EXPLANATORY STATEMENT
Statutory Rules 1989 No. 294
Issued by the Authority of the Attorney-General
Securities Industry Regulations (Amendment)
Subsection 150(1) of the Securities Industry Act 1980 (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 150(5) 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 purpose 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 accompanying Regulations are in accordance with a resolution made by the Council.
5. The accompanying Regulations are also expressed to be under section 4 of the Acts Interpretation Act 1901. That section provides that where an Act that does not come into operation immediately upon its enactment amends another Act in such a manner that the other Act, as amended, will confer power to make regulations then, unless the contrary intention appears, that power may be exercised before the amending Act comes into operation. Any regulations made under section 4 of the Acts Interpretation Act 1901 take effect on the day on which the Act concerned comes into operation or on the day on which the regulations would have taken effect if the amending Act had been in operation when the regulations were made, whichever is the later.
6. Part 8 of the Co-operative Scheme Legislation Amendment Act 1989 (the 1989 Act), being the Part of the 1989 Act for which these Regulations were made, was proclaimed to come into operation on 1 November 1989.
7. The purpose of the Regulations is to make changes of a technical nature to the Securities Industry Regulations. The need for the changes arises from amendments to the Act (made by the 1989 Act) which effect deregulatory reforms concerning the licensing of participants in the securities industry.
8. Details of the accompanying Regulations are as follows:
Regulation 1: Principal Regulations
The Principal Regulations referred to are the Securities Industry Regulations.
Regulation 2: Interpretation
This regulation amends Regulation 2 of the Principal Regulations by omitting the definition of life office from that regulation. This omission is consequential upon the removal of the exemption given to life offices under
Regulation 26(7)(b) of the Principal Regulations from requirements concerning securities dealers licences. It also substitutes a new definition of superannuation scheme to take account of changes to other legislation which is used to define the term in the Principal Regulations.
Regulation 3: Insertion of new Regulation 4A: Annexures accompanying forms
The format for and endorsement of annexures are prescribed by new Regulation 4A inserted by this regulation.
Regulations 4 and 6: Repeal of Regulations 15 and 17
Regulations 15 and 17 of the Principal Regulations, which relate to applications for and variation of dealers representatives and investment representatives licences, are repealed by regulations 4 and 6 respectively. The repealed Regulations are no longer necessary as representatives will no longer be required to hold a licence. Representatives will instead be required to hold a proper authority issued by their principal.
Regulation 5: Amendment of Regulation 16: Application for licence to be enclosed in sealed envelope
Regulation 5 amends regulation 16 of the Principal Regulations. The amendment is consequential upon the repeal of regulation 15 of the Principal Regulations by regulation 4.
Regulation 7: New Regulations substituted for Regulations 24 and 25
This regulation repeals regulations 24 and 25 of the Principal Regulations which relate to lodgment of an annual statement by licensed representatives. The repeal is consequential upon the discontinuation of the requirement for representatives to be licensed.
The regulation also substitutes two new regulations in placed of the repealed regulations.
Proposed Regulation 24: Register of holders of proper authorities: prescribed information
Paragraph 60E(3)(e) of the Act requires that dealers and investment advisers include in a register certain information concerning persons who hold proper authorities from them. Proposed Regulation 24 prescribes the date of birth of a holder of a proper authority to be one of the items which the register must contain.
Proposed Regulation 25: Amount payable for copy of a register
Proposed Regulation 25 prescribes an amount which a licensee may require for provision of a copy of the licensee’s register of persons who hold proper authorities from the licensee.
Regulation 8: Amendment of Regulation 26: Exemptions from licensing, etc
This regulation amends regulation 26 of the Principal Regulations by:
- removing from subregulation 26(7) an exemption formerly granted to life offices dealing with securities in relation to the carrying on of the business of life insurance from the need to comply with the licensing requirements of the Act;
- making amendments to subregulations 26(8) and 26(10) which are consequential upon the removal from the Act of the requirement that representatives be licensed; and
- removing the exemption formerly granted to bank employees from the need to comply with the licensing requirements of the Act in certain circumstances.
Regulation 9: Amendment of Regulation 42: Notice under subsection 90(2) or (3) or 90A(1) of the Act
Subsection 90(2) and (3) require the Commission to be notified of the location of registers of relevant interests maintained by licensees and financial journalists. Section 90 is to be repealed and replaced by two sections, 90 and 90A, which expand these requirements. Regulation 9 amends regulation 42 of the Principal Regulations to reflect this change in the Act.