Financial Sector Reform (Hayne Royal Commission Response - Stronger Regulators (2019 Measures)) Act 2020 (3 of 2020)

Schedule 3   Licensing and false or misleading documents

Part 1   Australian financial services licences

Corporations Act 2001

7   After section 913B

Insert:

913BA Fit and proper person test

(1) For the purposes of paragraph 913B(1)(c), subsection 914B(2) and paragraph 915C(1)(b), the requirement in this section is satisfied in relation to a person (the first person ) and a licence, or a proposed licence, if ASIC is satisfied that there is no reason to believe any of the following:

(a) that the first person is not a fit and proper person to provide the financial services covered by the licence;

(b) if the first person is a body corporate - that an officer of the first person is not a fit and proper person to perform one or more functions as an officer of an entity that provides the financial services covered by the licence;

(c) if the first person is a partnership or the multiple trustees of a trust:

(i) that any of the partners or trustees are not fit and proper persons to provide the financial services covered by the licence; or

(ii) that any of the senior managers of the partnership or the trust are not fit and proper persons to perform one or more functions as an officer of an entity that provides the financial services covered by the licence;

(d) that any person who controls the first person is not a fit and proper person to control an entity that provides the financial services covered by the licence;

(e) if a controller mentioned in paragraph (d) is a body corporate - that an officer of the controller is not a fit and proper person to perform one or more functions as an officer of an entity that controls an entity that provides the financial services covered by the licence;

(f) if a controller mentioned in paragraph (d) is a partnership or the multiple trustees of a trust:

(i) that any of the partners or trustees are not fit and proper persons to control an entity that provides the financial services covered by the licence; or

(ii) that any of the senior managers of the partnership or the trust are not fit and proper persons to perform one or more functions as an officer of an entity that controls an entity that provides the financial services covered by the licence.

(2) In considering whether a person is fit and proper for a purpose mentioned in a paragraph of subsection (1), ASIC must have regard to the matters in section 913BB.

913BB Fit and proper person test - matters to which ASIC must have regard

(1) ASIC must have regard to the matters set out in subsection (2) (subject to Part VIIC of the Crimes Act 1914) for the purposes of applying any of the following provisions to a person:

(a) a paragraph of subsection 913BA(1);

(b) paragraph 920A(1)(d).

Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them.

(2) The matters are as follows:

(a) whether any of the following of the person has ever been suspended or cancelled:

(i) an Australian financial services licence;

(ii) an Australian credit licence, or a registration under the Transitional Act, within the meaning of the National Consumer Credit Protection Act 2009;

(b) whether any of the following has ever been made against the person:

(i) a banning order, or a disqualification order under Subdivision B of Division 8 of this Part;

(ii) a banning order, or a disqualification order, under Part 2-4 of the National Consumer Credit Protection Act 2009;

(c) if the person is an individual - whether the person has ever been disqualified under this Act, or any other law of the Commonwealth or of a State or Territory, from managing corporations;

(d) whether the person has ever been banned from engaging in a credit activity (within the meaning of the National Consumer Credit Protection Act 2009) under a law of a State or Territory;

(e) whether the person has ever been linked to a refusal or failure to give effect to a determination made by AFCA;

(f) whether the person has ever:

(i) been a Chapter 5 body corporate or an insolvent under administration; or

(ii) if the person is a partnership - had a creditor's petition or a debtor's petition presented against it under Division 2 or 3 of Part IV of the Bankruptcy Act 1966;

(g) if the person is the multiple trustees of a trust - whether a trustee of the trust has ever been a Chapter 5 body corporate or an insolvent under administration;

(h) whether, in the last 10 years, the person has been convicted of an offence;

(i) any relevant information given to ASIC by a State or Territory, or an authority of a State or Territory, in relation to the person;

(j) any other matter prescribed by the regulations;

(k) any other matter ASIC considers relevant.