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 7.6 - LICENSING OF PROVIDERS OF FINANCIAL SERVICES  

Division 2 - Requirement to be licensed or authorised  

SECTION 911A   NEED FOR AN AUSTRALIAN FINANCIAL SERVICES LICENCE  

911A(1)    
Subject to this section, a person who carries on a financial services business in this jurisdiction must hold an Australian financial services licence covering the provision of the financial services.

Note 1: Also, a person must not provide a financial service contrary to a banning order or disqualification order under Division 8 .

Note 2: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

911A(2)    
However, a person is exempt from the requirement to hold an Australian financial services licence for a financial service they provide in any of the following circumstances:

(a)    the person provides the service as representative of a second person who carries on a financial services business and who:

(i) holds an Australian financial services licence that covers the provision of the service; or

(ii) is exempt under this subsection from the requirement to hold an Australian financial services licence that covers the provision of the service;

Note: However, representatives must still comply with section 911B even if they are exempted from this section by this paragraph.

(b)    the service is the issue, variation or disposal of a financial product by the person (the product provider ) pursuant to an arrangement (an intermediary authorisation ) between the product provider and a financial services licensee under which:

(i) the financial services licensee, or their authorised representatives, may make offers to people to arrange for the issue, variation or disposal of financial products by the product provider; and

(ii) the product provider is to issue, vary or dispose of financial products in accordance with such offers, if they are accepted;

provided that the offer pursuant to which the issue, variation or disposal is made was covered by the financial services licensee ' s Australian financial services licence;

(ba)    the service is the entry into of an intermediary authorisation referred to in paragraph (b);

(c)    all of the following apply:

(i) the service is the variation or disposal of a financial product by the person;

(ii) the same person issued the original product;

(iii) the person provides the service at the direct request of the person to whom it is provided (rather than through an intermediary);

(d)    the service is, or is provided incidentally to, the operation of a licensed market, or a licensed CS facility, operated by the person;

(ea)    the service is the provision of general advice and all of the following apply:

(i) the advice is provided in a newspaper or periodical of which the person is the proprietor or publisher;

(ii) the newspaper or periodical is generally available to the public otherwise than only on subscription;

(iii) the sole or principal purpose of the newspaper or periodical is not the provision of financial product advice;

(eb)    the service is the provision of general advice and all of the following apply:

(i) the advice is provided in the course of, or by means of, transmissions that the person makes by means of an information service (see subsection (6) ), or that are made by means of an information service that the person owns, operates or makes available;

(ii) the transmissions are generally available to the public;

(iii) the sole or principal purpose of the transmissions is not the provision of financial product advice;

(ec)    the service is the provision of general advice and all of the following apply:

(i) the advice is provided in sound recordings, video recordings, or data recordings;

(ii) the person makes the recordings available to the public by supplying copies of them to the public and/or by causing the recordings (if they are sound recordings) to be heard by the public, causing the recordings (if they are video recordings) to be seen and heard by the public, or the contents of the recordings (if they are data recordings) to be displayed or reproduced for the public;

(iii) the sole or principal purpose of the recordings is not the provision of financial product advice;

(ed) - (eg) (Repealed)

(eh)    the service is the acquisition of a financial product as an investment of the assets of a notified foreign passport fund by:

(i) the operator of the fund; or

(ii) another person acting on the direction of the operator of the fund, or the direction of an agent of the operator of the fund;

(ei)    the service is the disposal of a financial product that was acquired as an investment of the assets of a notified foreign passport fund by:

(i) the operator of the fund; or

(ii) another person acting on the direction of the operator of the fund, or the direction of an agent of the operator of the fund;

(ej)    the service is the issuing, acquisition or disposal of a derivative or foreign exchange contract by:

(i) the operator of a notified foreign passport fund; or

(ii) another person acting on the direction of the operator of a notified foreign passport fund, or the direction of an agent of the operator of a notified foreign passport fund;

for the purposes of managing the financial consequences to the fund of particular circumstances happening, or avoiding or limiting the financial consequences of fluctuations in, or in the value of, receipts or costs (including prices or interest rates);

(ek)    

the service is a claims handling and settling service in relation to an insurance product, and the person providing the service is not one of the following:

(i) the insurer under the insurance product;

(ii) a person who has authority from the insurer to reject all or part of a claim under the insurance product and who carries on a business of providing goods or services to persons insured under insurance products in satisfaction of the liability of the insurers under those products;

(iii) an insurance claims manager;

(iv) an insurance broker (within the meaning of the Insurance Contracts Act 1984 ) who provides the claims handling and settling service in relation to the insurance product on behalf of the insurer;

(v) a person who has provided, or has entered into an arrangement to provide, financial product advice to a person insured under the insurance product (including a person insured as a third party beneficiary under the contract of insurance that constitutes the insurance product, within the meaning of the Insurance Contracts Act 1984 ) and who also provides the claims handling and settling service on behalf of the insurer under the insurance product;

(vi) if the insurance product is prescribed by the regulations for the purposes of this subparagraph - a claimant intermediary representing a person insured under the product in pursuing a claim under the product;

(el)    

the service is a claims handling and settling service in relation to an insurance product and all of the following apply:

(i) the claims handling and settling service is provided under an arrangement between the issuer of the insurance product and a financial services licensee;

(ii) the issuer of the insurance product is prescribed by the regulations, or of a class prescribed by the regulations;

(iii) under the arrangement, the financial services licensee, or their authorised representatives, may provide the claims handling and settling service in relation to the insurance product;

(iv) the provision of the claims handling and settling service is covered by the financial services licensee ' s Australian financial services licence;

(v) the claims handling and settling service is provided to the insured as a retail client;

(em)    

the service is the provision of a claims handling and settling service in relation to an insurance product provided to a wholesale client under an arrangement between the issuer of the insurance product and a financial services licensee;

(en)    

the service is a claims handling and settling service of one of the following kinds:

(i) advice given by a lawyer, in a professional capacity as a lawyer, about matters of law, legal interpretation or the application of the law to any facts;

(ii) except as prescribed by the regulations - other advice given by a lawyer in the ordinary course of activities as a lawyer, that is reasonably regarded as a necessary part of those activities;

(iii) action taken by a lawyer, in a professional capacity as a lawyer, to determine whether an insurer is liable to another person under an insurance product, or to quantify the extent of the insurer ' s liability;

(iv) negotiation by a lawyer, in a professional capacity as a lawyer, of the settlement of a claim under an insurance product;

(v) other conduct by a lawyer, in a professional capacity as a lawyer and on behalf of another person, that could reasonably be regarded as a necessary part of acting on instruction and for which the lawyer has not received and is not entitled to receive a benefit other than the payment of professional charges, the reimbursement for expenses incurred on behalf of the other person, or the payment on account of expenses to be incurred on behalf of the other person;

(f)    

the person provides the service while performing functions, or exercising powers, in any of the following capacities or circumstances:

(i) as an official receiver or trustee within the meaning of the Bankruptcy Act 1966 ;

(ii) as a receiver, receiver and manager, or liquidator (whether appointed by a court or otherwise);

(iii) as a person appointed by a court to carry on a financial services business;

(iv) as the Public Trustee acting under a law, prescribed by regulations made for the purposes of this paragraph, of a State or Territory;

(v) as an administrator of a body corporate;

(vi) as an administrator of a deed of company arrangement executed by a body corporate;

(via) as a restructuring practitioner for a body corporate;

(vib) as a restructuring practitioner for a restructuring plan made by a body corporate;

(vii) as a trustee or person administering a compromise or arrangement between a body corporate and another person or persons;

(viii) as a personal representative of a deceased person other than a deceased financial services licensee;

(ix) subject to subsection (3) , as a personal representative of a deceased financial services licensee;

(x) in the administration of a bankrupt estate or in the winding up of a body corporate or partnership;

(g)    all of the following apply:

(i) the person is a body regulated by APRA;

(ii) the service is one in relation to which APRA has regulatory or supervisory responsibilities;

(iii) the service is provided only to wholesale clients;

(ga)    

the service is a superannuation trustee service that is provided only to wholesale clients;

(h)    

all of the following apply:

(i) the person is regulated by an overseas regulatory authority;

(ii) the provision of the service by the person is covered by an exemption specified by ASIC in writing under this subparagraph and published in the Gazette ; and

(iii) the service is provided only to wholesale clients;

(i)    the person provides the service only to related bodies corporate of the person;

(j)    

the person provides the service in the person ' s capacity as trustee of a self managed superannuation fund;

(k)    the provision of the service is covered by an exemption prescribed in regulations made for the purposes of this paragraph;

(l)    the provision of the service is covered by an exemption specified by ASIC in writing and published in the Gazette .

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

Note 2: A person is also exempt from the requirement to hold an Australian financial services licence in relation to certain services connected with offers that are eligible to be made under Division 1A of Part 7.12 (Employee share schemes): see subsection 1100ZC(7) .

911A(3)    
Subparagraph (2)(f)(ix) only applies until whichever of these happens first:

(a)    the end of 6 months after the death of the licensee;

(b)    the removal or discharge of the personal representative;

(c)    the final distribution of the licensee ' s estate.

911A(4)    

A person is not exempt under any paragraph of subsection (2) for a financial service they provide if the service is:

(a)    the operation of a registered scheme; or

(b)    a traditional trustee company service.

911A(4A)    

A person is not exempt under any paragraph of subsection (2) for a superannuation trustee service unless the exemption expressly covers a superannuation trustee service.

911A(5)    

The exemption under paragraph (2)(ea) , (eb) or (ec) , or an exemption under subparagraph (2)(h)(ii) or under paragraph (2)(k) or (l) , may apply unconditionally or subject to conditions:

(a)    in the case of the exemption under paragraph (2)(ea) , (eb) or (ec) , or an exemption under paragraph (2)(k) - specified in regulations made for the purposes of this paragraph; or

(b)    

in the case of an exemption under subparagraph (2)(h)(ii) or under paragraph (2)(l) - specified by ASIC in writing published in the Gazette .

911A(5A)    

Despite paragraph (2)(b) , the regulations may provide that the exemption under that paragraph does not apply in relation to:

(a)    a particular financial product or a particular kind of financial product; or

(b)    a particular financial product or a particular kind of financial product that is issued, varied or disposed of by a particular person, or a particular kind of person.

911A(5B)    

A person contravenes this subsection if the person contravenes subsection (1) .

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

911A(6)    
In this section:

information service
means:

(a) a broadcasting service; or

(b) an interactive or broadcast videotext or teletext service or a similar service; or

(c) an online database service or a similar service; or

(d) any other service identified in regulations made for the purposes of this paragraph.