EXPLANATORY STATEMENT for
ASIC Corporations and Credit (Repeal) Instrument 2017/791
Prepared by the Australian Securities and Investments Commission
Corporations Act 2001
National Consumer Credit Protection Act 2009
The Australian Securities and Investments Commission (ASIC) makes ASIC Corporations and Credit (Repeal) Instrument 2017/791(the Repeal instrument) under paragraph 911A(2)(l) of the Corporations Act 2001 and paragraphs 109(3)(a) and (d) of the National Consumer Credit Protection Act 2009 (National Credit Act).
Paragraph 911A(2)(l) provides that ASIC may exempt a person from the requirement to hold an Australian financial services licence.
Paragraph 109(3)(a) provides that ASIC may exempt a person or class of persons from all or specified provisions to which Part 2–6 of the National Credit Act applies.
Paragraph 109(3)(d) provides that ASIC may declare that provisions to which Part 2–6 of the National Credit Act applies apply in relation to a class of person as if specified provision were omitted, modified or varied as specified in the declaration
Under subsection 33(3) of the Acts Interpretation Act 1901 where an Act confers a power to make, grant or issue any instrument (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
- Background
Under the Legislation Act 2003, instrument such as ASIC Class Order [CO 03/1063], ASIC Class Order [CO 11/926] and ASIC Credit (Financial Counselling Agencies) Instrument 2015/992 (Instrument 2015/992) automatically cease to have effect, or ‘sunset’ after 10 years.
[CO 03/1063] was due to sunset on 1 October 2017. To continue the effect of the relief it provided, it is being remade in ASIC Corporations (Financial Counselling Agencies) Instrument 2017/792.
[CO 11/926] and Instrument 2015/992 were due to sunset on 1 April 2022 and 1 April 2026 respectively. To continue the effect of the relief they provided, they are being remade in ASIC Credit (Financial Counselling Agencies) Instrument 2017/793.
2. Purpose of the instrument
The Repeal Instrument is made to repeal the relief provided by:
- [CO 03/1063];
- [CO 11/926]; and
- Instrument 2015/992.
3. Operation of the instrument
Section 4 provides that each instrument specific in a Schedule to the instrument is repealed at set out in the items in the Schedule.
Schedule 1 repeals:
- ASIC Class Order [CO 03/1063];
- ASIC Class Order [CO 11/926]; and
- ASIC Credit (Financial Counselling Agencies) Instrument 2015/992.
4. Consultation
ASIC consulted publicly on its proposal to remake the exemptions in [CO 03/1063], [CO 11/926] and ASIC Credit (Financial Counselling Agencies) Instrument 2015/992 via Consultation Paper 282 Remaking ASIC class orders on financial counselling licensing relief. ASIC received 10 responses which supported the proposal.
Overview
The ASIC Corporations and Credit (Repeal) Instrument 2017/791 was enacted in 2017 by the Australian Securities and Investments Commission (ASIC) under the authority granted by the Corporations Act 2001 and the National Consumer Credit Protection Act 2009. This instrument was introduced to repeal certain instruments that were set to expire under the Legislation Act 2003, thereby ensuring the continuation of the relief they provided. Specifically, it repeals the relief previously offered by ASIC Class Order [CO 03/1063], ASIC Class Order [CO 11/926], and ASIC Credit (Financial Counselling Agencies) Instrument 2015/992. The objective of this repeal is to maintain the regulatory framework for financial counselling agencies by updating the expired instruments to ensure ongoing compliance and effectiveness in the financial services sector.
Scope and Application
The ASIC Corporations and Credit (Repeal) Instrument 2017/791 applies to the specified instruments that are set to expire under the Legislation Act 2003, namely ASIC Class Order [CO 03/1063], ASIC Class Order [CO 11/926], and ASIC Credit (Financial Counselling Agencies) Instrument 2015/992. These instruments pertain to financial counselling agencies and their regulatory exemptions from certain licensing requirements under the Corporations Act 2001 and the National Consumer Credit Protection Act 2009. The Repeal Instrument is designed to ensure the continuous effect of these reliefs by repealing the expiring instruments and replacing them with new ones, as detailed in ASIC Corporations (Financial Counselling Agencies) Instrument 2017/792 and ASIC Credit (Financial Counselling Agencies) Instrument 2017/793. The repeal applies to all financial counselling agencies that were subject to the reliefs provided by the expiring instruments, and these new instruments will continue to exempt certain financial counselling agencies from the requirement to hold an Australian financial services licence or from specified provisions under the National Credit Act. The geographic reach of the Repeal Instrument is national, as it pertains to federal legislation and the regulatory authority of ASIC over financial services across Australia.
Key Provisions
The ASIC Corporations and Credit (Repeal) Instrument 2017/791, under the Corporations Act 2001 and the National Consumer Credit Protection Act 2009, repeals specific relief measures that were previously in place through ASIC Class Order [CO 03/1063], ASIC Class Order [CO 11/926], and ASIC Credit (Financial Counselling Agencies) Instrument 2015/992. These repealed instruments had provided exemptions or reliefs from certain regulatory requirements for financial counselling agencies. The repeal of these instruments, as detailed in Section 4 and Schedule 1 of the Repeal Instrument, signifies the end of the relief measures they provided, which were initially designed to sunset after a period of 10 years or other specified dates. This repeal ensures that the regulatory framework returns to its original state, without the exemptions previously afforded.
The obligations imposed by the Repeal Instrument primarily affect financial counselling agencies by removing the exemptions they previously enjoyed. These agencies will now need to comply with the full range of requirements that they were previously exempt from. This includes the need to hold appropriate Australian financial services licences under the Corporations Act 2001, and adherence to all provisions of Part 2–6 of the National Consumer Credit Protection Act 2009. The repeal affects the regulatory landscape for financial counselling, making it imperative for these agencies to ensure they are fully compliant with all relevant laws and regulations.
There are no explicit offences or penalties stated within the Repeal Instrument itself. However, failure to comply with the regulatory requirements that now apply to financial counselling agencies could result in significant consequences. Under the Corporations Act 2001, non-compliance with licensing requirements could lead to enforcement actions by ASIC, including fines and potential criminal charges for individuals involved in the breach. Similarly, under the National Consumer Credit Protection Act 2009, non-compliance with credit-related provisions could also lead to penalties, including fines and civil actions. The maximum penalties would depend on the specific nature of the breach and the discretion of the courts in imposing sanctions.