Financial Services Reform Amendment Act 2003 (141 of 2003)

Schedule 2   Other amendments of the Corporations Act 2001

35   Subsection 912D(1)

Repeal the subsection (including the note), substitute:

(1) If:

(a) a financial services licensee breaches, or is likely to breach:

(i) any of the obligations under section 912A or 912B, other than the obligation under paragraph 912A(1)(c); or

(ii) the obligation under paragraph 912A(1)(c), so far as it relates to provisions of this Act or the ASIC Act referred to in paragraphs (a), (b) and (c) of the definition of financial services law in section 761A; or

(iii) the obligation under paragraph 912A(1)(c), so far as it relates to Commonwealth legislation that is covered by paragraph (d) of that definition and that is specified in regulations made for the purposes of this subparagraph; and

(b) the breach, or likely breach, is significant, having regard to the following:

(i) the number or frequency of similar previous breaches;

(ii) the impact of the breach or likely breach on the licensee’s ability to provide the financial services covered by the licence;

(iii) the extent to which the breach or likely breach indicates that the licensee’s arrangements to ensure compliance with those obligations is inadequate;

(iv) the actual or potential financial loss to clients of the licensee, or the licensee itself, arising from the breach or likely breach;

(v) any other matters prescribed by regulations made for the purposes of this paragraph;

the licensee must give a written report on the matter to ASIC as soon as practicable, and in any case within 5 business days, after becoming aware of the breach or likely breach.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

(1A) For the purposes of subsection (1), a financial services licensee is likely to breach an obligation referred to in that subsection if, and only if, the person is no longer able to comply with the obligation.