EXPLANATORY STATEMENT
Statutory Rules 1989 No. 371
Issued by the Authority of the Attorney-General
Futures Industry Regulations (Amendment)
Subsection 160(1) of the Futures Industry Act 1986 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters that are necessary or convenient to be prescribed for carrying out or giving effect to the Act. Subsection 160(8) of the Act provides that the power of the Governor-General to make regulations shall be exercised only in accordance with advice that is consistent with resolutions of the Ministerial Council for Companies and Securities (the Council).
2. The Council was established under an Agreement between the Commonwealth and the States, executed on 22 December 1978 (the Agreement), that provides the framework for a co-operative Commonwealth-State scheme for a uniform system of law and administration in relation to company law and the regulation of the securities and futures industries in the six States, the Australian Capital Territory and the Northern Territory of Australia.
3. Under subclause 45(1) of the Agreement, the Council may consider a proposal for the amendment of regulations made under the Commonwealth Acts enacted for the purposes of the co-operative companies and securities scheme. Should the Council approve any draft amending regulation which gives effect to such a proposal, the Commonwealth is then required, under subclause 45(2) of the Agreement, to submit the draft regulations to the Federal Executive Council for making by the Governor-General.
4. The proposed Regulations are in accordance with a resolution of the Council.
5. The purpose of the proposed Regulations is to make changes of a technical nature to the Futures Industry Regulations. The need for the changes arises from amendments to the Act made by the Co-operative Scheme Legislation Amendment Act 1989 with effect from 1 November 1989 which effect deregulatory reforms concerning the licensing of participants in the futures industry.
6. Details of the proposed Regulations are as follows:
Regulation 1: Principal Regulations
The Principal Regulations referred to are the Futures Industry Regulations.
Regulation 2: Conditions of licences: General
This regulation inserts a new Regulation 18 in the Principal Regulations that is consequential upon the discontinuation of licensing of representatives.
Paragraph 18(1)(a) requires a licensee to ensure that each representative of the licensee is adequately supervised in the duties that the representative is required by the licensee to perform.
Paragraphs 18(1)(b) and (c) require a licensee to ensure that each representative of the licensee is sufficiently trained prior to his or her acting as a representative and is kept up to date in relation to those duties by means of continuing training programs.
Subregulation 18(2) provides that the National Companies and Securities Commission (the NCSC) may require a licensee to satisfy it that the above conditions have been met.
Regulation 3: Insertion of new Regulations 22A and 22B: Prescribed information under para. 78E(3)(e) and forms of notice under s.78F of the Act
Section 78E of the Futures Industry Act (‘the Act’) requires a licensee to keep a register of holders of proper authorities in accordance with the section. Subsection 78E(3) sets out what information the register is to contain in relation to each holder of a proper authority and paragraph 78E(3)(e) requires the inclusion of any other prescribed information. Regulation 22A prescribes information specified in items 1, 2, 3 and 5 of new form 10C in Schedule 2 for the purpose of paragraph 78E(3)(e). The prescribed information relates to the register keeper’s name, the address of the register keeper’s principal place of business, the type and number of the licence held by the register keeper and the date of the representative’s first holding of a proper authority.
Section 78F of the Act requires a licensee to notify the NCSC, by way of written notice, of the location and contents of the register of holders of proper authorities which a licensee is required to keep under S.78E of the Act. Regulation 22B prescribes the form of the notices required under s.78F of the Act.
Regulation 4: Amendment of Schedule 2: New Forms 10A, 10B, and 10C
This Regulation amends Schedule 2 of the Principal Regulations by inserting new Forms 10A, 10B and 10C. Written notices under s. 78F of the Act (see Regulation 3 above) are to be in accordance with these forms.