Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 (87 of 2024)

Schedule 1   Financial market infrastructure: resolution authority

Part 2   Crisis prevention

Corporations Act 2001

28   After Subdivision A of Division 2 of Part 7.3

Insert:

Subdivision AA - Obligations on licensees and certain related bodies and persons

821H Notification of recapitalisation or restructuring

(1) A body corporate that:

(a) is a CS facility licensee; or

(b) is a related body corporate of a CS facility licensee and is incorporated in Australia;

must give written notice to the Reserve Bank immediately after:

(c) the body corporate forms an intention to enter into a transaction to recapitalise; or

(d) the board of the body corporate agrees to a plan to restructure the body corporate.

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

(2) Subsection (1) does not apply if the transaction or restructure is minor or insignificant.

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

Invalid acts

(3) Subject to subsection (6), if a body corporate:

(a) is incorporated in Australia; and

(b) purports to do either of the following acts:

(i) enter into a transaction to which paragraph (1)(c) applies;

(ii) an act that is part of implementing a plan to which paragraph (1)(d) applies; and

(c) contravenes subsection (1) in relation to that transaction or plan;

the act is invalid and of no effect.

(4) The body corporate may apply in writing to the Reserve Bank to have the contravention disregarded.

(5) The Reserve Bank may, by notice in writing given to the body corporate that made the application, agree to the contravention being disregarded for the purposes of subsection (3) if the Reserve Bank is satisfied that it would be appropriate for the contravention to be disregarded.

(6) For the purposes of subsection (3), the contravention must be disregarded if the Reserve Bank so agrees under subsection (5).

821J Notice of any other material changes in circumstances

(1) A body corporate that:

(a) is a CS facility licensee; or

(b) is a related body corporate of a CS facility licensee and is incorporated in Australia;

must give written notice to the Reserve Bank immediately after becoming aware of a material change in circumstances of the body corporate that:

(c) relate to:

(i) risk management; or

(ii) the licensee's ability to continue to provide one or more clearing and settlement facility services; and

(d) are circumstances to which subsection (2) applies.

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

(2) For the purposes of paragraph (1)(d), this subsection applies to circumstances that affect any of the following:

(a) the solvency of the body corporate;

(b) voting power in the body corporate (but see subsections (3) and (4));

(c) the structure of the body corporate;

(d) the structure of the group (if any) consisting of:

(i) the body corporate; and

(ii) each related body corporate of the body corporate;

(e) the provision of one or more clearing and settlement facility services that are critical to the functioning of the financial system in Australia.

Change in voting power in listed related body corporate

(3) Subsection (4) applies to a body corporate that is:

(a) a related body corporate of a CS facility licensee; and

(b) a listed entity.

(4) For the purpose of this section, a change in voting power in the body corporate is a material change in circumstances of the body corporate if, and only if:

(a) before the change, a particular person held:

(i) no voting power in the body corporate; or

(ii) less than 20% of the voting power in the body corporate; and

(b) after the change, the person holds at least 20% of that voting power.

Changes already notified to Reserve Bank

(5) A body corporate is not required to notify the Reserve Bank of a material change in circumstances of the body corporate under subsection (1) if the body corporate has already notified the Reserve Bank of that change under another provision of this Part.

821K Notification of appointment of external administrator

(1) If a person is considering appointing an external administrator of a body corporate that:

(a) is a CS facility licensee; or

(b) is a related body corporate of a CS facility licensee and is incorporated in Australia;

the person must give written notice to the Reserve Bank. The notice must be given at least 7 days before an external administrator of the body corporate is appointed.

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

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

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

(3) An external administrator of the body corporate must not be appointed before that time, unless the Reserve Bank approves the appointment.

Invalid acts

(4) If:

(a) the body corporate is incorporated in Australia; and

(b) a purported external administrator of the body corporate, appointed in contravention of subsection (3), purports to act in relation to the body corporate's business;

those acts are invalid and of no effect.

Safe harbour

(5) Subsection 588G(2) does not apply in relation to a person and a debt incurred by a body corporate if the debt is incurred:

(a) at a time while this section prevents the appointment of an external administrator; and

(b) in the ordinary course of the body corporate's business, or with the written consent of the Reserve Bank or by order of the Court.

821L Notification from liquidator and request for information about winding up

Notification of applications relating to winding up

(1) A liquidator, or a provisional liquidator, of a body corporate that:

(a) is a CS facility licensee; or

(b) is a related body corporate of a CS facility licensee and is incorporated in Australia;

must give written notice to the Reserve Bank, at least 7 days before making an application to the Court in relation to a matter arising under the winding-up of the body corporate.

(2) The notice must include details of the proposed application.

(3) The Reserve Bank is entitled to be heard on the application to the Court.

Information request

(4) The Reserve Bank may request the liquidator or provisional liquidator to give, within a reasonable time specified in the request, specified information in writing about:

(a) the application; or

(b) other matters relating to the winding-up, or proposed winding up, of the body corporate; or

(c) the affairs of the body corporate.

(5) The liquidator or provisional liquidator must comply with the request.