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 7.3A - CS SERVICES  

Division 1 - Preliminary  

SECTION 828   MEANING OF CS SERVICE  

828(1)    
A CS service is a service that can only be provided if it has access to a clearing and settlement facility, or to data used in the operation of a clearing and settlement facility.

828(2)    
The operation of a clearing and settlement facility is taken to be the provision of a CS service .

Division 2 - Regulation of CS services: CS services rules  

Subdivision A - Power to make CS services rules  

SECTION 828A   CS SERVICES RULES  

828A(1)    
ASIC may, by legislative instrument, make rules (the CS services rules ) that deal with the following:

(a)    the activities, conduct or governance of CS facility licensees, and associated entities of CS facility licensees, in relation to CS services;

(b)    if regulations made for the purposes of this paragraph specify other persons - the activities, conduct or governance of those persons in relation to CS services;

(c)    matters that are incidental to the matters mentioned in paragraphs (a) and (b) .

828A(2)    
Without limiting the scope of subsection (1) , the rules may deal with the following:

(a)    the specification of persons who are required to comply with requirements imposed by the rules;

(b)    for the purposes of subsection 822A(1) - matters with which the operating rules of a licensed CS facility must deal, in relation to CS services;

(c)    for the purposes of subsection 822A(2) - matters in respect of which a licensed CS facility must have written procedures, in relation to CS services;

(d)    for the purposes of subsection 822E(4) - matters to which the Minister must have regard, as mentioned in that subsection, in relation to CS services.

828A(3)    
For the purposes of this section, governance of a person may be in relation to CS services even if there only an indirect relationship between the governance and CS services.

828A(4)    
Despite subsection (1) , the rules cannot provide for matters in relation to a clearing and settlement facility that is exempt from the operation of Part 7.3 because of an exemption under section 820C .

SECTION 828B   CS SERVICES IN RELATION TO WHICH RULES MAY IMPOSE REQUIREMENTS  

Requirements can only be imposed in relation to CS services covered by a determination under this section

828B(1)    
The CS services rules cannot impose requirements in relation to CS services unless the CS services are covered by a determination under this section.

Minister may determine classes of CS services

828B(2)    
For the purposes of subsection (1) , the Minister may, by legislative instrument, make a determination specifying one or more classes of CS services.

Making determinations by reference to matters

828B(3)    
A determination under subsection (2) may specify a class of CS services by reference to any of the following matters:

(a)    CS facilities to which the CS services have access;

(b)    CS facilities, where data to which the CS services have access is used in the operation of the CS facilities;

(c)    financial products to which the CS services relate.

828B(4)    
Subsection (3) does not limit:

(a)    the matters by reference to which a determination under subsection (2) may specify a class of CS services; and

(b)    the operation of subsection 13(3) of the Legislation Act 2003 .

Making determinations: matters to which the Minister has regard

828B(5)    
In considering whether to make a determination under subsection (2) , the Minister:

(a)    must have regard to:

(i) the likely effect on the Australian economy, and on the efficiency, integrity and stability of the Australian financial system, of making the determination; and

(ii) the likely regulatory impact of making the determination; and

(iii) the likely effect of making the determination on the safety, fairness and effectiveness of competition in the provision of CS services; and

(b)    

must have regard to the matters (if any) raised by ASIC, the ACCC or the Reserve Bank in advice provided under subsection (6) in relation to the determination; and

(c)    may have regard to any other matters that the Minister considers relevant.

Note: Matters that the Minister may have regard to under paragraph (c) may, for example, include any relevant international standards and international commitments.

ASIC, ACCC or Reserve Bank may advise Minister

828B(6)    

ASIC, the ACCC or the Reserve Bank may (on its own initiative) and must (at the request of the Minister):

(a)    consider whether a determination should be made under subsection (2) specifying one or more particular classes of CS services; and

(b)    advise the Minister accordingly.

Amendment and revocation of determinations

828B(7)    
The Minister may amend or revoke a determination under subsection (2) in like manner and subject to like conditions (see subsections 33(3) and (3AA) of the Acts Interpretation Act 1901 ).

Subdivision B - Compliance with CS services rules  

SECTION 828C  

828C   OBLIGATION TO COMPLY WITH CS SERVICES RULES  

A person must comply with provisionsof the CS services rules that apply to the person.

Note 1: This section is a civil penalty provision (see section 1317E ). For relief from liability to a civil penalty relating to this section, see section 1317S .

Note 2: If there is an inconsistency between the standards determined under section 827D and the CS services rules, the standards prevail: see subsection 827D(2A) .

SECTION 828D   OBLIGATION TO NOTIFY ASIC IN RESPECT OF BREACH  

828D(1)    
A person must give written notice to ASIC, as soon as practicable, if the person becomes aware that the person may no longer be able to meet, or has breached, an obligation under section 828C .

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

828D(2)    
A person contravenes this subsection if the person contravenes subsection (1) .

Note: This subsection is a civil penalty provision (see section 1317E ).

828D(3)    
If ASIC receives a notice under subsection (1) , ASIC may give the Minister advice about the matter to which the notice relates.

SECTION 828E   ALTERNATIVES TO CIVIL PROCEEDINGS  

828E(1)    
The regulations may provide for a person who is alleged to have contravened section 828C 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.

828E(2)    
The penalty payable under regulations made under paragraph (1)(a) in relation to an alleged contravention of a CS services rule must not exceed:

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

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

828E(3)    
Without limiting regulations that may be made for the purpose 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.

SECTION 828F  

828F   FAILURE TO COMPLY WITH CS SERVICES RULES DOES NOT INVALIDATE TRANSACTION ETC.  

A failure, in relation to a transaction, to comply with a requirement of the CS services rules does not invalidate the transaction or affect any rights or obligations arising under, or relating to, the transaction.

Subdivision C - Power of ASIC to give directions etc.  

SECTION 828G   ASIC ' S POWER TO GIVE DIRECTIONS TO PERSON NOT COMPLYING WITH OBLIGATIONS  

828G(1)    
If ASIC considers that a person is not complying, or is not likely to comply, with its obligations under the CS services rules, ASIC may give the person a direction, in writing, to do specified things that ASIC believes will promote compliance by the person with those obligations.

828G(2)    
When ASIC gives the person the direction, ASIC must also give the person a statement, in writing, setting out the reasons for giving the direction.

828G(3)    
The direction has effect until the earlier of the following times:

(a)    the time ASIC revokes the direction under subsection (7) ;

(b)    the end of the period specified in the direction as the period during which the direction is effective.

828G(4)    
While the direction has effect, the person must comply with the direction.

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

828G(5)    
If the person fails to comply with the direction, ASIC may apply to the Court for, and the Court may make, an order that the person comply with the direction.

828G(6)    
ASIC may vary the direction by giving written notice to the person.

828G(7)    
ASIC may revoke the direction by giving written notice to the person.

Subdivision D - The process of making CS services  

SECTION 828H  

828H   MATTERS TO WHICH ASIC MUST HAVE REGARD WHEN MAKING RULES  

In considering whether to make a CS services rule, ASIC:

(a)    must have regard to:

(i) the likely effect of the proposed rule on the Australian economy, and on the efficiency, integrity and stability of the Australian financial system; and

(ii) the likely regulatory impact of the proposed rule; and

(iii) the likely effect of the proposed rule on the safety, fairness and effectiveness of competition in the provision of CS services; and

(iv) if the proposed rule will impose requirements in relation to a CS service - the structure of the market for the provision of the CS service; and

(b)    

must have regard to the matters (if any) raised by the ACCC or the Reserve Bank in consultations mentioned in paragraph 828J(1)(b) ; and

(c)    may have regard to any other matters that ASIC considers relevant.

Note: Matters that ASIC may have regard to under paragraph (c) may, for example, include any relevant international standards and international commitments.

SECTION 828J   ASIC TO CONSULT BEFORE MAKING RULES  

828J(1)    
ASIC must not make a CS services 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 ACCC;

(ii) the Reserve Bank;

(iii) any other person or body as required by regulations made for the purpose of this subparagraph.

Note: In some situations, consultation is not required: see section 828L .

828J(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.

828J(3)    
A failure to consult as required by subsection (1) does not invalidate a CS services rule.

SECTION 828K   MINISTERIAL CONSENT TO RULES REQUIRED  

828K(1)    
ASIC must not make a CS services rule unless the Minister has consented, in writing, to the making of the rule.

Note: In some situations, consent is not required: see section 828L .

828K(2)    
A consent under subsection (1) is not a legislative instrument.

SECTION 828L   EMERGENCY RULES: CONSULTATION AND CONSENT NOT REQUIRED  

828L(1)    
ASIC may make a CS services rule without consulting as required by section 828J , and without the consent of the Minister as required by section 828K , 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)    safety, fairness and effective competition in the provision of CS services.

828L(2)    
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.

828L(3)    
A direction under paragraph (2)(b) is not a legislative instrument.

828L(4)    

ASIC must not make a CS services rule in accordance with subsection (1) unless ASIC has consulted the Reserve Bank about the proposed rule.

828L(5)    
A failure to consult as required by subsection (4) does not invalidate a CS services rule.

SECTION 828M   AMENDMENT AND REVOCATION OF CS SERVICES RULES  

828M(1)    
ASIC may amend or revoke a CS services rule in like manner and subject to like conditions (see subsections 33(3) and (3AA) of the Acts Interpretation Act 1901 ).

828M(2)    
However, the requirements of sections 828H , 828J and 828K do not apply in relation to an amendment or revocation pursuant to a direction by the Minister under paragraph 828L(2)(b) .

Division 3 - Other provisions  

SECTION 828N  

828N   ASIC MAY GIVE ADVICE TO MINISTER  

ASIC may give advice to the Minister in relation to:

(a)    any matter in respect of which the Minister has a discretion under this Part; or

(b)    any other matter concerning the CS services rules.

Note: In some cases, the Minister must have regard to ASIC ' s advice: see paragraph 827A(2)(h) .

SECTION 828P  

828P   ACCC MAY GIVE ADVICE TO MINISTER  

The ACCC may give advice to the Minister in relation to any matter concerning the CS services rules.

Note: In some cases, the Minister must have regard to the ACCC ' s advice: see paragraph 827A(2)(h) .

SECTION 828Q  

828Q   RESERVE BANK MAY GIVE ADVICE TO MINISTER  

The Reserve Bank may give advice to the Minister in relation to:

(a)    any matter in respect of which the Minister has a discretion under this Part; or

(b)    any other matter concerning the CS services rules.

Note: In some cases, the Minister must have regard to the Reserve Bank ' s advice: see paragraph 827A(2)(h) .

SECTION 828R   EXEMPTIONS BY THE REGULATIONS OR BY ASIC  

828R(1)    
The provisions covered by this section are:

(a)    the following provisions:

(i) the provisions of this Part;

(ii) the provisions of regulations made for the purposes of provisions of this Part;

(iii) the provisions of rules made under Division 2 ; and

(b)    definitions in this Act, or in the regulations, as they apply to references in provisions referred to in paragraph (a) .

828R(2)    
The regulations, or ASIC by written instrument, may exempt a person or class of persons from all or specified provisions covered by this section.

828R(3)    
An exemption may apply unconditionally or subject to specified conditions. A person to whom a condition specified in an exemption applies must comply with the condition. The Court may, on application by ASIC, order the person to comply with the condition in a specified way.

828R(4)    
An exemption by ASIC is a legislative instrument if the exemption is expressed to apply in relation to a class of persons, (whether or not it is also expressed to apply in relation to one or more persons identified otherwise than by reference to membership of a class).

828R(5)    
If subsection (4) does not apply to an exemption by ASIC, the exemption is a notifiable instrument.

828R(6)    
If there is an inconsistency between:

(a)    an exemption prescribed by regulations made for the purposes of subsection (2) ; and

(b)    an exemption by ASIC under that subsection;

(including in relation to any conditions specified by ASIC), the regulations prevail to the extent of the inconsistency.