Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (103 of 2004)

Schedule 2 Financial reporting

Part 3 Financial Reporting Panel

Australian Securities and Investments Commission Act 2001

11 After Part 12

Insert:

Part 13 - Financial Reporting Panel

Division 1 - General

239AA Financial Reporting Panel

A Financial Reporting Panel is established.

239AB Membership

(1) The Financial Reporting Panel consists of such members, not fewer than 5, as hold office in accordance with this Part.

(2) The Minister is to appoint the members of the Financial Reporting Panel.

(3) Each of the members may be appointed as a full-time member or as a part-time member.

(4) The Minister must not appoint a person as a member unless the Minister is satisfied that the person is qualified for appointment because of his or her knowledge of, or experience in, one or more of the following fields:

(a) accounting;

(b) auditing;

(d) the administration of companies;

(e) law.

(5) The performance of the functions or the exercise of the powers of the Financial Reporting Panel is not affected merely because its membership is not as prescribed by subsection (1), unless a continuous period of 3 months has elapsed since its membership ceased to be as so prescribed.

239AC Chairperson

The Minister is to appoint as Chairperson of the Financial Reporting Panel a person who is, or is to be, a member.

239AD Functions and powers of Financial Reporting Panel

The Financial Reporting Panel has the functions and powers conferred on it by or under the Corporations legislation.

239AE Term of office as member

(1) Subject to this Act, a person appointed as a member holds office for the term specified in the instrument of appointment, but is eligible for re-appointment.

(2) The term specified must not exceed 5 years.

239AF Term of office as Chairperson

(1) Subject to this Act, a person appointed as Chairperson holds office as such until:

(a) the end of his or her current term as a member; or

(b) he or she otherwise stops being a member;

whichever happens first.

(2) A person is not ineligible to be appointed under section 239AC merely because he or she has been so appointed before.

239AG Resignation

A person may resign as a member or Chairperson by writing signed and delivered to the Minister.

239AH Termination of appointment

The Minister may terminate a member's appointment because of misbehaviour, or the physical or mental incapacity, of the member or if the member:

(a) becomes bankrupt, applies to take the benefit of a law for the relief of bankrupt or insolvent debtors, compounds with his or her creditors or assigns remuneration or property for their benefit; or

(b) is a full-time member and engages without the Minister's consent in paid employment outside the duties of the member's office; or

(c) is a full-time member and is absent from duty, except on leave granted in accordance with section 239AJ, for 14 consecutive days, or for 28 days in any period of 12 months; or

(d) without reasonable excuse, contravenes section 239BB.

239AI Remuneration and allowances

(1) A member must be paid such remuneration as is determined by the Remuneration Tribunal but, if no determination of that remuneration by the Tribunal is in operation, a member must be paid such remuneration as the Minister determines in writing.

(2) A member must be paid such allowances as the Minister determines in writing.

(3) This section has effect subject to the Remuneration Tribunal Act 1973.

239AJ Leave of absence

(1) A full-time member has such recreation leave entitlements as are determined by the Remuneration Tribunal.

(2) The Minister may grant a full-time member leave of absence, other than recreation leave, on such terms and conditions as to remuneration or otherwise as the Minister determines.

239AK Other terms and conditions

A member holds office on such terms and conditions (if any) in respect of matters not provided for by this Act as the Minister determines in writing.

239AL Acting Chairperson

(1) The Minister may appoint a member to act as Chairperson:

(a) during a vacancy in the office of Chairperson (whether or not an appointment has previously been made to the office); or

(b) during all periods when the Chairperson is absent from duty or from Australia or is, for any other reason, unable to perform the functions of the office.

(2) Anything done by, or in relation to, a person purporting to act under an appointment under subsection (1) is not invalid merely because:

(a) the occasion for the appointment had not arisen; or

(b) there was a defect or irregularity in connection with the appointment; or

(d) the occasion to act had not arisen or had ceased.

239AM Annual report

(1) The Financial Reporting Panel must, as soon as practicable after 30 June, and in any event before 31 October, in each year:

(a) prepare a report describing the operations of the Panel during the year that ended on 30 June in that year; and

(b) give to the Minister a copy of the report.

(2) If a copy of a report is given to the Minister under subsection (1), he or she must cause a copy of the report to be laid before each House of the Parliament within 15 sitting days of that House after he or she receives the first-mentioned copy.

Division 2 - Conduct of Financial Reporting Panel's business

239BA Constitution of Financial Reporting Panel in relation to particular matters

(1) The Financial Reporting Panel must, for the purposes of the performance or exercise of its functions or powers in relation to a particular matter, be constituted by 3 members in respect of whom a direction is in force under this section in relation to that matter.

(2) The Chairperson may give directions about the members (the sitting members ) who are to constitute the Financial Reporting Panel for the purposes of performing or exercising its functions or powers in relation to particular matters.

(3) A direction under subsection (2) must:

(a) unless the sitting members include the Chairperson - designate one of them as Chairperson; and

(b) in any case - designate one of the sitting members as Deputy Chairperson;

of the Financial Reporting Panel as constituted in relation to the matter concerned.

(4) If the Chairperson gives a direction as to the sitting members, he or she may:

(a) revoke the direction and give a new direction under subsection (2) as to the sitting members; or

(b) vary the direction to replace one or more of the sitting members;

at any time after the giving of the direction and before the commencement of proceedings in relation to the matter.

(5) If:

(a) the Chairperson gives a direction as to the sitting members; and

(b) one of those persons:

(i) ceases to be a member; or

(ii) ceases to be available for the purposes of proceedings in relation to a matter;

during the proceedings or after the completion of the proceedings but before the report on the matter to which the proceedings relate is finalised;

the Chairperson may vary the direction to replace that person at any time after the person so ceases to be a member or to be available.

239BB Disclosure of interests by members

(1) If:

(a) a member is, or is to be, a member of the Financial Reporting Panel as constituted for the purposes of the performance or exercise of its functions or powers in relation to a particular matter; and

(b) the member has or acquires any interest, pecuniary or otherwise, that could conflict with the proper performance of the member's functions in relation to that matter;

the member:

(d) except with the Chairperson's consent, must not take part in the performance or exercise of the Financial Reporting Panel's functions or powers in relation to the matter.

(2) The Chairperson must not, under paragraph (1)(d), consent to a member taking part in the performance or exercise of the Financial Reporting Panel's functions or powers in relation to a matter unless the Chairperson believes, on reasonable grounds, that the member's interest:

(a) is immaterial or indirect; and

(b) will not prevent the member from acting impartially in relation to the matter.

(3) If the Chairperson becomes aware that a member who is, or is to be, a member of the Financial Reporting Panel (as constituted for the purposes of the performance or exercise of its functions or powers in relation to a particular matter) has, in relation to that matter, an interest of the kind referred to in subsection (1):

(a) the Chairperson must revoke the direction given under subsection 239BA(2) in relation to the matter unless the Chairperson believes, on reasonable grounds, that the member's interest:

(i) is immaterial or indirect; and

(ii) will not prevent the member from acting impartially in relation to the matter; or

(b) if the Chairperson is not required to revoke that direction under paragraph (a), the Chairperson must cause the member's interest to be disclosed to the parties involved in the matter.

239BC Application of Division 2 of Part 7

Division 2 of Part 7 applies in relation to the Financial Reporting Panel as if a reference in section 127 to ASIC included a reference to the Financial Reporting Panel.

Division 3 - Financial Reporting Panel proceedings

239CA Interpretation

(1) For the purposes of the performance or exercise, in relation to a particular matter, of any of the Financial Reporting Panel's functions and powers, this Division has effect as if:

(a) a reference to the Financial Reporting Panel were a reference to the Financial Reporting Panel as constituted in relation to that matter; and

(b) a reference to a member were a reference to a member of the Financial Reporting Panel as so constituted; and

(c) if the Chairperson is not a member of the Financial Reporting Panel as so constituted - a reference to the Chairperson were a reference to the member designated, in a direction in force under subsection 239BA(2), as the Chairperson of the Financial Reporting Panel as so constituted; and

(d) a reference to the Deputy Chairperson were a reference to the member designated, in a direction in force under subsection 239BA(2), as Deputy Chairperson of the Financial Reporting Panel as so constituted.

(2) A reference in this Division to Financial Reporting Panel proceedings includes a reference to a part of the Financial Reporting Panel proceedings.

239CB Power to conduct proceedings

(1) The Financial Reporting Panel may conduct proceedings for the purposes of the performance or exercise of any of its functions and powers.

(2) The Chairperson may convene proceedings to be held at a place and time he or she determines.

239CC Financial Reporting Panel proceedings

Proceedings in private

(1) Subject to subsection (2), the Financial Reporting Panel's proceedings must take place in private.

Proceedings in public

(2) The proceedings must take place in public if the lodging entity requests the Panel, in writing, that the proceedings take place in public. This subsection has effect subject to any directions under subsection (3).

Part of proceedings in private or publication restrictions

(3) The Financial Reporting Panel may give directions under subsection (4) if:

(a) the proceedings are taking place in public at the request of the lodging entity under subsection (2); and

(b) the Financial Reporting Panel is satisfied that it is desirable to do so:

(i) because of the confidential nature of any evidence or matter; or

(ii) in order to protect the interests of any other person.

(4) The Financial Reporting Panel may:

(a) direct that a part of the proceedings take place in private; and

(b) give directions as to the persons who may be present at that part of the proceedings if it is to take place in private.

A reference in this section to proceedings that take place in private includes a reference to that part of the proceedings that takes place in private because of a direction under paragraph (a).

Who may be present at proceedings taking place in private

(5) The Financial Reporting Panel may give directions as to the persons who may be present at proceedings that take place in private.

(6) A person must not be present at proceedings that take place in private unless the person is:

(a) the Chairperson; or

(b) a member of the Financial Reporting Panel; or

(d) another person who is entitled to be given an opportunity to appear at the proceedings; or

(e) a person representing ASIC; or

(f) a member of the staff of the Financial Reporting Panel approved by the Panel; or

(g) entitled to be present because of a direction under subsection (4).

Penalty: 10 penalty units.

(7) An offence against subsection (6) is an offence of strict liability.

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

ASIC and person entitled to appear

(8) Nothing in a direction given by the Financial Reporting Panel under paragraph (3)(a) or subsection (6) prevents the presence at the proceedings of:

(a) a person representing ASIC; or

(b) a person who is entitled to be given an opportunity to appear at the proceedings.

Note: Although ASIC is entitled to have a representative at the proceedings, it is not entitled to be legally represented (see section 239CG).

(9) The Financial Reporting Panel may revoke or vary a direction given under subsection (4).

239CD Financial Reporting Panel may restrict publication of certain material

(1) If, during Financial Reporting Panel proceedings, the Panel is satisfied that it is desirable to do so, the Panel may give directions preventing or restricting the publication of:

(a) submissions or evidence made or given to the Panel; or

(b) matters contained in documents lodged with the Panel.

(2) In determining whether or not to give a direction under subsection (1), the Financial Reporting Panel must have regard to:

(a) whether:

(i) submissions or evidence made or given, or that may be made or given; or

(ii) a matter that has arisen or may arise;

during the proceedings is of a confidential nature or relates to the commission, or to the alleged or suspected commission, of an offence against an Australian law; and

(b) any unfair prejudice to a person's reputation that would be likely to be caused unless the Panel exercises its powers under this section; and

(d) any other relevant matter.

(3) A person must not contravene a direction given under subsection (1).

Penalty: 50 penalty units or imprisonment for 1 year, or both.

(4) An offence constituted by a contravention of subsection (3) is punishable on summary conviction.

(5) The Financial Reporting Panel may revoke or vary a direction given under subsection (1).

239CE Power to summon witnesses and take evidence

(1) A member may, by written summons in the prescribed form given to a person to whom subsection (2) applies:

(a) require the person to appear before the Financial Reporting Panel at Financial Reporting Panel proceedings to give evidence, to produce specified documents, or to do both; and

(b) require the person to attend from day to day unless excused, or released from further attendance, by a member.

Note: Failure to comply with a requirement made under this subsection is an offence (see section 239CJ).

(2) This subsection applies to:

(a) a staff member of ASIC; or

(b) an officer of the lodging entity; or

(d) any other person involved in preparing, or auditing, the relevant financial report for or on behalf of the lodging entity.

(3) In Financial Reporting Panel proceedings, the Financial Reporting Panel may take evidence on oath or affirmation, and for that purpose a member may:

(a) require a witness in the proceedings to either take an oath or make an affirmation; and

(b) administer an oath or affirmation to a witness in the proceedings.

Note: Failure to comply with a requirement made under this subsection is an offence (see section 239CJ).

(4) The oath or affirmation to be taken or made by a person for the purposes of this section is an oath or affirmation that the evidence the person will give will be true.

(5) The member presiding at Financial Reporting Panel proceedings:

(a) may require a witness in the proceedings to answer a question put to the witness; and

(b) may require a person appearing in the proceedings pursuant to a summons issued under this section to produce a document specified in the summons.

Note: Failure to comply with a requirement made under this subsection is an offence (see section 239CJ).

(6) The Financial Reporting Panel may pay such amount as it thinks reasonable on account of the costs and expenses (if any) that a person (other than a staff member of ASIC) incurs in complying with a requirement made under this section.

239CF Quorum

In Financial Reporting Panel proceedings, 2 members form a quorum.

239CG No legal representation in proceedings before the Financial Reporting Panel

(1) Unless the Financial Reporting Panel otherwise determines, a party to Financial Reporting Panel proceedings is not to be legally represented in the proceedings.

(2) For the purposes of this section, ASIC is taken to be a party to the proceedings.

(3) The Financial Reporting Panel may revoke or vary a determination made under subsection (1).

239CH Procedure

(1) Subject to subsections (2) to (4), the Financial Reporting Panel may determine the procedural rules to be followed in Financial Reporting Panel proceedings.

(2) Financial Reporting Panel proceedings are to be conducted in accordance with (in order of priority):

(a) the requirements of this Division and the Corporations Act; and

(b) the requirements of the regulations.

(3) Without limiting paragraph (2)(b), the regulations may deal with:

(a) the people who are entitled to be given the opportunity to appear in Financial Reporting Panel proceedings; and

(b) making submissions or giving evidence in Financial Reporting Panel proceedings; and

(c) the matters that the Financial Reporting Panel is to take into account when making a decision in the course of Financial Reporting Panel proceedings.

(4) The rules of procedural fairness, to the extent that they are not inconsistent with the provisions of this Act or the regulations made under it, apply to Financial Reporting Panel proceedings.

239CI Protection of members etc.

(1) A member has, in the performance or exercise of any of his or her functions and powers as a member in relation to Financial Reporting Panel proceedings, the same protection and immunity as a Justice of the High Court.

(2) Subject to this Act:

(a) a person who is required by a summons under section 239CE to appear in Financial Reporting Panel proceedings; or

(b) a witness in Financial Reporting Panel proceedings;

has the same protection as a witness in a proceeding in the High Court.

239CJ Non-compliance with requirements made under section 239CE

(1) A person must not fail to comply with a requirement made under subsection 239CE(1), (3) or (5).

Penalty: 10 penalty units.

(2) An offence against subsection (1) is an offence of strict liability.

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

239CK Contempt of Financial Reporting Panel

(1) A person must not:

(a) engage in conduct that results in the obstruction or hindering of the Financial Reporting Panel or a member in the performance or exercise of any of the Financial Reporting Panel's functions and powers; or

(b) engage in conduct that results in the disruption of Financial Reporting Panel proceedings.

Penalty: 50 penalty units or imprisonment for 1 year, or both.

(2) An offence constituted by a contravention of subsection (1) is punishable on summary conviction.

239CL Powers of Court where non-compliance with section 239CE

(1) This section applies if the Financial Reporting Panel, as constituted for the purposes of particular Financial Reporting Panel proceedings, is satisfied that a person has failed to comply with a requirement made under section 239CE in, or in relation to, those proceedings.

(2) A member of the Financial Reporting Panel as so constituted may by writing certify the failure to the Court.

(3) If a member of the Financial Reporting Panel does so, the Court may inquire into the case and may order the person to comply with the requirement as specified in the order.

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