Explanatory Statement

Issued by authority of the Minister for Revenue and Financial Services

Treasury Laws Amendment (Professional Standards Schemes) Regulations 2018

Australian Securities and Investments Commission Act 2001

Competition and Consumer Act 2010

Corporations Act 2001

Section 251 of the Australian Securities and Investments Commission Act 2001 (the ASIC Act), section 172 of the Competition and Consumer Act 2010 (the CCA) and section 1364 of the Corporations Act 2001 (the Corporations Act) each provide that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The intergovernmental Professional Standards Agreement 2011 provides for a national framework of professional standards legislation that provides professionals and members of occupational associations with capped civil liability. As part of this national framework, all states and territories have adopted legislation to establish a Professional Standards Council that can approve professional standards schemes in their respective jurisdictions. Members of professional groups that are part of these schemes are entitled to capped civil liability in return for raising industry service standards and having professional indemnity insurance up to the level of the prescribed liability cap.

As part of the national framework of professional standards legislation, the Commonwealth provides members of professional groups that are part of an approved professional standards scheme with capped civil liability in relation to misleading and deceptive conduct under the ASIC Act, the CCA and the Corporations Act to ensure that actions cannot be brought under these Acts to circumvent the cap on civil liability.

Sections 12GNA(2) of the ASIC Act, 137(2)(a) of the CCA and 1044B(2) of the Corporations Act provide for capped civil liability for misleading and deceptive conduct for professional standards schemes that are prescribed in relevant regulations. Accordingly, regulation 3A of the Australian Securities and Investments Commission Regulations 2001, regulation 8A of the Competition and Consumer Regulations 2010 and regulation 7.10.02 of the Corporations Regulations 2001 prescribe a list of professional standards schemes that have capped civil liability for misleading and deceptive conduct under their respective principal acts.

The Treasury Laws Amendment (Professional Standards Schemes) Regulations 2018 (the Regulations) gives effect to the decisions the Professional Standards Councils made to approve or amend professional standards schemes in their respective jurisdictions.

The Regulations prescribe the Law Society of South Australia Professional Standards Scheme and the South Australian Bar Association Inc Professional Standards Scheme as new professional standards schemes that have capped civil liability for misleading or deceptive conduct under the three Regulations listed above as these schemes have become approved professional standards schemes in South Australia.

The Regulations also prescribe an extension to include recently published modifications to:

•

extend the Australian Computer Society Professional Standards Scheme in the Competition and Consumer Regulations 2010 to 31 December 2018 to reflect the extension of the scheme that was approved in New South Wales; and

•

amend the RICSV Limited Scheme in the Competition and Consumer Regulations 2010 to reflect changes to scheme that have been approved in New South Wales.

Professional Standards Council seeks the opinion of independent actuarial consultants and calls for public comment on professional standards schemes via public notification in major newspapers circulating throughout the relevant jurisdictions prior to approving schemes. Further consultation by the Commonwealth Government was not considered necessary.

Details of the Regulations are set out in the Attachment.

The Acts do not specify any conditions that need to be met before the power to make the Regulations are exercised.

The Office of Best Practice Regulation has certified that the amendments do not require a Regulatory Impact Statement.

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

The Regulations commence on the day after they are registered on the Federal Register of Legislation.

Statement of Compatibility with Human Rights

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

Treasury Laws Amendment (Professional Standards Schemes) Regulations 2018

This Legislative Instrument 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 of the Legislative Instrument

The Regulations update the list of prescribed professional schemes that have capped civil liability for misleading and deceptive conduct under the ASIC Act, CCA and Corporations Act.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

ATTACHMENT

Details of the Treasury Laws Amendment (Professional Standards Schemes) Regulations 2018

Section 1 - Name of Regulations

This section provides that the title of the Regulations is the Treasury Laws Amendment (Professional Standards Schemes) Regulations 2018.

Section 2 - Commencement

This section provides that the Regulations commences the day after it is registered.

Section 3 - Authority

This section provides that the Regulations are made under the Australian Securities and Investments Commission Act 2001 (the ASIC Act), the Competition and Consumer Act 2010 (the CCA), and the Corporations Act 2001 (the Corporations Act).

Section 4 - Schedules

This section provides that each instrument that is specified in a Schedule to the Regulations is amended or repealed as set out in the applicable items in the Schedule concerned, and any other items in a Schedule to this instrument has effect according to its terms.

Schedule 1 - Amendments

Items 1, 2, 5, 6, 7, 10, 11

These items replace references to 'the day the Treasury Laws Amendment (Professional Standards Schemes) Regulations 2017 commences' with '25 May 2017' which is the date that instrument commenced.

Item 3, 8 and 12

These items prescribe that the Law Society of South Australia Professional Standards Scheme and the South Australian Bar Association Inc Professional Standards Scheme as new professional standards schemes that have capped civil liability for misleading or deceptive conduct under Commonwealth law.

The new schemes replace the old Law Society of South Australia Professional Standards Scheme and the South Australian Bar Association Inc Professional Standards Scheme.

Item 4

This item extends the application of capped civil liability under the CCA for the Australian Computer Society Professional Standards Scheme in accordance with the extension published in the NSW Government Gazette on 15 September 2017.

Item 9

This item amends the application of capped civil liability under the CCA to the RICSV Limited Scheme to incorporate the changes to the scheme as published in the NSW Government Gazette on 23 December 2016.