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 7.10 - MARKET MISCONDUCT AND OTHER PROHIBITED CONDUCT RELATING TO FINANCIAL PRODUCTS AND FINANCIAL SERVICES  

Division 1 - Preliminary  

SECTION 1040A  

1040A   CONTENT OF PART  

This Part deals in Division 2 with various kinds of prohibited conduct, other than insider trading. The insider trading prohibitions are contained in Division 3 .

SECTION 1040B   TREAT CERTAIN INSTRUMENTS AS IF THEY WERE FINANCIAL PRODUCTS AND DIVISION 3 FINANCIAL PRODUCTS  

1040B(1)    
This Part applies to bank accepted bills, and to negotiable certificates of deposit, as if they were:

(a)    financial products; and

(b)    

Division 3 financial products.

1040B(2)    
If a term used in this Part is defined outside of this Part by reference to financial products, treat that term when used in this Part as if that reference to financial products included a reference to each of the following:

(a)    bank accepted bills;

(b)    negotiable certificates of deposit.

1040B(3)    
Subsections (1) and (2) do not, by implication, affect the interpretation of any other provision:

(a)    of this Act; or

(b)    of an instrument made under this Act.

Division 2 - The prohibited conduct (other than insider trading prohibitions)  

SECTION 1041A  

1041A   MARKET MANIPULATION  

A person must not take part in, or carry out (whether directly or indirectly and whether in this jurisdiction or elsewhere):

(a) a transaction that has or is likely to have; or

(b) 2 or more transactions that have or are likely to have;

the effect of:

(c) creating an artificial price for trading in financial products on a financial market operated in this jurisdiction; or

(d) maintaining at a level that is artificial (whether or not it was previously artificial) a price for trading in financial products on a financial market operated in this jurisdiction.

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

Note 2: This section is also a civil penalty provision (see section 1317E ). For relief from liability to a civil penalty relating to this section, see section 1317S .

SECTION 1041B   FALSE TRADING AND MARKET RIGGING - CREATING A FALSE OR MISLEADING APPEARANCE OF ACTIVE TRADING ETC.  

1041B(1)   [ False appearance of active trading]  

A person must not do, or omit to do, an act (whether in this jurisdiction or elsewhere) if that act or omission has or is likely to have the effect of creating, or causing the creation of, a false or misleading appearance:

(a) of active trading in financial products on a financial market operated in this jurisdiction; or

(b) with respect to the market for, or the price for trading in, financial products on a financial market operated in this jurisdiction.

Note 1: Failure to comply with this subsection is an offence ( see subsection 1311(1) ). For defences to a prosecution based on this subsection, see Division 4 .

Note 2: This subsection is also a civil penalty provision (see section 1317E ). For relief from liability to a civil penalty relating to this subsection, see Division 4 and section 1317S .

1041B(1A)   [ Application of Criminal Code]  

For the purposes of the application of the Criminal Code in relation to an offence based on subsection (1):

(a) intention is the fault element for the physical element consisting of doing or omitting to do an act as mentioned in that subsection; and

(b) recklessness is the fault element for the physical element consisting of having, or being likely to have, the effect of creating, or causing the creation of, a false or misleading appearance as mentioned in that subsection.

Note 1: For intention , see section 5.2 of the Criminal Code .

Note 2: For recklessness , see section 5.4 of the Criminal Code .

1041B(2)   [ Circumstances creating misleading appearance]  

For the purposes of subsection (1), a person is taken to have created a false or misleading appearance of active trading in particular financial products on a financial market if the person:

(a) enters into, or carries out, either directly or indirectly, any transaction of acquisition or disposal of any of those financial products that does not involve any change in the beneficial ownership of the products; or

(b) makes an offer (the regulated offer ) to acquire or to dispose of any of those financial products in the following circumstances:

(i) the offer is to acquire or to dispose of at a specified price; and

(ii) the person has made or proposes to make, or knows that an associate of the person has made or proposes to make:

(A) if the regulated offer is an offer to acquire - an offer to dispose of; or

(B) if the regulated offer is an offer to dispose of - an offer to acquire;

the same number, or substantially the same number, of those financial products at a price that is substantially the same as the price referred to in subparagraph (i).

Note: The circumstances in which a person creates a false or misleading appearance of active trading in particular financial products on a financial market are not limited to the circumstances set out in this subsection.

1041B(3)   [ No change to beneficial ownership]  

For the purposes of paragraph (2)(a), an acquisition or disposal of financial products does not involve a change in the beneficial ownership if:

(a) a person who had an interest in the financial products before the acquisition or disposal; or

(b) an associate of such a person;

has an interest in the financial products after the acquisition or disposal.

1041B(4)   [ Invitation or offer]  

The reference in paragraph (2)(a) to a transaction of acquisition or disposal of financial products includes:

(a) a reference to the making of an offer to acquire or dispose of financial products; and

(b) a reference to the making of an invitation, however expressed, that expressly or impliedly invites a person to offer to acquire or dispose of financial products.

SECTION 1041C   FALSE TRADING AND MARKET RIGGING - ARTIFICIALLY MAINTAINING ETC. TRADING PRICE  

1041C(1)   [ False transactions causing change]  

A person must not (whether in this jurisdiction or elsewhere) enter into, or engage in, a fictitious or artificial transaction or device if that transaction or device results in:

(a) the price for trading in financial products on a financial market operated in this jurisdiction being maintained, inflated or depressed; or

(b) fluctuations in the price for trading in financial products on a financial market operated in this jurisdiction.

Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1) ). For defences to a prosecution based on this subsection, see Division 4 .

Note 2: This subsection is also a civil penalty provision (see section 1317E ). For relief from liability to a civil penalty relating to this subsection, see Division 4 and section 1317S .

1041C(2)   [ Intention of parties]  

In determining whether a transaction is fictitious or artificial for the purposes of subsection (1), the fact that the transaction is, or was at any time, intended by the parties who entered into it to have effect according to its terms is not conclusive.

SECTION 1041D  

1041D   DISSEMINATION OF INFORMATION ABOUT ILLEGAL TRANSACTIONS  

A person must not (whether in this jurisdiction or elsewhere) circulate or disseminate, or be involved in the circulation or dissemination of, any statement or information to the effect that the price for trading in financial products on a financial market operated in this jurisdiction will, or is likely to, rise or fall, or be maintained, because of a transaction, or other act or thing done, in relation to those financial products, if:

(a) the transaction, or thing done, constitutes or would constitute a contravention of section 1041A , 1041B , 1041C , 1041E or 1041F ; and

(b) the person, or an associate of the person:

(i) has entered into such a transaction or done such an act or thing; or

(ii) has received, or may receive, directly or indirectly, a consideration or benefit for circulating or disseminating, or authorising the circulation or dissemination of, the statement or information.

Note 1: Failure to comply with this section is an offence (see subsection 1311(1) ). For defences to a prosecution based on this section, see Division 4 .

Note 2: This section is also a civil penalty provision (see section 1317E ). For relief from liability to a civil penalty relating to this section, see Division 4 and section 1317S .

SECTION 1041E   FALSE OR MISLEADING STATEMENTS  

1041E(1)   [ Requirements]  

A person must not (whether in this jurisdiction or elsewhere) make a statement, or disseminate information, if:

(a) the statement or information is false in a material particular or is materially misleading; and

(b) the statement or information is likely:

(i) to induce persons in this jurisdiction to apply for financial products; or

(ii) to induce persons in this jurisdiction to dispose of or acquire financial products; or

(iii) to have the effect of increasing, reducing, maintaining or stabilising the price for trading in financial products on a financial market operated in this jurisdiction; and

(c) when the person makes the statement, or disseminates the information:

(i) the person does not care whether the statement or information is true or false; or

(ii) the person knows, or ought reasonably to have known, that the statement or information is false in a material particular or is materially misleading.

Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1) ). For defences to a prosecution based on this subsection, see Division 4 .

Note 2: Failure to comply with this subsection may also lead to civil liability under section 1041I . For relief from liability under that section, see Division 4 .

1041E(2)   [ Physical element; fault element]  

For the purposes of the application of the Criminal Code in relation to an offence based on subsection (1), paragraph (1)(a) is a physical element, the fault element for which is as specified in paragraph (1)(c).

1041E(3)   [ Strict liability]  

For the purposes of an offence based on subsection (1), strict liability applies to subparagraphs (1)(b)(i), (ii) and (iii).

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

SECTION 1041F   INDUCING PERSONS TO DEAL  

1041F(1)    
A person must not, in this jurisdiction, induce another person to deal in financial products:

(a)    by making or publishing a statement, promise or forecast if the person knows, or is reckless as to whether, the statement is misleading, false or deceptive; or

(b)    by a dishonest concealment of material facts; or

(c)    by recording or storing information that the person knows to be false or misleading in a material particular or materially misleading if:

(i) the information is recorded or stored in, or by means of, a mechanical, electronic or other device; and

(ii) when the information was so recorded or stored, the person had reasonable grounds for expecting that it would be available to the other person, or a class of persons that includes the other person.

Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1) ). For defences to a prosecution based on this subsection, see Division 4 .

Note 2: Failure to comply with this subsection may also lead to civil liability under section 1041I . For relief from liability under that section, see Division 4 .

1041F(2)    
(Repealed by No 17 of 2019, s 3, Sch 1 [ 103] (effective 13 March 2019).)

1041F(3)    
This section applies in relation to the following conduct as if that conduct were dealing in financial products:

(a)    

applying to become a standard employer-sponsor of a superannuation entity;

(b)    

permitting a person to become a standard employer-sponsor of a superannuation entity;

(c)    

applying, on behalf of an employee (within the meaning of the Retirement Savings Accounts Act 1997 ), for the employee to become the holder of an RSA.

SECTION 1041G  

1041G   DISHONEST CONDUCT  

A person must not, in the course of carrying on a financial services business in this jurisdiction, engage in dishonest conduct in relation to a financial product or financial service.

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

Note 2: Failure to comply with this subsection may also lead to civil liability under section 1041I .

SECTION 1041H   MISLEADING OR DECEPTIVE CONDUCT (CIVIL LIABILITY ONLY)  

1041H(1)    
A person must not, in this jurisdiction, engage in conduct, in relation to a financial product or a financial service, that is misleading or deceptive or is likely to mislead or deceive.

Note 1: Failure to comply with this subsection is not an offence.

Note 2: Failure to comply with this subsection may lead to civil liability under section 1041I . For limits on, and relief from, liability under that section, see Division 4 .

1041H(2)    
The reference in subsection (1) to engaging in conduct in relation to a financial product includes (but is not limited to) any of the following:

(a)    dealing in a financial product;

(b)    

without limiting paragraph (a) :

(i) issuing a financial product;

(ii) publishing a notice in relation to a financial product;

(iii) making, or making an evaluation of, an offer under a takeover bid or a recommendation relating to such an offer;

(iv) applying to become a standard employer-sponsor of a superannuation entity;

(v) permitting a person to become a standard employer-sponsor of a superannuation entity;

(vi) a trustee of a superannuation entity dealing with a beneficiary of that entity as such a beneficiary;

(vii) a trustee of a superannuation entity dealing with an employer-sponsor or an associate (within the meaning of the Superannuation Industry (Supervision) Act 1993 ) of an employer-sponsor, of that entity as such an employer-sponsor or associate;

(viii) applying, on behalf of an employee (within the meaning of the Retirement Savings Accounts Act 1997 ), for the employee to become the holder of an RSA;

(ix) an RSA provider dealing with an employer (within the meaning of the Retirement Savings Accounts Act 1997 ), or an associate (within the meaning of that Act) of an employer, who makes an application, on behalf of an employee (within the meaning of that Act) of the employer, for the employee to become the holder of an RSA, as such an employer;

(x) carrying on negotiations, or making arrangements, or doing any other act, preparatory to, or in any way related to, an activity covered by any of subparagraphs (i) to (ix) .

1041H(3)    

If a person engages in conduct:

(a)    

that contravenes:

(i) section 670A (misleading or deceptive takeover document); or

(ii) section 728 (misleading or deceptive fundraising document); or

(iia) section 738Y (other liabilities relating to defective CSF offer documents); or

(iii) section 1021NA or 1021NB ; or

(b)    in relation to a disclosure document or statement within the meaning of section 953A ; or

(c)    in relation to a disclosure document or statement within the meaning of section 1022A ;

the person ' s engaging in that conduct does not contravene subsection (1) of this section.

1041H(4)    

If a disclosing entity engages in conduct that:

(a)    does not contravene subsection 674A(2) , but would contravene that subsection if paragraph 674A(2)(d) contained the same text as paragraph 674(2)(d) ; or

(b)    does not contravene subsection 675A(2) , but would contravene that subsection if paragraph 675A(2)(b) contained the same text as paragraph 675(2)(b) ; or

the disclosing entity ' s engaging in that conduct does not contravene subsection (1) of this section.

Note: The subsections mentioned in paragraphs (a) and (b) deal with continuous disclosure of information by disclosing entities.

1041H(5)    

For the purposes of subsections (3) and (4) , a person or disclosing entity engages in conduct that contravenes a provision even if engaging in the conduct does not constitute an offence, or lead to a liability, because of the availability of a defence.

SECTION 1041I   CIVIL ACTION FOR LOSS OR DAMAGE FOR CONTRAVENTION OF SECTIONS 1041E TO 1041H  

1041I(1)   [ Recovery for losses]  

A person who suffers loss or damage by conduct of another person that was engaged in in contravention of section 1041E , 1041F , 1041G or 1041H may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention, whether or not that other person or any person involved in the contravention has been convicted of an offence in respect of the contravention.

1041I(1A)   [ Limitation]  

Subsection (1) has effect subject to section 1044B .

Note: Section 1044B may limit the amount that the person may recover for a contravention of section 1041H (Misleading or deceptive conduct) from the other person or from another person involved in the contravention.

1041I(1B)   [ Proportionate liability]  

Despite subsection (1), if:

(a) a person (the claimant ) makes a claim under subsection (1) in relation to:

(i) economic loss; or

(ii) damage to property;

caused by conduct of another person (the defendant ) that was done in contravention of section 1041H; and

(b) the claimant suffered the loss or damage:

(i) as a result partly of the claimant's failure to take reasonable care; and

(ii) as a result partly of the conduct referred to in paragraph (a); and

(c) the defendant:

(i) did not intend to cause the loss or damage; and

(ii) did not fraudulently cause the loss or damage;

the damages that the claimant may recover in relation to the loss or damage are to be reduced to the extent to which the court thinks just and equitable having regard to the claimant's share in the responsibility for the loss or damage.

Note: Division 2A also applies proportionate liability to a claim for damages under this section for a contravention of section 1041H .

1041I(2)   [ Time limit]  

An action under subsection (1) may be begun at any time within 6 years after the day on which the cause of action arose.

1041I(3)   [ Liability not confined]  

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

1041I(4)   [ Relief from liability]  

Section 1317S (which provides for relief from liability) applies in relation to liability under subsection (1) as if:

(a) the sections referred to in subsection (1) were civil penalty provisions; and

(b) proceedings under subsection (1) were eligible proceedings.

Note: Relief from liability under this section may also be available (depending on the circumstances) under Division 4 .

SECTION 1041J  

1041J   SECTIONS OF THIS DIVISION HAVE EFFECT INDEPENDENTLY OF EACH OTHER  

Subject to any express provision to the contrary, the various sections in this Division have effect independently of each other, and nothing in any of the sections limits the scope or application of any of the other sections.

SECTION 1041K   DIVISION APPLIES TO CERTAIN CONDUCT TO THE EXCLUSION OF STATE FAIR TRADING ACTS PROVISIONS  

1041K(1)    
This section applies to conduct:

(a) that contravenes:

(i) section 670A (misleading or deceptive takeover document); or

(ii) section 728 (misleading or deceptive fundraising document); or

(iia) section 738Y (other liabilities relating to defective CSF offer documents); or

(iii) section 1021NA or 1021NB ; or

(b) that relates to a disclosure document or statement within the meaning of section 953A ; or

(c) that relates to a disclosure document or statement within the meaning of section 1022A .

For this purpose, conduct contravenes the provision even if the conduct does not constitute an offence, or does not lead to any liability, because of the availability of a defence.

1041K(2)    
This Division operates in relation to conduct to which this section applies to the exclusion of the provisions of the State Fair Trading Act of any State or Territory.

Division 2A - Proportionate liability for misleading and deceptive conduct  

SECTION 1041L   APPLICATION OF DIVISION  

1041L(1)   [ Misleading or deceptive conduct]  

This Division applies to a claim (an apportionable claim ) if the claim is a claim for damages made under section 1041I for:

(a) economic loss; or

(b) damage to property;

caused by conduct that was done in a contravention of section 1041H .

1041L(2)   [ Single cause of action]  

For the purposes of this Division, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind).

1041L(3)   [ ``concurrent wrongdoer'']  

In this Division, a concurrent wrongdoer , in relation to a claim, is a person who is one of 2 or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim.

1041L(4)   [ Limitation]  

For the purposes of this Division, apportionable claims are limited to those claims specified in subsection (1).

1041L(5)   [ Insolvency of concurrent wrongdoer]  

For the purposes of this Division, it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died.

SECTION 1041M   CERTAIN CONCURRENT WRONGDOERS NOT TO HAVE BENEFIT OF APPORTIONMENT  

1041M(1)   [ Intended or fraudulently caused loss]  

Nothing in this Division operates to exclude the liability of a concurrent wrongdoer (an excluded concurrent wrongdoer ) in proceedings involving an apportionable claim if:

(a) the concurrent wrongdoer intended to cause the economic loss or damage to property that is the subject of the claim; or

(b) the concurrent wrongdoer fraudulently caused the economic loss or damage to property that is the subject of the claim.

1041M(2)   [ Liability of excluded concurrent wrongdoer]  

The liability of an excluded concurrent wrongdoer is to be determined in accordance with the legal rules (if any) that (apart from this Division) are relevant.

1041M(3)   [ Liability of concurrent wrongdoer]  

The liability of any other concurrent wrongdoer who is not an excluded concurrent wrongdoer is to be determined in accordance with the provisions of this Division.

SECTION 1041N   PROPORTIONATE LIABILITY FOR APPORTIONABLE CLAIMS  

1041N(1)   [ Proportionate liability]  

In any proceedings involving an apportionable claim:

(a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss; and

(b) the court may give judgment against the defendant for not more than that amount.

1041N(2)   [ Multiple claims]  

If the proceedings involve both an apportionable claim and a claim that is not an apportionable claim:

(a) liability for the apportionable claim is to be determined in accordance with the provisions of this Division; and

(b) liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Division) are relevant.

1041N(3)   [ Contributory negligence]  

In apportioning responsibility between defendants in the proceedings:

(a) the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law; and

(b) the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings.

1041N(4)   [ Application]  

This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings.

1041N(5)   [ Defendant in proceedings]  

A reference in this Division to a defendant in proceedings includes any person joined as a defendant or other party in the proceedings (except as a plaintiff) whether joined under this Division, under rules of court or otherwise.

SECTION 1041O   DEFENDANT TO NOTIFY PLAINTIFF OF CONCURRENT WRONGDOER OF WHOM DEFENDANT AWARE  

1041O(1)   [ Written notification]  

If:

(a) a defendant in proceedings involving an apportionable claim has reasonable grounds to believe that a particular person (the other person ) may be a concurrent wrongdoer in relation to the claim; and

(b) the defendant fails to give the plaintiff, as soon as practicable, written notice of the information that the defendant has about:

(i) the identity of the other person; and

(ii) the circumstances that may make the other person a concurrent wrongdoer in relation to the claim; and

(c) the plaintiff unnecessarily incurs costs in the proceedings because the plaintiff was not aware that the other person may be a concurrent wrongdoer in relation to the claim;

the court hearing the proceedings may order that the defendant pay all or any of those costs of the plaintiff.

1041O(2)   [ Costs of proceedings]  

The court may order that the costs to be paid by the defendant be assessed on an indemnity basis or otherwise.

SECTION 1041P  

1041P   CONTRIBUTION NOT RECOVERABLE FROM DEFENDANT  
A defendant against whom judgment is given under this Division as a concurrent wrongdoer in relation to an apportionable claim:

(a) cannot be required to contribute to any damages or contribution recovered from another concurrent wrongdoer in respect of the apportionable claim (whether or not the damages or contribution are recovered in the same proceedings in which judgment is given against the defendant); and

(b) cannot be required to indemnify any such wrongdoer.

SECTION 1041Q   SUBSEQUENT ACTIONS  

1041Q(1)   [ Multiple split action]  

In relation to an apportionable claim, nothing in this Division or any other law prevents a plaintiff who has previously recovered judgment against a concurrent wrongdoer for an apportionable part of any damage or loss from bringing another action against any other concurrent wrongdoer for that damage or loss.

1041Q(2)   [ Recovery amount limited]  

However, in any proceedings in respect of any such action, the plaintiff cannot recover an amount of damages that, having regard to any damages previously recovered by the plaintiff in respect of the damage or loss, would result in the plaintiff receiving compensation for damage or loss that is greater than the damage or loss actually sustained by the plaintiff.

SECTION 1041R   JOINING NON-PARTY CONCURRENT WRONGDOER IN THE ACTION  

1041R(1)   [ Leave to join defendant]  

The court may give leave for any one or more persons to be joined as defendants in proceedings involving an apportionable claim.

1041R(2)   [ Limitation]  

The court is not to give leave for the joinder of any person who was a party to any previously concluded proceedings in respect of the apportionable claim.

SECTION 1041S  

1041S   APPLICATION OF DIVISION  
Nothing in this Division:

(a) prevents a person being held vicariously liable for a proportion of an apportionable claim for which another person is liable; or

(b) prevents a partner from being held severally liable with another partner for that proportion of an apportionable claim for which the other partner is liable; or

(c) affects the operation of any other Act to the extent that it imposes several liability on any person in respect of what would otherwise be an apportionable claim.

Division 3 - The insider trading prohibitions  

Subdivision A - Preliminary  

SECTION 1042A   MEANING OF SOME TERMS RELATING TO THE INSIDER TRADING PROHIBITIONS  

1042A(1)    
In this Act:

Division 3 financial products
means:

(a) securities; or

(b) derivatives; or

(c) interests in a managed investment scheme; or

(d) debentures, stocks or bonds issued or proposed to be issued by a government; or

(e) superannuation products, other than those prescribed by regulations made for the purposes of this paragraph; or

(f) any other financial products that are able to be traded on a financial market.

inside information
means information in relation to which the following paragraphs are satisfied:

(a) the information is not generally available;

(b) if the information were generally available - a reasonable person would expect it to have a material effect on the price or value of particular Division 3 financial products.

relevant Division 3 financial products
, in relation to particular inside information, means the Division 3 financial products referred to in paragraph (b) of the definition of inside information in this subsection.

1042A(2)    
In this Division:

information
includes:

(a) matters of supposition and other matters that are insufficiently definite to warrant being made known to the public; and

(b) matters relating to the intentions, or likely intentions, of a person.

SECTION 1042B  

1042B   APPLICATION OF DIVISION  

This Division applies to:

(a) acts and omissions within this jurisdiction in relation to Division 3 financial products (regardless of where the issuer of the products is formed, resides or located and of where the issuer carries on business); and

(b) acts and omissions outside this jurisdiction (and whether in Australia or not) in relation to Division 3 financial products issued by:

(i) a person who carries on business in this jurisdiction; or

(ii) a body corporate that is formed in this jurisdiction.

SECTION 1042C   MEANING OF GENERALLY AVAILABLE  

1042C(1)    
For the purposes of this Division, information is generally available if:

(a)    it consists of readily observable matter; or

(b)    both of the following subparagraphs apply:

(i) it has been made known in a manner that would, or would be likely to, bring it to the attention of persons who commonly invest in Division 3 financial products of a kind whose price might be affected by the information; and

(ii) since it was made known, a reasonable period for it to be disseminated among such persons has elapsed; or

(c)    it consists of deductions, conclusions or inferences made or drawn from either or both of the following:

(i) information referred to in paragraph (a);

(ii) information made known as mentioned in subparagraph (b)(i).

1042C(2)    
None of the paragraphs of subsection (1) limits the generality of any of the other paragraphs of that subsection.

SECTION 1042D  

1042D   MEANING OF MATERIAL EFFECT  

For the purposes of this Division, a reasonable person would be taken to expect information to have a material effect on the price or value of particular Division 3 financial products if (and only if) the information would, or would be likely to, influence persons who commonly acquire Division 3 financial products in deciding whether or not to acquire or dispose of the first-mentioned financial products.

SECTION 1042E  

1042E   MEANING OF ABLE TO BE TRADED  

Particular Division 3 financial products that are ordinarily able to be traded on a licensed market are taken, for the purposes of this Division, to be able to be traded on that market even though trading in those products on that market is suspended by action taken by the market licensee, or is contrary to a direction given to the market licensee by ASIC under subsection 794AA(1) , 794D(1) , 798J(1) or 798JB(1) .

SECTION 1042F   MEANING OF PROCURE  

1042F(1)    
For the purposes of this Division, but without limiting the meaning that the expression procure has apart from this section, if a person incites, induces, or encourages an act or omission by another person, the first-mentioned person is taken to procure the act or omission by the other person.

1042F(2)    
Subsection (1) does not limit the application in relation to provisions in this Division of:

(a)    section 6 of the Crimes Act 1914 ; or

(b)    

section 11.1 , 11.2 , 11.2A , 11.4 or 11.5 of the Criminal Code .

SECTION 1042G   INFORMATION IN POSSESSION OF OFFICER OF BODY CORPORATE  

1042G(1)   [ Knowledge and actions of body corporate]  

For the purposes of this Division:

(a) a body corporate is taken to possess any information which an officer of the body corporate possesses and which came into his or her possession in the course of the performance of duties as such an officer; and

(b) if an officer of a body corporate knows any matter or thing because he or she is an officer of the body corporate, it is to be presumed that the body corporate knows that matter or thing; and

(c) if an officer of a body corporate, in that capacity, is reckless as to a circumstance or result, it is to be presumed that the body corporate is reckless as to that circumstance or result; and

(d) for the purposes of paragraph 1043M(2) (b), if an officer of a body corporate ought reasonably to know any matter or thing because he or she is an officer of the body corporate, it is to be presumed that the body corporate ought reasonably to know that matter or thing.

1042G(2)   [ Liability for conduct]  

This section does not limit the application of section 769B in relation to this Division.

SECTION 1042H   INFORMATION IN POSSESSION OF PARTNER OR EMPLOYEE OF PARTNERSHIP  

1042H(1)   [ Knowledge and actions of partner]  

For the purposes of this Division:

(a) a member of a partnership is taken to possess any information:

(i) which another member of the partnership possesses and which came into the other member's possession in the other member's capacity as a member of the partnership; or

(ii) which an employee of the partnership possesses and which came into his or her possession in the course of the performance of duties as such an employee; and

(b) if a member or employee of a partnership knows any matter or thing because the member or employee is such a member or employee, it is to be presumed that every member of the partnership knows that matter or thing; and

(c) if a member or employee of a partnership, in that capacity, is reckless as to a circumstance or result, it is to be presumed that every member of the partnership is reckless as to that circumstance or result; and

(d) for the purposes of paragraph 1043M(2) (b), if a member or employee of a partnership ought reasonably to know any matter or thing because he or she is such a member or employee, it is to be presumed that every member of the partnership ought reasonably to know that matter or thing.

1042H(2)   [ Liability for conduct]  

This section does not limit the application of section 769B in relation to this Division.

Subdivision B - The prohibited conduct  

SECTION 1043A   PROHIBITED CONDUCT BY PERSON IN POSSESSION OF INSIDE INFORMATION  

1043A(1)    
Subject to this Subdivision, if:

(a)    a person (the insider ) possesses inside information; and

(b)    

the insider knows, or ought reasonably to know, that the matters specified in paragraphs (a) and (b) of the definition of inside information in subsection 1042A(1) are satisfied in relation to the information;

the insider must not (whether as principal or agent):

(c)    apply for, acquire, or dispose of, relevant Division 3 financial products, or enter into an agreement to apply for, acquire, or dispose of, relevant Division 3 financial products; or

(d)    procure another person to apply for, acquire, or dispose of, relevant Division 3 financial products, or enter into an agreement to apply for, acquire, or dispose of, relevant Division 3 financial products.

Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1) ). For defences to a prosecution based on this subsection, see section 1043M .

Note 2: This subsection is also a civil penalty provision (see section 1317E ). For relief from liability to a civil penalty relating to this subsection, see sections 1043N and 1317S .

1043A(2)    
Subject to this Subdivision, if:

(a)    a person (the insider ) possesses inside information; and

(b)    

the insider knows, or ought reasonably to know, that the matters specified in paragraphs (a) and (b) of the definition of inside information in subsection 1042A(1) are satisfied in relation to the information; and

(c)    relevant Division 3 financial products are able to be traded on a financial market operated in this jurisdiction;

the insider must not, directly or indirectly, communicate the information, or cause the information to be communicated, to another person if the insider knows, or ought reasonably to know, that the other person would or would be likely to:

(d)    apply for, acquire, or dispose of, relevant Division 3 financial products, or enter into an agreement to apply for, acquire, or dispose of, relevant Division 3 financial products; or

(e)    procure another person to apply for, acquire, or dispose of, relevant Division 3 financial products, or enter into an agreement to apply for, acquire, or dispose of, relevant Division 3 financial products.

Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1) ). For defences to a prosecution based on this subsection, see section 1043M .

Note 2: This subsection is also a civil penalty provision (see section 1317E ). For relief from liability to a civil penalty relating to this subsection, see sections 1043N and 1317S .

1043A(3)    
For the purposes of the application of the Criminal Code in relation to an offence based on subsection (1) or (2) :

(a)    paragraph (1)(a) is a physical element, the fault element for which is as specified in paragraph (1)(b) ; and

(b)    paragraph (2)(a) is a physical element, the fault element for which is as specified in paragraph (2)(b) .

SECTION 1043B  

1043B   EXCEPTION FOR WITHDRAWAL FROM REGISTERED SCHEME OR NOTIFIED FOREIGN PASSPORT FUND  

Subsection 1043A(1) does not apply in respect of a member's withdrawal from a registered scheme or a notified foreign passport fund if the amount paid to the member on withdrawal is calculated (so far as is reasonably practicable) by reference to the underlying value of the assets of the financial or business undertaking or scheme, common enterprise, investment contract or time-sharing scheme to which the member's interest relates, less any reasonable charge for acquiring the member's interest.

SECTION 1043C   EXCEPTION FOR UNDERWRITERS  

1043C(1)    
Subsection 1043A(1) does not apply in respect of:

(a) applying for or acquiring securities, managed investment products or foreign passport fund products under an underwriting agreement or a sub-underwriting agreement; or

(b) entering into an agreement referred to in paragraph (a); or

(c) disposing of securities, managed investment products or foreign passport fund products acquired under an agreement referred to in paragraph (a).

1043C(2)    
Subsection 1043A(2) does not apply in respect of:

(a) the communication of information in relation to securities, managed investment products or foreign passport fund products to a person solely for the purpose of procuring the person to enter into an underwriting agreement in relation to any such securities, managed investment products or foreign passport fund products; or

(b) the communication of information in relation to securities, managed investment products or foreign passport fund products by a person who may be required under an underwriting agreement to apply for or acquire any such securities, managed investment products or foreign passport fund products if the communication is made to another person solely for the purpose of procuring the other person to do either or both of the following:

(i) enter into a sub-underwriting agreement in relation to any such securities, managed investment products or foreign passport fund products;

(ii) apply for any such securities, managed investment products or foreign passport fund products.

SECTION 1043D  

1043D   EXCEPTION FOR ACQUISITION PURSUANT TO LEGAL REQUIREMENT  

Subsection 1043A(1) does not apply in respect of the acquisition of financial products pursuant to a requirement imposed by this Act.

SECTION 1043E  

1043E   EXCEPTION FOR INFORMATION COMMUNICATED PURSUANT TO A LEGAL REQUIREMENT  

Subsection 1043A(2) does not apply in respect of the communication of information pursuant to a requirement imposed by the Commonwealth, a State, a Territory or any regulatory authority.

SECTION 1043F  

1043F   CHINESE WALL ARRANGEMENTS BY BODIES CORPORATE  

A body corporate does not contravene subsection 1043A(1) by entering into a transaction or agreement at any time merely because of information in the possession of an officer or employee of the body corporate if:

(a) the decision to enter into the transaction or agreement was taken on its behalf by a person or persons other than that officer or employee; and

(b) it had in operation at that time arrangements that could reasonably be expected to ensure that the information was not communicated to the person or persons who made the decision and that no advice with respect to the transaction or agreement was given to that person or any of those persons by a person in possession of the information; and

(c) the information was not so communicated and no such advice was so given.

SECTION 1043G   CHINESE WALL ARRANGEMENTS BY PARTNERSHIPS ETC.  

1043G(1)   [ No actual knowledge by other partners]  

The members of a partnership do not contravene subsection 1043A(1) by entering into a transaction or agreement at any time merely because one or more (but not all) of the members, or an employee or employees of the partnership, are in actual possession of information if:

(a) the decision to enter into the transaction or agreement was taken on behalf of the partnership by any one or more of the following persons:

(i) a member or members who are taken to have possessed the information merely because another member or other members, or an employee or employees of the partnership, were in possession of the information;

(ii) an employee or employees of the partnership who was not or were not in possession of the information; and

(b) the partnership had in operation at that time arrangements that could reasonably be expected to ensure that the information was not communicated to the person or persons who made the decision and that no advice with respect to the transaction or agreement was given to that person or any of those persons by a person in possession of the information; and

(c) the information was not so communicated and no such advice was so given.

1043G(2)   [ Deemed knowledge insufficient]  

A member of a partnership does not contravene subsection 1043A(1) by entering into a transaction or agreement otherwise than on behalf of the partnership merely because the member is taken to possess information that is in the possession of another member or an employee of the partnership.

SECTION 1043H  

1043H   EXCEPTION FOR KNOWLEDGE OF PERSON'S OWN INTENTIONS OR ACTIVITIES  

A natural person does not contravene subsection 1043A(1) by entering into a transaction or agreement in relation to financial products issued by another person merely because the person is aware that he or she proposes to enter into, or has previously entered into or proposed to enter into, one or more transactions or agreements in relation to financial products issued by the other person or by a third person.

SECTION 1043I   EXCEPTION FOR BODIES CORPORATE  

1043I(1)   [ No liability of body corporate]  

A body corporate does not contravene subsection 1043A(1) by entering into a transaction or agreement in relation to financial products issued by another person merely because the body corporate is aware that it proposes to enter into, or has previously entered into or proposed to enter into, one or more transactions or agreements in relation to financial products issued by the other person or by a third person.

1043I(2)   [ Awareness insufficient to impose liability]  

Subject to subsection (3), a body corporate does not contravene subsection 1043A(1) by entering into a transaction or agreement in relation to financial products issued by another person merely because an officer or employee of the body corporate is aware that the body corporate proposes to enter into, or has previously entered into or proposed to enter into, one or more transactions or agreements in relation to financial products issued by the other person or by a third person.

1043I(3)   [ Liability imposed with actual knowledge]  

Subsection (2) does not apply unless the officer or employee of the body corporate became aware of the matters referred to in that subsection in the course of the performance of duties as such an officer or employee.

SECTION 1043J   EXCEPTION FOR OFFICERS OR AGENTS OF BODY CORPORATE  

1043J(1)   [ No liability for officers of body corporate]  

Subject to subsection (2), a person (the first person ) does not contravene subsection 1043A(1) by entering into a transaction or agreement on behalf of a person (the second person ) in relation to financial products issued by another person (the third person ) merely because the first person is aware that the second person proposes to enter into, or has previously entered into or proposed to enter into, one or more transactions or agreements in relation to financial products issued by the third person or by a fourth person.

1043J(2)   [ Liability imposed with actual knowledge]  

Subsection (1) does not apply unless the first person became aware of the matters referred to in that subsection in the course of the performance of duties as an officer or employee of the second person or in the course of acting as an agent of the second person.

SECTION 1043K  

1043K   TRANSACTIONS BY HOLDER OF FINANCIAL SERVICES LICENCE OR A REPRESENTATIVE OF THE HOLDER OF SUCH A LICENCE  

A person (the agent ) does not contravene subsection 1043A(1) by applying for, acquiring, or disposing of, or entering into an agreement to apply for, acquire, or dispose of, financial products that are able to be traded on a licensed market if:

(a) the agent is a financial services licensee or a representative of a financial services licensee; and

(b) the agent entered into the transaction or agreement concerned on behalf of another person (the principal ) under a specific instruction by the principal to enter into that transaction or agreement; and

(c) the licensee had in operation, at the time when that transaction or agreement was entered into, arrangements that could reasonably be expected to ensure that any information in the possession of the licensee, or of any representative of the licensee, as a result of which the person in possession of the information would be prohibited by subsection 1043A(1) from entering into that transaction or agreement was not communicated to the agent and that no advice with respect to the transaction or agreement was given to the principal or to the agent by a person in possession of the information; and

(d) the information was not so communicated and no such advice was so given; and

(e) the principal is not an associate of the licensee or of any representative of the licensee;

but nothing in this section affects the application of subsection 1043A(1) in relation to the principal.

SECTION 1043L   A SPECIFIC SITUATION IN WHICH A COMPENSATION ORDER UNDER SECTION 1317HA MAY BE MADE  

1043L(1)   Situation to which this section applies.  

If:

(a) a person (the insider ) possesses information that is not generally available but, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of Division 3 financial products (other than derivatives); and

(b) the insider knows that, or is reckless as to whether:

(i) the information is not generally available; and

(ii) if the information were generally available, it might have a material effect on the price or value of those Division 3 financial products; and

(c) the insider (whether as principal or agent) in contravention of subsection 1043A(1) :

(i) applies for, acquires, or disposes of, or enters into an agreement to apply for, acquire, or dispose of, any such Division 3 financial products; or

(ii) procures another person to apply for, acquire, or dispose of, or to enter into an agreement to apply for, acquire, or dispose of, any such Division 3 financial products;

the following subsections apply.

1043L(2)   Compensation for damage suffered by person applying for the Division 3 financial products.  

If the insider applied for or agreed to apply for, or procured another person to apply for or to agree to apply for, the Division 3 financial products, the issuer of the products may, by action under section 1317HA , recover as compensation for damage suffered by the issuer, the amount (if any) by which the price described in the first of the following paragraphs was less than the price described in the second of those paragraphs:

(a) the price at which the products were applied for, or agreed to be applied for, by the insider or the other person;

(b) the price at which they would have been likely to have been disposed of in a disposal made at the time of the application or the time of the agreement, as the case may be, if the information had been generally available.

The action may be taken against the insider, the other person or any other person involved in the contravention.

1043L(3)   Compensation for damage suffered by person disposing of the Division 3 financial products.  

If the insider acquired or agreed to acquire, or procured another person to acquire or to agree to acquire, the Division 3 financial products from a person (in this subsection and subsection (5) called the disposer ) who did not possess the information, the disposer may, by action under section 1317HA , recover, as compensation for damage suffered by the disposer, the amount (if any) by which the price described in the first of the following paragraphs was less than the price described in the second of those paragraphs:

(a) the price at which the financial products were acquired, or agreed to be acquired, by the insider or the other person from the disposer;

(b) the price at which they would have been likely to have been acquired in an acquisition made at the time of the first-mentioned acquisition or the time of the agreement, as the case may be, if the information had been generally available.

The action may be taken against the insider, the other person or any other person involved in the contravention.

1043L(4)   Compensation for damage suffered by person acquiring the Division 3 financial products.  

If the insider disposed of or agreed to dispose of, or procured another person to dispose of or to agree to dispose of, the Division 3 financial products to a person (in this subsection and subsection (5) called the acquirer ) who did not possess the information, the acquirer may, by action under section 1317HA , recover, as compensation for damage suffered by the acquirer, the amount (if any) by which the price described in the first of the following paragraphs was greater than the price described in the second of those paragraphs:

(a) the price at which the financial products were disposed of, or agreed to be disposed of, by the insider or the other person to the acquirer;

(b) the price at which they would have been likely to have been disposed of in a disposal made at the time of the first-mentioned disposal or the time of the agreement, as the case may be, if the information had been generally available.

The action may be taken against the insider, the other person or any other person involved in the contravention.

1043L(5)   Additional situations in which issuer may recover.  

In addition to any action that may be brought as provided by subsection (3) or (4), the issuer of the financial products may, in the case of an acquisition or disposal of, or an agreement to acquire or dispose of, the financial products by the insider or another person in the circumstances mentioned in that subsection, by action under section 1317HA , recover, as compensation for damage suffered by the issuer:

(a) in the case of an acquisition or agreement to acquire the financial products - the amount (if any) by which the price described in the first of the following subparagraphs was less than the price described in the second of those subparagraphs:

(i) the price at which the financial products were acquired, or agreed to be acquired, by the insider or other person from the disposer;

(ii) the price at which they were likely to have been acquired in an acquisition made at the time of the first-mentioned acquisition or the time of the agreement, as the case may be, if the information had been generally available; or

(b) in the case of a disposal or an agreement to dispose of financial products - the amount (if any) by which the price described in the first of the following subparagraphs was greater than the price described in the second of those subparagraphs:

(i) the price at which the financial products were disposed of, or agreed to be disposed of, by the insider or other person to the acquirer;

(ii) the price at which they would have been likely to have been disposed of at the time of the first-mentioned disposal or the time of the agreement, as the case may be, if the information had been generally available.

The action may be taken against the insider, the other person or any other person involved in the contravention.

1043L(6)   ASIC may take action for benefit of issuer.  

ASIC may, if it considers that it is in the public interest to do so, bring an action in accordance with subsection (2) or (5) in the name of, and for the benefit of, an issuer of Division 3 financial products for the recovery of an amount that the issuer is entitled to recover by virtue of that subsection.

1043L(7)   Relief from liability.  

In an action brought against a person in accordance with this section because the person entered into, or procured another person to enter into, a transaction or agreement at a time when certain information was in the first-mentioned person's possession, the court may relieve the person wholly or partly from liability if it appears to the court that the information came into the first-mentioned person's possession solely as a result of the information having been made known as mentioned in subparagraph 1042C(1) (b)(i).

Special provision for registered schemes and notified foreign passport funds - treatment of amount recovered in respect of subsection (2) loss

1043L(8)    

If:

(a) the responsible entity for a registered scheme or the operator of a notified foreign passport fund; or

(b) ASIC in the name of, and for the benefit of, the responsible entity for a registered scheme or the operator of a notified foreign passport fund;

brings an action in accordance with subsection (2) in respect of a subscription for, or any agreement to subscribe for, any interests in the scheme or fund, any amount recovered in the action:

(c) is to be held:

(i) in the case of a registered scheme other than an Australian passport fund - by the responsible entity; and

(ii) in the case of an Australian passport fund or a notified foreign passport fund - by the responsible holding party for the fund;

on behalf of the persons who, at the time of the subscription or agreement, had rights or interests in the relevant financial or business undertaking or scheme, common enterprise, investment contract or time-sharing scheme; and

(d) is to be held on their behalf in the respective proportions that, at that time, their individual rights or interests bore to the total of all those rights or interests.

Special provision for registered schemes and notified foreign passport funds - treatment of amount recovered in respect of subsection (5) loss

1043L(9)    

If:

(a) the responsible entity for a registered scheme or the operator of a notified foreign passport fund; or

(b) ASIC in the name of, and for the benefit of, the responsible entity for a registered scheme or the operator of a notified foreign passport fund;

brings an action in accordance with subsection (5) in respect of an acquisition or disposal of, or an agreement to acquire or dispose of, interests in the scheme or fund, any amount recovered in the action:

(c) is to be held:

(i) in the case of a registered scheme other than an Australian passport fund - by the responsible entity; and

(ii) in the case of an Australian passport fund or a notified foreign passport fund - by the responsible holding party for the fund;

on behalf of the persons who, at the time of the disposal, acquisition or agreement, had rights or interests in the relevant financial or business undertaking or scheme, common enterprise, investment contract or time-sharing scheme; and

(d) is to be held on their behalf in the respective proportions that, at that time, their individual rights or interests bore to the total of all those rights or interests.

1043L(10)    
Any right of action that a person has by virtue of this section is in addition to any right that any other person has under section 1317HA .

SECTION 1043M   DEFENCES TO PROSECUTION FOR AN OFFENCE  

1043M(1)   [ Defence if facts and circumstances exist]  

In a prosecution of a person for an offence based on subsection 1043A(1) or (2) , it is not necessary for the prosecution to prove the non-existence of facts or circumstances which, if they existed, would, by virtue of section 1043B , 1043C , 1043D , 1043E , 1043F , 1043G , 1043H , 1043I , 1043J or 1043K , preclude the act or omission from constituting a contravention of subsection 1043A(1) or (2) , as the case may be, but it is a defence if the facts or circumstances existed.

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

1043M(2)   [ When information became known]  

In a prosecution brought against a person for an offence based on subsection 1043A(1) because the person entered into, or procured another person to enter into, a transaction or agreement at a time when certain information was in the first-mentioned person's possession:

(a) it is a defence if the information came into the first-mentioned person's possession solely as a result of the information having been made known as mentioned in subparagraph 1042C(1) (b)(i); and

(b) it is a defence if the other party to the transaction or agreement knew, or ought reasonably to have known, of the information before entering into the transaction or agreement.

Note: A defendant bears an evidential burden in relation to the matters referred to in paragraphs (a) and (b). See subsection 13.3(3) of the Criminal Code .

1043M(3)   [ Communicating information]  

In a prosecution against a person for an offence based on subsection 1043A(2) because the person communicated information, or caused information to be communicated, to another person:

(a) it is a defence if the information came into the first-mentioned person's possession solely as a result of the information having been made known as mentioned in subparagraph 1042C(1) (b)(i); and

(b) it is a defence if the other person knew, or ought reasonably to have known, of the information before the information was communicated.

Note: A defendant bears an evidential burden in relation to the matters referred to in paragraphs (a) and (b). See subsection 13.3(3) of the Criminal Code .

SECTION 1043N  

1043N   RELIEF FROM CIVIL LIABILITY  

In proceedings against a person under Part 9.4B (including under section 1317HA ) relating to a contravention of subsection 1043A(1) or (2) , the court may relieve the person wholly or partly from liability if it appears to the court that:

(a) in any case - the circumstances in any of the sections referred to in subsection 1043M(1) applied; or

(b) in the case of subsection 1043A(1) - the circumstance referred to in paragraph 1043M(2) (a) or (b) applied; or

(c) in the case ofsubsection 1043A(2) - the circumstance referred to in paragraph 1043M(3) (a) or (b) applied.

SECTION 1043O  

1043O   POWERS OF COURT  

If, in a proceeding instituted under this Act, the Court finds that a contravention of section 1043A has occurred, the Court may, in addition to any other orders that it may make under any other provision of this Act, make such order or orders as it thinks just, including, but without limiting the generality of the above, any one or more of the following orders:

(a) an order restraining the exercise of rights attached to Division 3 financial products;

(b) an order restraining the issue of Division 3 financial products;

(c) an order restraining the acquisition or disposal of Division 3 financial products;

(d) an order directing the disposal of Division 3 financial products;

(e) an order vesting Division 3 financial products in ASIC;

(f) an order cancelling an agreement for the acquisition or disposal of Division 3 financial products;

(g) an order cancelling an Australian financial services licence;

(h) for the purpose of securing compliance with any other order made under this section, an order directing a person to do or refrain from doing a specified act.

Division 4 - Defences, relief and limits on liability  

SECTION 1044A   GENERAL DEFENCE OR RELIEF FOR PUBLISHERS  

1044A(1)   [ No knowledge that publication an offence]  

It is a defence to a prosecution for an offence based on a provision of this Part committed by the publication of an advertisement if:

(a) the defendant was, at that time, a person whose business it was to publish or arrange for the publication of advertisements; and

(b) they received the advertisement for publication in the ordinary course of that business and did not know, and had no reason to believe, that its publication would amount to an offence against that provision.

Note: A defendant bears an evidential burden in relation to the matters in subsection (1). See subsection 13.3(3) of the Criminal Code .

1044A(2)   [ Relief from liability]  

In proceedings against a person under:

(a) Part 9.4B (including under section 1317H or 1317HA ) relating to a contravention of a civil penalty provision that is in this Part; or

(b) section 1041I relating to a contravention of a provision to which that section applies;

the court may relieve the person wholly or partly from liability if it appears to the court that the circumstances mentioned in paragraphs (1)(a) and (b) applied.

SECTION 1044B   LIMIT ON LIABILITY FOR MISLEADING OR DECEPTIVE CONDUCT  

State or Territory professional standards law limits liability

1044B(1)    

A professional standards law of a State or Territory applies to limit occupational liability relating to an action for contravention of section 1041H in the same way as it limits occupational liability arising under a law of the State or Territory.

Note: Section 1041H prohibits misleading or deceptive conduct by a person in relation to a financial product or financial service.

1044B(2)    
However, the professional standards law applies for that purpose:

(a)    only in relation to a scheme that was prescribed by the regulations at the time (the contravention time ) of the contravention; and

(b)    as if the scheme were in force under that law at the contravention time in the form the scheme would have been in if:

(i) the scheme had not been amended or revoked under that law since the scheme was first prescribed; and

(ii) the modifications (if any) prescribed by the regulations at the contravention time had been made to the scheme.

Which State ' s or Territory ' s professional standards law applies?

1044B(3)    
For the purposes of working out whether a professional standards law of a particular State or Territory applies under subsection (1) in relation to a particular contravention of section 1041H , choice of law rules operate in relation to the contravention in the same way as they operate in relation to a tort.

Definitions

1044B(4)    

In this section:

modifications
(Repealed by No 76 of 2023, s 3, Sch 1[20] (effective 20 October 2023).)

occupation
includes profession and trade.

occupational association
means a body:

(a) that represents the interests of persons who have the same occupation; and

(b) whose membership is limited principally to such persons.

occupational liability
means civil liability arising directly or vicariously from anything done or omitted by a member of an occupational association in the course of his or her occupation.

professional standards law
means a law providing for the limitation of occupational liability by reference to schemes for limiting that liability that were formulated and published in accordance with that law.

Division 5 - Miscellaneous  

SECTION 1045A   EXEMPTIONS AND MODIFICATIONS BY REGULATIONS  

1045A(1)   [ Regulations]  

The regulations may:

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

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

(c) provide that this Part applies as if specified provisions were omitted, modified or varied as specified in the regulations.

1045A(2)   [ ``provisions of this Part'']  

For the purpose of this section, the provisions of this Part include:

(a) definitions in this Act, or in the regulations, as they apply to references in this Part; and

(b) any provisions of Part 10.2 (transitional provisions) that relate to provisions of this Part.