Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

PART 7.2A - SUPERVISION OF FINANCIAL MARKETS  

SECTION 798F  

798F   ASIC TO SUPERVISE FINANCIAL MARKETS  

ASIC has the function of supervising financial markets the operators of which are licensed under subsection 795B(1).

SECTION 798G   MARKET INTEGRITY RULES  

798G(1)    
ASIC may, by legislative instrument, make rules (the market integrity rules ) that deal with the following:

(a)    the activities or conduct of licensed markets;

(b)    the activities or conduct of persons in relation to licensed markets;

(c)    the activities or conduct of persons in relation to financial products traded on licensed markets.

Note: The market integrity rules will not apply in relation to all licensed markets: see subsection 798H(2) .

798G(2)    

Without limiting subsection (1) , the market integrity rules may:

(a)    provide for applications to be made to the Administrative Review Tribunal for review of decisions made under the rules; and

(b)    contain provisions that apply:

(i) in addition to the Administrative Review Tribunal Act 2024 ; or

(ii) instead of that Act; or

(iii) contrary to that Act.

798G(3)    
ASIC must not make a market integrity rule unless the Minister has consented, in writing, to the making of the rule.

Emergency rules

798G(4)    
Despite subsection (3) , ASIC may make a market integrity rule without the consent of the Minister if ASIC is of the opinion that it is necessary, or in the public interest, to protect people dealing in a financial product or class of financial products.

798G(5)    
However, if ASIC does so, ASIC must:

(a)    provide the Minister, on the following day, with a written explanation of the need for the rule; and

(b)    amend or revoke the rule in accordance with any written directions of the Minister.

Crisis resolution

798G(5A)    

Despite subsection (3) , ASIC may make a market integrity rule without the consent of the Minister if the Reserve Bank, under subsection 849AB(1) , requests ASIC to make the rule.

798G(5B)    

However, if ASIC does so, ASIC must provide the Minister, on the following day, with a copy of the request.

798G(5C)    

The Minister may, if the Minister considers it appropriate after being given the copy of the request, direct ASIC to vary or revoke the rule.

798G(5D)    

ASIC must comply with the direction given under subsection (5C) immediately.

Minister ' s instruments are not legislative instruments

798G(6)    
None of the following is a legislative instrument:

(a)    a consent given under subsection (3) ;

(b)    a direction given under paragraph (5)(b) ;

(c)    

a direction given under subsection (5C) .

SECTION 798H   COMPLYING WITH MARKET INTEGRITY RULES  

798H(1)    
The following entities must comply with the market integrity rules:

(a) operators of licensed markets;

(b) participants in licensed markets;

(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.

798H(2)    
Subsection (1) does not apply in relation to a financial market the operator of which is licensed under subsection 795B(2) (overseas markets).

798H(3)    

If there is an inconsistency between the market integrity rules and the derivative transaction rules or the derivative trade repository rules, the market integrity rules prevail to the extent of the inconsistency.

SECTION 798J   ASIC ' S DIRECTIONS POWER - PROTECTING PEOPLE DEALING IN FINANCIAL PRODUCTS  

798J(1)    
ASIC may, by written notice given to an entity, direct the entity:

(a)    to suspend dealings in a financial product or class of financial products; or

(b)    to take, or refrain from taking:

(i) any actions; or

(ii) one or more specified actions;

relating to dealings in a specified financial product or class of financial products;

if ASIC considers the direction is necessary, or in the public interest, to protect people dealing in the financial product or class of financial products.

798J(2)    
The direction:

(a)    must specify a reasonable time by which, or a reasonable period during which, it is to be complied with; and

(b)    must include the reasons for the direction; and

(c)    may deal with either or both of the matters in paragraphs (1)(a) and (b) .

Note: ASIC may also give directions to entities that are market licensees under section 794D . A failure to comply with a direction under that section is an offence: see subsection 1311(1) .

798J(3)    
The entity must comply with the direction (even if, under subsection 798JA(1) , the licensee has requested ASIC to refer the direction to the Minister).

798J(4)    
If the licensee fails to comply with the direction, ASIC may apply to the Court for, and the Court may make, an order that the licensee comply with the direction.

SECTION 798JA   MATTERS RELATING TO ASIC DIRECTIONS - PROTECTING PEOPLE DEALING IN FINANCIAL PRODUCTS  

Referrals to the Minister

798JA(1)    
If, at any time after an entity receives a direction under subsection 798J(1) , the entity requests in writing that ASIC refer the direction to the Minister, ASIC must do so immediately.

798JA(2)    
The Minister may, if the Minister considers it appropriate after being referred the direction, direct ASIC to vary or revoke the direction.

798JA(3)    
ASIC must comply with the direction given under subsection (2) immediately.

798JA(4)    
A direction given under subsection (2) is not a legislative instrument.

Variations and revocations

798JA(5)    
ASIC may vary or revoke a direction given under subsection 798J(1) :

(a)    in like manner; and

(b)    subject to like conditions, except if a condition is contrary to a direction given under subsection (2) of this section;

(see subsection 33(3) of the Acts Interpretation Act 1901 ).

Directions are not legislative instruments

798JA(6)    
A direction given under subsection 798J(1) is not a legislative instrument.

SECTION 798JB   ASIC ' S DIRECTIONS POWER - CRISIS RESOLUTION  

798JB(1)    
If the Reserve Bank, under subsection 849AB(1) , requests ASIC to:

(a)    give a direction to an entity under this subsection to suspend dealings in a financial product or class of financial products; or

(b)    give some other direction to an entity under this subsection in relation to dealings in a financial product or class of financial products;

ASIC may give the direction, in writing, to the entity.

Note: ASIC may also, at the request of the Reserve Bank, give directions to entities that are market licensees under section 794AA . A failure to comply with a direction under that section is an offence: see subsection 1311(1) .

798JB(2)    
The entity must comply with the direction.

798JB(3)    
If the entity fails to comply with the direction, ASIC may apply to the Court for, and the Court may make, an order that the entity comply with the direction.

SECTION 798JC   MATTERS RELATING TO ASIC DIRECTIONS - CRISIS RESOLUTION  

Variation or revocation

798JC(1)    
If the Reserve Bank, under subsection 849AB(1) , requests ASIC to vary a direction given to an entity under subsection 798JB(1) , ASIC may vary the direction by giving written notice to the entity.

798JC(2)    
ASIC may revoke a direction given to an entity under subsection 798JB(1) by giving written notice to the entity.

Directions are not legislative instruments

798JC(3)    
A direction given under subsection 798JB(1) , a variation under subsection (1) of this section, or a revocation under subsection (2) of this section is not a legislative instrument.

SECTION 798K   ALTERNATIVES TO CIVIL PROCEEDINGS  

798K(1)    
The regulations may provide for a person who is alleged to have contravened subsection 798H(1) (complying with market integrity rules) to do one or more of the following as an alternative to civil proceedings:

(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.

798K(2)    

The penalty payable under regulations made under paragraph (1)(a) in relation to an alleged contravention of a market integrity rule must not exceed:

(a) for an individual - 3,000 penalty units; and

(b) for a body corporate - 15,000 penalty units.

798K(3)    
Without limiting regulations that may be made under 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.

SECTION 798L   EXEMPTIONS AND MODIFICATIONS BY REGULATIONS  

798L(1)   [ Regulations may exempt or modify]  

The regulations may:

(a) exempt a person or class of persons from all or specified provisions of this Part; or

(b) exempt a financial market or class of financial markets from all or specified provisions of this Part; or

(c) provide that this Part applies in relation to a person or a financial market, or a class of persons or financial markets, as if specified provisions were omitted, modified or varied as specified in the regulations.

798L(2)   [ Part includes definitions]  

For the purpose of this section, the provisions of this Part include definitions in this Act, or in the regulations, as they apply to references in this Part.

SECTION 798M   EXEMPTIONS BY ASIC  

798M(1)    

ASIC may exempt a particular financial market, or class of financial markets, from all or specified provisions of this Part. An exemption may be unconditional, or subject to conditions specified in the exemption.

Note: The provisions of this Part include regulations made for the purposes of this Part (see section 761H ).

798M(2)    

ASIC may, at any time:

(a)    vary an exemption to:

(i) impose conditions, or additional conditions, on the exemption; or

(ii) vary or revoke any of the conditions on the exemption; or

(b)    revoke an exemption.

798M(3)    

However, ASIC may only take action under subsection (2) after:

(a)    giving notice, and an opportunity to make submissions on the proposed action, to the operator of each financial market known by ASIC to be covered by the exemption; and

(b)    if the exemption covers a class of financial markets - a notice has been published on ASIC ' s website allowing a reasonable period within which the operator of each financial market covered by the exemption may make submissions on the proposed action, and that period has ended.

798M(4)    
If an exemption is expressed to apply in relation to a class of financial markets (whether or not it is also expressed to apply in relation to one or more financial markets otherwise than by reference to membership of a class), then the exemption, and any variation or revocation of the exemption, is a legislative instrument.

798M(5)    

If subsection (4) does not apply to an exemption, then the exemption, and any variation or revocation of the exemption, must be in writing and ASIC must publish notice of it on ASIC ' s website.