Financial Sector Legislation Amendment (Review of Prudential Decisions) Act 2008 (25 of 2008)

Schedule 1   Court power of disqualification etc.

Part 1   Amendments commencing on Royal Assent

Superannuation Industry (Supervision) Act 1993

57   After section 126F

Insert:

Subdivision B - Disqualification by the Federal Court of Australia

126G Application of this Subdivision

This Subdivision applies to the extent that the Regulator is APRA.

126H Court power of disqualification

(1) On application by the Regulator, the Federal Court of Australia may, by order, disqualify an individual from being or acting as a person referred to in subsection (2), for a period that the Court considers appropriate, if the Court is satisfied:

(a) as mentioned in subsection (3), (4) or (5); and

(b) that the disqualification is justified.

Note: For offences relating to disqualified persons, see Subdivision C.

(2) For the purposes of subsection (1), the Court may disqualify an individual from being or acting as:

(a) a trustee of:

(i) a particular superannuation entity; or

(ii) a class of superannuation entities; or

(iii) any superannuation entity; or

(b) a responsible officer of:

(i) a particular body corporate that is a trustee, an investment manager or a custodian of a superannuation entity; or

(ii) a class of bodies corporate that are trustees, investment managers or custodians of superannuation entities; or

(iii) any body corporate that is a trustee, investment manager or custodian of a superannuation entity.

(3) The Court may disqualify an individual, in accordance with subsection (1), if satisfied:

(a) that the individual has contravened this Act or the Financial Sector (Collection of Data) Act 2001 on one or more occasions; and

(b) that the nature or seriousness of the contravention or contraventions, or the number of contraventions, provides grounds for disqualifying the individual.

(4) The Court may disqualify an individual, in accordance with subsection (1), who is, or was, a responsible officer of a trustee, investment manager or custodian (the body corporate ) if satisfied that:

(a) the body corporate has contravened this Act or the Financial Sector (Collection of Data) Act 2001 on one or more occasions; and

(b) at the time of one or more of the contraventions, the individual was a responsible officer of the body corporate; and

(c) in respect of the contravention or contraventions that occurred while the individual was a responsible officer of the body corporate - the nature or seriousness of it or them, or the number of them, provides grounds for the disqualification of the individual.

(5) The Court may disqualify an individual, in accordance with subsection (1), if satisfied that the individual is otherwise not a fit and proper person to be a person referred to in subsection (2).

(6) In deciding whether it is satisfied as mentioned in subsection (3), (4) or (5), the Court may take into account:

(a) any matters specified in the regulations for the purposes of this paragraph; and

(b) any other matters the Court considers relevant.

(7) In deciding whether the disqualification is justified as mentioned in paragraph (1)(b), the Court may have regard to:

(a) the individual's conduct in relation to the management, business or property of any corporation; and

(b) any other matters the Court considers relevant.

(8) As soon as practicable after the Court disqualifies an individual under this section, the Regulator must cause particulars of the disqualification to which the notice relates:

(a) to be given:

(i) if the individual is, or is acting as, a trustee of a superannuation entity - to the entity concerned; or

(ii) if the individual is, or is acting as, a responsible officer of a body corporate that is a trustee, an investment manager or a custodian of a superannuation entity - to the body corporate concerned; and

(b) to be published in the Gazette.

126J Court power to revoke or vary a disqualification etc.

(1) A disqualified person, or the Regulator, may apply to the Federal Court of Australia for:

(a) if an individual is a disqualified person only because he or she was disqualified under section 126H - a variation or a revocation of the order made under that section; or

(b) otherwise - an order that the person is not a disqualified person.

(2) If the Court revokes an order under paragraph (1)(a) or makes an order under paragraph (1)(b), then, despite section 120, the person is not a disqualified person .

(3) At least 21 days before commencing the proceedings, written notice of the application must be lodged:

(a) if the disqualified person makes the application - by the person with the Regulator; or

(b) if the Regulator makes the application - by the Regulator with the disqualified person.

(4) An order under paragraph (1)(b) may be expressed to be subject to exceptions and conditions determined by the Court.

Subdivision C - Offences relating to disqualified persons

126K Disqualified persons not to be trustees, investment managers or custodians of superannuation entities

(1) A person commits an offence if:

(a) the person is a disqualified person; and

(b) the person knows he or she is a disqualified person; and

(c) the person is or acts as a trustee, investment manager or custodian of a superannuation entity; and

(d) for a person who is an individual and who is a disqualified person only because he or she was disqualified under section 126H - the person is disqualified from being or acting as a trustee of that superannuation entity.

Penalty: Imprisonment for 2 years.

(2) A person commits an offence if:

(a) the person is a disqualified person; and

(b) the person knows he or she is a disqualified person; and

(c) the person is or acts as a trustee, investment manager or custodian of a superannuation entity; and

(d) for a person who is an individual and who is a disqualified person only because he or she was disqualified under section 126H - the person is disqualified from being or acting as a trustee of that superannuation entity.

Penalty: 60 penalty units.

(3) Subsection (2) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code.

(4) A person commits an offence if:

(a) the person is a disqualified person; and

(b) the person knows he or she is a disqualified person; and

(c) the person is or acts as a responsible officer of a body corporate that is a trustee, investment manager or custodian of a superannuation entity; and

(d) for a person who is an individual and who is a disqualified person only because he or she was disqualified under section 126H - the person is disqualified from being or acting as that responsible officer.

Penalty: Imprisonment for 2 years.

(5) A person commits an offence if:

(a) the person is a disqualified person; and

(b) the person knows he or she is a disqualified person; and

(c) the person is or acts as a responsible officer of a body corporate that is a trustee, investment manager or custodian of a superannuation entity; and

(d) for a person who is an individual and who is a disqualified person only because he or she was disqualified under section 126H - the person is disqualified from being or acting as that responsible officer.

Penalty: 60 penalty units.

(6) Subsection (5) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code.

(7) A person commits an offence if:

(a) the person is a trustee of a superannuation entity; and

(b) the person is or becomes a disqualified person; and

(c) the person does not tell the Regulator in writing immediately.

Penalty: 50 penalty units.

(8) Subsection (7) is an offence of strict liability.

Note 1: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

Note 2: For strict liability , see section 6.1 of the Criminal Code.