Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 (87 of 2024)
Schedule 2 Financial market infrastructure: new and enhanced regulatory powers
Part 7 Rule-making power for CS facility licensees
Corporations Act 2001
65 After Division 3 of Part 7.3
Insert:
Division 3A - CS facility rules
Subdivision A - Power to make CS facility rules
826H CS facility rules
ASIC may, by legislative instrument, make rules (the CS facility rules ) for the purposes of promoting the provision of fair and effective services by licensed CS facilities.
Subdivision B - Compliance with CS facility rules
826J Complying with CS facility rules
(1) The following entities must comply with the CS facility rules:
(a) operators of licensed CS facilities;
(b) participants in licensed CS facilities;
(c) entities prescribed by the regulations for the purposes of this paragraph.
Note: This subsection is a civil penalty provision: see section 1317E. For relief from liability to a civil penalty relating to this subsection, see section 1317S.
(2) Subsection (1) does not apply in relation to a clearing and settlement facility the operator of which is licensed under subsection 824B(2) (overseas clearing and settlement facilities).
826K Inconsistency with other instruments
Inconsistency with other rules
(1) If there is an inconsistency between the CS facility rules and any of the following rules:
(a) the CS services rules;
(b) the derivative transaction rules;
(c) the derivative trade repository rules;
the CS facility rules prevail to the extent of the inconsistency.
Inconsistency with the financial stability standards
(2) If the Reserve Bank considers there is an inconsistency between a CS facility rule and one or more standards determined under section 827D, the Reserve Bank must refer the matter to the Minister.
Note: If there is an inconsistency between the CS facility rules and standards determined under section 827D, the standards prevail: see subsection 827D(2A).
(3) The Minister may, if the Minister considers it appropriate after being referred the matter, direct ASIC to vary or revoke the CS facility rule.
(4) ASIC must comply with the direction given under subsection (3) immediately.
(5) A direction given under subsection (3) is not a legislative instrument.
826L Alternatives to civil proceedings
(1) The regulations may provide for a person who is alleged to have contravened subsection 826J(1) (complying with CS facility rules) to be not liable to civil proceedings in relation to that alleged contravention if the person instead does one or more of the following in relation to that alleged contravention:
(a) pay a penalty to the Commonwealth;
(b) undertake or institute remedial measures (including education programs);
(c) accept sanctions other than the payment of a penalty to the Commonwealth;
(d) enter into a legally enforceable undertaking.
(2) The penalty payable under regulations made for the purposes of paragraph (1)(a) in relation to an alleged contravention of a CS facility rule must not exceed:
(a) for an individual - 3,000 penalty units; and
(b) for a body corporate - 15,000 penalty units.
(3) Without limiting regulations that may be made for the purposes of paragraph (1)(d), those regulations may provide for one or more of the following kinds of undertakings:
(a) an undertaking to take specified action within a specified period;
(b) an undertaking to refrain from taking specified action;
(c) an undertaking to pay a specified amount within a specified period to the Commonwealth or to some other specified person.
Subdivision C - The process of making CS facility rules
826M ASIC to consult before making rules
(1) ASIC must not make a CS facility rule unless ASIC:
(a) has consulted the public about the proposed rule; and
(b) has also consulted the following about the proposed rule:
(i) the Reserve Bank;
(ii) any other person or body prescribed by the regulations for the purposes of this subparagraph.
Note: In some situations, consultation is not required: see sections 826P and 826Q.
(2) Without limiting the ways in which ASIC may comply with the obligation in paragraph (1)(a) to consult the public about a proposed rule, ASIC is taken to comply with that obligation if ASIC, on its website:
(a) makes the proposed rule, or a description of the content of the proposed rule, available; and
(b) invites the public to comment on the proposed rule.
(3) A failure to consult as required by subsection (1) does not invalidate a CS facility rule.
826N Ministerial consent to rules required
(1) ASIC must not make a CS facility rule unless the Minister has consented, in writing, to the making of the rule.
Note: In some situations, consent is not required: see sections 826P and 826Q.
(2) A consent given under subsection (1) is not a legislative instrument.
826P Emergency rules - consultation and consent not required
(1) ASIC may, under section 826H, make a CS facility rule without consulting as required by section 826M, and without the consent of the Minister as required by subsection 826N(1), if ASIC is of the opinion that it is necessary, or in the public interest, to do so in order to protect:
(a) the Australian economy; or
(b) the efficiency, integrity and stability of the Australian financial system; or
(c) the provision of fair and effective services by licensed CS facilities.
(2) However, if ASIC does so, ASIC must, on the following day, provide the Minister and the Reserve Bank with a written explanation of the need for the rule.
(3) The Minister may, if the Minister considers it appropriate after being provided with the explanation, direct ASIC to vary or revoke the rule.
(4) ASIC must comply with the direction given under subsection (3) immediately.
(5) A direction given under subsection (3) is not a legislative instrument.
826Q Crisis resolution - consultation and consent not required
(1) ASIC may:
(a) under section 826H, make a CS facility rule; or
(b) under section 826R, vary a CS facility rule;
without consulting as required by section 826M, and without the consent of the Minister as required by subsection 826N(1), if the Reserve Bank, under subsection 849AB(1), requests ASIC to make the rule or variation.
(2) However, if ASIC does so, ASIC must, on the following day, provide the Minister with a copy of the request.
(3) The Minister may, if the Minister considers it appropriate after being provided with a copy of the request, direct ASIC to vary or revoke the rule.
(4) ASIC must comply with the direction given under subsection (3) immediately.
(5) A direction given under subsection (3) is not a legislative instrument.
826R Variation and revocation of rules
(1) ASIC may vary or revoke a CS facility rule in like manner and subject to like conditions (see subsection 33(3) of the Acts Interpretation Act 1901).
(2) However, the requirements of sections 826M and 826N do not apply in relation to a variation or revocation in accordance with a direction by the Minister under subsection 826K(3), 826P(3) or 826Q(3).
Subdivision D - Limitations
826S Regulations may limit how rules may deal with certain matters
The regulations may prescribe limits on:
(a) the extent to which, or the way in which, the CS facility rules may deal with matters permitted by Subdivision A; or
(b) the classes of persons on whom those rules may impose requirements; or
(c) the extent to which those rules may impose requirements (or certain kinds of requirements) on certain classes of persons.
Subdivision E - Exemptions
826T Provisions covered by this Subdivision
In this Subdivision, the provisions covered by this Subdivision are:
(a) the following provisions:
(i) the provisions of this Division;
(ii) the provisions of regulations made for the purposes of the provisions of this Division;
(iii) the provisions of the CS facility rules; and
(b) definitions in this Act, or in the regulations, as they apply to references in provisions referred to in paragraph (a).
826U Exemptions and modifications by regulations
(1) The regulations may:
(a) exempt a person or class of persons from all or specified provisions covered by this Subdivision; or
(b) exempt a clearing and settlement facility or class of clearing and settlement facilities from all or specified provisions covered by this Subdivision; or
(c) declare that provisions covered by this Subdivision apply in relation to:
(i) a person or a clearing and settlement facility; or
(ii) a class of persons or clearing and settlement facilities;
as if specified provisions were omitted, modified or varied as specified in the regulations.
(2) If there is an inconsistency between:
(a) an exemption prescribed by regulations made for the purposes of subsection (1); and
(b) an exemption by ASIC under section 820C;
(including in relation to any conditions specified by ASIC), the regulations prevail to the extent of the inconsistency.