ASIC Corporations (Law Societies—Statutory Deposit Accounts and Public Purpose Funds) Instrument 2022/436
I, Rhys Bollen, delegate of the Australian Securities and Investments Commission, make the following notifiable instrument.
Date 31 May 2022
Contents
Part 1—Preliminary
1 Name of notifiable instrument
2 Commencement
3 Authority
4 Definitions
Part 2—Exemption
5 Statutory deposit accounts and public purpose fund exemptions
6 Where the exemptions apply
7 NSW Public Purpose Fund exemption
Part 1—Preliminary
1 Name of notifiable instrument
This is the ASIC Corporations (Law Societies—Statutory Deposit Accounts and Public Purpose Funds) Instrument 2022/436.
2 Commencement
This instrument commences on the day after it is registered on the Federal Register of Legislation.
Note: The register may be accessed at www.legislation.gov.au.
3 Authority
This instrument is made under subsection 926A(2) of the Corporations Act 2001.
4 Definitions
In this instrument:
Act means the Corporations Act 2001.
eligible legal body means each of the following:
(a) The Law Society of New South Wales;
(b) The Law Society of the Australian Capital Territory;
(c) The Law Society of Tasmania;
(d) The Law Society of Western Australia Inc.;
(e) the trustees of the NSW Public Purpose Fund.
NSW Public Purpose Fund means the fund established under Division 2 of Part 5 of the Legal Profession Uniform Application Act 2014 (NSW).
The Law Society of Tasmania means the body corporate continued in existence by section 618 of the Legal Profession Act 2007 (Tas.).
The Law Society of the Australian Capital Territory means the body corporate continued in existence under section 576 of the Legal Profession Act 2006 (ACT).
The Law Society of Western Australia Inc. means the body corporate incorporated under the Associations Incorporation Act 2015 (WA) that is referred to in section 3 of the Legal Profession Act 2008 (WA).
Part 2—Exemption
5 Statutory deposit accounts and public purpose fund exemptions
An eligible legal body does not have to comply with subsection 911A(1) of the Act for the provision of a financial service where:
(a) the service consists of either or both of the following:
(i) providing custodial or depository services;
(ii) dealing in financial products; and
(b) the service is provided to the extent reasonably necessary:
(i) in respect of The Law Society of New South Wales—for the purpose of holding, investing and repaying money in accordance with Part 5 of the Legal Profession Uniform Law Application Act 2014 (NSW); and
(ii) in respect of The Law Society of the Australian Capital Territory—for the purposes of the society performing its functions under Division 3.1.4 of Part 3.1 of the Legal Profession Act 2006 (ACT); and
(iii) in respect of The Law Society of Tasmania—for the purposes of the society performing its functions under sections 355 and 357 of the Legal Profession Act 2007 (Tas.); and
(iv) in respect of The Law Society of Western Australia Inc.—for the purposes of the society performing its functions under section 3 of the Law Society Public Purposes Trust Act 1985 (WA); and
(v) in respect of the trustees of the NSW Public Purpose Fund—for the operation of the fund.
6 Where the exemptions apply
(1) An exemption in section 5 applies in relation to the matters referred to in a subparagraph of paragraph 5(b) where the relevant eligible legal body in relation to those matters makes available on its Internet website, in a manner reasonably likely to come to the attention of a person seeking information about the matters, a prominent notice to the effect that the persons responsible for those matters are exempt from the requirement to hold an Australian financial services licence under the Act.
(2) In this section:
relevant eligible legal body means:
(a) in relation to the matters referred to in subparagraphs 5(b)(i) and (v)—the Law Society of New South Wales; and
(b) in relation to the matters referred to in subparagraph 5(b)(ii)—The Law Society of the Australian Capital Territory; and
(c) in relation to the matters referred to in subparagraph 5(b)(iii)—The Law Society of Tasmania; and
(d) in relation to the matters referred to in subparagraph 5(b)(iv)—The Law Society of Western Australia Inc.
7 NSW Public Purpose Fund exemption
The Law Society of New South Wales does not have to comply with subsection 911A(1) of the Act for the provision of a financial service where:
(a) the service consists of any or all of the following:
(i) providing a custodial or depository service;
(ii) dealing in financial products;
(iii) providing financial product advice; and
(b) the service is provided to the trustees of the NSW Public Purpose Fund; and
(c) the service is provided to the extent reasonably necessary to enable the trustees to discharge their duties as trustees of the NSW Public Purpose Fund.
Overview
The ASIC Corporations (Law Societies—Statutory Deposit Accounts and Public Purpose Funds) Instrument 2022/436 was enacted to address the need for exempting certain financial services provided by eligible legal bodies from the requirement to hold an Australian financial services licence under the Corporations Act 2001. This notifiable instrument was made by Rhys Bollen, a delegate of the Australian Securities and Investments Commission (ASIC), under subsection 926A(2) of the Act. The policy objective is to streamline financial services provided by law societies for statutory deposit accounts and public purpose funds, while ensuring transparency by requiring eligible legal bodies to disclose their exemption on their websites. The instrument aims to facilitate the operation of these funds by allowing law societies to offer necessary financial services without the burden of holding a financial services licence.
Scope and Application
The ASIC Corporations (Law Societies—Statutory Deposit Accounts and Public Purpose Funds) Instrument 2022/436 applies to certain specified entities within the legal profession, namely the Law Society of New South Wales, the Law Society of the Australian Capital Territory, the Law Society of Tasmania, the Law Society of Western Australia Inc., and the trustees of the NSW Public Purpose Fund. These entities are referred to as "eligible legal bodies" in the instrument. The exemptions provided under this instrument pertain to financial services provided by these eligible legal bodies, specifically custodial or depository services, dealing in financial products, and, in the case of the NSW Public Purpose Fund, also financial product advice. The exemptions are applicable to the extent that these services are reasonably necessary for the eligible legal bodies to perform their respective functions as outlined in their respective legal frameworks. It is a requirement under this instrument for the relevant eligible legal body to make a prominent notice available on its internet website, indicating that the persons responsible for the specified matters are exempt from holding an Australian financial services licence under the Corporations Act 2001. The exemptions are confined to the activities of these specific entities and do not extend to any other legal bodies or financial services not covered under the specified activities.
Key Provisions
The ASIC Corporations (Law Societies—Statutory Deposit Accounts and Public Purpose Funds) Instrument 2022/436I provides specific exemptions for certain legal bodies in relation to financial services under the Corporations Act 2001 (referred to as the 'Act'). Eligible legal bodies, which include The Law Society of New South Wales, The Law Society of the Australian Capital Territory, The Law Society of Tasmania, The Law Society of Western Australia Inc., and the trustees of the NSW Public Purpose Fund, are exempt from the requirement to hold an Australian financial services licence (section 5). This exemption applies when these bodies provide custodial or depository services or deal in financial products, but only to the extent reasonably necessary for them to perform their respective functions as outlined in their respective Acts and laws (section 5(b)). For instance, The Law Society of New South Wales is exempt in its role of holding, investing, and repaying money in accordance with Part 5 of the Legal Profession Uniform Law Application Act 2014 (NSW), among others.
These legal bodies must make prominent notices available on their websites to inform the public about their exemption status under the Act (section 6). This requirement ensures transparency and informs the public that the bodies providing financial services are exempt from needing a financial services licence. The Law Society of New South Wales, for example, must inform the public about its exemption status on its website, as must the other eligible legal bodies in relation to their specific services (section 6(1)).
Additionally, the Law Society of New South Wales is granted a further exemption under section 7, allowing it to provide custodial or depository services, deal in financial products, and provide financial product advice to the trustees of the NSW Public Purpose Fund. This exemption is limited to the extent reasonably necessary to enable the trustees to discharge their duties as outlined in the Law Society Public Purposes Trust Act 1985 (WA). This section aims to facilitate the efficient operation of the fund by allowing the Law Society of New South Wales to offer these services without the need for a financial services licence.
Failure to comply with the transparency requirements by not making the exemption notice prominently available on the website may result in legal consequences. Although the specific penalties for non-compliance are not detailed in the text, breaches of such requirements under the Corporations Act 2001 could lead to civil or criminal penalties. These penalties could include fines, depending on the severity and intent behind the non-compliance, and may vary based on the specific provisions of the Act.