Commonwealth Government Securities Legislation Amendment (Retail Trading) Act 2012 (155 of 2012)

Schedule 1   Retail trade in Commonwealth Government securities

Corporations Act 2001

14   After Division 5B of Part 7.9

Insert:

Division 5C - Information about CGS depository interests

1020AG Jurisdictional scope of Division

(1) Section 1020AI applies only in relation to recommendations received in this jurisdiction.

(2) The regulations may make provision dealing with the jurisdictional scope of some or all of the other provisions of this Division. The other provisions of this Division have effect subject to any such regulations.

1020AH Definitions

In this Division:

CGS depository interest information website means a website that is prescribed by the regulations for the purposes of this definition.

information statement for a class of CGS depository interests means a document that:

(a) contains a statement that the document is an information statement for that class for the purposes of this Division; and

(b) contains information about all CGS depository interests of that class (whether or not it also contains information about CGS depository interests of another class); and

(c) is prepared by the Commonwealth; and

(d) is published on the CGS depository interest information website.

regulated person , in relation to a CGS depository interest, means:

(a) an issuer of the CGS depository interest; or

(b) any financial services licensee; or

(c) any authorised representative of a financial services licensee; or

(d) any person who is not required to hold an Australian financial services licence because the person is covered by:

(i) paragraph 911A(2)(j); or

(ii) an exemption in regulations made for the purposes of paragraph 911A(2)(k); or

(iii) an exemption specified by ASIC for the purposes of paragraph 911A(2)(l); or

(e) any person who is required to hold an Australian financial services licence but who does not hold such a licence.

1020AI Requirement to give information statements for CGS depository interest if recommending acquisition of interest

(1) A regulated person must give a person (the client ) each information statement for a class of CGS depository interests if:

(a) the regulated person provides financial product advice to the client that consists of, or includes, a recommendation that the client acquire a CGS depository interest of that class; and

(b) the financial product advice is provided to the client as a retail client; and

(c) the financial product advice is personal advice to the client.

Each information statement must be given at or before the time when the regulated person provides the advice and must be given in accordance with this Division.

Note: If the recommendation is to acquire CGS depository interests of a class for which there is an information statement and that is a subset of a wider class of CGS depository interests for which there is another information statement, the regulated person must give the client both information statements.

(2) However, the regulated person does not have to give the client an information statement for a class of CGS depository interests if:

(a) the client has already received that statement; or

(b) the regulated person reasonably believes that the client has received that statement.

Strict liability offence of failing to give statement

(3) A regulated person commits an offence if:

(a) the regulated person is required by this section to give another person an information statement for a class of CGS depository interests; and

(b) the regulated person does not give the other person, in accordance with section 1020AK, that statement by the time the regulated person is required to do so.

Note: A defendant bears an evidential burden in relation to the matter in subsection (2). See subsection 13.3(3) of the Criminal Code.

(4) An offence based on subsection (3) is an offence of strict liability.

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

Ordinary offence of failing to give statement

(5) A regulated person commits an offence if:

(a) the regulated person is required by this section to give another person an information statement for a class of CGS depository interests; and

(b) the regulated person does not give the other person, in accordance with section 1020AK, that statement by the time the regulated person is required to do so.

Note: A defendant bears an evidential burden in relation to the matter in subsection (2).

Defence for authorised representative

(6) In any proceedings against an authorised representative of a financial services licensee for an offence based on subsection (3) or (5), it is a defence if:

(a) the licensee had provided the representative with information or instructions about the giving of information statements for a class of CGS depository interests; and

(b) the representative’s failure to give an information statement for that class occurred because the representative was acting in reliance on that information or those instructions; and

(c) the representative’s reliance on that information or those instructions was reasonable.

Note: A defendant bears an evidential burden in relation to the matters in subsection (6). See subsection 13.3(3) of the Criminal Code.

Offence of failing to ensure authorised representative gives statement

(7) A financial services licensee commits an offence if the licensee does not take reasonable steps to ensure that an authorised representative of the licensee complies with the representative’s obligations under this section to give each information statement for a class of CGS depository interests as and when required by this section.

1020AJ Information statement given must be up to date

A regulated person must not, in purported compliance with this Division, give a person at a time a document that:

(a) purports to be an information statement for a class of CGS depository interests; and

(b) is not an information statement for that class published at that time on the CGS depository interest information website.

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

1020AK How an information statement is to be given

(1) An information statement for a class of CGS depository interests:

(a) must be:

(i) given to a person, or the person’s agent, personally; or

(ii) sent to the person, or the person’s agent, at an address (including an electronic address) or fax number nominated by the person or the agent; and

(b) may be printed or be in electronic form.

(2) For the purposes of this section, the information statement is sent to a person at an address if, and only if:

(a) the information statement is sent to the address; and

(b) either:

(i) the envelope or other container in which the information statement is sent; or

(ii) the message that accompanies the information statement;

is addressed to the person.

(3) The information statement may be given or sent to the person’s agent only if the agent is not acting as the person’s agent in one of the following capacities:

(a) a financial services licensee;

(b) an authorised representative of a financial services licensee;

(c) a person who is not required to hold an Australian financial services licence because the person is covered by:

(i) paragraph 911A(2)(j); or

(ii) an exemption in regulations made for the purposes of paragraph 911A(2)(k); or

(iii) an exemption specified by ASIC for the purposes of paragraph 911A(2)(l);

(d) a person who is required to hold an Australian financial services licence but who does not hold such a licence;

(e) an employee, director or other representative of a person referred to in paragraph (a), (b), (c) or (d).

(4) The regulations may provide for other ways of giving an information statement for a class of CGS depository interests.

(5) The regulations may specify requirements as to the manner in which an information statement for a class of CGS depository interests may be given to a person. The giving of the information statement is not effective unless those requirements are satisfied.

1020AL Civil action for loss or damage

(1) A person (the client ) who suffers loss or damage for a reason described in column 1 of an item of the table may recover the amount of the loss or damage by action begun against a person indicated in column 2 of that item within 6 years after the loss or damage was suffered.

(2) A financial services licensee is responsible for the conduct of an authorised representative of the licensee for the purposes of item 1 of the table in subsection (1), and the authorised representative is not liable under that item, if:

(a) the authorised representative is not an authorised representative of any other financial services licensee; or

(b) the licensee is responsible (alone or jointly and severally with other financial services licensees) for the authorised representative’s conduct under section 917C, disregarding sections 917D and 917F.

(3) This section does not affect any liability that a person has under any other law.

Other orders

(4) The court dealing with an action under subsection (1) may, in addition to awarding loss or damage under that subsection and if it thinks it necessary in order to do justice between the parties:

(a) make an order declaring void a contract entered into by the client referred to in that subsection for or relating to a financial product or a financial service; and

(b) if it makes an order under paragraph (a) - make such other order or orders as it thinks are necessary or desirable because of that order.

(5) Without limiting paragraph (4)(b), the orders that may be made under that paragraph include (but are not limited to) an order for the return of money paid by a person, and/or an order for payment of an amount of interest specified in, or calculated in accordance with, the order.