Australian Securities and Investments Commission
Corporations Act 2001 — Subsections 655A(1) and 673(1) — Variation
Under subsections 655A(1) and 673(1) of the Corporations Act 2001 (the “Act”) 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 [01/1599] by:
1. in paragraph 2 omitting the words “futures contracts” and substituting the word “derivatives”; and
2. omitting from the Schedule the words “By Laws” and substituting the words “operating rules”.
Dated this 5th day of March 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 to address issues within the financial services sector, specifically to enhance regulation and oversight of corporations. This Act was introduced by the Australian Parliament to streamline the regulatory framework for corporations and improve transparency and accountability within the financial services industry. The policy objective of the Act is to protect investors and consumers by ensuring that corporations adhere to stringent regulatory standards, thereby maintaining the integrity of the financial market. One of the legislative instruments amending the Act is F2006B01612, which varies Class Order [01/1599] to update terminology from "futures contracts" to "derivatives" and from "By Laws" to "operating rules" under subsections 655A(1) and 673(1). This amendment aims to modernise the regulatory language to better reflect current financial practices and ensure compliance with contemporary standards.
Scope and Application
The Australian Securities and Investments Commission Corporations Act 2001, as amended, pertains to various entities, including corporations, limited partnerships, and trustees of certain types of trusts, as well as to individuals holding specific positions within these entities. The Act applies to conduct and transactions involving securities and financial products, and it is designed to regulate and maintain transparency and integrity within financial markets in Australia. The geographic and jurisdictional reach of the Act is national, as it is a Commonwealth Act and therefore applies across the entire country. However, the Act may interact with state and territory laws, particularly in areas concerning consumer protection and business operations. Exclusions and exemptions within the Act are typically specified in relation to particular classes of entities or transactions, such as small proprietary companies or transactions below a certain financial threshold. The application of the Act can be extended or restricted through subordinate instruments such as class orders and regulatory guidelines issued by the Australian Securities and Investments Commission, which in this instance, has varied the Class Order [01/1599] to adjust definitions and terminology regarding financial instruments and operating rules.
Key Provisions
The Australian Securities and Investments Commission Corporations Act 2001, specifically subsections 655A(1) and 673(1), includes provisions that allow for the variation of class orders issued under the Act. The legislative instrument F2006B011622 details a variation to Class Order [01/1599], effective from the commencement of Schedule 1 to the Financial Services Reform Act 2001. The variation involves two key changes: first, the substitution of the term "derivatives" for "futures contracts" in paragraph 2 of Class Order [01/1599], and second, the replacement of the term "By Laws" with "operating rules" in the Schedule of the same order. These changes are aimed at updating and aligning the terminology with current financial practices and regulatory standards.
Under this variation, entities governed by Class Order [01/1599], which likely includes financial institutions and market operators, must ensure that their operations and documentation reflect these changes. The use of the term "derivatives" instead of "futures contracts" signifies a broader regulatory scope, encompassing various types of derivative instruments. Similarly, replacing "By Laws" with "operating rules" indicates a shift towards more flexible and operationally focused regulatory guidelines. These obligations require entities to review their existing policies, procedures, and documentation to incorporate these changes and ensure compliance with the updated regulatory framework.
Failure to comply with the provisions of the varied Class Order [01/1599] may result in regulatory consequences. The Act does not explicitly state penalties for non-compliance with the class order variation in this legislative instrument. However, general penalties applicable under the Corporations Act 2001 could apply, including fines and other sanctions for breaches of the Act. Entities that do not adhere to the updated terminology and requirements may face enforcement actions, which could include legal proceedings, orders for redress, or other corrective measures to ensure compliance with the regulatory standards set forth by the Australian Securities and Investments Commission.