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Treasury Laws Amendment (ASIC Governance) Bill 2018

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2016-2017-2018

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

Treasury Laws Amendment (ASIC Governance) Bill 2018

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

(Circulated by authority of the

Minister for Revenue and Financial Services, Minister for Women and Minister Assisting the Prime Minister for the Public Service, the Hon Kelly O’Dwyer MP)

 



Table of contents

Glossary............................................................................................................. 1

General outline and financial impact........................................................... 3

Chapter 1 ........... Additional Deputy Chairperson of ASIC........................ 5

Chapter 2 ........... Statement of Compatibility with Human Rights............ 9

 

 



The following abbreviations and acronyms are used throughout this explanatory memorandum.

Abbreviation

Definition

ASIC

Australian Securities and Investments Commission

ASIC Act

Australian Securities and Investments Commission Act 2001

Bill

Treasury Laws Amendment (ASIC Governance) Bill 2018

 

 



Overview

This Bill amends the ASIC Act to enable the Governor-General to appoint a second Deputy Chairperson of ASIC.

Date of effect The amendments apply from the day after the end of the period of 14 days beginning on the day the Bill receives the Royal Assent.

Proposal announced No

Financial impact Nil

Human rights implications :  This Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights — Chapter 2.

Compliance cost impact Nil

 

 



Chapter 1          

Additional Deputy Chairperson of ASIC

Outline of chapter

1.1                   The chapter explains the amendments to the ASIC Act enabling the Governor-General to appoint a second Deputy Chairperson of ASIC.

Context of amendments

1.2                   ASIC enforces and regulates companies, financial services and credit laws to protect consumers, investors and creditors. ASIC is an independent Australian Government body, which has regulated financial markets, securities, futures and corporations since January 1991.

1.3                   ASIC is headed by a Commission consisting of between three and eight members. The terms and conditions of the appointment of members are set out in the ASIC Act, and members are appointed by the Governor-General on the nomination of the relevant Minister. Currently, one member must be appointed Chairperson and another member may be appointed Deputy Chairperson.

1.4                   To fulfil its role, ASIC needs to operate as effectively and efficiently as possible, and for that it needs strong leadership and internal governance. Given the breadth of ASIC’s responsibilities, it is also crucial that ASIC’s leadership has the right mix of skills, knowledge and experience.

1.5                   Amending the ASIC Act to provide for two Deputy Chairpersons will assist ASIC in operating as an effective and efficient regulator. It will provide greater flexibility for the Commission to determine how it undertakes its oversight and other governance functions.

1.6                   Having a second Deputy Chairperson will also support ASIC in engaging with its stakeholders to better communicate its role, its priorities and how its resources are allocated.

Summary of new law

1.7                   The ASIC Act currently provides that one ASIC member must be appointed as Chairperson and another member may be appointed a Deputy Chairperson.

1.8                   This Bill amends the ASIC Act to give the Governor-General the discretion to appoint a second ASIC Deputy Chairperson. The Governor-General’s existing discretion to not appoint any Deputy Chairperson is preserved.   

1.9                   Consistent with the existing requirements, only a full-time member of ASIC can be appointed as a Deputy Chairperson of ASIC.

1.10               The Bill also makes amendments to provide operational certainty to ASIC in the event that a second Deputy Chairperson is appointed.

Comparison of key features of new law and current law

New law

Current law

The Governor-General has the discretion to appoint a maximum of two full-time ASIC members as Deputy Chairpersons.

The Governor-General has the discretion to appoint one full-time ASIC member as the Deputy Chairperson.

Detailed explanation of new law

1.11               Schedule 1 of the Bill amends the ASIC Act to provide the Governor-General with the discretion to appoint a second Deputy Chairperson of ASIC. [Schedule 1, item 2, subsection 10(3) of the ASIC Act]

1.12               Consistent with the existing requirements, only a full-time member of ASIC can be appointed as a Deputy Chairperson of ASIC. [Schedule 1, item 2, subsection 10(2) of the ASIC Act]  

1.13               Where the ASIC Chairperson is absent from a meeting and there are two Deputy Chairpersons present, the Bill provides that the Chairperson may nominate one of them to preside over the meeting. Where only one of the Deputy Chairpersons is available, the Bill provides for that Deputy Chairperson to preside at the meeting. [Schedule 1, item 3, subsection 106(2) of the ASIC Act]  

1.14               Where the Chairperson is absent and there are no Deputy Chairpersons available for a particular meeting, the Bill preserves the existing requirement for the members present to decide which of them should preside over the meeting. [Schedule 1, item 3, subsection 106(3) of the ASIC Act]  

1.15               Existing section 118 of the ASIC Act, which allows for the Minister to appoint an ASIC member to act as Deputy Chairperson, is amended to make it clear that the Minister can appoint an ASIC member to act as a Deputy Chairperson when:

•        there are fewer than two persons appointed as a Deputy Chairperson; or

•        a Deputy Chairperson is absent or acting as the Chairperson.

[Schedule 1, item 8, section 118 of the ASIC Act]  

1.16               The amendment to section 118 ensures that there is flexibility to have an acting Deputy Chairperson when the position is vacant.

Consequential amendments

1.17               As a result of the amendments to provide for ASIC to have two Deputy Chairpersons, a number of references to ‘the Deputy Chairperson’ have been replaced with a reference to ‘a Deputy Chairperson’ so that the provisions continue to operate when a second Deputy Chairperson is appointed. The provisions amended in this way include:

•        subsection 5(1) which provides for the definition of ‘Deputy Chairperson’; [Schedule 1, item 1, subsection 5(1) of the ASIC Act]  

•        section 109 which provides for the term of office for the Chairperson and a Deputy Chairperson; [Schedule 1, items 4 and 5, subsection 109(1) of the ASIC Act]  

•        section 110 which provides for the resignation of the Chairperson or a Deputy Chairperson; and [Schedule 1, item 6, section 110 of the ASIC Act]  

•        section 116 which provides for appointing an acting member. [Schedule 1, item 7,  paragraph 116(1)(c) of the ASIC Act]  

1.18               Existing subsection 35(1) of the Foreign Evidence Act 1994 is also amended to replace the reference to ‘the Deputy Chairperson’ with ‘a Deputy Chairperson’ so that the provision continues to operate when a second Deputy Chairperson is appointed. [Schedule 1, item 10, subsection 35(1) of the Foreign Evidence Act 1994]

Application and transitional provisions

1.19               The amendments apply from the day after the end of the period of 14 days beginning on the day the Bill receives Royal Assent. [Clause 2]

1.20               A transitional provision provides that the amendments in the Bill do not affect any appointments applying immediately before the commencement of the Bill. This ensures that these arrangements are not disturbed until they are subsequently modified, terminated or cease to apply. [Schedule 1, item 9, section 315 of the ASIC Act]



Chapter 2          

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Treasury Laws Amendment (ASIC Governance) Bill 2018

2.1                   This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview

2.2                   This Bill provides for the Governor-General to appoint a second Deputy Chairperson of ASIC.

Human rights implications

2.3                   This Bill does not engage any of the applicable rights or freedoms.

Conclusion

2.4                   This Bill is compatible with human rights as it does not raise any human rights issues.