Trade Practices (Removal of Exceptions) Regulations (Amendment)

Overview

The Trade Practices (Removal of Exceptions) Regulations Amendment, enacted in 1981 by the Governor-General of the Commonwealth of Australia on the advice of the Federal Executive Council, represents a modification to the Trade Practices Act 1974. This legislative instrument specifically targets the removal of certain exceptions under the Act, particularly focusing on the requirements for prescribed societies to mandate insurance from specified insurers. The amendment aims to ensure that requirements by these societies, except for terminating building societies and co-operative housing societies within the meaning of the Co-operation Act 1923 of New South Wales, regarding insurance are not disregarded in assessments of compliance with Part IV of the Act. This regulatory change seeks to provide clarity and enforce stricter adherence to trade practices by eliminating specific exceptions that may have previously allowed for certain practices to go unexamined.

Scope and Application

The Trade Practices (Removal of Exceptions) Regulations 1981, as amended, applies to prescribed societies within the Commonwealth of Australia, with specific reference to terminating building societies and co-operative housing societies. This legislative instrument was made under the Trade Practices Act 1974 and aims to modify the existing regulations by removing exceptions concerning certain insurance requirements imposed by these societies on borrowers. By omitting sub-regulation (1) and substituting it with the new provision, the Act explicitly states that such requirements should not be disregarded when determining if a contravention of Part IV of the Act has occurred. This change ensures that any prescribed society, excluding the specified exceptions, must adhere to the Act’s provisions, thereby maintaining a consistent regulatory framework across the industry. The geographic reach of this regulation is national, applying uniformly across all states and territories within Australia.

Key Provisions

The primary operative sections of this legislative instrument concern the Trade Practices (Removal of Exceptions) Regulations 1981. Specifically, Regulation 3 amends the definition of certain exceptions under section 51 of the Trade Practices Act 1974. The amendment involves removing the sub-regulation that previously allowed certain societies to require borrowers to use specified insurers without being considered in breach of Part IV of the Act. The new sub-regulation (1) explicitly states that a requirement by a prescribed society, excluding terminating building societies and co-operative housing societies within the meaning of the Co-operation Act 1923 of the State of New South Wales, to insure with a society-specified insurer is not disregarded when determining whether there has been a contravention of the Act (Trade Practices (Removal of Exceptions) Regulations 1981, Reg 3(1)). The Act imposes obligations on the entities governed by it, specifically prescribed societies. These societies must now comply with the amended regulations, meaning that any requirement they impose on borrowers to insure with specific insurers will be considered when determining compliance with the Act. This means that such requirements could potentially contravene Part IV of the Act, which addresses anti-competitive practices and other unfair trading practices (Trade Practices (Removal of Exceptions) Regulations 1981, Reg 3(1)). This amendment ensures that any practice which could lead to anti-competitive behaviour is subject to scrutiny, even if it involves insurance requirements. Breaches of the amended regulations can lead to various civil and criminal consequences. Under the Trade Practices Act 1974, contraventions of the Act can result in significant penalties. For corporations, the penalties can include substantial fines, with the maximum penalty being $1.1 million for serious contraventions (Trade Practices Act 1974, s 87A). For individuals, the penalties can include fines up to $220,000 and/or imprisonment for up to five years (Trade Practices Act 1974, s 87B). These penalties are designed to deter non-compliance and to ensure that entities adhere to the fair trading practices outlined in the Act.