Australian Securities and Investments Commission
Corporations Act 2001 — Paragraph 926A(2)(c) — Declaration
Under paragraph 926A(2)(c) of the Corporations Act 2001 (the Act), the Australian Securities and Investments Commission declares that Part 7.6 (other than Divisions 4 and 8) of the Act applies in relation to an Australian ADI and any person engaged under a written agreement to provide financial services in relation to basic deposit products on its behalf, in the case specified in the Schedule as if provisions of that Part were modified or varied as follows:
1. in paragraph 910A:
(a) before the definition of representative, add:
“banking agent means, in relation to an Australian ADI, a person engaged under a written agreement to provide financial services in relation to basic deposit products on behalf of the Australian ADI.”; and
(b) in the definition of representative, add after subparagraph (a)(iv):
“(v) a banking agent; or”;
2. after paragraph 911B(1)(a), add:
“(aa) these conditions are satisfied:
(i) the principal is an Australian ADI which holds an Australian financial services licence covering the provision of the service; and
(ii) the provider is:
(A) a banking agent of the principal; or
(B) an employee or director of the banking agent of the principal;”; and
3. after subsection 917A(1), add:
“(1A) Without limiting subsection (1), this Division also applies to any conduct of a representative who is a banking agent of an Australian ADI in relation to any money received by the agent from another person (the client) in relation to the agent arranging for the issue of a basic deposit product by the ADI.”.
Schedule
The provision of a financial service where all of the following apply:
- the service is provided by:
(a) a person (the agent) engaged under a written agreement to provide the service on behalf of an Australian ADI; or
(b) an employee or director of the agent;
2. the service is arranging for the issue of a basic deposit product by the ADI;
3. the ADI has given ASIC notice in writing of its intention to rely on this instrument;
Note: A single notice expressing an intention to rely on this instrument is sufficient to satisfy this requirement in relation to all of the agents of an ADI appointed from time to time. It is not necessary for separate notices to be given in relation to each agent.
4. the agent is not a representative of the ADI under one or more of subparagraphs (a)(i) to (a)(iii) of the definition of representative in section 910A of the Act;
5. the ADI has taken reasonable steps to ensure that before providing the financial service to another person (the customer) as a retail client, the agent specifically draws to the customer’s attention the availability of a dispute resolution system of the ADI that covers complaints by holders of the basic deposit product and how that system may be accessed.
Interpretation
In this instrument:
basic deposit product has the meaning given by section 761A of the Act; and
retail client has the meaning given by section 761G of the Act.
Commencement
This instrument takes effect upon gazettal.
Dated this 19th day of July 2004
Signed by Brendan Byrne
as a delegate of the Australian Securities and Investments Commission
Overview
The Australian Securities and Investments Commission Corporations Act 2001, enacted by the Parliament of Australia, is a comprehensive piece of legislation that governs corporate behaviour, financial markets, and investment activities within the country. A legislative instrument, F2007B00674, was introduced under this Act to address a specific gap in regulatory oversight concerning Australian Authorised Deposit-taking Institutions (ADIs) and their agents who provide financial services related to basic deposit products. This legislative instrument was designed to ensure that certain provisions of the Corporations Act, specifically those within Part 7.6, apply to these agents as if they were modified to include them explicitly within the scope of the Act’s regulations. This ensures a consistent regulatory environment and protects consumers engaging with these financial service providers. The policy objective is to enhance consumer protection by ensuring that the same regulatory standards are applied to agents of ADIs, thereby maintaining a fair and transparent financial services market.
Scope and Application
The Corporations Act 2001, as modified by the legislative instrument F2007B00674, extends the scope of Part 7.6 of the Act to Australian Authorised Deposit-taking Institutions (ADIs) and individuals or entities engaged under a written agreement to provide financial services concerning basic deposit products on behalf of these institutions. This application is contingent on the Australian Securities and Investments Commission (ASIC) receiving written notice from the ADI of their intention to rely on this instrument. The Act specifically modifies the definitions and conditions to include 'banking agents'—persons engaged to provide such services—and outlines circumstances where these agents, along with their employees or directors, are considered representatives of the ADI. The modifications also clarify the application of certain provisions to the conduct of these banking agents in relation to money received from clients for arranging basic deposit products. The instrument's provisions apply nationally, as it is a Commonwealth-level legislative instrument, and it does not specify exclusions beyond the conditions outlined in the Schedule. It should be noted that the Act's reach is extended through subordinate instruments, which can further define or modify its application.
Key Provisions
Under this legislative instrument, Part 7.6 of the Corporations Act 2001 (with certain exclusions) is applied to Australian authorised deposit-taking institutions (ADIs) and their agents who provide financial services related to basic deposit products. This is done through specific modifications to the Act as outlined in the Schedule. For instance, in paragraph 910A, the definitions of "representative" and "banking agent" are expanded to include certain financial service providers (section 1(a)). Additionally, conditions are added to paragraph 911B(1) to specify circumstances under which the Act applies to these providers (section 2). Lastly, subsection 917A(1) is amended to extend the application of this Division to any conduct by a banking agent related to money received from a client for arranging a basic deposit product (section 3).
The Act imposes several obligations on Australian ADIs and their agents. Firstly, the ADI must provide ASIC with written notice of its intention to rely on this instrument (Schedule item 3). Secondly, ADIs must ensure that before their agents provide financial services to retail clients, the agents must inform these clients about the availability of a dispute resolution system and how to access it (Schedule item 5). These obligations ensure that both ADIs and their agents adhere to certain standards when providing financial services related to basic deposit products.
There are no explicit offences or penalties outlined in this legislative instrument for breaches of its provisions. However, the failure to comply with the obligations imposed by the Act could potentially lead to enforcement actions by ASIC, which might include seeking court orders or imposing fines. The exact penalties for non-compliance would depend on the specific nature of the breach and the applicable laws at the time of enforcement.