Explanatory Statement

Issued by authority of the Assistant Treasurer, Minister for Housing and Minister for Homelessness, Social and Community Housing

Treasury Laws Amendment (Professional Standards Schemes) Regulations 2021

Australian Securities and Investments Commission Act 2001

Competition and Consumer Act 2010

Corporations Act 2001

The Australian Securities and Investments Commission Act 2001 (the ASIC Act) provides for the Australian Securities and Investments Commission to administer the Corporations Act 2001 (the Corporations Act) and other prescribed laws of the Commonwealth.

The Corporations Act provides for the regulation of corporations and financial services.

The Competition and Consumer Act 2010 (the CCA) promotes competition and fair trading and provides for consumer protection.

Section 251 of the ASIC Act, section 172 of the CCA and section 1364 of the Corporations Act each provide that the Governor-General may make regulations prescribing matters required or permitted by the Acts to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Acts.

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. This provides consistency across Commonwealth and state and territory laws.

All approved professional standards schemes are prescribed under the CCA. In addition, those schemes relating to financial services are also prescribed under the ASIC Act and Corporations Act.

Subsections 12GNA(2) of the ASIC Act, 137(2) 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 2021 (the Regulations) gives effect to decisions of the Professional Standards Councils to approve or amend professional standards schemes in their respective jurisdictions, as published in the relevant state Government gazette or on the relevant state Government legislation website. The Regulations extend three currently-prescribed schemes.

Details of the currently approved schemes, as well as the expired schemes, are publicly available on the Professional Standards Councils website:
www.psc.gov.au.

The Professional Standards Councils seek the opinion of independent actuarial consultants and call 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.

As the Regulations prescribe or extend a number of schemes, the Regulations have incorporated by reference the relevant state Government gazette notices or legislative instruments. Gazette notice references include the state, gazette number and date the gazette was published; legislative instrument references include the title and date of making the instrument. Government gazette notices and legislative instruments can be accessed for free from the state government websites below, by searching the relevant gazette date/number or legislative instrument title.

Details of the Regulations are set out in the Attachment A.

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 advised that the amendments do not require a Regulatory Impact Statement.

A Statement of Compatibility with Human Rights is at Attachment B

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

The Regulations commence on the day after registration on the Federal Register of Legislation.

ATTACHMENT A

Details of the Customs Amendment (Fees) Regulations 2021

Section 1 - Name of Regulations

This section provides that the title of the Regulations is the Treasury Laws Amendment (Professional Standards Schemes) Regulations 2021.

Section 2 - Commencement

This section provides that the Regulations commence on the day after registration on the Federal Register of Legislation.

Section 3 - Authority

This section provides that the Regulations are made under the ASIC Act, the CCA, and 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 item in a Schedule to this instrument has effect according to its terms.

Schedule 1 - Amendments

Items 1, 3 and 6 - extension of scheme: The Law Institute of Victoria Limited Scheme

These items extend the application of capped civil liability for misleading or deceptive conduct under ASIC Act, the CCA and the Corporations Act to the Law Institute of Victoria Limited Scheme to incorporate the extension to the scheme as published in the Victorian Government Gazette on 4 March 2021.

Items 2, 5 and 7 - extension of scheme: The Institute of Public Accountants Professional Standards Scheme

These items extend the application of capped civil liability for misleading or deceptive conduct under ASIC Act, the CCA and the Corporations Act to the Institute of Public Accountants Professional Standards Scheme to incorporate the extension to the scheme as published in the Victorian Government Gazette on 24 December 2020.

Items 4 - extension of scheme: The RICS Valuers Limited Scheme

This item extends the application of capped civil liability for misleading or deceptive conduct under the CCA to the RICS Valuers Limited Scheme to incorporate the extension to the scheme as published in the New South Wales Government Gazette on 6 November 2020.

ATTACHMENT B

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 2021

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 Act.

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 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).

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. This provides consistency across Commonwealth and state and territory laws.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms. Consideration has been given to the international conventions as set out in section 3 of the Human Rights Act.

This Legislative Instrument does not impose or amend penalty provisions, nor does it apply retrospectively or concern privacy rights of individuals or groups of people.

Conclusion

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