Explanatory Statement

Issued by authority of the Assistant Treasurer

Corporations Amendment (Financial Services Information Lodgement Periods) Regulation 2015

Corporations Act 2001

Section 1364 of the Corporations Act 2001 (Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed, for carrying out or giving effect to the Act.

Section 922A of the Act provides that the regulations may prescribe the maintenance of registers relating to financial services.

Section 926B of the Act provides that the regulations may provide that Part 7.6 of the Act applies as if specified provisions were omitted, modified or varied as specified in the regulations.

The purpose of the Corporations Amendment (Financial Services Information Lodgement Periods) Regulation 2015 (proposed Regulation) is to amend the Corporations Regulations 2001 (Regulations) to align the information lodgement periods in relation to information required to be notified to the Australian Securities and Investments Commission (ASIC) in relation to the Authorised Representatives Register (Register), with the information lodgement periods in relation to the Register of Financial Advisers.

ASIC licenses persons to carry on a financial services business. Australian Financial Services licensees (licensees), and their directors and employees, may be authorised to provide financial services.

In addition, licensees may authorise other persons who are not their employees or directors to provide financial advice. These persons, who are called 'authorised representatives', may be natural persons or corporate entities. In certain circumstances, authorised representatives can sub-authorise a third party to provide financial advice.

ASIC maintains several registers with information including about financial advisers. The Register records information about individual and corporate authorised representatives. ASIC recently launched a Register of Financial Advisers which contains information about all natural persons who provide personal advice about certain financial products to retail clients, including employees, directors and individual authorised representatives.

Licensees must notify ASIC of changes to details of information on the Register of Financial Advisers within 30 business days.

Currently, licensees are required to notify ASIC of changes to information on the Register within either 15 business days (for new authorisations and sub-authorisations) or 10 business days (for variations in the details of existing authorisations and sub-authorisations).

As a transitional provision, Regulation 11 of the Corporations (Fees) Amendment (Register of Relevant Providers) Regulation 2015 specifies that no fee is charged for information lodgements in relation to the Register or the Register of Financial Advisers from 3 March to 30 September 2015. This includes no late fees relating to these information lodgements.

The proposed Regulation would extend the information lodgement periods for the Register to 30 business days so that it is the same as the information lodgement period that applies to the Register of Financial Advisers.

The Regulation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Details of the proposed Regulation are set out in the Attachment.

The Corporations Act 2001 does not specify any conditions that need to be satisfied before the power to make the proposed Regulation may be exercised.

Targeted consultation was conducted on the substance of the proposed Regulation in March 2015 and on an exposure draft of the proposed Regulation in June 2015. Stakeholders did not raise any concerns with the proposed Regulation.

The proposed Regulation commences on the day after it is registered.

ATTACHMENT

Details of the Corporations Amendment (Financial Services Information Lodgement Periods) Regulation 2015

Section 1 - Name of Regulation

This section provides that the name of the proposed Regulation is the Corporations Amendment (Financial Services Information Lodgement Periods) Regulation 2015 (the proposed Regulation).

Section 2 - Commencement

The proposed Regulation commences on the day after it is registered.

Section 3 - Authority

The proposed Regulation is made under the Corporations Act 2001 (the Act).

Section 4 - Schedule

This section provides that the schedules amend the Corporations Regulations 2001 (the Regulations).

Schedule 1 - Amendments

Item 1

Item 1 amends regulation 7.6.04(1)(c) and extends the time period for notifying ASIC of changes to the particulars in the Register (excluding changes that are reported to ASIC under section 916F of the Act or changes that are a direct consequence of an act by ASIC) from 10 business days to 30 business days.

Item 2

Item 2 inserts new regulation 7.6.04AA into the Regulations to modify the operation of section 916F of the Act. The item relies upon the power in section 926B to modify the operation of Part 7.6 of the Act.

Subitem 2(a) extends the time period for lodging information about new authorisations and sub-authorisations under subsection 916F(1) of the Act from 15 business days to 30 business days.

Subitem 2(b) extends the time period for lodging information about variations in existing authorisations and sub-authorisations under subsection 916F(3) of the Act from 10 business days to 30 business days.

Item 3

Item 3 amends the heading of Chapter 10 from 'Repeals' to 'Repeals, transitional matters and application provisions'. This makes it clear that Chapter 10 includes provisions which relate to transitional matters (such as, Part 10.2) and application provisions (such as, Part 10.22 which is inserted by item 4 of the proposed Regulations).

Item 4

Item 4 sets out the application provisions for the proposed Regulation.

Regulation 10.22.01 states that the change to the licensing condition in paragraph 7.6.04(1)(c) applies to all licensees, irrespective of whether their licence was granted before, on or after the proposed Regulation commences.

Regulation 10.22.01 applies the extension of the time period for notifying ASIC of changes to the information on the Register to changes that occur on or after 19 August 2015. The date, 19 August 2015, is 30 business days before 30 September 2015 (the date that the amnesty on late fees ends) in most states and territories in Australia.

Subregulation 10.22.02(1) applies the extension of the information lodgement period for the authorisations covered by subsection 916F(1) to authorisations that occur on or after 19 August 2015.

Subregulation 10.22.02(2) applies the extension of the information lodgement period for the variations and revocations of an authorisation covered by subsection 916F(3) to events that occur on or after 19 August 2015.

Item 4 of the proposed Regulation ensures that licensees are not charged a late fee if they lodge within 30 business days, either by virtue of the amnesty on late fees which applies to information lodged by 30 September 2015, given regulation 11 of the Corporations (Fees) Amendment (Register of Relevant Providers) Regulation 2015 (Example 1), or the extension of the information lodgement periods (Example 2).

Example 1: Events that occur before 19 August 2015

On 18 August 2015, licensee ABC authorises D to provide financial services on its behalf and revokes the authorisation of E to provide financial advice.

The proposed Regulation does not apply because the authorisation and revocation occur before 19 August 2015 (subregulations 10.22.01 and 10.22.02). ABC must notify ASIC of the authorisation of D within 15 business days and the revocation of E's authorisation within 10 business days under subsections 916F(1) and (3).

Example 2: Events that occur on or after 19 August 2015

On 19 August 2015, licensee XYZ authorises a representative to provide advice on its behalf. On 1 September 2015, it revokes the authorisation of another representative.

The proposed Regulation applies because both events occur on or after 19 August 2015 and XYZ has 30 business days to notify ASIC (subregulations 10.22.01 and 10.22.02).

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The proposed Regulation would extend the information lodgement periods for the Register to 30 business days so that it is the same as the information lodgement period that applies to the Register of Financial Advisers.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.