EXPLANATORY STATEMENT

Select Legislative Instrument 2009 No. 386

Issued by the authority of the Minister for Financial Services, Superannuation and Corporate Law

Corporations Act 2001

Corporations Amendment Regulations 2009 (No. 10)

Subsection 1364(1) of the Corporations Act 2001 (the Act) provides that the Governor‑General may make regulations prescribing matters required or permitted by the Act to be prescribed by regulations or necessary, or convenient to be prescribed by regulations for the carrying out or giving effect to the Act.

The Regulations make a technical amendment to update two references to Australian Standards in the Corporations Regulations 2001 (the Principal Regulations) relating to matters that the Australian Securities and Investments Commission (ASIC) must take into account when considering whether to make or approve standards or requirements relating to internal dispute resolution.

Financial services licensees

Under section 912A of the Act, general obligations on financial services licensees which provide financial services to retail clients include that the licensee is required to have a dispute resolution system in place complying with subsection 912A(2) of the Act.  This requirement includes both an internal dispute resolution procedure and membership of an external dispute resolution scheme.  The internal dispute resolution procedure must comply with standards and requirements made or approved by ASIC in accordance with the relevant regulations made for the purposes of paragraph 912A(2)(a)(i).

Regulation 7.6.02(1)(a) in the Principal Regulations previously required ASIC to take Australian Standard AS 4269 1995 (known as Complaints Handling) into account when considering whether to make or approve standards or requirements relating to internal dispute resolution.

The Regulations substitute a reference to the new Australian Standard - Australian Standard AS ISO 10002-2006 Customer satisfaction - Guidelines for complaints handling in organizations - which has been issued by Standards Australia.

Product disclosure statements

A comparable amendment has also been made to subregulation 7.9.77(1) in the Principal Regulations, which relates to the internal dispute resolution procedure required of an issuer or regulated person who gives a retail client a Product Disclosure Statement (see section 1017G(2) of the Act).

Subregulation 7.9.77(1) previously required ASIC to take Australian Standard AS 4269 1995 (known as Complaints Handling) into account when considering whether to make or approve standards or requirements relating to internal dispute resolution.

The Regulations substitute a reference to the new Australian Standard referred to above - Australian Standard AS ISO 10002-2006 Customer satisfaction - Guidelines for complaints handling in organizations - which has been issued by Standards Australia.

Further details on the Regulations are set out in the Attachment. 

The Regulations were subject to a consultation process in the context of wider consultation undertaken in relation to margin lending disclosure requirements.  Public consultation commenced on 22 September 2009 for a four-week period.  No submissions were received relating to these amendments.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Regulations commenced on the day after they were registered on the Federal register of legislative instruments.

Attachment to explanatory statement

Details of the Corporations Amendment Regulations 2009 (No. 10)

Regulation 1 — Name of Regulations

This regulation provides that the name of the Regulations is the Corporations Amendment Regulations 2009 (No. 10).

Regulation 2 — Commencement

This regulation provides that the Regulations commence on the day after they are registered.

Regulation 3 — Amendment of Corporations Regulations 2001

This regulation provides that the Regulations amend the Corporations Regulations 2001 (the Principal Regulations).

Item [1] – Paragraph 7.6.02 (1) (a)

Item [1] substitutes a new paragraph updating the reference to the new Australian Standard AS ISO 10002-2006.

Item [2] – Paragraph 7.9.77 (1) (a)

Item [2] substitutes a new paragraph updating the reference to the new Australian Standard AS ISO 10002-2006.