House debates

Monday, 14 September 2009

Corporations Legislation Amendment (Financial Services Modernisation) Bill 2009

Consideration in Detail

4:51 pm

Photo of Chris BowenChris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Hansard source

I present a supplementary explanatory memorandum to the bill.

I ask leave of the committee to move government amendments (1) to (14) as circulated together.

Leave granted.

I move government amendments (1) to (14) together, for the reasons outlined in my second reading speech:

(1)    Schedule 1, page 8 (after line 30), after item 11, insert:

11A  After subsection 911A(5)

Insert:

     (5A)    Despite paragraph (2)(b), the regulations may provide that the exemption under that paragraph does not apply in relation to:

             (a)    a particular financial product or a particular kind of financial product; or

             (b)    a particular financial product or a particular kind of financial product that is issued, varied or disposed of by a particular person, or a particular kind of person.

(2)    Schedule 1, item 12, page 9 (before line 5), before section 985E, insert:

985EA Application of this Subdivision

                 This Subdivision applies to a financial services licensee (the provider) in relation to:

             (a)    the issuing of a margin lending facility to a retail client; or

             (b)    the increasing of the limit of a margin lending facility that was issued to a retail client.

(3)    Schedule 1, item 12, page 9 (line 7), omit “A financial services licensee (the provider)”, substitute “The provider”.

(4)    Schedule 1, item 12, page 9 (lines 8 to 10), omit paragraphs 985E(1)(a) and (b), substitute:

             (a)    issue the margin lending facility to the retail client; or

             (b)    increase the limit of the margin lending facility that was issued to the retail client;

(5)    Schedule 1, item 12, page 12 (line 32), after “critical day”, insert “referred to in subsection 985E(1)”.

(6)    Schedule 2, page 19 (lines 4 to 11), omit items 1 and 2, substitute:

1  Subsection 5(1)

Insert:

traditional trustee company services has the same meaning as in Chapter 5D of the Corporations Act.

2  Subsection 5(1)

Insert:

trustee company has the same meaning as in Chapter 5D of the Corporations Act.

2A  Subsection 5(1)

Insert:

trust property, in relation to a trustee company, means property that is or was held by the trustee company as trustee.

(7)    Schedule 2, page 19 (after line 24), after item 3, insert:

3A  Subsection 12CC(5)

After “financial products”, insert “or financial services”.

(8)    Schedule 2, page 19, after proposed item 3A, insert:

3B  Division 4 of Part 3 (heading)

Repeal the heading, substitute:

Division 4—Requirements to disclose information

(9)    Schedule 2, page 19, after proposed item 3B, insert:

3C  Section 40

After “section 41”, insert “or 42”.

3D  At the end of paragraph 40(c)

Add:

            (iii)    an alleged or suspected contravention, by a trustee company, of a law of the Commonwealth, or of a State or Territory, being a contravention that involves fraud or dishonesty and that relates to trust property; or

(10)  Schedule 2, page 19, after proposed item 3D, insert:

3E  After section 41

Insert:

42 Acquisitions and disposals of trust property by trustee companies

        (1)    ASIC may require a trustee company to disclose to it, in relation to an acquisition or disposal of trust property by the trustee company, all or any of the following:

             (a)    the name of:

                   (i)    the person from or through whom the trust property was acquired; or

                  (ii)    the person to or through whom the trust property was disposed;

             (b)    whether the acquisition or disposal was effected on the instructions of another person, and the nature of any such instructions;

             (c)    the names of the beneficiaries of the trust.

Note:   Failure to comply with a requirement made under this subsection is an offence (see section 63).

        (2)    Information required to be disclosed under this section need only be disclosed to the extent to which it is known to the person required to make the disclosure.

Note:   In criminal proceedings, a defendant bears an evidential burden in relation to the matters in subsection (2).

        (3)    An offence under subsection 63(2) relating to subsection (1) of this section is an offence of strict liability.

Note:   For strict liability, see section 6.1 of the Criminal Code.

(11)  Schedule 2, page 19, after proposed item 3E, insert:

3F  After section 43

Insert:

44 Exercise of certain powers of ASIC in relation to trust property acquired or disposed of by trustee company

        (1)    This section applies if ASIC considers that a contravention of a law of the Commonwealth, or of a State or Territory, may have been committed by a trustee company, being a contravention that involves fraud or dishonesty and that relates to trust property.

        (2)    ASIC may require a director, secretary or senior manager of the trustee company to disclose to ASIC information of which he or she is aware and that may have affected an acquisition or disposal of trust property by the trustee company.

Note:   Failure to comply with a requirement made under this subsection is an offence (see section 63).

        (3)    If ASIC believes on reasonable grounds that a person can give information about particular matters, being any or all of the following:

             (a)    an acquisition or disposal of trust property by the trustee company;

             (b)    the financial position of the trustee company;

             (c)    an audit of, or a report of an auditor about, accounts or records of the trustee company;

ASIC may require the person to disclose to it the information that the person has about those particular matters.

Note:   Failure to comply with a requirement made under this subsection is an offence (see section 63).

        (4)    An offence under subsection 63(2) relating to subsection (2) or (3) of this section is an offence of strict liability.

Note:   For strict liability, see section 6.1 of the Criminal Code.

        (5)    ASIC must not exercise a power conferred by subsection (2) or (3) except for the purpose of investigating the possible contravention referred to in subsection (1).

(12)  Schedule 2, page 19, after proposed item 3F, insert:

3G  Subsection 63(2)

Omit “section 41 or 43”, substitute “section 41, 42, 43 or 44”.

(13)  Schedule 2, page 19, after proposed item 3G, insert:

3H  After paragraph 71(b)

Insert:

         or (c)    trust property acquired or disposed of by a trustee company;

(14)  Schedule 2, page 19, after proposed item 3H, insert:

3J  After subsection 73(1)

Insert:

     (1A)    If paragraph 71(c) applies, ASIC may make one or more of the following:

             (a)    an order restraining a specified person from disposing of any interest in specified trust property;

             (b)    an order restraining a specified person from acquiring any interest in specified trust property;

             (c)    an order directing a body corporate not to pay, except in the course of winding up, a sum due from the body corporate in respect of specified trust property;

             (d)    an order directing a body corporate not to register the transfer or transmission of specified trust property.

Note:                The heading to section 73 is altered by inserting “and trust property” after “financial products”.

3K  Subsections 73(2) and (3)

After “subsection (1)”, insert “or (1A)”.

Question agreed to.

Bill, as amended, agreed to

Ordered that this bill be reported to the House with amendments

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