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 7.9A - PRODUCT INTERVENTION ORDERS  

SECTION 1023S   AVOIDANCE SCHEMES - PROHIBITION  

General prohibition

1023S(1)    
A person must not, either alone or with others, engage in any of the following conduct:

(a)    enter into a scheme;

(b)    begin to carry out a scheme;

(c)    carry out a scheme;

if, having regard to any matters as required under subsection (8) , it would be reasonable to conclude that the purpose, or one of the purposes, of the person engaging in that conduct was to avoid the application of a credit product intervention order.

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

Constitutional corporations

1023S(2)    
A constitutional corporation must not, either alone or with others, engage in any of the following conduct:

(a)    enter into a scheme;

(b)    begin to carry out a scheme;

(c)    carry out a scheme;

if, having regard to any matters as required under subsection (8) , it would be reasonable to conclude that the purpose, or one of the purposes, of the constitutional corporation engaging in that conduct was to avoid the application of a credit product intervention order.

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

Constitutional trade and commerce

1023S(3)    
A person must not in the course of constitutional trade and commerce, either alone or with others, engage in any of the following conduct:

(a)    enter into a scheme;

(b)    begin to carry out a scheme;

(c)    carry out a scheme;

if, having regard to any matters as required under subsection (8) , it would be reasonable to conclude that the purpose, or one of the purposes, of the person engaging in that conduct was to avoid the application of a credit product intervention order.

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

Use of communications service

1023S(4)    
A person must not use postal, telegraphic, telephonic or other like services (within the meaning of paragraph 51(v) of the Constitution), either alone or with others, in order to engage in any of the following conduct:

(a)    enter into a scheme;

(b)    begin to carry out a scheme;

(c)    carry out a scheme;

if, having regard to any matters as required under subsection (8) , it would be reasonable to conclude that the purpose, or one of the purposes, of the person engaging in that conduct was to avoid the application of a credit product intervention order.

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

Prohibitions independent of each other

1023S(5)    
To avoid doubt, subsections (1) , (2) , (3) and (4) are independent from and do not limit each other.

1023S(6)    
If conduct constitutes a contravention of 2 or more subsections of this section, proceedings may be started against a person in relation to the contravention of any one or more of those subsections.

1023S(7)    
However, the person is not liable to more than one pecuniary penalty in relation to the same conduct.

Matters to which regard must be had

1023S(8)    
In determining, for the purposes of subsection (1) , (2) , (3) or (4) , whether it would be reasonable to conclude that a purpose of a person entering into or carrying out (to any extent) a scheme was to avoid the application of a credit product intervention order, regard must be had to any matters prescribed by the regulations.

1023S(9)    
Subsection (8) does not limit the matters to which regard may be had in making a determination described in that subsection.

Offence

1023S(10)    
A person commits an offence if:

(a)    the person is subject to a requirement under subsection (1) , (2) , (3) or (4) ; and

(b)    the person engages in conduct; and

(c)    the conduct contravenes the requirement.

Definitions

1023S(11)    
In this section:

constitutional corporation
means a corporation to which paragraph 51(xx) of the Constitution applies.

constitutional trade and commerce
means trade and commerce:

(a) between Australia and places outside Australia; or

(b) between the States; or

(c) between a State and a Territory; or

(d) between 2 Territories; or

(e) within a Territory.

credit product intervention order
means a product intervention order made in relation to a financial product of the kind covered by paragraph 12BAA(7)(k) of the Australian Securities and Investments Commission Act 2001 (which is about credit facilities).

scheme
means:

(a) any agreement, arrangement, understanding, promise or undertaking, whether express or implied; or

(b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise; or

(c) any combination of 2 or more things that are schemes because of paragraph (a) or (b).