Overview

The Corporations (Foreign Exchange Markets) Exemption Amendment Notice 2005 (No. 2) was introduced to extend the exemption period for certain foreign exchange markets from the Corporations Act 2001 until 31 March 2006. Enacted by the Parliamentary Secretary to the Treasurer, this amendment builds on the Corporations (Foreign Exchange Markets) Exemption Notice 2004, which initially exempted specified foreign exchange markets from the operation of Part 7.2 of the Act, contingent on certain conditions. The primary objective of this amendment is to provide additional time for the regulatory status of the single body that relies on this exemption to be conclusively determined by the Australian Securities and Investments Commission (ASIC). It is crucial to note that this extension is not indicative of any preliminary assessment regarding the likely advice that ASIC may provide to Treasury Ministers concerning the application for an individual exemption. This amendment ensures a seamless continuation of the exemption from its commencement on 29 September 2005, effectively bridging the gap until the final determination of the body's regulatory status. As per section 56 of the Legislative Instruments Act 2003, the requirement for gazettal in section 791C of the Corporations Act is now satisfied by registration, which ensures that the rights and liabilities of individuals remain unaffected by the timing of the registration of this notice.

Scope and Application

The Corporations (Foreign Exchange Markets) Exemption Amendment Notice 2005 (No. 2) pertains to the Corporations Act 2001, specifically amending the Corporations (Foreign Exchange Markets) Exemption Notice 2004 to extend its effective period until 31 March 2006. This amendment applies to financial markets, particularly foreign exchange markets, that are currently exempt from certain provisions of the Corporations Act under specified conditions. The exemption is available to entities that have notified the Australian Securities and Investments Commission (ASIC) of their reliance on it. As of the notice, only one entity has declared such reliance, and the extension aims to provide sufficient time for the determination of its regulatory status. The amendment ensures that the exemption remains in effect seamlessly from its initial commencement on 10 March 2004 until the new termination date, without creating disadvantages or liabilities for entities other than the Commonwealth or its authorities. The amendment extends the exemption's jurisdictional reach to encompass the continuous operation of the specified foreign exchange markets until the extended date, thereby maintaining regulatory certainty for the one entity involved. The notice's registration on the Federal Register of Legislative Instruments satisfies the legislative requirement previously met through gazette publication. Notably, no formal public consultation was conducted as the change represents a minor adjustment to an existing instrument. The primary intent behind this amendment is to support the operational stability of the one entity utilizing the exemption while its regulatory framework is being finalised.

Key Provisions

The Corporations (Foreign Exchange Markets) Exemption Amendment Notice 2005 (No. 2) amends the Corporations (Foreign Exchange Markets) Exemption Notice 2004, extending its term to 31 March 2006. This amendment follows the original exemption notice which was published on 10 March 2004 and had an initial expiry date of 10 March 2005. The amendment was first extended to 30 September 2005 by the Corporations (Foreign Exchange Markets) Exemption Amendment Notice 2005 (No. 1), and now this second amendment further extends the exemption until the end of March 2006. This notice will take effect from 29 September 2005, although its registration on the Federal Register of Legislative Instruments will occur at a later date. The intent of this extension is to provide a continuous exemption period from the original commencement date until 31 March 2006. Entities or operators of foreign exchange markets that rely on this exemption must ensure they notify the Australian Securities and Investments Commission (ASIC) in writing of their reliance on this exemption. This requirement is one of the conditions set out under the original Corporations (Foreign Exchange Markets) Exemption Notice 2004. The obligation on the operator is to confirm their status and reliance on the exemption to ASIC. The extension does not alter any existing obligations but rather provides a continuous exemption period to facilitate the regulatory process for the body currently using the exemption. Breach of the conditions outlined in the exemption notice could potentially lead to the entity losing the exemption, thereby becoming subject to the regulatory provisions of Part 7.2 of the Corporations Act 2001. While the notice does not explicitly detail penalties for non-compliance, any breach of the conditions under the Corporations Act could result in enforcement actions by ASIC. These actions may include civil penalties or legal proceedings against the entity. The precise penalties would be determined in the context of the broader Corporations Act and related regulations. The Corporations (Foreign Exchange Markets) Exemption Amendment Notice 2005 (No. 2) does not involve formal public consultation as it represents a minor change to an existing instrument. The primary purpose of this amendment is to allow sufficient time for the regulatory status of the one body currently using the exemption to be finalised. This extension should not be interpreted as an indication of the likely advice ASIC may provide to Treasury Ministers regarding an individual exemption application.