Corporations Amendment Regulations 2000 (No. 2) 2000 No. 30
EXPLANATORY STATEMENT
Statutory Rules 2000 No. 30
Issued by the authority of the Minister for Financial Services and Regulation
Corporations Act 1989
Corporations Amendment Regulations 2000 (No. 2)
Section 22 of the Corporations Act 1989 (the Act) empowers the Governor General to make regulations, not inconsistent with the Act or the Corporations Law (the Law), prescribing matters required or permitted by the Law to be prescribed by regulations, or necessary or convenient to be prescribed by regulations for carrying out of giving effect to the Corporations Law.
Section 1258 of the Law limits the way in which a futures broker can deal in futures contracts on behalf of another person. Dealing on behalf of another person on a 'recognised futures exchange' is permitted by section 1258. The term 'recognised futures exchange' is defined in section 9 of the Law to mean a body corporate that conducts a futures market outside Australia and is prescribed for the purposes of this definition. By virtue of Corporations Regulation 8.2.02, the bodies corporate specified in Schedule 11 of the Corporations Regulations are prescribed for this purpose.
The Regulations amend Schedule 11 of the Corporations Regulations by including two additional foreign exchanges and update the references to two foreign futures exchanges to reflect name changes. The Regulations also correct an error in an exchange name. The two additional foreign exchanges to be prescribed are:
* the 'Helsinki Securities and Derivatives Exchange, Clearing House Limited (HEX)'; and
* the 'Cantor Financial Futures Exchanges (CFFE)'.
The Regulations commence on gazettal.
Overview
The Corporations Amendment Regulations 2000 (No. 2) were enacted to address gaps and ensure the accuracy of the regulatory framework governing the activities of futures brokers in Australia. This legislative instrument, issued under the authority of the Minister for Financial Services and Regulation, amends the Corporations Regulations by updating and expanding the list of recognised foreign futures exchanges. Specifically, the Regulations introduce two new foreign exchanges, the Helsinki Securities and Derivatives Exchange, Clearing House Limited (HEX) and the Cantor Financial Futures Exchanges (CFFE), while also correcting a previous error in the nomenclature of an existing exchange. These amendments are intended to align the regulatory framework with current market practices and ensure that Australian futures brokers can comply with the legislative requirements when dealing in futures contracts on recognised foreign exchanges. The overarching policy objective is to maintain the integrity and efficiency of the financial markets by providing clear and updated regulatory guidelines.
Scope and Application
The Corporations Amendment Regulations 2000 (No. 2) amend the Corporations Regulations to update the list of recognised futures exchanges, as defined in the Corporations Law, by adding two additional foreign exchanges and correcting an error in the name of an existing exchange. These regulations apply to futures brokers who deal in futures contracts on behalf of another person on recognised futures exchanges. The amendment ensures that the list of prescribed exchanges reflects current market conditions and accurately identifies those exchanges that are authorised for such transactions. These regulations extend to the Commonwealth of Australia and are designed to operate within the parameters set by the Corporations Act 1989 and the Corporations Law. The inclusion of specific exchanges in Schedule 11 of the Corporations Regulations is necessary for the effective oversight and regulation of financial transactions conducted by Australian entities on international markets.
Key Provisions
The main operative sections of the Corporations Amendment Regulations 2000 (No. 2) involve amendments to Schedule 11 of the Corporations Regulations, which lists prescribed recognised futures exchanges for the purposes of section 1258 of the Corporations Law. Section 1258 of the Law allows futures brokers to deal in futures contracts on behalf of another person, but only on a recognised futures exchange. The Regulations add two new recognised futures exchanges to this list: the Helsinki Securities and Derivatives Exchange, Clearing House Limited (HEX), and the Cantor Financial Futures Exchanges (CFFE) (Section 1 of the Regulations). Furthermore, the Regulations update the names of two existing exchanges to reflect recent name changes and correct an error in the name of another exchange.
The obligations imposed by these Regulations are primarily on futures brokers who need to ensure compliance with the updated list of recognised futures exchanges when dealing in futures contracts on behalf of others. This means that futures brokers must only conduct such dealings on the exchanges listed in Schedule 11, including the newly added or updated exchanges. This requirement ensures that the activities of futures brokers remain within the parameters set by the Corporations Law.
Failure to comply with the Corporations Regulations can result in various consequences, although specific offences, penalties, or consequences for breach are not detailed within the text of the Explanatory Statement. Generally, breaches of the Corporations Act and its associated regulations can lead to civil penalties, including fines, and may also attract criminal penalties depending on the severity and intent behind the breach. The maximum penalties for contraventions of the Corporations Act can include substantial fines for both individuals and corporate entities, and in some cases, imprisonment for officers of corporations found to be in breach of the Act. The specifics of these penalties would be determined by the courts when individual cases are heard.