Corporations Act 2001
Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .
View history note
Hide history noteCCH note - modifying legislative instruments: The application of Pt 7.6 is affected by the following legislative instruments that commenced or were amended on or after 1 January 2022: the ASIC Corporations (Custody Standards for Providers of Custodial and Depository Services) Instrument 2024/17 (other than Divs 4 and 8); the ASIC Corporations (Investor Directed Portfolio Services) Instrument 2023/669 (as amended by ASIC Corporations (Amendment) Instrument 2024/554) (other than Divs 4 and 8); the ASIC Corporations (Record-Keeping Requirements for Australian Financial Services Licensees when Giving Personal Advice) Instrument 2024/508 (other than Divs 4 and 8); and the ASIC Corporations and Credit (Breach Reporting - Reportable Situations) Instrument 2024/620 (other than Divs 4 and 8).
The application of Pt 7.6 is also affected by Class Order 14/1262: Relief for 31 Day Notice Term Deposits (other than Divs 4 and 8).
For other legislative instruments or class orders before 1 January 2022 that affect the application of Pt 7.6, please consult the legislative instruments or class orders directly. These are reproduced in the regulatory-resources section of the company-law practice area in CCH iKnowConnect.
CCH Note - modifying legislative instruments: The application of Division 3 is affected by the following legislative instruments that commenced on or after 1 January 2022: the ASIC Corporations (Incidental Retail Cover) Instrument 2022/716; the ASIC Corporations (Financial Requirements for Issuers of Retail OTC Derivatives) Instrument 2022/705; the ASIC Corporations (Financial Requirements for Responsible Entities, IDPS Operators and Corporate Directors of Retail CCIVs) Instrument 2023/647; the ASIC Corporations (Financial Requirements for Custodial or Depository Service Providers) Instrument 2023/648; the ASIC Corporations (Investor Directed Portfolio Services) Instrument 2023/669; and the ASIC Corporations (Record-Keeping Requirements for Australian Financial Services Licensees when Giving Personal Advice) Instrument 2024/508 (other than Divs 4 and 8).
For legislative instruments or class orders before 1 January 2022 that affect the application of Division 3, please consult the legislative instruments or class orders directly. These are reproduced in the regulatory-resources section of the company-law practice area in CCH iKnowConnect.
CCH Note - modifying legislative instruments: The application of Subdivision B is affected by the following legislative instruments that commenced on or after 1 January 2022: the ASIC Corporations (Incidental Retail Cover) Instrument 2022/716; the ASIC Corporations (Financial Requirements for Issuers of Retail OTC Derivatives) Instrument 2022/705; the ASIC Corporations (Financial Requirements for Responsible Entities, IDPS Operators and Corporate Directors of Retail CCIVs) Instrument 2023/647; and the ASIC Corporations (Financial Requirements for Custodial or Depository Service Providers) Instrument 2023/648.
For legislative instruments or class orders before 1 January 2022 that affect the application of Subdivision B, please consult the legislative instruments or class orders directly. These are reproduced in the regulatory-resources section of the company-law practice area in CCH iKnowConnect.
CCH note: This provision is modified by legislative instruments. See the CCH note at the end of the provision for details.
There is a reportable situation in relation to a financial services licensee if one of the following paragraphs is satisfied: (a) the financial services licensee or a representative of the financial services licensee has breached a core obligation and the breach is significant; (b) the financial services licensee or a representative of the financial services licensee is no longer able to comply with a core obligation and the breach, if it occurs, will be significant; (c) the financial services licensee or a representative of the financial services licensee conducts an investigation into whether there is a reportable situation of the kind mentioned in paragraph (a) or (b) and the investigation continues for more than 30 days; (d) an investigation described in paragraph (c) discloses that there is no reportable situation of the kind mentioned in paragraph (a) or (b) .
912D(2)
There is also a reportable situation in relation to a financial services licensee if: (a) in the course of providing a financial service, the financial services licensee or a representative of the financial services licensee has engaged in conduct constituting gross negligence; or (b) the financial services licensee or a representative of the financial services licensee has committed serious fraud; or (c) any other circumstances prescribed by the regulations for the purposes of this paragraph exist.
912D(3)
Each of the following is a core obligation : (a) an obligation under section 912A or 912B , other than the obligation under paragraph 912A(1)(c) ; (b) 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) , (c) and (d) of the definition of financial services law in section 761A ; (c) in relation to financial services, other than traditional trustee company services provided by a licensed trustee company - the obligation under paragraph 912A(1)(c) , so far as it relates to Commonwealth legislation that is covered by paragraph (e) of that definition and that is specified in regulations made for the purposes of this paragraph; (d) in relation to traditional trustee company services provided by a licensed trustee company - the obligation under paragraph 912A(1)(c) , so far as it relates to Commonwealth, State or Territory legislation, or a rule of common law or equity, that is covered by paragraph (e) or (f) of that definition; (e) an obligation of a representative of the licensee under the financial services law, so far as it relates to provisions of this Act or the ASIC Act referred to in paragraphs (a) , (b) , (c) and (d) of the definition of financial services law in section 761A .
912D(4)
For the purposes of this section, a breach of a core obligation is taken to be significant if: (a) the breach is constituted by the commission of an offence under any law and the commission of the offence is punishable on conviction by a penalty that may include imprisonment for a maximum period of:
(i) if the offence involves dishonesty - 3 months or more; or
(b) the breach is constituted by the contravention of a civil penalty provision under any law, other than a civil penalty provision prescribed by the regulations for the purposes of this paragraph; or (c) the breach is constituted by a contravention of subsection 1041H(1) of this Act or subsection 12DA(1) of the ASIC Act (misleading or deceptive conduct in relation to a financial product or a financial service); or (d) the breach results, or is likely to result, in material loss or damage to:
(ii) in any other case - 12 months or more; or
(i) in the case of a managed investment scheme - a member or members of the scheme; or
(ii) in the case of a superannuation entity - a member or members of the entity; or
(e) any other circumstances prescribed by the regulations for the purposes of this paragraph exist.
(iii) in all cases - a person or persons to whom the financial services licensee or a representative of the financial services licensee provides a financial product or a financial service as a wholesale or retail client; or
912D(5)
Otherwise, for the purposes of this section, a breach of a core obligation is significant having regard to the following: (a) the number or frequency of similar breaches; (b) the impact of the breach on the financial services licensee ' s ability to provide financial services covered by the licence; (c) the extent to which the breach indicates that the financial services licensee ' s arrangements to ensure compliance with those obligations are inadequate; (d) any other matters prescribed by regulations made for the purposes of this paragraph.
912D(6)
Regulations for the purposes of paragraph (4)(b) may prescribe a civil penalty provision to the extent that it relates to the following: (a) contraventions of specified provisions; (b) specified matters.
CCH note - modifying legislative instruments: Section 912D is modified by the following legislative instruments that commenced or were amended on or after 1 January 2022: the ASIC Corporations (Incidental Retail Cover) Instrument 2022/716; the ASIC Corporations (Financial Requirements for Issuers of Retail OTC Derivatives) Instrument 2022/705; the ASIC Corporations (Financial Requirements for Responsible Entities, IDPS Operators and Corporate Directors of Retail CCIVs) Instrument 2023/647; the ASIC Corporations (Financial Requirements for Custodial or Depository Service Providers) Instrument 2023/648; the ASIC Corporations (Investor Directed Portfolio Services) Instrument 2023/669; the ASIC Corporations and Credit (Breach Reporting - Reportable Situations) Instrument 2021/716 (as amended by ASIC Corporations (Amendment) Instrument 2024/554); and the ASIC Corporations and Credit (Breach Reporting - Reportable Situations) Instrument 2024/620.
For modifying legislative instruments or class orders before 1 January 2022, please consult the legislative instruments or class orders directly. These are reproduced in the regulatory-resources section of the company-law practice area in CCH iKnowConnect.
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