Explanatory Statement

Issued by authority of the Assistant Treasurer

Treasury Laws Amendment (Professional Standards Schemes No.2) Regulations 2018

Australian Securities and Investments Commission Act 2001

Competition and Consumer Act 2010

Corporations Act 2001

Section 251 of the Australian Securities and Investments Commission Act 2001 (the ASIC Act), section 172 of the Competition and Consumer Act 2010 (the CCA) and section 1364 of the Corporations Act 2001 (the Corporations Act) each provide 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.

The intergovernmental Professional Standards Agreement 2011 provides for a national framework of professional standards legislation that provides professionals and members of occupational associations with capped civil liability. As part of this national framework, all states and territories have adopted legislation to establish a Professional Standards Council that can approve professional standards schemes in their respective jurisdictions. Members of professional groups that are part of these schemes are entitled to capped civil liability in return for raising industry service standards and having professional indemnity insurance up to the level of the prescribed liability cap.

As part of the national framework of professional standards legislation, the Commonwealth provides members of professional groups that are part of an approved professional standards scheme with capped civil liability in relation to misleading and deceptive conduct under the ASIC Act, the CCA and the Corporations Act to ensure that actions cannot be brought under these Acts to circumvent the cap on civil liability.

Sub-sections 12GNA(2) of the ASIC Act, 137(2) of the CCA and 1044B(2) of the Corporations Act provide for capped civil liability for misleading and deceptive conduct for professional standards schemes that are prescribed in relevant regulations. Accordingly, regulation 3A of the Australian Securities and Investments Commission Regulations 2001 (the ASIC Regulations), regulation 8A of the Competition and Consumer Regulations 2010 (the CC Regulations) and regulation 7.10.02 of the Corporations Regulations 2001 (the Corporations Regulations) prescribe a list of professional standards schemes that have capped civil liability for misleading and deceptive conduct under their respective principal acts.

The Treasury Laws Amendment (Professional Standards Schemes No.2) Regulations 2018 (the Regulations) gives effect to the decisions the Professional Standards Councils made to approve or amend professional standards schemes in their respective jurisdictions.

The Regulations prescribe the CPA Australia Ltd Professional Standards (Accountants) Scheme and the Institute of Public Accountants Professional Standards Scheme as new professional standards schemes that have capped civil liability for misleading or deceptive conduct under the three Regulations listed above as these schemes have become approved professional standards schemes in New South Wales (NSW).

The Regulations also prescribe recently published modifications to:

•

extend the Law Society of New South Wales Scheme in the ASIC Regulations, the CC Regulations and the Corporations Regulations to 21 November 2018 to reflect the extension of the scheme that was approved in NSW;

•

extend the Bar Association of Queensland Scheme in the ASIC Regulations, the CC Regulations and the Corporations Regulations to 30 June 2019 to reflect the extension of the scheme that was approved in Queensland;

•

amend the New South Wales Bar Association Scheme, and the Law Society of South Australia Professional Standards Scheme in the ASIC Regulations, the CC Regulations and the Corporations Regulations, to reflect changes to the schemes that have been approved by the various states; and

•

amend the Australian Property Institute Valuers Limited Scheme in the CC Regulations only, to reflect changes to the scheme that has been approved in NSW.

The Professional Standards Councils seek the opinion of independent actuarial consultants and call for public comment on professional standards schemes via public notification in major newspapers circulating throughout the relevant jurisdictions prior to approving schemes. Further consultation by the Commonwealth Government was not considered necessary.

Details of the Regulations are set out in the Attachment.

The Acts do not specify any conditions that need to be met before the power to make the Regulations are exercised.

The Office of Best Practice Regulation has advised that the amendments do not require a Regulatory Impact Statement.

The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.

The Regulations commence on the day after it is registered on the Federal Register of Legislation.

Statement of Compatibility with Human Rights

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

Treasury Laws Amendment (Professional Standards Schemes No.2) Regulations 2018

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 Regulations update the list of prescribed professional schemes that have capped civil liability for misleading and deceptive conduct under the ASIC Act, the CCA and the Corporations Act.

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.

ATTACHMENT

Details of the Treasury Laws Amendment (Professional Standards Schemes No.2) Regulations 2018

Section 1 - Name of Regulations

This section provides that the title of the Regulations is the Treasury Laws Amendment (Professional Standards Schemes No.2) Regulations 2018.

Section 2 - Commencement

This section provides that the Regulations commence the day after registration.

Section 3 - Authority

This section provides that the Regulations are made under the ASIC Act, the CCA, and the Corporations Act.

Section 4 - Schedules

This section provides that each instrument that is specified in a Schedule to the Regulations is amended or repealed as set out in the applicable items in the Schedule concerned, and any other items in a Schedule to this instrument has effect according to its terms.

Schedule 1 - Amendments

Items 1, 9, and 16

These items prescribe the CPA Australia Ltd Professional Standards (Accountants) Scheme as a new professional standard scheme that has capped civil liability for misleading or deceptive conduct under Commonwealth law. The new scheme replaces the CPA Australia Limited Professional Standards Scheme.

Items 2, 10 and 17

These items extend the application of capped civil liability under the ASIC Act, the CCA and the Corporations Act to the Law Society of New South Wales Scheme to incorporate the changes to the scheme as published in the NSW Government Gazette on 30 June 2017.

These items also amends the application of capped civil liability under the ASIC Act, the CCA and the Corporations Act to the New South Wales Bar Association Scheme to incorporate the changes to the scheme as published in the NSW Government Gazette on 10 November 2017.

Items 3, 11 and 18

These items extends the application of capped civil liability under the ASIC Act, the CCA and the Corporations Act to the Bar Association of Queensland Scheme to incorporate the changes to the scheme as published in the Queensland Government Gazette on 23 March 2018.

Items 4, 12 and 19

These items amend the application of capped civil liability under the ASIC Act, the CCA and the Corporations Act to the Law Society of South Australia Professional Standard Scheme to incorporate the changes to the scheme as published in the South Australian Government Gazette on 21 November 2017.

Items 5, 7, 13, 14 and 20

These items replace references to 'the day the Treasury Laws Amendment (Professional Standards Schemes) Regulations 2018 commences' with '10 February 2018' which is the date that instrument commenced.

Items 6, 15 and 21

These items prescribe the Institute of Public Accountants Professional Standards Scheme as a new professional standards scheme that has capped civil liability for misleading or deceptive conduct under Commonwealth law. This scheme was published in the New South Wales Government Gazette on 20 October 2017.

Item 8

This item amends the application of capped civil liability under the CCA to the Australian Property Institute Valuers Limited Scheme to incorporate changes to the scheme as published in NSW Government Gazette on 10 November 2017.