EXPLANATORY STATEMENT
Select Legislative Instrument 2007 No. 119
Issued by the authority of the Parliamentary Secretary to the Treasurer
Australian Securities and Investments Commission Act 2001
Australian Securities and Investments Commission Amendment Regulations 2007 (No. 1)
Subsection 251(1) of the Australian Securities and Investments Commission Act 2001 (the Act) provides that the Governor General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The amendments to the Regulations allow the Australian Securities and Investments Commission (ASIC) to pass confidential information to three further market operators, namely Bloomberg Tradebook Australia Pty Ltd (BTA), BGC Partners (Australia) Pty Ltd (BGC) and Mercari Pty Ltd (Mercari).
ASIC is given certain sensitive information in confidence or in connection with the performance of its functions or the exercise of its powers under the corporations legislation.
Subsection 127(4B) of the Act authorises the disclosure, by an authorised person, of such information to prescribed bodies corporate (including foreign companies) if the Chairperson of ASIC is satisfied that the information will enable or assist the body corporate to monitor compliance with, enforce, or perform functions or exercise powers under the Corporations Act 2001, the business law of a State not covered by the Act, the business law of a foreign country or the operating rules of the body corporate.
Subsection 127(4C) of the Act provides that the regulations may specify a body corporate for the purposes of subsection 127(B) if, and only if, the body corporate conducts, or is involved in the supervision of, a financial market, or is a body corporate that holds an Australian clearing and settlement facility licence.
Regulation 8A of the Australian Securities and Investments Commission Regulations 2001 (the Principal Regulations) provides that the bodies corporate listed in Schedule 3 to the Principal Regulations are specified for the purposes of subsection 127(4C) of the Act.
The amendments to the Regulations to include market operators BTA, BGC and Mercari among the prescribed bodies corporate for the purposes of subsection 127(4B) allows each to more effectively perform the market supervisory functions required of them as financial market licensees.
Under the Corporations Agreement 2002, the Commonwealth must consult with and receive approval from the Ministerial Council for Corporations before making amendments to certain provisions of the Principal Regulations. The Council has approved these amendments, and agreed to dispense with the period of public exposure given that the amendments are technical in nature.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003. The Regulations commenced on the day after they were registered on the Federal Register of Legislative Instruments.
Overview
The Australian Securities and Investments Commission Amendment Regulations 2007 (No. 1) were introduced to address a gap in the Australian Securities and Investments Commission Act 2001, by enabling the Australian Securities and Investments Commission (ASIC) to share confidential information with additional market operators. Enacted by the Parliament of Australia, these regulations aim to facilitate the effective supervision and compliance of financial markets by allowing ASIC to disclose sensitive information to specified entities involved in financial market operations or holding Australian clearing and settlement facility licences. The inclusion of Bloomberg Tradebook Australia Pty Ltd, BGC Partners (Australia) Pty Ltd, and Mercari Pty Ltd as prescribed bodies corporate under these amendments is intended to enhance their capacity to monitor and enforce compliance with financial market regulations, thereby ensuring a more robust regulatory framework for the financial industry.
Scope and Application
The Australian Securities and Investments Commission Amendment Regulations 2007 (No. 1) pertain to the Australian Securities and Investments Commission Act 2001 and are designed to facilitate the disclosure of confidential information held by the Australian Securities and Investments Commission (ASIC) to specified entities. The scope of the Regulations extends to enabling ASIC to share sensitive information with certain market operators that are involved in the supervision of financial markets or hold an Australian clearing and settlement facility licence. Specifically, the Regulations have been amended to include Bloomberg Tradebook Australia Pty Ltd, BGC Partners (Australia) Pty Ltd, and Mercari Pty Ltd as prescribed bodies corporate under subsection 127(4C) of the Act. This inclusion ensures that these entities can more effectively perform their market supervisory functions. The Regulations apply to entities within the Commonwealth jurisdiction and are subject to consultation and approval from the Ministerial Council for Corporations, in accordance with the Corporations Agreement 2002. The amendments are considered technical and thus exempt from a period of public exposure.
Key Provisions
The Australian Securities and Investments Commission Amendment Regulations 2007 (No. 1) primarily concern the disclosure of sensitive information to specific market operators. According to section 251(1) of the Australian Securities and Investments Commission Act 2001 (the Act), the Governor General can make regulations to prescribe matters required or permitted by the Act, or necessary or convenient for carrying out or giving effect to the Act. Under these Regulations, the Australian Securities and Investments Commission (ASIC) is permitted to share confidential information with three additional market operators: Bloomberg Tradebook Australia Pty Ltd (BTA), BGC Partners (Australia) Pty Ltd (BGC) and Mercari Pty Ltd (Mercari). This extension aims to enable these entities to more effectively monitor compliance, enforce regulations, or perform functions related to financial markets.
These Regulations impose specific obligations on ASIC. For instance, under subsection 127(4B) of the Act, ASIC can disclose sensitive information to prescribed bodies corporate if the Chairperson of ASIC is satisfied that such information will assist these bodies in their supervisory functions. Moreover, under subsection 127(4C) of the Act, the regulations can specify a body corporate for the purposes of subsection 127(4B) only if the body corporate conducts, or is involved in the supervision of, a financial market, or holds an Australian clearing and settlement facility licence. The inclusion of BTA, BGC, and Mercari in Schedule 3 of the Principal Regulations facilitates their ability to perform their designated market supervisory roles.
The Regulations also outline potential consequences for breaches. While specific civil or criminal penalties are not detailed within these Regulations, it is understood that any unauthorised disclosure of information could result in significant legal repercussions under the Corporations Act 2001 and other relevant laws. The prescribed bodies corporate, including the newly added BTA, BGC, and Mercari, must ensure they adhere strictly to the terms of the disclosure to avoid any legal ramifications. The Ministerial Council for Corporations has approved these amendments, acknowledging their technical nature and the need for streamlined consultation processes.