EXPLANATORY STATEMENT

Corporations (Foreign Exchange Markets) Exemption Amendment Notice 2005 (No. 2)

Subsection 791C(1) of the Corporations Act 2001 (the Act) empowers the Minister, ‘by publishing a notice in the Gazette’, to exempt from the operation of Part 7.2 of the Act a particular financial market or type of financial market. 

By an instrument dated 9 March 2004 and published in the Australian Securities and Investments Commission (ASIC) Gazette of 10 March 2004, the then Parliamentary Secretary to the Treasurer exempted certain foreign exchange markets from the operation of Part 7.2 on specified conditions.  The instrument is the Corporations (Foreign Exchange Markets) Exemption Notice 2004.  This notice was expressed to cease to have effect at the end of 10 March 2005.

By an instrument dated 7 March 2005 and duly registered on the Federal Register of Legislative Instruments, the Parliamentary Secretary to the Treasurer amended the earlier notice, so that it ceased to have effect at the end of 30 September 2005.  The instrument is the Corporations (Foreign Exchange Markets) Exemption Amendment Notice 2005 (No. 1).

One of the criteria for use of the exemption is that the operator of the market has notified ASIC in writing that the operator relies on this exemption.  Only one body has so notified ASIC. 

It has been decided to further extend the general exemption until 31 March 2006 to allow time for the regulatory status of this body to be finally determined.  The extension should not be construed as indicative of a preliminary view as to the likely advice that ASIC may give to Treasury Ministers in relation to the application for an individual exemption referred to above.

The Corporations (Foreign Exchange Markets) Exemption Amendment Notice 2005 (No. 2) will, on registration on the Federal Register of Legislative Instruments, extend the term of the Corporations (Foreign Exchange Markets) Exemption Notice 2004 to 31 March 2006. 

The notice will be taken to have commenced on 29 September 2005.  This was considered the most appropriate way of extending the life of the exemption, so that it would have continuous effect from commencement of the original notice until 31 March 2006.  Although the notice will take effect before the date it is registered, this will not affect the rights of any person (other than the Commonwealth or an authority of the Commonwealth) as at the date of registration so as to disadvantage that person; nor will it impose liabilities on any person (other than the Commonwealth or an authority of the Commonwealth) in respect of anything done or omitted to be done before the date of registration.

The effect of section 56 of the Legislative Instruments Act 2003 is that the requirement for gazettal in section 791C of the Corporations Act is now satisfied by registration.

There has been no formal public consultation on the Corporations (Foreign Exchange Markets) Exemption Amendment Notice 2005 (No. 2) because it involves a minor change to an existing instrument.  The primary purpose of the new instrument is to facilitate the operation of the one body which has chosen to use this exemption for a reasonable period during which its regulatory status is to be finally determined.