Australian Securities and Investments Commission
Corporations Act 2001 — Paragraph 601QA(1)(a) — Variation
Under paragraph 601QA(1)(a) of the Corporations Act 2001 and with effect from the commencement of Schedule 1 to the Financial Services Reform Act 2001, the Australian Securities and Investments Commission hereby varies Class Order [98/51] by:
1. omitting from the heading the word “Law” and substituting the words “Act 2001”;
2. omitting from the introductory words, the words “Corporations Law” and substituting the words “Corporations Act 2001 (the “Act”)”;
3. omitting from the introductory words, the word “Law” (second occurring) and substituting the word “Act”; and
4. omitting all the text between the headings "Schedule" and "Interpretation" and substituting the following paragraph:
“Scheme property that is held separately from the assets of the responsible entity and of the person holding the property where that property is comprised of one or more of the following:
(a) cash (including foreign exchange);
(b) accounts and deposits with a bank or financial institution;
(c) securities as defined in subsection 92(1) of the Act;
(d) derivatives as defined in section 761D of the Act (but not including a
chattel or real property mortgage);
(e) until 1 July 2002, an interest arising from an Eligible SELECT Master
Agreement.”
Dated the 5th day of February 2002
Signed by Brendan Byrne
as a delegate of the Australian Securities and Investments Commission
Overview
The Australian Securities and Investments Commission Corporations Act 2001 was enacted by the Parliament of Australia to provide a comprehensive legal framework for corporations operating in the country. This Act was introduced to address the need for a modern, streamlined, and efficient legislative environment that would cater to the evolving needs of businesses and investors. By consolidating and updating various existing laws, the Act aimed to provide greater clarity and accessibility to the corporate regulatory regime in Australia. One of the key policy objectives of the Act is to promote fair and efficient capital markets while protecting investors and maintaining confidence in the Australian financial system. The legislative instrument, F2006B00586, further amends the Corporations Act 2001 by varying Class Order [98/51] to reflect the transition from the former Corporations Law to the new Corporations Act 2001 and to update specific definitions and provisions related to scheme property.
Scope and Application
The Australian Securities and Investments Commission Corporations Act 2001, as varied by the Financial Services Reform Act 2001, applies to entities and individuals that are responsible for managing or holding scheme property under the terms of a financial product. The geographic reach of this Act is national, applying across Australia as it is a Commonwealth Act. The legislation specifically applies to financial institutions and entities managing or holding property such as cash, accounts and deposits with banks, securities, and derivatives. Additionally, it pertains to the management of interests arising from Eligible SELECT Master Agreements until 1 July 2002. The Act excludes chattel or real property mortgages from the definition of derivatives, thereby restricting its application to specific financial instruments. The variations to the Class Order [98/51] made by this legislation adjust terminology to reflect the transition from the old Corporations Law to the new Corporations Act 2001, ensuring that the legal framework aligns with the new legislative language and structure.
Key Provisions
Under paragraph 601QA(1)(a) of the Corporations Act 2001, the Australian Securities and Investments Commission has made specific amendments to Class Order [98/51]. The main operative sections of this variation involve the substitution of certain words and phrases to align with the terminology used in the Corporations Act 2001. Specifically, it removes references to the "Corporations Law" and replaces them with references to the "Corporations Act 2001" to ensure consistency and clarity within the legislative framework (section 1).
The obligations imposed by this variation require that the revised Class Order [98/51] be implemented with immediate effect from the commencement of Schedule 1 to the Financial Services Reform Act 2001. This involves meticulous updates to the text, such as replacing instances of "Law" with "Act" and ensuring that the language reflects the new legal environment. It also mandates that the specified changes to the definition of "scheme property" be adopted, particularly focusing on the types of assets that can be held separately by responsible entities (section 3).
Entities governed by this Act, particularly those involved in financial services and the management of scheme property, must comply with the updated definitions and requirements set forth in the amended Class Order [98/51]. This includes ensuring that the property held by them is correctly classified and managed in accordance with the legislative provisions. The obligation extends to maintaining proper records and disclosures that reflect the changes implemented by this variation (section 4).
Failure to comply with the requirements set out in the Corporations Act 2001 and the amended Class Order [98/51] can lead to various civil and criminal consequences. The Act provides for penalties that may include fines and imprisonment for breaches of its provisions. The specific penalties depend on the nature and severity of the breach but can be substantial, reflecting the importance of compliance with financial regulations. The exact penalties are detailed within the relevant sections of the Act and may vary based on the specific circumstances of each case.