Financial Sector Reform (Hayne Royal Commission Response - Better Advice) Act 2021 (115 of 2021)

Schedule 1 Initial amendments

Part 1 Main amendments

Australian Securities and Investments Commission Act 2001

12 After Part 8

Insert:

Part 9 - Financial Services and Credit Panels

Division 1 - ASIC to convene panels

139 ASIC to convene panels

(1) ASIC may, in writing, convene one or more Financial Services and Credit Panels.

(2) ASIC must, in circumstances prescribed by the regulations (if any), convene a panel under subsection (1) to perform functions or exercise powers under the corporations legislation in relation to a relevant provider.

(3) A panel convened under subsection (1) must consist of the following members appointed under subsection 140(1):

(a) a Chair;

(b) at least 2 other members.

(4) The Chair must be a staff member.

Division 2 - Panel members

140 Appointment of panel members

(1) A member of a Financial Services and Credit Panel is to be appointed by ASIC by written instrument.

(2) If a determination is in force under subsection 141(1), a person must not be appointed as a member of a Financial Services and Credit Panel unless the person is specified in the determination.

(3) However, subsection (2) does not apply in relation to the appointment of the Chair of a Financial Services and Credit Panel.

141 Minister may specify persons who are eligible to be appointed to panels

(1) The Minister may make a written determination specifying persons who are eligible to be appointed to Financial Services and Credit Panels.

(2) The Minister must not specify a person for the purposes of subsection (1) unless:

(a) the person is not a member of ASIC; and

(b) the person is not a staff member; and

(i) business;

(ii) administration of companies;

(iii) financial markets;

(iv) financial products and financial services;

(v) law;

(vi) economics;

(vii) accounting;

(viii) taxation;

(ix) credit activities and credit services.

(3) In specifying a person for the purposes of subsection (1), the Minister may consult the Tax Practitioners Board.

(4) A determination made under subsection (1) is not a legislative instrument.

142 Disclosure of interests to ASIC

A person specified in a determination in force under subsection 141(1) must give written notice to ASIC of all interests, pecuniary or otherwise, that the person has or acquires and that could conflict with the proper performance of the person's duties if the person were to be appointed as a member of a Financial Services and Credit Panel.

143 Allowances

(1) A member of a Financial Services and Credit Panel is to be paid the allowances that are determined by the Remuneration Tribunal. If no determination of those allowances by the Tribunal is in operation, a member is to be paid the allowances that are prescribed under subsection (3).

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

(3) The Minister may, by legislative instrument, prescribe allowances for the purposes of subsection (1).

144 Resignation

(1) A member of a Financial Services and Credit Panel may resign the member's appointment by giving ASIC a written resignation.

(2) The resignation takes effect on the day it is received by ASIC or, if a later day is specified in the resignation, on that later day.

145 Termination of appointment

ASIC may at any time terminate the appointment of a member of a Financial Services and Credit Panel.

146 Other terms and conditions

A member of a Financial Services and Credit Panel holds office on the terms and conditions (if any) in relation to matters not covered by this Act that are determined in writing by ASIC.

147 Application of finance law

A member of a Financial Services and Credit Panel (other than the Chair of the panel) is not an official of ASIC for the purposes of the finance law (within the meaning of the Public Governance, Performance and Accountability Act 2013).

Division 3 - Decisions of panels

Subdivision A - Decisions of panels at meetings

148 Convening meetings

(1) The Chair of a Financial Services and Credit Panel must hold such meetings as are necessary for the panel to:

(a) perform its functions and exercise its powers under the corporations legislation; and

(b) perform functions or exercise powers delegated to the panel by ASIC under section 102 of this Act.

(2) The Chair of a Financial Services and Credit Panel may convene a meeting at any time.

(3) However, the Chair of a Financial Services and Credit Panel must not convene a meeting if the Chair has or acquires any interest, pecuniary or otherwise, that conflicts or could conflict with the proper performance of the Chair's duties in a matter being considered or about to be considered by the panel.

(4) The Chair of a Financial Services and Credit Panel must, by written notice given to ASIC, disclose any interest of a kind mentioned in subsection (3).

149 Presiding at meetings

The Chair of a Financial Services and Credit Panel must preside at all meetings of the panel.

150 Disclosure of interests to panels

(1) A member of a Financial Services and Credit Panel (other than the Chair of the panel) who has or acquires any interest, pecuniary or otherwise, that conflicts or could conflict with the proper performance of the member's duties in a matter being considered or about to be considered by the panel must disclose the nature of the interest to the Chair of the panel.

(2) The disclosure must be made as soon as possible after the relevant facts have come to the member's knowledge.

(3) The disclosure must be recorded:

(a) if the disclosure is made at a meeting of the panel - in the minutes of that meeting; or

(b) otherwise - in the minutes of the next meeting of the panel after the disclosure is made.

(4) At a meeting of the panel after the disclosure is made, the member:

(a) must not be present during any deliberation by the panel on the matter; and

(b) must not take part in any decision of the panel with respect to the matter.

151 Quorum

(1) At a meeting of a Financial Services and Credit Panel, a quorum is constituted by a majority of members of the panel.

(2) However, if:

(a) a member of the panel is required under section 150 not to be present during the deliberations, or to take part in any decision, of the panel with respect to a particular matter; and

(b) when the member leaves the meeting concerned there is no longer a quorum present;

the remaining members of the panel at the meeting constitute a quorum for the purpose of any deliberation or decision at that meeting with respect to that matter.

152 Voting at meetings

(1) A question arising at a meeting of a Financial Services and Credit Panel is to be determined by a majority of the votes of the members of the panel present and voting.

(2) The Chair of the panel has a deliberative vote and, if the votes are equal, a casting vote.

153 Participation in meetings etc.

(1) The Chair of a Financial Services and Credit Panel may decide to hold all or part of a meeting:

(a) at a particular place; or

(b) using any technology that allows an individual to participate in the meeting, or that part of the meeting, without being physically present at the meeting or that part of the meeting.

(2) If the Chair of the panel decides to hold all or part of a meeting using technology of a kind mentioned in paragraph (1)(b):

(a) each member of the panel may use that technology to participate in the meeting or that part of the meeting; and

(b) the meeting or that part of the meeting may be held at 2 or more places at the same time.

154 Conduct of meetings

A Financial Services and Credit Panel may, subject to this Division, regulate proceedings at its meetings as it considers appropriate.

155 Minutes

A Financial Services and Credit Panel must keep minutes of its meetings.

Subdivision B - Decisions of panels without meetings

156 Decisions without meetings

(1) A Financial Services and Credit Panel is taken to have made a decision at a meeting if:

(a) the Chair of the panel informs the other members of the panel of the proposed decision, or makes reasonable efforts to do so; and

(b) without meeting, a majority of the members of the panel entitled to vote on the proposed decision indicate agreement with the decision; and

(2) Subsection (1) applies only if:

(a) the Chair of the panel is not prevented by subsection 148(3) from convening a meeting in relation to the proposed decision; and

(b) the panel:

(i) has determined that it may make decisions of that kind without meeting; and

(ii) has determined the method by which members of the panel are to indicate agreement with proposed decisions.

(3) For the purposes of paragraph (1)(b):

(a) a member of the panel (other than the Chair of the panel) is not entitled to vote on a proposed decision if the member would not have been entitled to vote on that proposal if the matter had been considered at a meeting of the panel; and

(b) if:

(i) the number of members indicating agreement with the decision is equal to the number of members not indicating agreement with the decision; and

(ii) the Chair of the panel indicates the Chair's agreement with the decision;

a majority of the members of the panel entitled to vote on the proposed decision is taken to have indicated agreement with the decision.

(4) The panel must keep a record of decisions made in accordance with this section.

Division 4 - Panel hearings

Subdivision A - General

157 When hearings are to be held

(1) A Financial Services and Credit Panel may only hold a hearing as required or permitted by this section.

(2) A Financial Services and Credit Panel must hold a hearing if:

(a) the panel proposes to make:

(i) a decision to make an order, as an ASIC delegate, against a person under subsection 920A(1) of the Corporations Act (ASIC's power to make a banning order); or

(ii) a decision to make an order, as an ASIC delegate, against a person under subsection 80(1) of the National Consumer Credit Protection Act 2009 (ASIC's power to make a banning order); or

(b) a relevant provider requests that the panel hold a hearing in response to a proposed action notice given to the relevant provider.

(3) A Financial Services and Credit Panel may hold a hearing if ASIC makes a request of the panel under:

(a) paragraph 171E(3)(a) of this Act (variation, withdrawal and enforcement of undertakings given to Financial Services and Credit Panels); or

(b) subsection 921N(2) or paragraph 921N(4)(a) of the Corporations Act (variation or revocation of instruments affecting relevant providers).

158 Panels to take account of evidence and submissions

A Financial Services and Credit Panel must take into account the following:

(a) any evidence given, or any submission made, to it at a hearing of the panel;

(b) any submission lodged with it under subsection 162(2);

in making a decision on a matter to which the evidence or submission relates.

Subdivision B - Hearing procedures

159 Proceedings at hearings

(1) A hearing of a Financial Services and Credit Panel must be conducted with as little formality and technicality, and with as much expedition, as a proper consideration of the matters before the panel permits.

(2) At a hearing of a Financial Services and Credit Panel, the panel:

(a) is not bound by the rules of evidence; and

(b) may, on such conditions as it thinks fit, permit a person to intervene; and

(3) The Chair of a Financial Services and Credit Panel may decide to hold all or part of a hearing of the panel:

(a) at a particular place; or

(b) using any technology that allows an individual to participate in the hearing, or that part of the hearing, without being physically present at the hearing or that part of the hearing.

(4) If the Chair of a Financial Services and Credit Panel decides to hold all or part of a hearing using technology of a kind mentioned in paragraph (3)(b):

(a) each participant in the hearing (including each member of the panel) may use that technology to participate in the hearing or that part of the hearing; and

(b) the hearing or that part of the hearing may be held at 2 or more places at the same time.

(5) Subdivision A of Division 3 (decisions of panels at meetings) applies, so far as practicable, in relation to a hearing of a Financial Services and Credit Panel as if the hearing were a meeting of the panel.

160 Notice of hearings

If a Financial Services and Credit Panel holds a hearing in relation to a proposed decision affecting a person:

(a) the Chair of the panel must appoint a time for the hearing and give written notice of that time to the person; and

(b) if the Chair of the panel decides under paragraph 159(3)(a) to hold the hearing, or part of the hearing, at a particular place - the Chair must give written notice of the place to the person; and

(c) if the Chair of the panel decides under paragraph 159(3)(b) to hold the hearing, or part of the hearing, using technology that allows an individual to participate in the hearing, or that part of the hearing, without being physically present at the hearing or that part of the hearing - the Chair must give notice of the technology to be used to the person.

161 Who may be present at hearings etc.

(1) A person must not be present at a hearing, or a part of a hearing, of a Financial Services and Credit Panel in relation to a proposed decision affecting a person (the affected person ) unless:

(a) the panel has decided, under paragraph 163(2)(a), to hold the hearing or the part of the hearing, as the case may be, in public; or

(b) the person is required by a summons under subsection 165(1) to appear at the hearing; or

(d) both the following apply:

(i) the person is a staff member;

(ii) the Chair of the panel has not directed the person to leave the hearing or the part of the hearing, as the case may be; or

(e) the person is covered by subsection (2).

Note: Failure to comply with this subsection is an offence (see subsection 171(1)).

(2) This subsection covers the following:

(a) the affected person;

(b) a person who is, under section 164, representing:

(i) the affected person; or

(ii) a person required by a summons under subsection 165(1) to appear at the hearing.

162 Appearance of affected persons at hearings

(1) A person does not need to appear at a hearing of a Financial Services and Credit Panel in relation to a proposed decision affecting the person (even if the person requested the hearing in response to a proposed action notice given to the person).

(2) If the person chooses not to appear at the hearing, the person may, before the day of the hearing, lodge with the panel any written submissions that the person wishes the panel to take into account in relation to the proposed decision.

163 Affected persons may request hearings to be held in public

(1) A person may request that a hearing (or a part of a hearing) of a Financial Services and Credit Panel in relation to a proposed decision affecting the person be held in public.

(2) The panel must decide to:

(a) hold the hearing (or that part of the hearing) in public; or

(b) not hold the hearing (or that part of the hearing) in public.

(3) In making a decision under subsection (2), the panel must have regard to the following:

(a) whether evidence that may be given, or a matter that may arise, during the hearing (or that part of the hearing) is of a confidential nature or relates to the commission, or to the alleged or suspected commission, of an offence;

(b) any unfair prejudice to a person's reputation that would be likely to be caused if the hearing (or that part of the hearing) took place in public;

(d) any other relevant matter.

164 Representation at hearings

(1) At a hearing of a Financial Services and Credit Panel, an individual may appear in person or be represented by an employee of the individual approved by the panel.

(2) A body corporate may be represented at a hearing of a Financial Services and Credit Panel by an officer or employee of the body corporate approved by the panel.

(3) An unincorporated association, or a person in the person's capacity as a member of an unincorporated association, may be represented at a hearing of a Financial Services and Credit Panel by a member, officer or employee of the association approved by the panel.

(4) Any person may be represented at a hearing of a Financial Services and Credit Panel by a barrister or solicitor of the Supreme Court of a State or Territory or of the High Court.

165 Power to require persons to appear and give evidence etc.

(1) At or prior to a hearing of a Financial Services and Credit Panel in relation to a proposed decision affecting a person (the affected person ), the Chair of the panel may, by written summons given to a person (other than the affected person):

(a) require the person to appear before the panel at the hearing 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 the Chair.

Note 1: The affected person does not need to appear at the hearing (see subsection 162(1)).

Note 2: Failure to comply with a requirement made under this subsection is an offence (see subsection 170(1)).

(2) At a hearing of a Financial Services and Credit Panel, the panel may take evidence on oath or affirmation, and for that purpose the Chair of the panel may:

(a) require a person appearing at the hearing to either take an oath or make an affirmation; and

(b) administer an oath or affirmation to a person appearing at the hearing.

Note: Failure to comply with a requirement made under this subsection is an offence (see subsection 170(2)).

(3) The oath or affirmation to be taken or made by a person for the purposes of subsection (2) is an oath or affirmation that the evidence the person will give will be true.

(4) The Chair of a Financial Services and Credit Panel presiding at a hearing of the panel:

(a) may require a person appearing at the hearing to answer a question put to the person; and

(b) may require a person appearing at the hearing 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 subsection 170(3)).

(5) The Chair of a Financial Services and Credit Panel may permit a person appearing at a hearing of the panel to give evidence by tendering, and if the Chair so requires, verifying by oath or affirmation, a written statement.

166 Allowances and expenses

A person required by a summons under subsection 165(1) to appear at a hearing of a Financial Services and Credit Panel in relation to a proposed decision affecting a person (the affected person ) is entitled to be paid the prescribed allowances and expenses (if any) by:

(a) if the summons was issued at the affected person's request - the affected person; or

(b) otherwise - ASIC.

167 Panels may restrict publication of certain material

(1) If, at a hearing of a Financial Services and Credit Panel, the panel is satisfied that it is desirable to restrict the publication of evidence given before the panel, or matters contained in documents lodged with the panel, the panel may give a written direction restricting the publication of that evidence or those matters.

Note: Failure to comply with a direction in force under this subsection is an offence (see subsection 171A(1)).

(2) In determining whether it is desirable to restrict the publication of evidence given before the panel, or matters contained in documents lodged with the panel, the panel must have regard to:

(a) whether evidence that has been or may be given, or a matter that has arisen or may arise, during the hearing is:

(i) of a confidential nature; or

(ii) 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 gives a direction restricting the publication of that evidence or those matters; and

(c) whether it is in the public interest that the panel gives a direction restricting the publication of that evidence or those matters; and

(d) any other relevant matter.

Subdivision C - Offences

168 Contempt of panels

(1) A person commits an offence if:

(a) the person does an act or omits to do an act; and

(b) the act or omission results in the obstruction or hindering of a Financial Services and Credit Panel, or a member of the panel, in the performance or exercise of any of the panel's functions and powers.

Penalty: 2 years imprisonment.

(2) A person commits an offence if:

(a) the person does an act or omits to do an act; and

(b) the act or omission results in the disruption of a hearing.

Penalty: 2 years imprisonment.

169 Giving false evidence

(1) A person commits an offence if:

(a) the person gives evidence at a hearing of a Financial Services and Credit Panel; and

(b) the evidence is false or misleading in a material particular.

Penalty: 2 years imprisonment.

(2) Subsection (1) does not apply if the person, when giving the evidence, reasonably believed that it was true and not misleading.

Note: A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code).

170 Failing to comply with certain requirements

(1) A person commits an offence if:

(a) the person is required to do something in accordance with a summons given to the person under subsection 165(1); and

(b) the person fails to comply with the requirement.

Penalty: 50 penalty units.

(2) A person commits an offence if:

(a) the person is required under paragraph 165(2)(a) to take an oath or make an affirmation; and

(b) the person fails to comply with the requirement.

Penalty: 50 penalty units.

(3) A person commits an offence if:

(a) the person is required under subsection 165(4) to answer a question or produce a document; and

(b) the person fails to comply with the requirement.

Penalty: 50 penalty units.

(4) An offence against subsection (1), (2) or (3) is an offence of strict liability.

171 Being present at hearings

(1) A person commits an offence if:

(a) the person is present at a hearing, or a part of a hearing, of a Financial Services and Credit Panel; and

(b) the panel has not decided, under paragraph 163(2)(a), to hold the hearing or the part of the hearing, as the case may be, in public; and

(d) the person is not covered by subsection 161(2).

Penalty: 30 penalty units.

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

171A Publication of restricted material

(1) A person commits an offence if:

(a) the person publishes evidence given before, or matters contained in documents lodged with, a Financial Services and Credit Panel; and

(b) a direction restricting the publication of that evidence or those matters is in force under subsection 167(1).

Penalty: 120 penalty units.

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

Subdivision D - Other matters

171B Reference to Court of question of law arising at hearing

(1) ASIC may, at the request of the Chair of a Financial Services and Credit Panel, refer to the Court for decision a question of law arising at a hearing of the panel.

(2) Where a question is referred under subsection (1), the panel must not, in relation to a matter to which the hearing relates:

(a) make, while the reference is pending, a decision to which the question is relevant; or

(b) proceed in a manner, or make a decision, that is inconsistent with the Court's opinion on the question.

(3) Where a question is referred under subsection (1):

(a) ASIC must send to the Court all documents that were before the panel in connection with the hearing; and

(b) at the end of the proceeding in the Court in relation to the reference, the Court must cause the documents to be returned to ASIC.

171C Protection of panel members etc.

(1) A member of a Financial Services and Credit Panel has, in the performance or exercise of any of the member's functions and powers as a member in relation to a hearing of the panel, the same protection and immunity as a Justice of the High Court.

(2) A barrister, solicitor or other person representing a person at a hearing of a Financial Services and Credit Panel has the same protection and immunity as a barrister in appearing for a party in a proceeding in the High Court.

(3) Subject to this Act, a person who is required by a summons under subsection 165(1) to appear at a hearing of a Financial Services and Credit Panel, or a person appearing at a such a hearing, has the same protection as a witness in a proceeding in the High Court.

Division 5 - Information given to panel members

171D Use and disclosure of information

(1) A person commits an offence if:

(a) the person is or was a member of a Financial Services and Credit Panel; and

(b) the person uses or discloses information; and

(c) the information was obtained by the person in connection with the performance of the panel's functions or the exercise of the panel's powers.

Penalty: 2 years imprisonment.

(2) Subsection (1) does not apply if the use or disclosure:

(a) is required or permitted by a law of the Commonwealth or a prescribed law of a State or Territory; or

(b) is made to ASIC for the purposes of the performance of ASIC's functions, or the exercise of its powers, under the corporations legislation or the National Consumer Credit Protection Act 2009; or

(c) is made to the Tax Practitioners Board for the purposes of the performance of the Board's functions, or the exercise of its powers, under the Tax Agent Services Act 2009; or

(d) is made for the purposes of the performance of the panel's functions or the exercise of its powers; or

(e) is made to another Financial Services and Credit Panel for the purposes of the performance of the other panel's functions or the exercise of the other panel's powers.

Note: A defendant bears an evidential burden in relation to the matters in subsection (2) (see subsection 13.3(3) of the Criminal Code).

Division 6 - Enforceable undertakings

171E Variation, withdrawal and enforcement of undertakings given to Financial Services and Credit Panels

(1) A Financial Services and Credit Panel may accept a written undertaking given by a person in connection with a matter in relation to which the panel may make an instrument under subsection 921K(1) of the Corporations Act (power of Financial Services and Credit Panels to take action against relevant providers).

Variation or withdrawal of undertaking

(2) The person may apply to ASIC to withdraw or vary the undertaking.

(3) If the person makes an application under subsection (2), ASIC must decide to:

(a) request a Financial Services and Credit Panel to decide whether it consents to the person withdrawing or varying the undertaking; or

(b) refuse to make such a request.

(4) The person may withdraw or vary the undertaking only if:

(a) ASIC makes a request of a Financial Services and Credit Panel under paragraph (3)(a) in relation to the variation or withdrawal; and

(b) the panel consents to the variation or withdrawal.

Enforcement of undertaking

(5) If ASIC considers that the person who gave the undertaking has breached any of its terms, ASIC may apply to the Court for an order under subsection (6).

(6) If the Court is satisfied that the person has breached a term of the undertaking, the Court may make all or any of the following orders:

(a) an order directing the person to comply with that term of the undertaking;

(b) an order directing the person to pay to the Commonwealth an amount up to the amount of any financial benefit that the person has obtained directly or indirectly and that is reasonably attributable to the breach;

(c) any order that the Court considers appropriate directing the person to compensate any other person who has suffered loss or damage as a result of the breach;

(d) any other order that the Court considers appropriate.

Division 7 - Electronic communication

171F Electronic communication of documents

Documents given by panels etc.

(1) Section 921W of the Corporations Act applies in relation to a document that is required or permitted under this Part to be given to a person by:

(a) a Financial Services and Credit Panel; or

(b) the Chair of a Financial Services and Credit Panel; or

as if the document were covered by subsection (1) of that section.

Documents given to panels etc.

(2) Section 921X of the Corporations Act applies in relation to a document that is required or permitted under this Part to be given by a person to:

(a) a Financial Services and Credit Panel; or

(b) the Chair of a Financial Services and Credit Panel; or

as if the document were covered by subsection (1) of that section.

Copyright notice

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).