a disqualified person; and

                     (b)  the person is or acts as one of the following:

                              (i)  if the body corporate is an ADI (other than a foreign ADI)—a director or senior manager of the body corporate;

                             (ii)  if the body corporate is a foreign ADI—a senior manager of the Australian operations of the body corporate;

                            (iii)  if the body corporate is an authorised NOHC—a director or senior manager of the body corporate;

                            (iv)  if the body corporate is an ADI or an authorised NOHC—an auditor of the body corporate; and

                     (c)  for a person who is a disqualified person only because he or she was disqualified under section 21—the person is disqualified from being or acting as that director, senior manager or auditor (as the case requires); and

                     (d)  in any case—the body corporate allows the person to be or act as a director, senior manager or auditor (as the case requires).

Penalty:  250 penalty units.

             (5)  A body corporate commits an offence if:

                     (a)  a person is a disqualified person; and

                     (b)  the person is or acts as one of the following:

                              (i)  if the body corporate is an ADI (other than a foreign ADI)—a director or senior manager of the body corporate;

                             (ii)  if the body corporate is a foreign ADI—a senior manager of the Australian operations of the body corporate;

                            (iii)  if the body corporate is an authorised NOHC—a director or senior manager of the body corporate;

                            (iv)  if the body corporate is an ADI or an authorised NOHC—an auditor of the body corporate; and

                     (c)  for a person who is a disqualified person only because he or she was disqualified under section 21—the person is disqualified from being or acting as that director, senior manager or auditor (as the case requires); and

                     (d)  in any case—the body corporate allows the person to be or act as a director, senior manager or auditor (as the case requires).

Penalty:  60 penalty units.

4  Subsection 19(7)

Repeal the subsection.

5  Paragraph 20(1)(f)

Omit “APRA”, substitute “the Federal Court of Australia”.

6  Subsection 20(1) (note)

Omit “APRA”, substitute “The Federal Court of Australia”.

7  Sections 21 and 22

Repeal the sections, substitute:

21   Court power of disqualification

             (1)  On application by APRA, the Federal Court of Australia may, by order, disqualify a person from being or acting as a person referred to in subsection (2), for a period that the Court considers appropriate, if the Court is satisfied that:

                     (a)  the person is not a fit and proper person to be or act as such a person; and

                     (b)  the disqualification is justified.

             (2)  For the purposes of subsection (1), the Court may disqualify a person from being or acting as one or more of the following:

                     (a)  a director or senior manager of:

                              (i)  a particular ADI; or

                             (ii)  a class of ADIs; or

                            (iii)  any ADI;

                            (other than a particular foreign ADI, a class of foreign ADIs or any foreign ADI);

                     (b)  a senior manager of the Australian operations of:

                              (i)  a particular foreign ADI; or

                             (ii)  a class of foreign ADIs; or

                            (iii)  any foreign ADI;

                     (c)  a director or senior manager of:

                              (i)  a particular authorised NOHC; or

                             (ii)  a class of authorised NOHCs; or

                            (iii)  any authorised NOHC;

                     (d)  an auditor of:

                              (i)  a particular ADI or a particular authorised NOHC; or

                             (ii)  a class of ADIs or a class of authorised NOHCs; or

                            (iii)  any ADI or any authorised NOHC.

             (3)  In deciding whether it is satisfied as mentioned in paragraph (1)(a), the Court may take into account:

                     (a)  any matters specified in the regulations for the purposes of this paragraph; and

                     (b)  any criteria for fitness and propriety set out in the prudential standards; and

                     (c)  any other matters the Court considers relevant.

             (4)  In deciding whether the disqualification is justified as mentioned in paragraph (1)(b), the Court may have regard to:

                     (a)  if the application is for the person to be disqualified from being or acting as a director or senior manager—the person’s conduct in relation to the management, business or property of any corporation; and

                     (b)  if the application is for the person to be disqualified from being or acting as an auditor—the person’s conduct in relation to the functions or duties of the person as required under this Act and the prudential standards; and

                     (c)  in any case—any other matters the Court considers relevant.

             (5)  As soon as practicable after the Court disqualifies a person under this section, APRA must cause particulars of the disqualification:

                     (a)  to be given:

                              (i)  if the person is, or is acting as, a person referred to in subparagraph (2)(a)(i)—to the ADI concerned; or

                             (ii)  if the person is, or is acting as, a person referred to in subparagraph (2)(b)(i)—to the foreign ADI concerned; or

                            (iii)  if the person is, or is acting as, a person referred to in subparagraph (2)(c)(i)—to the authorised NOHC concerned; or

                            (iv)  if the person is, or is acting as, a person referred to in subparagraph (2)(d)(i)—to the ADI or authorised NOHC concerned; and

                     (b)  to be published in the Gazette .

22   Court power to revoke or vary a disqualification etc.

             (1)  A disqualified person, or APRA, may apply to the Federal Court of Australia for:

                     (a)  if the person is a disqualified person only because he or she was disqualified under section 21—a variation or a revocation of the order made under that section; or

                     (b)  otherwise—an order that the person is not a disqualified person.

             (2)  If the Court revokes an order under paragraph (1)(a) or makes an order under paragraph (1)(b), then, despite section 20, the person is not a disqualified person .

             (3)  At least 21 days before commencing the proceedings, written notice of the application must be lodged:

                     (a)  if the disqualified person makes the application—by the person with APRA; or

                     (b)  if APRA makes the application—by APRA with the disqualified person.

             (4)  An order under paragraph (1)(b) may be expressed to be subject to exceptions and conditions determined by the Court.

8  Paragraph 23(2)(a)

Repeal the paragraph, substitute:

                     (a)  either:

                              (i)  for a person who is a disqualified person only because he or she was disqualified under section 21—is disqualified from being or acting as a director or senior manager of the ADI or NOHC; or

                             (ii)  otherwise—is a disqualified person; or

9  Application and transitional provisions

Disqualifications

(1)       For the purposes of the Banking Act 1959 , a disqualification by APRA that is in force under section 21 of that Act immediately before this item commences continues in force after this item commences.

(2)       For the purposes of the Banking Act 1959 , a reference in column 1 of the table in the provision of the Banking Act 1959 (as in force immediately after this item commences) referred to in column 2 is taken to include the reference in column 3.

 

New references to court orders to include references to disqualifications by APRA

Item

Column 1

Reference

Column 2

Provision of the Banking Act

Column 3

Reference taken to be included

1

a person who was disqualified under section 21

section 19 and paragraph 22(1)(a)

a person who was disqualified under section 21 under a disqualification that is continued in force under subitem (1)

2

a person disqualified under section 21 by the Federal Court of Australia

paragraph 20(1)(f)

a person disqualified under section 21 by APRA under a disqualification that is continued in force under subitem (1)

3

an order made under section 21

paragraph 22(1)(a) and subsection 22(2)

a disqualification made under section 21 that is continued in force under subitem (1)

 

(3)       Section 21 of the Banking Act 1959 (as in force immediately after this item commences) applies in relation to any conduct engaged in by a person, whether before or after this item commences.

Waivers of disqualifications

(4)       If:

                     (a)  a person applies to APRA for a determination under section 22 of the Banking Act 1959 that the person is not a disqualified person; and

                     (b)  APRA has not made a decision on the application at the time this item commences;

the application is taken to be withdrawn at that time.

Note:       See subitem (7) for the treatment of a decision by APRA under section 22 of the Banking Act 1959 in respect of which review proceedings are on foot at commencement.

(5)       A determination under section 22 of the Banking Act 1959 that is in force immediately before this item commences continues in force after that time. However, APRA may not revoke the determination.

(6)       If:

                     (a)  a determination in relation to a person continues in force under subitem (5); and

                     (b)  after this item commences, an order is made under section 21 of the Banking Act 1959 (as in force at that time) that the person is disqualified from being or acting as a person referred to in subsection 21(2) of that Act;

the determination ceases to be in force.

Review proceedings on foot at commencement

(7)       The amendments to the Banking Act 1959 made by this Schedule do not affect:

                     (a)  any request, in relation to a decision made under section 21 or 22 of that Act, for a review that is pending under section 51B of that Act immediately before the commencement of this item; or

                     (b)  any proceeding, in relation to a decision under section 21 or 22 of that Act that has been confirmed or varied under subsection 51B(3) of that Act, that is pending before the Administrative Appeals Tribunal immediately before the commencement of this item; or

                     (c)  any appeal to a court in relation to a proceeding referred to in paragraph (b).

(8)       If a disqualification by APRA under section 21, or a determination under section 22, of the Banking Act 1959 is confirmed or varied as a result of a request, proceeding or appeal referred to in subitem (7), the disqualification or determination is, for the purposes of subitem (1) or (5) (as the case requires), taken to have been in force immediately before this item commences.

Insurance Act 1973

10  Subsections 24(1) to (7)

Repeal the subsections, substitute:

             (1)  A person commits an offence if:

                     (a)  the person is a disqualified person; and

                     (b)  the person is or acts as one of the following:

                              (i)  a director or senior manager of a general insurer (other than a foreign general insurer);

                             (ii)  a senior manager, or agent in Australia for the purpose of section 118, of a foreign general insurer;

                            (iii)  a director or senior manager of an authorised NOHC; and

                     (c)  for a person who is a disqualified person only because he or she was disqualified under section 25A—the person is disqualified from being or acting as that director, senior manager or agent in Australia (as the case requires).

Penalty:  Imprisonment for 2 years.

             (2)  A person commits an offence if:

                     (a)  the person is a disqualified person; and

                     (b)  the person is or acts as one of the following:

                              (i)  a director or senior manager of a general insurer (other than a foreign general insurer);

                             (ii)  a senior manager, or agent in Australia for the purpose of section 118, of a foreign general insurer;

                            (iii)  a director or senior manager of an authorised NOHC; and

                     (c)  for a person who is a disqualified person only because he or she was disqualified under section 25A—the person is disqualified from being or acting as that director, senior manager or agent in Australia (as the case requires).

Penalty:  60 penalty units.

             (3)  Subsection (2) is an offence of strict liability.

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

             (4)  A body corporate commits an offence if:

                     (a)  a person is a disqualified person; and

                     (b)  the person is or acts as one of the following:

                              (i)  if the body corporate is a general insurer (other than a foreign general insurer)—a director or senior manager of the insurer;

                             (ii)  if the body corporate is a foreign general insurer—a senior manager, or agent in Australia for the purpose of section 118, of the insurer;

                            (iii)  if the body corporate is an authorised NOHC—a director or senior manager of the NOHC; and

                     (c)  for a person who is a disqualified person only because he or she was disqualified under section 25A—the person is disqualified from being or acting as that director, senior manager or agent in Australia (as the case requires); and

                     (d)  in any case—the body corporate allows the person to be or act as a director, senior manager or agent in Australia (as the case requires).

Penalty:  250 penalty units.

             (5)  A body corporate commits an offence if:

                     (a)  a person is a disqualified person; and

                     (b)  the person is or acts as one of the following:

                              (i)  if the body corporate is a general insurer (other than a foreign general insurer)—a director or senior manager of the insurer;

                             (ii)  if the body corporate is a foreign general insurer—a senior manager, or agent in Australia for the purpose of section 118, of the insurer;

                            (iii)  if the body corporate is an authorised NOHC—a director or senior manager of the NOHC; and

                     (c)  for a person who is a disqualified person only because he or she was disqualified under section 25A—the person is disqualified from being or acting as that director, senior manager or agent in Australia (as the case requires); and

                     (d)  in any case—the body corporate allows the person to be or act as a director, senior manager or agent in Australia (as the case requires).

Penalty:  60 penalty units.

             (6)  Subsection (5) is an offence of strict liability.

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

11  Paragraph 25(1)(f)

Omit “APRA”, substitute “the Federal Court of Australia”.

12  Subsection 25(1) (note)

Omit “APRA”, substitute “The Federal Court of Australia”.

13  Sections 25A and 26

Repeal the sections, substitute:

25A   Court power of disqualification

             (1)  On application by APRA, the Federal Court of Australia may, by order, disqualify a person from being or acting as a person referred to in subsection (2), for a period that the Court considers appropriate, if the Court is satisfied that:

                     (a)  the person is not a fit and proper person to be or act as such a person; and

                     (b)  the disqualification is justified.

             (2)  For the purposes of subsection (1), the Court may disqualify a person from being or acting as one or more of the following:

                     (a)  a director or senior manager of:

                              (i)  a particular general insurer; or

                             (ii)  a class of general insurers; or

                            (iii)  any general insurer;

                            (other than a particular foreign general insurer, a class of foreign general insurers or any foreign general insurer);

                     (b)  a senior manager, or agent in Australia for the purpose of section 118, of:

                              (i)  a particular foreign general insurer; or

                             (ii)  a class of foreign general insurers; or

                            (iii)  any foreign general insurer;

                     (c)  a director or senior manager of:

                              (i)  a particular authorised NOHC; or

                             (ii)  a class of authorised NOHCs; or

                            (iii)  any authorised NOHC.

             (3)  In deciding whether it is satisfied as mentioned in paragraph (1)(a), the Court may take into account:

                     (a)  any matters specified in the regulations for the purposes of this paragraph; and

                     (b)  any criteria for fitness and propriety set out in the prudential standards; and

                     (c)  any other matters the Court considers relevant.

             (4)  In deciding whether the disqualification is justified as mentioned in paragraph (1)(b), the Court may have regard to:

                     (a)  the person’s conduct in relation to the management, business or property of any corporation; and

                     (b)  any other matters the Court considers relevant.

             (5)  As soon as practicable after the Court disqualifies a person under this section, APRA must cause particulars of the disqualification:

                     (a)  to be given:

                              (i)  if the person is, or is acting as, a person referred to in subparagraph (2)(a)(i)—to the general insurer concerned; or

                             (ii)  if the person is, or is acting as, a person referred to in subparagraph (2)(b)(i)—to the foreign general insurer concerned; or

                            (iii)  if the person is, or is acting as, a person referred to in paragraph (2)(c)(i)—to the authorised NOHC concerned; and

                     (b)  to be published in the Gazette .

26   Court power to revoke or vary a disqualification etc.

             (1)  A disqualified person, or APRA, may apply to the Federal Court of Australia for:

                     (a)  if the person is a disqualified person only because he or she was disqualified under section 25A—a variation or a revocation of the order made under that section; or

                     (b)  otherwise—an order that the person is not a disqualified person.

             (2)  If the Court revokes an order under paragraph (1)(a) or makes an order under paragraph (1)(b), then, despite section 25, the person is not a disqualified person .

             (3)  At least 21 days before commencing the proceedings, written notice of the application must be lodged:

                     (a)  if the disqualified person makes the application—by the person with APRA; or

                     (b)  if APRA makes the application—by APRA with the disqualified person.

             (4)  An order under paragraph (1)(b) may be expressed to be subject to exceptions and conditions determined by the Court.

14  Paragraph 27(2)(a)

Repeal the paragraph, substitute:

                     (a)  either:

                              (i)  for a person who is a disqualified person only because he or she was disqualified under section 25A—is disqualified from being or acting as a director or senior manager of the insurer or NOHC; or

                             (ii)  otherwise—is a disqualified person; or

15  Paragraph 39(3)(b)

Omit “determination”, substitute “order”.

16  Paragraph 43(1)(c)

Repeal the paragraph, substitute:

                     (c)  the person is disqualified under section 44 from holding the appointment; or

17  Sections 44 and 45

Repeal the sections, substitute:

43A   Disqualified persons must not act as auditor or actuary of general insurer

             (1)  A person commits an offence if:

                     (a)  the person is disqualified under section 44; and

                     (b)  the person is or acts as an auditor or actuary of a general insurer; and

                     (c)  the person is disqualified from being or acting as that auditor or actuary (as the case requires).

Penalty:  Imprisonment for 2 years.

             (2)  A person commits an offence if:

                     (a)  the person is disqualified under section 44; and

                     (b)  the person is or acts as an auditor or actuary of a general insurer; and

                     (c)  the person is disqualified from being or acting as that auditor or actuary (as the case requires).

Penalty:  60 penalty units.

             (3)  Subsection (2) is an offence of strict liability.

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

             (4)  A body corporate commits an offence if:

                     (a)  a person is disqualified under section 44; and

                     (b)  the person is or acts as an actuary or auditor of the body corporate; and

                     (c)  the person is disqualified from being or acting as that actuary or auditor (as the case requires); and

                     (d)  the body corporate allows the person to be or act as an actuary or auditor (as the case requires).

Penalty:  250 penalty units.

             (5)  A body corporate commits an offence if:

                     (a)  a person is disqualified under section 44; and

                     (b)  the person is or acts as an actuary or auditor of the body corporate; and

                     (c)  the person is disqualified from being or acting as that actuary or auditor (as the case requires); and

                     (d)  the body corporate allows the person to be or act as an actuary or auditor (as the case requires).

Penalty:  60 penalty units.

             (6)  Subsection (5) is an offence of strict liability.

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

             (7)  A failure to comply with this section does not affect the validity of an appointment or transaction.

Note 1:       Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

Note 2:       If a body corporate is convicted of an offence against this section, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 5 times the penalty above.

44   Court power of disqualification

             (1)  On application by APRA, the Federal Court of Australia may, by order, disqualify a person from holding any appointment as a person referred to in subsection (2), for a period that the Court considers appropriate, if the Court is satisfied that:

                     (a)  any of the following applies:

                              (i)  the person has failed to perform adequately and properly the functions and duties of such an appointment under this Act or the prudential standards;

                             (ii)  the person otherwise does not meet one or more of the criteria for fitness and propriety set out in the prudential standards;

                            (iii)  the person does not meet the eligibility criteria for such an appointment as set out in the prudential standards; and

                     (b)  the disqualification is justified.

             (2)  For the purposes of subsection (1), the Court may disqualify a person from being or acting as an auditor or actuary of:

                     (a)  a particular general insurer; or

                     (b)  a class of general insurers; or

                     (c)  any general insurer.

             (3)  In deciding whether it is satisfied as mentioned in paragraph (1)(a), the Court may take into account:

                     (a)  any matters specified in the regulations for the purposes of this paragraph; and

                     (b)  any criteria for fitness and propriety set out in the prudential standards; and

                     (c)  any other matters the Court considers relevant.

             (4)  In deciding whether the disqualification is justified as mentioned in paragraph (1)(b), the Court may have regard to:

                     (a)  the person’s conduct in relation to the functions or duties that the person is required to perform under this Act and the prudential standards; and

                     (b)  any other matters the Court considers relevant.

             (5)  As soon as practicable after the Court disqualifies a person under this section, APRA must cause particulars of the disqualification:

                     (a)  if the person is, or is acting as, an auditor or actuary of a general insurer—to be given to the general insurer concerned; and

                     (b)  to be published in the Gazette .

45   Court power to revoke or vary a disqualification etc.

             (1)  A person who is disqualified under section 44, or APRA, may apply to the Federal Court of Australia for a variation or a revocation of an order made under that section.

             (2)  At least 21 days before commencing the proceedings, written notice of the application must be lodged:

                     (a)  if the person who is disqualified makes the application—by the person with APRA; or

                     (b)  if APRA makes the application—by APRA with the person who is disqualified.

18  After paragraph 48(1)(a)

Insert:

                    (aa)  is disqualified under section 44 from being or acting as an auditor of the general insurer; or

19  After paragraph 48(2)(a)

Insert:

                    (aa)  is disqualified under section 44 from being or acting as an actuary of the general insurer; or

20  Subsection 48(4)

Repeal the subsection.

21  Application and transitional provisions

(1)       For the purposes of the Insurance Act 1973 , a disqualification by APRA that is in force under section 25A or 44 of that Act immediately before this item commences continues in force after this item commences.

(2)       For the purposes of the Insurance Act 1973 , a reference in column 1 of the table in the provision of the Insurance Act 1973 (as in force immediately after this item commences) referred to in column 2 is taken to include the reference in column 3.

 

New references to court orders to include references to disqualifications by APRA

Item

Column 1

Reference

Column 2

Provision of the Insurance Act

Column 3

Reference taken to be included

1

a person who was disqualified under section 25A

section 24 and paragraph 26(1)(a)

a person who was disqualified under section 25A under a disqualification that is continued in force under subitem (1)

2

a person disqualified under section 25A by the Federal Court of Australia

paragraph 25(1)(f)

a person disqualified under section 25A by APRA under a disqualification that is continued in force under subitem (1)

3

an order made under section 25A

paragraph 26(1)(a) and subsection 26(2)

a disqualification made under section 25A that is continued in force under subitem (1)

4

an order made under section 44

paragraph 40(2)(b)

a disqualification made under section 44 that is continued in force under subitem (1)

5

a person disqualified under section 44

sections 43, 43A, 45 and 48

a person disqualified under section 44 under a disqualification that is continued in force under subitem (1)

 

(3)       Sections 25A and 44 of the Insurance Act 1973 (as in force immediately after this item commences) apply in relation to any conduct engaged in by a person, whether before or after this item commences.

Waivers of disqualifications

(4)       If:

                     (a)  either:

                              (i)  a person applies to APRA for a determination under section 26 of the Insurance Act 1973 that the person is not a disqualified person; or

                             (ii)  a person applies to APRA under section 45 of the Insurance Act 1973 for the revocation of a determination under section 44 of that Act; and

                     (b)  APRA has not made a decision on the application at the time this item commences;

the application is taken to be withdrawn at that time.

Note:       See subitem (7) for the treatment of a decision by APRA under section 26 or 45 of the Insurance Act 1973 in respect of which review proceedings are on foot at commencement.

(5)       A determination under section 26 of the Insurance Act 1973 that is in force immediately before this item commences continues in force after that time. However, APRA may not revoke the determination.

(6)       If:

                     (a)  a determination in relation to a person continues in force under subitem (5); and

                     (b)  after this item commences, an order is made under section 25A of the Insurance Act 1973 (as in force at that time) that the person is disqualified from being or acting as a person referred to in subsection 25A(2) of that Act;

the determination ceases to be in force.

Review proceedings on foot at commencement

(7)       The amendments to the Insurance Act 1973 made by this Schedule do not affect:

                     (a)  any request, in relation to a decision made under section 25A, 26, 44 or 45 of that Act, for a review that is pending under section 63 of that Act immediately before the commencement of this item; or

                     (b)  any proceeding, in relation to a decision under section 25A, 26, 44 or 45 of that Act that has been confirmed or varied under subsection 63(4) of that Act, that is pending before the Administrative Appeals Tribunal immediately before the commencement of this item; or

                     (c)  any appeal to a court in relation to a proceeding referred to in paragraph (b).

(8)       If a disqualification by APRA under section 25A or 44, or a determination under section 26, of the Insurance Act 1973 is confirmed or varied as a result of a request, proceeding or appeal referred to in subitem (7), the disqualification or determination is, for the purposes of subitem (1) or (5) (as the case requires), taken to have been in force immediately before this item commences.

Life Insurance Act 1995

22  Paragraph 84(b)

Repeal the paragraph, substitute:

                     (b)  no order is in force under section 245A that the person is disqualified from being or acting as an auditor of the life company.

23  Paragraph 85(1)(c)

Repeal the paragraph, substitute:

                     (c)  an order takes effect under section 245A that the person is disqualified from being or acting as an auditor of the life company.

24  Section 86

Repeal the section.

25  Paragraph 93(3)(b)

Repeal the paragraph, substitute:

                     (b)  no order is in force under section 245A that the person is disqualified from being or acting as an actuary of the life company.

26  Paragraph 94(1)(c)

Repeal the paragraph, substitute:

                     (c)  an order takes effect under section 245A that the person is disqualified from being or acting as an actuary of the life company.

27  Section 94A

Repeal the section.

28  At the end of Division 8 of Part 6

Add:

125A   APRA may direct removal of auditor or actuary

             (1)  APRA may, if satisfied there is a ground under subsection (2), give a written direction to a life company to end the appointment of a person as:

                     (a)  the auditor of the company; or

                     (b)  the appointed actuary of the company.

             (2)  The grounds for giving a direction to end a person’s appointment are:

                     (a)  either:

                              (i)  for a person who is a disqualified person only because he or she was disqualified under section 245A—the person is disqualified from being or acting as an auditor or actuary of the company; or

                             (ii)  otherwise—the person is a disqualified person; or

                     (b)  the person is not a fit and proper person to hold the appointment; or

                     (c)  the person has failed to perform adequately and properly the duties or functions of the appointment under this Act, the regulations or the Financial Sector (Collection of Data) Act 2001 .

             (3)  Before directing a life company to end a person’s appointment, APRA must:

                     (a)  give written notice to:

                              (i)  the life company; and

                             (ii)  the person; and

                     (b)  give the life company and the person a reasonable opportunity to make submissions on the matter.

             (4)  The notice must include a statement that any submissions in response to the notice may be discussed by APRA with other persons as mentioned in paragraph (5)(b).

             (5)  If a submission is made in response to the notice, APRA:

                     (a)  must have regard to the submission; and

                     (b)  may discuss any matter contained in the submission with any persons APRA considers appropriate for the purpose of assessing the truth of the matter.

             (6)  A direction to end a person’s appointment takes effect on the day specified in the direction, which must be at least 7 days after the direction is made.

             (7)  If APRA directs a life company to end a person’s appointment, APRA must give the life company and the person a copy of the direction.

             (8)  A direction to end a person’s appointment is not a legislative instrument.

             (9)  A life company commits an offence if:

                     (a)  the life company does or fails to do an act; and

                     (b)  by doing or failing to do the act, the life company fails to comply with a direction under this section.

Penalty:  60 penalty units.

           (10)  Subsection (9) is an offence of strict liability.

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

29  Subsection 236(1) (after paragraph (z) of the definition of reviewable decision )

Insert:

                    (za)  a decision to give a direction under section 125A;

30  Subsection 245(1)

Omit “this section”, substitute “this Act”.

31  At the end of subsection 245(1)

Add:

               ; or (d)  the Federal Court of Australia has disqualified the person under section 245A.

Note:       The heading to section 245 is altered by omitting “ Bankrupts and persons convicted of certain offences ” and substituting “ Disqualified persons ”.

32  Subsections 245(2) to (5)

Repeal the subsections, substitute:

             (2)  A person commits an offence if:

                     (a)  the person is a disqualified person; and

                     (b)  the person is or acts as:

                              (i)  a director of a company registered under this Act; or

                             (ii)  a principal executive officer of a company registered under this Act; or

                            (iii)  an appointed actuary of a company registered under this Act; or

                            (iv)  an auditor of a company registered under this Act; and

                     (c)  for a person who is a disqualified person only because he or she was disqualified under section 245A—the person is disqualified from being or acting as that director, principal executive officer, actuary or auditor (as the case requires).

Penalty:  Imprisonment for 2 years.

             (3)  A person commits an offence if:

                     (a)  the person is a disqualified person; and

                     (b)  the person is or acts as:

                              (i)  a director of a company registered under this Act; or

                             (ii)  a principal executive officer of a company registered under this Act; or

                            (iii)  an appointed actuary of a company registered under this Act; or

                            (iv)  an auditor of a company registered under this Act; and

                     (c)  for a person who is a disqualified person only because he or she was disqualified under section 245A—the person is disqualified from being or acting as that director, principal executive officer, actuary or auditor (as the case requires).

Penalty:  60 penalty units.

             (4)  Subsection (3) is an offence of strict liability.

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

             (5)  A company commits an offence if:

                     (a)  the company is registered under this Act; and

                     (b)  a person is a disqualified person; and

                     (c)  the person is or acts as:

                              (i)  a director of the company; or

                             (ii)  a principal executive officer of the company; or

                            (iii)  an appointed actuary of the company; or

                            (iv)  an auditor of the company; and

                     (d)  for a person who is a disqualified person only because he or she was disqualified under section 245A—the person is disqualified from being or acting as that director, principal executive officer, actuary or auditor (as the case requires); and

                     (e)  in any case—the company allows the person to be or act as a director, principal executive officer, actuary or auditor (as the case requires).

Penalty:  250 penalty units.

          (5A)  A company commits an offence if:

                     (a)  the company is registered under this Act; and

                     (b)  a person is a disqualified person; and

                     (c)  the person is or acts as:

                              (i)  a director of the company; or

                             (ii)  a principal executive officer of the company; or

                            (iii)  an appointed actuary of the company; or

                            (iv)  an auditor of the company; and

                     (d)  for a person who is a disqualified person only because he or she was disqualified under section 245A—the person is disqualified from being or acting as that director, principal executive officer, actuary or auditor (as the case requires); and

                     (e)  in any case—the company allows the person to be or act as a director, principal executive officer, actuary or auditor (as the case requires).

Penalty:  60 penalty units.

          (5B)  Subsection (5A) is an offence of strict liability.

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

33  After section 245

Insert:

245A   Court power of disqualification

             (1)  On application by APRA, the Federal Court of Australia may, by order, disqualify a person from being or acting as someone referred to in subsection (2), for a period that the Court considers appropriate, if the Court is satisfied that:

                     (a)  the person is not a fit and proper person to be or act as such a person; and

                     (b)  the disqualification is justified.

             (2)  For the purposes of subsection (1), the Court may disqualify a person from being or acting as a director, principal executive officer, appointed actuary or auditor of:

                     (a)  a particular company registered under this Act; or

                     (b)  a class of companies registered under this Act; or

                     (c)  any company registered under this Act.

             (3)  In deciding whether it is satisfied as mentioned in paragraph (1)(a), the Court may take into account:

                     (a)  any matters specified in the regulations for the purposes of this paragraph; and

                     (b)  any criteria for fitness and propriety specified in the prudential standards; and

                     (c)  any other matters the Court considers relevant.

             (4)  In deciding whether the disqualification is justified as mentioned in paragraph (1)(b), the Court may have regard to:

                     (a)  if the application is for the person to be disqualified from being or acting as a director or principal executive officer—the person’s conduct in relation to the management, business or property of any corporation; and

                     (b)  if the application is for the person to be disqualified from being or acting as an appointed actuary or auditor—the person’s conduct in relation to the functions or duties of an actuary or auditor under this Act; and

                     (c)  in any case—any other matters the Court considers relevant.

             (5)  As soon as practicable after the Court disqualifies a person under this section, APRA must cause particulars of the disqualification:

                     (a)  if the person is, or is acting as, a director, principal executive officer, appointed actuary or auditor of a company registered under this Act—to be given to the company concerned; and

                     (b)  to be published in the Gazette .

245B   Court power to revoke or vary a disqualification etc.

             (1)  A disqualified person, or APRA, may apply to the Federal Court of Australia for:

                     (a)  if the person is a disqualified person only because he or she was disqualified under section 245A—a variation or a revocation of the order made under that section; or

                     (b)  otherwise—an order that the person is not a disqualified person.

             (2)  If the Court revokes an order under paragraph (1)(a) or makes an order under paragraph (1)(b), then, despite section 245, the person is not a disqualified person .

             (3)  At least 21 days before commencing the proceedings, written notice of the application must be lodged:

                     (a)  if the disqualified person makes the application—by the person with APRA; or

                     (b)  if APRA makes the application—by APRA with the disqualified person.

             (4)  An order under paragraph (1)(b) may be expressed to be subject to exceptions and conditions determined by the Court.

34  Application

Section 245A of the Life Insurance Act 1995 (as inserted by this Act) applies in relation to any conduct engaged in by a person, whether before or after this item commences.

Retirement Savings Accounts Act 1997

35  Section 16 (definition of approved auditor )

Omit “in respect of whom a disqualification order is in force under section 67”, substitute “who is disqualified from being or acting as an auditor of all RSA providers under section 67”.

36  Section 16 (paragraphs (i) and (j) of the definition of reviewable decision )

Repeal the paragraphs.

37  After subsection 65(1)

Insert:

          (1A)  For the purposes of subsection (1), a person is not an approved auditor, in relation to an RSA provider, if the person is disqualified from being or acting as an approved auditor of that RSA provider under section 67.

38  Section 67

Repeal the section, substitute:

67   Court power of disqualification

             (1)  On application by APRA, the Federal Court of Australia may, by order, disqualify a person from holding any appointment as a person referred to in subsection (2), for a period that the Court considers appropriate, if the Court is satisfied:

                     (a)  as mentioned in subsection (3); and

                     (b)  that the disqualification is justified.

Note:          For offences relating to persons disqualified under this section, see section 67B.

             (2)  For the purposes of subsection (1), the Court may disqualify a person from being or acting as an auditor of:

                     (a)  a particular RSA provider; or

                     (b)  a class of RSA providers; or

                     (c)  any RSA provider.

             (3)  The Court may disqualify a person, in accordance with subsection (1), if the Court is satisfied that:

                     (a)  the person has failed, whether within or outside Australia, to carry out or perform adequately and properly:

                              (i)  the duties of an auditor under this Act or the regulations; or

                             (ii)  any duties required by a law of the Commonwealth, a State or a Territory to be carried out or performed by an auditor; or

                            (iii)  any functions that an auditor is entitled to perform in relation to this Act or the regulations or the Financial Sector (Collection of Data) Act 2001 ; or

                     (b)  the person is otherwise not a fit and proper person to be an approved auditor for the purposes of this Act.

             (4)  In deciding whether it is satisfied as mentioned in subsection (3), the Court may take into account:

                     (a)  any matters specified in the regulations for the purposes of this paragraph; and

                     (b)  any other matters the Court considers relevant.

             (5)  In deciding whether the disqualification is justified as mentioned in paragraph (1)(b), the Court may have regard to:

                     (a)  the person’s conduct in relation to the functions or duties that the person is required to perform under this Act or the regulations; and

                     (b)  any other matters the Court considers relevant.

             (6)  As soon as practicable after the Court disqualifies a person under this section, APRA must cause particulars of the disqualification:

                     (a)  if the person is, or is acting as, an auditor of an RSA provider—to be given to the RSA provider concerned; and

                     (b)  to be published in the Gazette .

67A   Court power to revoke or vary a disqualification etc.

             (1)  A person who is disqualified under section 67, or APRA, may apply to the Federal Court of Australia for a variation or a revocation of an order made under that section.

             (2)  At least 21 days before commencing the proceedings, written notice of the application must be lodged:

                     (a)  if the person who is disqualified makes the application—by the person with APRA; or

                     (b)  if APRA makes the application—by APRA with the person who is disqualified.

67B   Disqualified persons not to be auditor of RSA provider

             (1)  A person commits an offence if:

                     (a)  the person is, or acts as, an auditor of an RSA provider for the purposes of this Act; and

                     (b)  the person is disqualified under section 67 from being or acting as an auditor of that RSA provider; and

                     (c)  the person knows that he or she is so disqualified.

Penalty:  Imprisonment for 2 years.

             (2)  A person commits an offence if:

                     (a)  the person is, or acts as, an auditor of an RSA provider for the purposes of this Act; and

                     (b)  the person is disqualified under section 67 from being or acting as an auditor of that RSA provider; and

                     (c)  the person knows that he or she is so disqualified.

Penalty:  60 penalty units.

             (3)  Subsection (2) is an offence of strict liability.

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

39  Subsection 68(3)

Repeal the subsection, substitute:

             (3)  The power of APRA under subsection (1) may be exercised whether or not an order disqualifying the auditor has been made under section 67.

40  Application and transitional provisions

(1)       For the purposes of the Retirement Savings Accounts Act 1997 , a disqualification by APRA that is in force under section 67 of that Act immediately before this item commences continues in force after this item commences.

(2)       For the purposes of the Retirement Savings Accounts Act 1997 , a reference in column 1 of the table in the provision of the Retirement Savings Accounts Act 1997 (as in force immediately after this item commences) referred to in column 2 is taken to include the reference in column 3.

 

New references to court orders to include references to disqualifications by APRA

Item

Column 1

Reference

Column 2

Provision of the Retirement Savings Accounts Act

Column 3

Reference taken to be included

1

a person disqualified under section 67

sections 67A and 67B

a person disqualified under section 67 under a disqualification that is continued in force under subitem (1)

2

an order made under section 67

subsection 67A(1)

a disqualification made under section 67 that is continued in force under subitem (1)

 

(3)       Section 67 of the Retirement Savings Accounts Act 1997 (as in force immediately after this item commences) applies in relation to any conduct engaged in by a person, whether before or after this item commences.

Waivers of disqualifications

(4)       If:

                     (a)  a person applies to APRA under section 67 of the Retirement Savings Accounts Act 1997 for the revocation of a disqualification order under section 67 of that Act; and

                     (b)  APRA has not made a decision on the application at the time this item commences;

the application is taken to be withdrawn at that time.

Note:       See subitem (5) for the treatment of a decision by APRA under section 67 of the Retirement Savings Accounts Act 1997 in respect of which review proceedings are on foot at commencement.

Review proceedings on foot at commencement

(5)       The amendments to the Retirement Savings Accounts Act 1997 made by this Schedule do not affect:

                     (a)  any request, in relation to a decision made under section 67 of that Act, for a review that is pending under section 189 of that Act immediately before the commencement of this item; or

                     (b)  any proceeding, in relation to a decision under section 67 of that Act that has been confirmed or varied under subsection 189(4) of that Act, that is pending before the Administrative Appeals Tribunal immediately before the commencement of this item; or

                     (c)  any appeal to a court in relation to a proceeding referred to in paragraph (b).

(6)       If a disqualification by APRA under section 67 of the Retirement Savings Accounts Act 1997 is confirmed or varied as a result of a request, proceeding or appeal referred to in subitem (5), the disqualification is, for the purposes of subitem (1), taken to have been in force immediately before this item commences.

Superannuation Industry (Supervision) Act 1993

41  Subsection 10(1) (definition of approved auditor )

Repeal the definition, substitute:

approved auditor means a person included in a class of persons specified in regulations made for the purposes of this definition, but does not include:

                     (a)  a person who is disqualified from being or acting as an auditor of all superannuation entities under section 130D; or

                     (b)  a person in respect of whom a disqualification order is in force under section 131.

42  Saving regulations

The amendment made by item 41 of this Schedule does not affect the continuity of any regulations made for the purposes of the definition of approved auditor in subsection 10(1) of the Superannuation Industry (Supervision) Act 1993 that are in force immediately before this item commences.

43  Subsection 10(1) (paragraphs (pa) and (pb) of the definition of reviewable decision )

Repeal the paragraphs.

44  Subsection 10(1) (after paragraph (q) of the definition of reviewable decision )

Insert:

                   (qa)  a decision of the Regulator under subsection 126A(1), (2) or (3) to disqualify an individual; or

                   (qb)  a decision of the Regulator under subsection 126A(5) refusing to revoke the disqualification of an individual; or

45  Application

The amendments made by items 43 and 44 of this Schedule apply to decisions made after this item commences.

46  After subsection 35C(1)

Insert:

          (1A)  For the purposes of subsection (1), a person is not an approved auditor, in relation to a superannuation entity, if the person is disqualified from being or acting as an approved auditor of that superannuation entity under section 130D.

47  After subsection 113(1)

Insert:

       (1AA)  For the purposes of subsection (1), a person is not an approved auditor, in relation to a superannuation entity, if the person is disqualified from being or acting as an approved auditor of that superannuation entity under section 130D.

48  Before section 119

Insert:

Division 1 Object of Part and definition of disqualified person

49  Paragraph 120(1)(c)

Repeal the paragraph, substitute:

                     (c)  either:

                              (i)  to the extent that the Regulator is the Commissioner of Taxation—the Regulator has disqualified the individual under section 126A; or

                             (ii)  to the extent that the Regulator is APRA—the Federal Court of Australia has disqualified the individual under section 126H.

50  Paragraph 120(2)(a)

Repeal the paragraph, substitute:

                     (a)  the body corporate knows, or has reasonable grounds to suspect, that a person who is, or is acting as, a responsible officer of the body corporate is:

                              (i)  for a person who is a disqualified person only because he or she was disqualified under section 126H—disqualified from being or acting as a responsible officer of the body corporate; or

                             (ii)  otherwise—a disqualified person; or

51  Subsection 120(2A)

Repeal the subsection (not including the heading).

52  Sections 120A and 121

Repeal the sections.

53  Before section 122

Insert:

Division 2 Requirements for custodians and investment managers

54  Sections 126 and 126A

Repeal the sections, substitute:

Division 3 Disqualified persons

Subdivision A Disqualification by the Commissioner of Taxation

126   Application of this Subdivision

                   This Subdivision applies to the extent that the Regulator is the Commissioner of Taxation.

126A   The Regulator may disqualify individuals

             (1)  The Regulator may disqualify an individual if satisfied that:

                     (a)  the person has contravened this Act or the Financial Sector (Collection of Data) Act 2001 on one or more occasions; and

                     (b)  the nature or seriousness of the contravention or contraventions, or the number of contraventions, provides grounds for disqualifying the individual.

Note:          For offences relating to disqualified persons, see Subdivision C.

             (2)  The Regulator may disqualify an individual who is, or was, a responsible officer of a trustee, investment manager or custodian (the body corporate ) if satisfied that:

                     (a)  the body corporate has contravened this Act or the Financial Sector (Collection of Data) Act 2001 on one or more occasions; and

                     (b)  at the time of one or more of the contraventions, the individual was a responsible officer of the body corporate; and

                     (c)  in respect of the contravention or contraventions that occurred while the individual was a responsible officer of the body corporate—the nature or seriousness of it or them, or the number of them, provides grounds for the disqualification of the individual.

             (3)  The Regulator may disqualify an individual if satisfied that the individual is otherwise not a fit and proper person to be a trustee, investment manager or custodian, or a responsible officer of a body corporate that is a trustee, investment manager or custodian.

             (4)  A disqualification takes effect on the day on which it is made.

             (5)  The Regulator may revoke a disqualification on application by the disqualified individual or on its own initiative. A revocation takes effect on the day on which it is made.

             (6)  The Regulator must give the individual written notice of a disqualification, revocation of a disqualification or a refusal to revoke a disqualification.

             (7)  The Regulator must cause particulars of a notice given under subsection (6) or 344(6) (result of internal review) to be published in the Gazette as soon as practicable.

55  Subsection 126D(1)

Repeal the subsection.

56  Subsection 126D(1A)

Repeal the subsection, substitute:

          (1A)  If, having regard to any of the following:

                     (a)  the offence to which the application relates;

                     (b)  the time that has passed since the applicant committed the offence;

                     (c)  the applicant’s age when the applicant committed the offence;

                     (d)  the orders made by the court in relation to the offence;

                     (e)  any other relevant matter;

the Regulator is satisfied that the applicant is highly unlikely to:

                      (f)  contravene this Act; and

                     (g)  do anything that would result in a self managed superannuation fund not complying with this Act;

the Regulator must, by notice in writing given to the applicant, make a declaration waiving the applicant’s status as a disqualified person for the purposes of this Part.

57  After section 126F

Insert:

Subdivision B Disqualification by the Federal Court of Australia

126G   Application of this Subdivision

                   This Subdivision applies to the extent that the Regulator is APRA.

126H   Court power of disqualification

             (1)  On application by the Regulator, the Federal Court of Australia may, by order, disqualify an individual from being or acting as a person referred to in subsection (2), for a period that the Court considers appropriate, if the Court is satisfied:

                     (a)  as mentioned in subsection (3), (4) or (5); and

                     (b)  that the disqualification is justified.

Note:          For offences relating to disqualified persons, see Subdivision C.

             (2)  For the purposes of subsection (1), the Court may disqualify an individual from being or acting as:

                     (a)  a trustee of:

                              (i)  a particular superannuation entity; or

                             (ii)  a class of superannuation entities; or

                            (iii)  any superannuation entity; or

                     (b)  a responsible officer of:

                              (i)  a particular body corporate that is a trustee, an investment manager or a custodian of a superannuation entity; or

                             (ii)  a class of bodies corporate that are trustees, investment managers or custodians of superannuation entities; or

                            (iii)  any body corporate that is a trustee, investment manager or custodian of a superannuation entity.

             (3)  The Court may disqualify an individual, in accordance with subsection (1), if satisfied:

                     (a)  that the individual has contravened this Act or the Financial Sector (Collection of Data) Act 2001 on one or more occasions; and

                     (b)  that the nature or seriousness of the contravention or contraventions, or the number of contraventions, provides grounds for disqualifying the individual.

             (4)  The Court may disqualify an individual, in accordance with subsection (1), who is, or was, a responsible officer of a trustee, investment manager or custodian (the body corporate ) if satisfied that:

                     (a)  the body corporate has contravened this Act or the Financial Sector (Collection of Data) Act 2001 on one or more occasions; and

                     (b)  at the time of one or more of the contraventions, the individual was a responsible officer of the body corporate; and

                     (c)  in respect of the contravention or contraventions that occurred while the individual was a responsible officer of the body corporate—the nature or seriousness of it or them, or the number of them, provides grounds for the disqualification of the individual.

             (5)  The Court may disqualify an individual, in accordance with subsection (1), if satisfied that the individual is otherwise not a fit and proper person to be a person referred to in subsection (2).

             (6)  In deciding whether it is satisfied as mentioned in subsection (3), (4) or (5), the Court may take into account:

                     (a)  any matters specified in the regulations for the purposes of this paragraph; and

                     (b)  any other matters the Court considers relevant.

             (7)  In deciding whether the disqualification is justified as mentioned in paragraph (1)(b), the Court may have regard to:

                     (a)  the individual’s conduct in relation to the management, business or property of any corporation; and

                     (b)  any other matters the Court considers relevant.

             (8)  As soon as practicable after the Court disqualifies an individual under this section, the Regulator must cause particulars of the disqualification to which the notice relates:

                     (a)  to be given:

                              (i)  if the individual is, or is acting as, a trustee of a superannuation entity—to the entity concerned; or

                             (ii)  if the individual is, or is acting as, a responsible officer of a body corporate that is a trustee, an investment manager or a custodian of a superannuation entity—to the body corporate concerned; and

                     (b)  to be published in the Gazette .

126J   Court power to revoke or vary a disqualification etc.

             (1)  A disqualified person, or the Regulator, may apply to the Federal Court of Australia for:

                     (a)  if an individual is a disqualified person only because he or she was disqualified under section 126H—a variation or a revocation of the order made under that section; or

                     (b)  otherwise—an order that the person is not a disqualified person.

             (2)  If the Court revokes an order under paragraph (1)(a) or makes an order under paragraph (1)(b), then, despite section 120, the person is not a disqualified person .

             (3)  At least 21 days before commencing the proceedings, written notice of the application must be lodged:

                     (a)  if the disqualified person makes the application—by the person with the Regulator; or

                     (b)  if the Regulator makes the application—by the Regulator with the disqualified person.

             (4)  An order under paragraph (1)(b) may be expressed to be subject to exceptions and conditions determined by the Court.

Subdivision C Offences relating to disqualified persons

126K   Disqualified persons not to be trustees, investment managers or custodians of superannuation entities

             (1)  A person commits an offence if:

                     (a)  the person is a disqualified person; and

                     (b)  the person knows he or she is a disqualified person; and

                     (c)  the person is or acts as a trustee, investment manager or custodian of a superannuation entity; and

                     (d)  for a person who is an individual and who is a disqualified person only because he or she was disqualified under section 126H—the person is disqualified from being or acting as a trustee of that superannuation entity.

Penalty:  Imprisonment for 2 years.

             (2)  A person commits an offence if:

                     (a)  the person is a disqualified person; and

                     (b)  the person knows he or she is a disqualified person; and

                     (c)  the person is or acts as a trustee, investment manager or custodian of a superannuation entity; and

                     (d)  for a person who is an individual and who is a disqualified person only because he or she was disqualified under section 126H—the person is disqualified from being or acting as a trustee of that superannuation entity.

Penalty:  60 penalty units.

             (3)  Subsection (2) is an offence of strict liability.

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

             (4)  A person commits an offence if:

                     (a)  the person is a disqualified person; and

                     (b)  the person knows he or she is a disqualified person; and

                     (c)  the person is or acts as a responsible officer of a body corporate that is a trustee, investment manager or custodian of a superannuation entity; and

                     (d)  for a person who is an individual and who is a disqualified person only because he or she was disqualified under section 126H—the person is disqualified from being or acting as that responsible officer.

Penalty:  Imprisonment for 2 years.

             (5)  A person commits an offence if:

                     (a)  the person is a disqualified person; and

                     (b)  the person knows he or she is a disqualified person; and

                     (c)  the person is or acts as a responsible officer of a body corporate that is a trustee, investment manager or custodian of a superannuation entity; and

                     (d)  for a person who is an individual and who is a disqualified person only because he or she was disqualified under section 126H—the person is disqualified from being or acting as that responsible officer.

Penalty:  60 penalty units.

             (6)  Subsection (5) is an offence of strict liability.

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

             (7)  A person commits an offence if:

                     (a)  the person is a trustee of a superannuation entity; and

                     (b)  the person is or becomes a disqualified person; and

                     (c)  the person does not tell the Regulator in writing immediately.

Penalty:  50 penalty units.

             (8)  Subsection (7) is an offence of strict liability.

Note 1:       Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

Note 2:       For strict liability , see section 6.1 of the Criminal Code .

58  Before section 127

Insert:

Division 4 Non-compliance not to invalidate appointment or transaction

59  Before section 128

Insert:

Division 1 Object of Part

60  Before section 129

Insert:

Division 2 Obligations of actuaries and auditors

61  After section 130C

Insert:

Division 3 Disqualifying and removing actuaries and auditors

130D   Court power of disqualification

             (1)  This section applies to the extent that the Regulator is APRA.

             (2)  On application by the Regulator, the Federal Court of Australia may, by order, disqualify a person from being or acting as a person referred to in subsection (3), for a period that the Court considers appropriate, if the Court is satisfied:

                     (a)  as mentioned in subsection (4); and

                     (b)  that the disqualification is justified.

Note:          For offences relating to persons disqualified under this section, see section 131C.

             (3)  For the purposes of subsection (2), the Court may disqualify a person from being or acting as an approved auditor or actuary, for the purposes of this Act, of:

                     (a)  a particular superannuation entity; or

                     (b)  a class of superannuation entities; or

                     (c)  any superannuation entity.

             (4)  The Court may disqualify a person, in accordance with subsection (2), if the Court is satisfied that:

                     (a)  the person has failed, whether within or outside Australia, to carry out or perform adequately and properly:

                              (i)  the duties of an auditor or actuary under this Act or the regulations; or

                             (ii)  any duties required by a law of the Commonwealth, a State or a Territory to be carried out or performed by an auditor or actuary; or

                            (iii)  any functions that an auditor or actuary is entitled to perform in relation to this Act or the regulations or the Financial Sector (Collection of Data) Act 2001 ; or

                     (b)  the person is otherwise not a fit and proper person to be a person referred to in subsection (3).

             (5)  In deciding whether it is satisfied as mentioned in subsection (4), the Court may take into account:

                     (a)  any matters specified in the regulations for the purposes of this paragraph; and

                     (b)  any other matters the Court considers relevant.

             (6)  In deciding whether the disqualification is justified as mentioned in paragraph (2)(b), the Court may have regard to:

                     (a)  the person’s conduct in relation to his or her duties under this Act and the regulations; and

                     (b)  any other matters the Court considers relevant.

             (7)  As soon as practicable after the Court disqualifies a person under this section, the Regulator must cause particulars of the disqualification to which the notice relates to be published in the Gazette .

130E   Court power to revoke or vary a disqualification etc.

             (1)  A person who is disqualified under section 130D, or the Regulator (to the extent that the Regulator is APRA), may apply to the Federal Court of Australia for a variation or a revocation of an order made under section 130D.

             (2)  At least 21 days before commencing the proceedings, written notice of the application must be lodged:

                     (a)  if the person who is disqualified makes the application—by the person with the Regulator; or

                     (b)  if the Regulator makes the application—by the Regulator with the person who is disqualified.

62  Subsection 131(1)

Repeal the subsection, substitute:

Application of section

          (1A)  This section applies to the extent that the Regulator is the Commissioner of Taxation.

Disqualification order

             (1)  The Regulator may make a written order (a disqualification order ) disqualifying a person from being an approved auditor or actuary for the purposes of this Act if:

                     (a)  the person has failed, whether within or outside Australia, to carry out or perform adequately and properly:

                              (i)  the duties of an auditor or an actuary (as the case requires) under this Act or the regulations; or

                             (ii)  any duties required by a law of the Commonwealth, a State or a Territory to be carried out or performed by an auditor or an actuary (as the case requires); or

                            (iii)  any functions that an auditor or actuary (as the case requires) is entitled to perform in relation to this Act or the regulations or the Financial Sector (Collection of Data) Act 2001 ; or

                     (b)  the person is otherwise not a fit and proper person to be an approved auditor or actuary for the purposes of this Act.

Note:          For offences relating to persons disqualified under this section, see section 131C.

Note:       The heading to section 131 is altered by inserting “ and actuaries ” after “ Auditors ”.

63  Paragraphs 131(7)(a) and (b)

After “auditor”, insert “or actuary (as the case requires)”.

64  Before 131A

Insert:

Division 4 Offences and failure to carry out duties etc.

65  Subsection 131A(3)

Repeal the subsection, substitute:

             (3)  In relation to an approved auditor or actuary, the power of the Regulator under subsection (1) may be exercised whether or not an order disqualifying the auditor or actuary has been made under section 130D or 131.

66  Paragraph 131AA(2)(a)

Repeal the paragraph, substitute:

                     (a)  the person is disqualified under section 130D or 131 from being, or acting as, an approved auditor or actuary of the superannuation entity; or

67  At the end of Part 16

Add:

131C   Disqualified persons not to be auditor or actuary of superannuation entities

             (1)  A person commits an offence if:

                     (a)  the person is, or acts as, an auditor or actuary of a superannuation entity for the purposes of this Act; and

                     (b)  either:

                              (i)  for a person who is disqualified under section 130D—the person is disqualified from being or acting as an auditor or actuary (as the case requires) of that superannuation entity; or

                             (ii)  otherwise—the person is disqualified under section 131 from being or acting as an auditor or actuary (as the case requires); and

                     (c)  the person knows that he or she is so disqualified.

Penalty:  Imprisonment for 2 years.

             (2)  A person commits an offence if:

                     (a)  the person is, or acts as, an auditor or actuary of a superannuation entity for the purposes of this Act; and

                     (b)  either:

                              (i)  for a person who is disqualified under section 130D—the person is disqualified from being or acting as an auditor or actuary (as the case requires) of that superannuation entity; or

                             (ii)  otherwise—the person is disqualified under section 131 from being or acting as an auditor or actuary (as the case requires); and

                     (c)  the person knows that he or she is so disqualified.

Penalty:  60 penalty units.

             (3)  Subsection (2) is an offence of strict liability.

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

68  Paragraph 133(1)(a)

Repeal the paragraph, substitute:

                     (a)  either:

                              (i)  for a trustee who is an individual and who is a disqualified person only because he or she was disqualified under section 126H—the individual is disqualified from being or acting as a trustee of that superannuation entity; and

                             (ii)  otherwise—the trustee is a disqualified person within the meaning of Part 15; or

69  Subsection 344(12)

Omit “(pa), (pb), (q),”, substitute “(q), (qa), (qb),”.

70  Application and transitional provisions

(1)       For the purposes of the Superannuation Industry (Supervision) Act 1993 , a disqualification by the Commissioner of Taxation that is in force under section 120A of that Act immediately before this item commences continues in force after this item commences as if it were made under section 126A of that Act (as in force at that time).

(2)       For the purposes of the Superannuation Industry (Supervision) Act 1993 , a disqualification by APRA that is in force under section 120A of that Act immediately before this item commences continues in force after this item commences.

(3)       For the purposes of the Superannuation Industry (Supervision) Act 1993 , a disqualification by APRA or the Commissioner of Taxation that is in force under section 131 of that Act immediately before this item commences continues in force after this item commences.

(4)       For the purposes of the Superannuation Industry (Supervision) Act 1993 , a reference in column 1 of the table in the provision of the Superannuation Industry (Supervision) Act 1993 (as in force immediately after this item commences) referred to in column 2 is taken to include the reference in column 3.

 

New references to court orders to include references to disqualifications by the Regulator

References

Item

Column 1

Reference

Column 2

Provision of the Superannuation Industry (Supervision) Act

Column 3

Reference taken to be included

1

an individual disqualified under section 126A by the Commissioner of Taxation

subparagraph 120(1)(c)(i)

an individual disqualified under section 120A by the Commissioner of Taxation under a disqualification that is continued in force under subitem (1)

2

an individual disqualified under section 126H by the Federal Court of Australia

subparagraph 120(1)(c)(ii)

an individual disqualified under section 120A by APRA under a disqualification that is continued in force under subitem (2)

3

an individual disqualified under section 126H

paragraph 126J(1)(a)

an individual disqualified by APRA under section 120A under a disqualification that is continued in force under subitem (2)

4

an order made under section 126H

paragraph 126J(1)(a) and subsection 126J(2)

a disqualification made by APRA under section 120A that is continued in force under subitem (2)

5

a person disqualified under section 130D

section 130E, section 131C

a person disqualified by APRA under section 131 under a disqualification that is continued in force under subitem (3)

6

an order made under section 130D

section 130E

a disqualification made by APRA under section 131 that is continued in force under subitem (3)

 

(5)       Sections 126A, 126H, 130D and 131 of the Superannuation Industry (Supervision) Act 1993 (as in force immediately after this item commences) apply in relation to any conduct engaged in by a person, whether before or after this item commences.

Waivers of disqualifications

(6)       If:

                     (a)  either:

                              (i)  a person applies to APRA for a declaration under section 126D of the Superannuation Industry (Supervision) Act 1993 waiving his or her status as a disqualified person; or

                             (ii)  a person applies to APRA under section 131 of the Superannuation Industry (Supervision) Act 1993 for the revocation of an order under section 131 of that Act; and

                     (b)  APRA has not made a decision on the application at the time this item commences;

the application is taken to be withdrawn at that time.

Note:       See subitem (9) for the treatment of a decision by APRA under section 126D or 131 of the Superannuation Industry (Supervision) Act 1993 in respect of which review proceedings are on foot at commencement.

(7)       A declaration by APRA under section 126D of the Superannuation Industry (Supervision) Act 1993 that is in force immediately before this item commences continues in force after that time. However, APRA may not revoke the declaration.

(8)       If:

                     (a)  a declaration in relation to a person continues in force under subitem (7); and

                     (b)  after this item commences, an order is made under section 126H or 130D of the Superannuation Industry (Supervision) Act 1993 (as in force at that time) that the person is disqualified from being or acting as a person referred to in subsection 126H(2) or 130D(3) (as the case requires) of that Act;

the declaration ceases to be in force.

Review proceedings on foot at commencement

(9)       The amendments to the Superannuation Industry (Supervision) Act 1993 made by this Schedule do not affect:

                     (a)  any request, in relation to a decision made by APRA or the Commissioner of Taxation under section 120A, 126D or 131 of that Act, for a review that is pending under section 344 of that Act immediately before the commencement of this item; or

                     (b)  any proceeding, in relation to a decision by APRA or the Commissioner of Taxation under section 120A, 126D or 131 of that Act that has been confirmed or varied under subsection 344(4) of that Act, that is pending before the Administrative Appeals Tribunal immediately before the commencement of this item; or

                     (c)  any appeal to a court in relation to a proceeding referred to in paragraph (b).

(10)     If a disqualification under section 120A or 131, or a declaration under section 126D, of the Superannuation Industry (Supervision) Act 1993 is confirmed or varied as a result of a request, proceeding or appeal referred to in subitem (9), the disqualification or declaration is, for the purposes of subitem (1), (2), (3) or (7) (as the case requires), taken to have been in force immediately before this item commences.



 

Part 2 Amendments contingent on the Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007

Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007

71  Items 9A, 9B, 9D, 9E, 9F and 9G of Schedule 2

Repeal the items.

Insurance Act 1973

72  Subparagraph 24(1)(b)(iii)

Omit “and”.

73  At the end of paragraph 24(1)(b)

Add:

                            (iv)  a director or senior manager of a corporate agent; and

74  Subparagraph 24(2)(b)(iii)

Omit “and”.

75  At the end of paragraph 24(2)(b)

Add:

                            (iv)  a director or senior manager of a corporate agent; and

76  Subparagraph 24(4)(b)(iii)

Omit “and”.

77  At the end of paragraph 24(4)(b)

Add:

                            (iv)  if the body corporate is a corporate agent—a director or senior manager of the corporate agent; and

78  Subparagraph 24(5)(b)(iii)

Omit “and”.

79  At the end of paragraph 24(5)(b)

Add:

                            (iv)  if the body corporate is a corporate agent—a director or senior manager of the corporate agent; and

80  At the end of subsection 25A(2)

Add:

                   ; (d)  a director or senior manager of:

                              (i)  a particular corporate agent; or

                             (ii)  a class of corporate agents; or

                            (iii)  any corporate agent.

81  Subparagraph 25A(5)(a)(iii)

Omit “and”.

82  At the end of paragraph 25A(5)(a)

Add:

                       or (iv)  if the person is, or is acting as, a person referred to in paragraph (2)(d)(i)—to the corporate agent concerned, and to any foreign general insurer for which the agent is the corporate agent; and

83  Subparagraph 27(2)(a)(i)

Omit “insurer or NOHC”, substitute “insurer, NOHC or corporate agent”.