EXPLANATORY STATEMENT for
ASIC Corporations (Banking Code of Practice) Instrument 2018/700
Prepared by the Australian Securities and Investments Commission
Corporations Act 2001
The Australian Securities and Investments Commission (ASIC) makes ASIC Corporations (Banking Code of Practice) Instrument 2018/700 (the Instrument) under subsection 1101A(1) of the Corporations Act 2001 (the Corporations Act).
Subsection 1101A(1) of the Corporations Act provides that ASIC may, on application, approve codes of conduct that relate to any aspect of the activities of financial services licensees, authorised representatives of financial services licensees, or issuers of financial products, being activities in relation to which ASIC has a regulatory responsibility. The approval must be in writing.
- Background
ASIC’s code approval power
ASIC must not approve a code of conduct under section 1101A unless it is satisfied that:
(a) the code is not inconsistent with the Corporations Act or any other law of the Commonwealth under which ASIC has regulatory responsibilities; and
(b) it is appropriate to approve the code, having regard to the following matters, and to any other matters that ASIC considers are relevant:
(i) the ability of the applicant to ensure that persons who hold out that they comply with the code will comply with the code as in force from time to time; and
(ii) the desirability of codes of conduct being harmonised to the greatest extent possible.
Australian Banking Association
The Australian Banking Association (ABA) applied to ASIC for approval of its Banking Code of Practice under section 1101A of the Corporations Act.
2. Purpose of the instrument
The purpose of the Instrument is to provide ASIC’s approval of the ABA’s Banking Code of Practice, published in August 2018 by the ABA, as existing at the date of the Instrument.
ASIC has assessed the Banking Code of Practice and is satisfied that it meets the requirements of subsection 1101A(3) of the Corporations Act.
3. Operation of the instrument
Section 2 of the Instrument provides that the Instrument commences on the day after it is registered on the Federal Register of Legislation.
Section 5 of the Instrument approves the Banking Code of Practice for the purposes of section 1101A of the Corporations Act.
4. Documents incorporated by reference
The Instrument incorporates by reference the Banking Code of Practice.
This document is available at http://www.ausbanking.org.au.
The Banking Code of Practice (the Code) is a self-regulatory document created by the banking industry, as represented by the ABA, and is administered by an independent Code monitoring body. The Code sets out standards of practice and service in the Australian banking industry for individual and small business customers, and their guarantors. ASIC does not administer the Code.
5. Consultation
ASIC engaged with a targeted range of stakeholders to invite their feedback on the content of the draft Banking Code of Practice and on the adequacy and transparency of the ABA’s consultation process in developing the Code. Stakeholders with whom ASIC engaged included consumer and small business representatives, various industry peak bodies, ombudsmen and the Code monitoring body.
The ABA undertook a substantial stakeholder consultation process as part of the development of the Code.