Australian Securities and Investments Commission
Corporations Act 2001 - Subsection 741(1) - Variation
Under subsection 741(1) 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 [00/44] by:
- omitting from the heading the word "Law" and substituting the words "Act 2001";
- omitting from the first paragraph, the words "Corporations Law (the "Law")" and substituting the words "Corporations Act 2001 (the "Act")";
- omitting from paragraph 1 under the heading "Provisions affected", the words "Corporations Law" and substituting the word "Act";
- omitting subparagraph 2(d) under the heading "Provisions affected" and substituting the following subparagraph:
"(d) an electronic application form issued and partly completed by a
financial services licensee ("licensee form") where the issuer had
reasonable grounds to believe that the licensee form was distributed
with an electronic disclosure document.";
5. omitting the definition of "securities dealer" under the heading "Definitions" and substituting the following definition:
""financial services licensee" includes, during the transition period (within the meaning of subsection 1431(1) of the Act) for a regulated principal, a reference to a regulated principal described in item 1 of the table set out in section 1430 of the Act.";
6. omitting from paragraph 2 under the heading "Conditions" the words "securities dealer" (twice occurring) and substituting the words "financial services licensee";
7. omitting from paragraph 6 under the heading "Conditions":
(a) the words "within Australia" and substituting the words "in this jurisdiction"; and
(b) the word "countries" and substituting the word "places";
8. omitting from subparagraph 7(c) under the heading "Conditions" the words "securities dealer" and substituting the words "financial services licensee";
9. omitting from paragraph 12 under the heading "Conditions" the words "securities dealer" and substituting the words "financial services licensee";
10. omitting from paragraph 13 under the heading "Conditions" the words "securities dealer" (twice occurring) and substituting the words "financial services licensee"; and
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11. inserting immediately before the date of the instrument the following heading and note:
"This jurisdiction
Note 4: In this instrument, "this jurisdiction" means Australia: Act, ss 5 and 9 (definition of "this jurisdiction").".
Dated this 3rd day of March 2002
Signed by Brendan Byrne
as a delegate of the Australian Securities and Investments Commission
Overview
The Corporations Act 2001 was enacted by the Parliament of Australia to provide a comprehensive legal framework governing corporations and financial markets in Australia. The Act was introduced to address the need for a unified and modernised legislative structure that could effectively regulate corporate activities, enhance market integrity, and protect investors and consumers. The Financial Services Reform Act 2001, which commenced on the date of the legislative instrument, included provisions for the variation of certain class orders to align with the new legislative framework established by the Corporations Act 2001. This variation aimed to ensure that the regulatory regime smoothly transitioned from the old Corporations Law to the new Corporations Act, maintaining continuity and clarity in the application of financial services regulations. The policy objective was to create a robust and coherent legislative environment that supports the stability and efficiency of Australia's financial markets.
Scope and Application
Subsection 741(1) of the Corporations Act 2001, as varied by the Australian Securities and Investments Commission under the Financial Services Reform Act 2001, applies to the Class Order [00/44], specifically targeting financial services licensees and their practices within Australia. The Act seeks to update the terminology and definitions in the Class Order to align with the new legislative framework established by the Corporations Act 2001. This variation includes substituting references to "Corporations Law" with "Corporations Act 2001" and replacing "securities dealer" with "financial services licensee" throughout the Class Order. The changes also extend the geographical application from within Australia to "in this jurisdiction," with "this jurisdiction" defined as Australia, thereby ensuring the updated terminology applies nationally. Notably, the variation omits certain subparagraphs and definitions that are no longer relevant under the new Act. The application of this legislative instrument is thus comprehensive, covering all financial services licensees operating within Australia and ensuring that the Class Order remains effective and relevant under the current legal framework.
Key Provisions
The main operative sections of this legislative instrument involve the modification of Class Order [00/44] under the Corporations Act 2001. Specifically, this variation (subsection 741(1)) omits and substitutes various terms to reflect the transition from the old Corporations Law to the new Corporations Act 2001. The changes include replacing references to "Corporations Law" with "Corporations Act 2001", and substituting "financial services licensee" for "securities dealer" throughout the order. Additionally, the definition of "financial services licensee" is updated to include regulated principals within the transition period. The scope of certain conditions is expanded from "within Australia" to "in this jurisdiction", and the term "countries" is replaced with "places" in one instance. A new heading and note are also added to clarify the geographical scope of the order.
The obligations and requirements imposed by this Act on the parties or entities it governs primarily involve updating references and terminology to align with the new legislative framework. Financial services licensees must now adhere to the updated terms and conditions specified in the modified Class Order. This includes the use of electronic application forms issued and partly completed by a financial services licensee where there are reasonable grounds to believe that the form was distributed with an electronic disclosure document. Licensees must also ensure compliance with the new conditions outlined in the order, such as the use of "financial services licensee" instead of "securities dealer" and the broader geographical scope of "in this jurisdiction".
In terms of offences, penalties, or civil/criminal consequences for breach, the legislative instrument itself does not explicitly detail the penalties for non-compliance with the modified Class Order. However, under the Corporations Act 2001, breaches of class orders can lead to civil penalties. The maximum penalty for a corporation can be up to $1.65 million, while individuals may face fines of up to $330,000 or imprisonment for up to five years, or both, depending on the severity of the breach. Additionally, ongoing non-compliance may result in further regulatory action by the Australian Securities and Investments Commission, including the imposition of more severe penalties or legal proceedings.