Schedule 1 Amendments
(regulation 3)
[1] Subregulation 1.0.02 (1),
definition of approved foreign bank, subparagraph (a) (ii)
omit
operating rules; and
insert
operating rules or by ASIC under the
market integrity rules; and
[2] Regulation 7.2.07
omit
must deal:
insert
must deal to the extent that a matter is
not dealt with in the market integrity rules:
[3] Subparagraph 7.2.07 (b) (ii)
substitute
(ii) provision
for the monitoring of participants’ compliance with the operating rules; and
[4] Subparagraph 7.2.07 (b) (iii)
omit
[5] Subparagraph 7.2.07 (b) (iv)
omit
expulsion, suspension or disciplining of
insert
expulsion or suspension of, or
enforcement action against,
[6] Subparagraph 7.2.07 (b) (v)
omit
expulsion, suspension or disciplining
insert
expulsion or suspension
[7] Subparagraph 7.2.07 (b) (vi)
omit
[8] Subparagraph 7.2.07 (b) (vii)
omit
expulsion, suspension or disciplining of
insert
expulsion or suspension of, or
enforcement action against,
[9] Paragraph 7.2.07 (i)
omit
and between participants and clients
[10] Regulation 7.2.08
omit
procedures:
insert
procedures to the extent that the market
integrity rules do not deal with a matter:
[11] Paragraph 7.2.08 (c)
substitute
(c) arrangements for
the monitoring of compliance by participants and listed entities with the
operating rules of the licensed market:
[12] Paragraph 7.2.08 (e)
omit
[13] After Part 7.2
insert
Part 7.2A Supervision of
financial markets
Division 7.2A.1 Enforceable undertakings
7.2A.01 Enforceable undertakings
(1) For paragraph 798K (1) (d)
of the Act, ASIC may accept a written undertaking, entered into by a person who
is alleged to have contravened subsection 798H (1) of the Act, as an
alternative to civil proceedings.
(2) Without limiting subregulation (1), ASIC may
accept an undertaking that includes any of the following:
(a) an undertaking to
take specified action within a specified period;
(b) an undertaking to
refrain from taking specified action;
(c) an undertaking to
pay a specified amount within a specified period to the Commonwealth or to some
other specified person.
Note An undertaking may relate to an infringement notice given under
Division 7.2A.2 in relation to the alleged contravention. For example, an
infringement notice may require a person to enter into an undertaking; a person
may enter into an undertaking to comply with an infringement notice; a person
may enter into an undertaking if the person does not comply with an
infringement notice or the infringement notice is withdrawn.
(3) If ASIC agrees, in
writing, to the withdrawal or variation of the undertaking, the person who
entered into the undertaking may withdraw or vary the undertaking.
(4) If ASIC is satisfied that
the person who entered into the undertaking has breached a term of the undertaking,
ASIC may apply to a Court for an order
under subregulation (5).
(5) If the Court is satisfied that the person has
breached a term of the undertaking, the Court may make one or more of the
following orders:
(a) an order directing
the person to comply with the term of the undertaking;
(b) an order directing
the person to pay to the Commonwealth an amount not exceeding the amount of any
financial benefit that the person has obtained directly or indirectly and that
is reasonably attributable to the breach;
(c) an order directing
the person to compensate another person who has suffered loss or damage as a
result of the breach;
(d) any other order
that the Court considers appropriate.
(6) This regulation does not
affect the liability of a person to civil proceedings if ASIC does not accept
an undertaking in relation to the alleged contravention of subsection 798H (1)
of the Act.
Division 7.2A.2 Infringement notices
7.2A.02 Purpose of Division
(1) For subsection 798K (1) of the Act, the
purpose of this Division is to set out a scheme under which a person who is
alleged to have contravened subsection 798H (1) of the Act may do one or
more of the following as an alternative to civil proceedings:
(a) pay a penalty to
the Commonwealth;
(b) undertake or
institute remedial measures (including education programs);
(c) accept sanctions
other than the payment of a penalty to the Commonwealth (including public
censure, suspension for no more than six months from performing certain
financial services in relation to a licensed market, or disgorgement of
profits);
(d) enter into an
undertaking under regulation 7.2A.01, including an undertaking to do an action
mentioned in paragraph (a), (b) or (c).
(2) This Division does not
require ASIC to give an infringement notice to a person in relation to the
alleged contravention of subsection 798H (1) of the Act.
(3) This Division does not
affect the liability of a person to civil proceedings if ASIC does not give an infringement notice to the person in relation to the alleged contravention of subsection 798H (1)
of the Act.
(4) This Division does not affect the liability of a
person to civil proceedings if:
(a) ASIC gives an
infringement notice to the person in relation
to the alleged contravention of subsection 798H (1) of the Act; and
(b) either:
(i) the
notice is withdrawn; or
(ii) the
person does not comply with the notice in accordance with regulation 7.2A.08.
(5) This Division does not
limit or otherwise affect the penalty that a Court
could impose on the person for a contravention of subsection 798H (1) of
the Act.
7.2A.03 Definitions for Division 7.2A.2
In this Division:
compliance period has the meaning given by subregulation 7.2A.08 (2).
infringement notice means an infringement notice given under regulation 7.2A.04.
recipient, in relation to an infringement notice, means the person
to whom ASIC gives the infringement notice or intends to give the infringement notice
under regulation 7.2A.04.
7.2A.04 When infringement notice can be given
(1) If ASIC has reasonable grounds to believe that a
person has contravened subsection 798H (1) of the Act, ASIC may give to
the person an infringement notice in relation to the alleged contravention.
(2) ASIC may give a person an
infringement notice that is in relation to more than one alleged contravention
of subsection 798H (1) of the Act.
(3) If ASIC withdraws an infringement notice given to a person in
relation to the alleged contravention of subsection 798H (1) of the Act, ASIC may give the person
a new infringement notice in relation to the alleged contravention.
Example for subregulation (3)
An infringement notice given to
a person in relation to an alleged contravention of subsection 798H (1) of the Act may be withdrawn, and a new infringement notice given to
the person in relation to that alleged contravention, if the original
infringement notice contained an error.
7.2A.05 Statement of reasons must be given
(1) Before giving a recipient an infringement notice,
ASIC must:
(a) give the recipient
a written statement that sets out ASIC’s reasons for believing that the
recipient has contravened subsection 798H (1)
of the Act; and
(b) give the recipient, or a representative of
the recipient, an opportunity to:
(i) appear
at a private hearing before ASIC; and
(ii) give
evidence to ASIC; and
(iii) make
submissions to ASIC;
in relation to
the alleged contravention of subsection 798H (1)
of the Act.
(2) If a recipient, or a
representative of a recipient, gives ASIC evidence or information under
paragraph (1) (b) in relation to the alleged contravention of subsection 798H (1) of the Act, the evidence or
information is not admissible in evidence in
any proceedings against the recipient, other than proceedings relating to the
evidence or information being false or misleading.
7.2A.06 Contents of infringement notice
An infringement notice:
(a) must state the date
on which it is given; and
(b) must be identified
by a unique code; and
(c) must state the
name and address of the recipient; and
(d) must state that it
is being given by ASIC under regulation 7.2A.04; and
(e) must specify details of each alleged
contravention of subsection 798H (1) of the Act to which the infringement
notice relates, including:
(i) the
conduct that made up each alleged contravention (including,
to the extent known, the date on which it occurred and the place at which it
occurred); and
(ii) each
market integrity rule that ASIC alleges the recipient has contravened; and
(f) must, in relation
to each market integrity rule that ASIC alleges the recipient has contravened,
state the maximum pecuniary penalty that a Court could order the recipient to
pay for contravening the market integrity rule; and
(g) must, in relation to each alleged
contravention of subsection 798H (1) of the Act to which the infringement
notice relates:
(i) specify the
penalty (if any) payable for each alleged contravention of subsection 798H (1) of the Act; and
(ii) if subparagraph (i) applies:
(A) specify
the total penalty that the recipient must pay to the Commonwealth; and
(B) state
that the penalty is payable to ASIC on behalf of the Commonwealth; and
(C) explain
how payment of the penalty can be made; and
(iii) specify
the remedial measures (if any) that the recipient must undertake or institute;
and
(iv) specify
the sanctions (if any) that the recipient must accept; and
(v) specify
the terms of an undertaking (if any) that the recipient must enter into under
regulation 7.2A.01; and
(h) must state that
the recipient may choose not to comply with the infringement notice, but that
if the recipient does not comply, civil proceedings may be brought against the recipient
in relation to the alleged contravention; and
(i) must explain what
the recipient must do to comply with the infringement notice and the effect of
compliance with the infringement notice; and
(j) must state that the recipient may apply to
ASIC:
(i) for
withdrawal of the notice under regulation 7.2A.11; and
(ii) for an
extension of time under regulation 7.2A.09; and
(k) must state that
ASIC may publish details of the infringement notice under regulation 7.2A.15;
and
(l) may include any other information that
ASIC considers necessary.
Note For sub-subparagraph (g) (ii) (A), the total penalty
is the sum of the penalties payable under subparagraph (g) (i).
7.2A.07 Amount of penalty payable to the Commonwealth
(1) The penalty payable (if
any) for an alleged contravention of subsection
798H (1) of the Act is the amount determined by ASIC.
Note Subsection 798K (2) of the Act states that the penalty
payable under paragraph 798K (1) (a) of the Act in relation to a
market integrity rule must not exceed three-fifths of the penalty amount set
out in the market integrity rules in relation to the rule.
(2) If an infringement notice
is in relation to more than one alleged contravention of subsection 798H (1)
of the Act, the total penalty payable under the infringement notice is the sum
of the penalties payable (if any) for the alleged contraventions.
7.2A.08 Compliance with infringement notice
(1) A recipient complies with an infringement notice
if, during the compliance period, the recipient does all of the following:
(a) pays the penalty specified
in the infringement notice under sub-subparagraph 7.2A.06 (g) (ii) (A)
(if any);
(b) undertakes or
institutes the remedial measures specified in the infringement notice under subparagraph
7.2A.06 (g) (iii) (if any);
(c) accepts the
sanctions specified in the infringement notice under subparagraph 7.2A.06 (g) (iv)
(if any);
(d) enters into an
undertaking (including an undertaking to comply with the infringement notice)
with the terms specified in the infringement notice under subparagraph 7.2A.06 (g) (v)
(if any).
(2) The compliance period for an
infringement notice:
(a) starts on the day
on which the infringement notice is given to the recipient; and
(b) ends:
(i) 27 days after
the day on which the infringement notice is given to the recipient; or
(ii) on
another day permitted by this regulation.
(3) If the recipient applies
for a further period of time in which to comply with the infringement notice,
and the application is granted, the compliance period ends at the end of the further
period allowed.
(4) If the recipient applies for a further period of
time in which to comply with the infringement notice, and the application is
refused, the compliance period ends on the later of:
(a) 28 days after the
day on which the infringement notice was given to the recipient; and
(b) 7 days after the
notice of refusal is given to the recipient.
(5) If the recipient applies
for the infringement notice to be withdrawn, and the application is refused,
the compliance period ends 28 days after the notice of refusal is given to the
recipient.
7.2A.09 Extension of compliance period
(1) During the compliance
period, a recipient may apply, in writing, to ASIC for a further period of no
more than 28 days in which to comply with the infringement notice.
(2) The application must:
(a) specify the
infringement notice’s unique identification code; and
(b) set out the reasons
for the application.
(3) Within 14 days after receiving the application,
ASIC must:
(a) grant or refuse a
further period no longer than the period sought (and no more than 28 days); and
(b) notify the
recipient in writing of the decision and, if the decision is a refusal, the
reasons for the decision.
(4) If ASIC refuses a further
period under paragraph (3) (a), the recipient may not make a further application
under subregulation (1) in relation to that infringement notice.
(5) If ASIC has not granted or
refused a further period under paragraph (3) (a) within 14 days after
receiving the application, ASIC is taken to have refused a further period.
7.2A.10 Effect of compliance with infringement notice
(1) Subject to subregulation (3), if:
(a) an infringement
notice is given to a recipient in relation to an alleged contravention of subsection 798H (1) of the Act; and
(b) the infringement
notice is not withdrawn; and
(c) the recipient
complies with the infringement notice;
the effects in subregulation (2) apply.
(2) The effects are:
(a) any
liability of the recipient to the Commonwealth for the alleged contravention of
subsection 798H (1) of
the Act is discharged; and
(b) no civil or
criminal proceedings may be brought or continued by the Commonwealth against
the recipient for the conduct specified in the infringement notice as being the
conduct that made up the alleged
contravention of subsection 798H (1)
of the Act; and
(c) no administrative
action may be taken by ASIC under section 914A, 915B, 915C or 920A of the
Act against the recipient for the conduct specified in the infringement notice as
being the conduct that made up the
alleged contravention of subsection 798H (1)
of the Act; and
(d) the recipient is not
taken to have admitted guilt or liability in relation to the alleged
contravention; and
(e) the recipient is
not taken to have contravened subsection 798H (1) of the Act.
Note Third parties are not prevented from
commencing civil proceedings against the recipient, including under sections
793C and 1101B of the Act, and under section 1317J of the Act in relation to sections
1317G and 1317HB of the Act. ASIC is not prevented from applying for an
order on behalf of a plaintiff in accordance with the
Act.
(3) Subregulation (2) does not apply if the recipient
has knowingly:
(a) provided false or
misleading information to ASIC; or
(b) withheld evidence
or information from ASIC;
in relation to the alleged contravention
of subsection 798H (1) of the Act.
7.2A.11 Application to withdraw infringement notice
(1) During the compliance
period, a recipient of an infringement notice may apply, in writing, to ASIC
for the infringement notice to be withdrawn.
(2) The application must:
(a) specify the
infringement notice’s unique identification code; and
(b) set out the reasons
for the application.
(3) Within 14 days after receiving the application,
ASIC must:
(a) withdraw or refuse
to withdraw the infringement notice; and
(b) notify the
recipient in writing of the decision and, if the decision is a refusal, the
reasons for the decision.
(4) Without limiting subregulation (3), ASIC may
withdraw the infringement notice after taking into account the following
matters:
(a) whether the
recipient has previously been found to have contravened subsection 798H (1) of the Act;
(b) the circumstances
in which the contravention set out in the infringement notice is alleged to
have occurred;
(c) whether an infringement
notice has previously been given to the recipient in relation to an alleged
contravention of subsection 798H (1) of
the Act, and whether
the recipient complied with the infringement notice;
(d) any other relevant
matter.
(5) If, under paragraph (3) (a),
ASIC refuses to withdraw the infringement notice, the recipient may not make a
further application under subregulation (1) in relation to that infringement
notice.
(6) If ASIC has not withdrawn,
or refused to withdraw, the infringement notice within 14 days after receiving
the application, ASIC is taken to have refused to withdraw the infringement notice.
7.2A.12 Withdrawal of infringement notice by ASIC
(1) ASIC may withdraw an
infringement notice given by ASIC without an application under regulation 7.2A.11
having been made.
(2) Without limiting
subregulation (1), ASIC may withdraw the infringement notice after taking into
account a matter mentioned in paragraph 7.2A.11 (4) (a), (b), (c) or
(d).
7.2A.13 Notice of withdrawal of infringement notice
(1) A notice withdrawing an infringement notice must
include the following information:
(a) the name and
address of the recipient;
(b) the date the
infringement notice was given;
(c) the infringement
notice’s unique identification code.
(2) The notice must also state
that the infringement notice is withdrawn.
7.2A.14 Withdrawal of notice after compliance
(1) ASIC may withdraw an infringement notice after the
recipient has complied with the infringement notice only if the recipient
agrees, in writing, to the withdrawal.
(2) If an infringement notice
is withdrawn after the penalty specified in it (if any) has been paid, the
Commonwealth must refund the amount of the penalty to the person who paid it.
(3) If an infringement notice is withdrawn after the
recipient has complied with a requirement specified in the infringement notice:
(a) to undertake or
institute remedial measures; or
(b) to accept sanctions
other than a payment of a penalty to the Commonwealth; or
(c) to enter into an
undertaking;
the remedial measures, sanctions or
undertaking are taken to no longer be enforceable by ASIC.
7.2A.15 Publication of details of infringement notice
(1) If ASIC gives an
infringement notice to a recipient, ASIC may, at the end of the compliance
period, publish details of the infringement notice.
(2) If ASIC decides to publish
details of the infringement notice, ASIC must
publish the details in accordance with either or both of subregulations (3) and
(4).
(3) ASIC may publish details of an infringement notice
by publishing in the Gazette:
(a) a copy of the
infringement notice; and
(b) the following statements:
(i) a
statement as to whether the recipient has complied with the infringement
notice;
(ii) if the recipient has complied
with the infringement notice, a statement that:
(A) compliance
is not an admission of guilt or liability; and
(B) the
recipient is not taken to have contravened subsection 798H (1) of the Act;
(iii) if the recipient has not
complied with the infringement notice, a statement that:
(A) the
giving of an infringement notice to a recipient is only an allegation that the
recipient has contravened subsection 798H (1) of the Act; and
(B) the
recipient is not taken to have contravened subsection 798H (1) of the Act.
(4) ASIC may publish details of an infringement notice
by issuing a written or oral statement that:
(a) includes an accurate summary of the details
of the infringement notice, including:
(i) the name
of the recipient; and
(ii) the
amount of the penalty specified in the infringement notice (if any); and
(iii) the
remedial measures specified in the infringement notice (if any); and
(iv) the
sanctions specified in the infringement notice (if any); and
(v) the terms
of an undertaking specified in the infringement notice (if any); and
(vi) the
conduct specified in the infringement notice as being the conduct that made up
the alleged contravention of subsection 798H (1) of the Act; and
(b) includes the following statements:
(i) a
statement as to whether the recipient has complied with the infringement
notice;
(ii) if the recipient has complied
with the infringement notice, a statement that:
(A) compliance
is not an admission of guilt or liability; and
(B) the
recipient is not taken to have contravened subsection 798H (1) of the Act;
(iii) if the recipient has not
complied with the infringement notice, a statement that:
(A) the
giving of an infringement notice to a recipient is only an allegation that the
recipient has contravened subsection 798H (1) of the Act; and
(B) the
recipient is not taken to have contravened subsection 798H (1) of the Act.
[14] Subregulation 7.8.01 (4A)
omit
required by the operating rules of a
licensed market
insert
required, by the market integrity rules
or the operating rules of a licensed market,
[15] Paragraph 7.8.01 (5) (c)
omit
the rules of a licensed market or
insert
the market integrity rules, the
operating rules of a licensed market or the operating rules of a
[16] Subregulation 7.8.01 (8)
after
under
insert
the market integrity rules,
[17] Paragraph 7.8.01 (8) (a)
after
operating rules
insert
or market integrity rules
[18] Subregulation 7.8.01 (8),
note
after
operating rules
insert
or market integrity
rules
[19] Paragraph 7.8.02 (1) (f)
after
pursuant to
insert
the market integrity rules or
[20] Subregulation 7.8.17 (1)
substitute
(1) For paragraph 991B (3) (b) of the Act, if
a participant in a licensed market:
(a) enters into a
transaction; and
(b) complies with all
of the participant’s obligations in relation to the transaction under the
market integrity rules and the operating rules of the licensed market;
subsection 991B (2) of the Act does
not apply in relation to the transaction.
[21] Subregulation 7.8.18 (1)
omit
operating rules of a licensed market of
which the financial services licensee is a participant
insert
market integrity rules, or the operating
rules of a licensed market in relation to which the financial services licensee
is a participant,
[22] Paragraph 7.8.20 (3) (b)
substitute
(b) the financial
services licensee has complied with all of the financial services licensee’s
obligations in relation to the transaction under the market integrity rules and
the operating rules of the relevant licensed market; and
[23] Paragraph 7.8.20 (3) (c)
before
operating
rules
insert
market integrity rules or the
[24] Paragraph 7.9.63C (1) (b)
substitute
(b) the participant has
complied with all of the participant’s obligations in relation to the
transaction under the market integrity rules and the operating rules of the
licensed market; and
[25] Subparagraph 7.9.63C (2) (b) (ii)
after
permitted
by the
insert
market integrity rules or the
[26] Paragraph 7.9.63C (3) (b)
substitute
(b) the participant has
complied with all of the participant’s obligations in relation to the
transaction under the market integrity rules and the operating rules of the
licensed market; and
[27] Paragraph 7.9.63C (4) (b)
after
provided by
insert
the market integrity rules or
[28] After Part 10.5
insert
Part 10.14 Transitional provisions
relating to the Corporations Amendment (Financial Market Supervision) Act
2010
10.14.01 Application of Part 10.14
For subsection 1513 (1)
of the Act, this Part deals with matters of a transitional, application or
saving nature relating to the amendments and repeals made by Schedule 1 to the Corporations
Amendment (Financial Market Supervision) Act 2010 (the amending
Schedule).
10.14.02 Amendments not to apply to certain operators of licensed markets
The amendments made by the amending Schedule do
not apply to the following operators of licensed
markets:
(a) BGC Partners
(Australia) Pty Limited;
(b) Bloomberg Tradebook
Australia Pty Ltd;
(c) Mercari Pty Ltd;
(d) Yieldbroker Pty
Limited.
Note The requirement in subsection 798H (1)
of the Act for an operator of a licensed market to comply with the market
integrity rules was introduced by one of the amendments made by the amending
Schedule.
10.14.03 Transfer of documents
(1) This regulation applies if:
(a) an operator of a licensed market, a related body corporate
of the operator, or an employee of the operator, gives information in
confidence to ASIC; and
(b) the information
relates to the operation of Part 7.2 of the Act; and
(c) the information
was requested by, or given to, ASIC to help ASIC exercise its powers or perform
its functions under Part 7.2A of the Act.
(2) The information does not
cease to be the subject of legal professional privilege solely because the
information has been given to ASIC.
(3) The operator or employee:
(a) has qualified
privilege in respect of the giving of the information to ASIC; and
(b) is not liable to
any person in relation to the giving of the information to ASIC.
(4) The giving of the information to ASIC is not to be
taken to be:
(a) a contravention of
a law, including a law relating to privacy or confidentiality; or
(b) a breach of
contract or duty to a person.
10.14.04 Notifications, consents, waivers, etc
(1) This regulation applies if:
(a) an operator of a
licensed market gave a written waiver, consent, recognition, accreditation,
approval, determination, exemption or notification to a participant in the
licensed market under the operating rules of the licensed market; and
(b) the power or
obligation in the operating rules to give the waiver, consent, recognition,
accreditation, approval, determination, exemption or notification is
incorporated into the market integrity rules.
(2) The waiver, consent, recognition, accreditation,
approval, determination, exemption or notification:
(a) is taken to have
been given by ASIC under the market integrity rules; and
(b) will continue in
its existing form, and continue to have the same effect, (as given under the
operating rules) unless ASIC determines that it should be amended or revoked.
(3) ASIC may:
(a) determine that a
waiver, consent, recognition, accreditation, approval, determination, exemption
or notification is no longer appropriate; and
(b) determine, in
writing, that the waiver, consent, recognition, accreditation, approval,
determination, exemption or notification is amended or revoked as provided in
the determination.
(4) If ASIC proposes to make a
determination under subregulation (3), ASIC must give reasonable notice to
the participant before making the determination.
10.14.05 Notification given by participant to operator of licensed
market
(1) This regulation applies if:
(a) a participant in a
licensed market gave the operator of the licensed market a written notification
or certification under the operating rules of the licensed market; and
(b) the power or obligation
in the operating rules to give the notification or certification is incorporated
into the market integrity rules.
(2) The notification or certification:
(a) is taken to have been
given to ASIC by the participant under the market integrity rules; and
(b) will continue in
its existing form, and continue to have the same effect, (as given under the
operating rules) unless ASIC otherwise determines.
(3) ASIC may:
(a) determine that a
notification or certification is no longer appropriate; and
(b) determine, in
writing, that the notification or certification is amended or revoked as
provided in the determination.
(4) If ASIC proposes to make a
determination under subregulation (3), ASIC must give reasonable notice to
the participant before making the determination.
10.14.06 Registers
If:
(a) an operator of a
licensed market kept a register under, or in relation to, the operating rules
of the licensed market; and
(b) the relevant
operating rules are incorporated into the market integrity rules;
the register is taken to be kept by ASIC
under, or in relation to, the market integrity rules.