Prepared by the Office of Parliamentary Counsel, Canberra
Corporations Act 2001
No. 50, 2001
Compilation No. 79
Compilation date: 1 July 2017
Includes amendments up to: Act No. 75, 2017
Registered: 6 July 2017
This compilation is in 6 volumes
Volume 1: sections 1–260E
Volume 2: sections 283AA–601DJ
Volume 3: sections 601EA–742
Volume 4: sections 760A–993D
Volume 5: sections 1010A–1369A
Volume 6: sections 1370–1637
Schedules
Endnotes
Each volume has its own contents
This compilation includes commenced amendments made by Act No. 45,
2017
Authorised Version C2017C00210 registered 06/07/2017
About this compilation
This compilation
This is a compilation of the Corporations Act 2001 that shows the text of the
law as amended and in force on 1 July 2017 (the compilation date).
The notes at the end of this compilation (the endnotes) include information
about amending laws and the amendment history of provisions of the compiled
law.
Uncommenced amendments
The effect of uncommenced amendments is not shown in the text of the
compiled law. Any uncommenced amendments affecting the law are accessible
on the Legislation Register (www.legislation.gov.au). The details of
amendments made up to, but not commenced at, the compilation date are
underlined in the endnotes. For more information on any uncommenced
amendments, see the series page on the Legislation Register for the compiled
law.
Application, saving and transitional provisions for provisions and
amendments
If the operation of a provision or amendment of the compiled law is affected by
an application, saving or transitional provision that is not included in this
compilation, details are included in the endnotes.
Editorial changes
For more information about any editorial changes made in this compilation, see
the endnotes.
Modifications
If the compiled law is modified by another law, the compiled law operates as
modified but the modification does not amend the text of the law. Accordingly,
this compilation does not show the text of the compiled law as modified. For
more information on any modifications, see the series page on the Legislation
Register for the compiled law.
Self-repealing provisions
If a provision of the compiled law has been repealed in accordance with a
provision of the law, details are included in the endnotes.
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Contents
Chapter 7—Financial services and markets 1
Part 7.9—Financial product disclosure and other provisions
relating to issue, sale and purchase of financial
products 1
Division 1—Preliminary 1
1010A Part generally does not apply to securities.........................1
1010B Part does not apply to financial products not issued
in the course of a business .................................................1
1010BA Part does not apply to contribution plans ..........................2
1010C Special provisions about meaning of sale and offer ..........2
1010D General approach to offence provisions ............................2
Division 2—Product Disclosure Statements 3
Subdivision A—Preliminary 3
1011A Jurisidictional scope of Division .......................................3
1011B Definitions.........................................................................3
1011C Treatment of offers of options over financial
products .............................................................................4
Subdivision B—Requirement for a Product Disclosure Statement
to be given 4
1012A Obligation to give Product Disclosure Statement—
personal advice recommending particular financial
product ..............................................................................4
1012B Obligation to give Product Disclosure Statement—
situations related to issue of financial products .................6
1012C Obligation to give Product Disclosure Statement—
offers related to sale of financial products.........................7
1012D Situations in which Product Disclosure Statement
is not required..................................................................12
1012DAA Rights issues for which Product Disclosure
Statement is not required .................................................17
1012DA Product Disclosure Statement not required for sale
amounting to indirect issue..............................................20
1012E Small scale offerings of managed investment and
other prescribed financial products (20 issues or
sales in 12 months) ..........................................................26
1012F Product Disclosure Statement for certain
superannuation products may be provided later ..............29
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1012G Product Disclosure Statement may sometimes be
provided later ..................................................................29
1012H Obligation to take reasonable steps to ensure that
Product Disclosure Statement is given to person
electing to be covered by group financial product ...........31
1012I Obligation to give employer a Product Disclosure
Statement in relation to certain superannuation
products and RSA products .............................................32
1012IA Treatment of arrangements under which a person
can instruct another person to acquire a financial
product ............................................................................34
1012J Information must be up to date........................................38
1012K Anti-avoidance determinations........................................38
Subdivision C—Preparation and content of Product Disclosure
Statements 39
1013A Who must prepare Product Disclosure Statement ...........39
1013B Title of Product Disclosure Statement .............................40
1013C Product Disclosure Statement content
requirements ....................................................................40
1013D Product Disclosure Statement content—main
requirements ....................................................................42
1013DA Information about ethical considerations etc. ..................45
1013E General obligation to include other information
that might influence a decision to acquire .......................45
1013F General limitations on extent to which information
is required to be included ................................................45
1013FA Information not required to be included in PDS for
continuously quoted securities.........................................46
1013G Product Disclosure Statement must be dated...................47
1013H Requirements if Product Disclosure Statement
states or implies that financial product will be able
to be traded......................................................................47
1013I Extra requirements if Product Disclosure
Statement relates to managed investment products
that are ED securities.......................................................48
1013J Requirements if Statement has been lodged with
ASIC................................................................................49
1013K Requirements relating to consents to certain
statements ........................................................................49
1013L Product Disclosure Statement may consist of 2 or
more separate documents given at same time..................50
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1013M Combining a Product Disclosure Statement and a
Financial Services Guide in a single document ...............51
Subdivision D—Supplementary Product Disclosure Statements 51
1014A What a Supplementary Product Disclosure
Statement is .....................................................................51
1014B Title of Supplementary Product Disclosure
Statement.........................................................................52
1014C Form of Supplementary Product Disclosure
Statement.........................................................................52
1014D Effect of giving person a Supplementary Product
Disclosure Statement .......................................................52
1014E Situation in which only a Supplementary Product
Disclosure Statement need be given ................................53
1014F Application of other provisions in relation to
Supplementary Product Disclosure Statements ...............53
Subdivision DA—Replacement Product Disclosure Statements 53
1014G Application of this Subdivision—stapled securities ........53
1014H What a Replacement Product Disclosure Statement
is......................................................................................54
1014J Consequences of lodging a Replacement Product
Disclosure Statement .......................................................54
1014K Form, content and preparation of Replacement
Product Disclosure Statements ........................................54
1014L Giving, lodgment and notice of Replacement
Product Disclosure Statements ........................................55
Subdivision E—Other requirements relating to Product
Disclosure Statements and Supplementary
Product Disclosure Statements 56
1015A Subdivision applies to Product Disclosure
Statements and Supplementary Product Disclosure
Statements .......................................................................56
1015B Some Statements must be lodged with ASIC ..................56
1015C How a Statement is to be given .......................................57
1015D Notice, retention and access requirements for
Statement that does not need to be lodged.......................58
1015E Altering a Statement after its preparation and
before giving it to a person..............................................59
Subdivision F—Other rights and obligations related to Product
Disclosure Statements 60
1016A Provisions relating to use of application forms................60
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1016B If Statement lodged with ASIC, financial product
is not to be issued or sold before specified period ...........64
1016C Minimum subscription condition must be fulfilled
before issue or sale ..........................................................65
1016D Condition about ability to trade on a market must
be fulfilled before issue or sale........................................65
1016E Choices open to person making the offer if
disclosure condition not met or Product Disclosure
Statement defective .........................................................67
1016F Remedies for person acquiring financial product
under defective Product Disclosure Document................73
Division 3—Other disclosure obligations of the issuer of a
financial product 75
1017A Obligation to give additional information on
request .............................................................................75
1017B Ongoing disclosure of material changes and
significant events.............................................................77
1017BA Trustees of regulated superannuation funds—
obligation to make product dashboard publicly
available ..........................................................................80
1017BB Trustees of registrable superannuation entities—
obligation to make information relating to
investment of assets publicly available............................83
1017BC Obligations relating to investment of assets of
registrable superannuation entities—general rule
about giving notice and providing information ...............84
1017BD Obligations relating to investment of assets of
registrable superannuation entities—giving notice
to providers under custodial arrangements ......................85
1017BE Obligations relating to investment of assets of
registrable superannuation entities—giving notice
to acquirers under custodial arrangements.......................87
1017C Information for existing holders of superannuation
products and RSA products .............................................88
1017D Periodic statements for retail clients for financial
products that have an investment component ..................93
1017DA Trustees of superannuation entities—regulations
may specify additional obligations to provide
information......................................................................95
1017E Dealing with money received for financial product
before the product is issued .............................................97
1017F Confirming transactions ..................................................99
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1017G Certain product issuers and regulated persons must
meet appropriate dispute resolution requirements .........105
Division 4—Advertising for financial products 107
1018A Advertising or other promotional material for
financial product must refer to Product Disclosure
Statement.......................................................................107
1018B Prohibition on advertising personal offers covered
by section 1012E ...........................................................110
Division 5—Cooling-off periods 112
1019A Situations in which this Division applies.......................112
1019B Cooling-off period for return of financial product.........113
Division 5A—Unsolicited offers to purchase financial products
off-market 115
1019C Definitions.....................................................................115
1019D Offers to which this Division applies ............................115
1019E How offers are to be made.............................................116
1019F Prohibition on inviting offers to sell ..............................117
1019G Duration and withdrawal of offers.................................117
1019H Terms of offer cannot be varied ....................................117
1019I Contents of offer document ...........................................118
1019J Obligation to update market value.................................119
1019K Rights if requirements of Division not complied
with................................................................................120
Division 5B—Disclosure etc. in relation to short sales covered by
securities lending arrangement of listed
section 1020B products 124
1020AA Definitions.....................................................................124
1020AB Seller disclosure ............................................................125
1020AC Licensee disclosure........................................................126
1020AD Public disclosure of information....................................127
1020AE Licensee’s obligation to ask seller about short sale .......129
1020AF Regulations....................................................................129
Division 5C—Information about CGS depository interests 131
1020AG Jurisdictional scope of Division ....................................131
1020AH Definitions.....................................................................131
1020AI Requirement to give information statements for
CGS depository interest if recommending
acquisition of interest ....................................................132
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1020AJ Information statement given must be up to date ............134
1020AK How an information statement is to be given ................134
1020AL Civil action for loss or damage......................................136
Division 6—Miscellaneous 138
1020A Offers etc. relating to certain managed investment
schemes not to be made in certain circumstances..........138
1020B Prohibition of certain short sales of securities,
managed investment products and certain other
financial products ..........................................................138
1020D Part cannot be contracted out of ....................................140
1020E Stop orders by ASIC......................................................140
1020F Exemptions and modifications by ASIC .......................144
1020G Exemptions and modifications by regulations...............145
Division 7—Enforcement 147
Subdivision A—Offences 147
1021A Overview.......................................................................147
1021B Definitions.....................................................................147
1021C Offence of failing to give etc. a disclosure
document or statement...................................................149
1021D Offence of preparer of defective disclosure
document or statement giving the document or
statement knowing it to be defective .............................151
1021E Offence of preparer of defective disclosure
document or statement giving the document or
statement (whether or not known to be defective) .........152
1021F Offence of regulated person (other than preparer)
giving disclosure document or statement knowing
it to be defective ............................................................153
1021FA Paragraph 1012G(3)(a) obligation—offences
relating to communication of information .....................154
1021FB Paragraph 1012G(3)(a) obligation—offences
relating to information provided by product issuer
for communication by another person ...........................155
1021G Offence of financial services licensee failing to
ensure authorised representative gives etc.
disclosure documents or statements as required ............158
1021H Offences if a Product Disclosure Statement (or
Supplementary PDS) does not comply with certain
requirements ..................................................................158
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1021I Offence of giving disclosure document or
statement that has not been prepared by the
appropriate person .........................................................159
1021J Offences if preparer etc. of disclosure document or
statement becomes aware that it is defective .................160
1021K Offence of unauthorised alteration of Product
Disclosure Statement (or Supplementary PDS).............161
1021L Offences of giving, or failing to withdraw, consent
to inclusion of defective statement ................................162
1021M Offences relating to keeping and providing copies
of Product Disclosure Statements (or
Supplementary PDSs)....................................................164
1021N Offence of failing to provide additional
information requested under section 1017A..................165
1021NA Offences relating to obligation to make product
dashboard publicly available .........................................165
1021NB Offences relating to obligation to make
superannuation investment information publicly
available ........................................................................168
1021NC Offences relating to obligations under
sections 1017BC, 1017BD and 1017BE........................170
1021O Offences of issuer or seller of financial product
failing to pay money into an account as required ..........172
1021P Offences relating to offers to which Division 5A
applies ...........................................................................173
Subdivision B—Civil liability 175
1022A Definitions.....................................................................175
1022B Civil action for loss or damage......................................177
1022C Additional powers of court to make orders ...................184
Part 7.10—Market misconduct and other prohibited conduct
relating to financial products and financial services 185
Division 1—Preliminary 185
1040A Content of Part ..............................................................185
Division 2—The prohibited conduct (other than insider trading
prohibitions) 186
1041A Market manipulation .....................................................186
1041B False trading and market rigging—creating a false
or misleading appearance of active trading etc..............186
1041C False trading and market rigging—artificially
maintaining etc. trading price ........................................188
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1041D Dissemination of information about illegal
transactions....................................................................189
1041E False or misleading statements ......................................190
1041F Inducing persons to deal................................................191
1041G Dishonest conduct .........................................................192
1041H Misleading or deceptive conduct (civil liability
only) ..............................................................................192
1041I Civil action for loss or damage for contravention
of sections 1041E to 1041H ..........................................194
1041J Sections of this Division have effect independently
of each other ..................................................................196
1041K Division applies to certain conduct to the
exclusion of State Fair Trading Acts provisions............196
Division 2A—Proportionate liability for misleading and
deceptive conduct 197
1041L Application of Division .................................................197
1041M Certain concurrent wrongdoers not to have benefit
of apportionment ...........................................................197
1041N Proportionate liability for apportionable claims ............198
1041O Defendant to notify plaintiff of concurrent
wrongdoer of whom defendant aware ...........................199
1041P Contribution not recoverable from defendant................199
1041Q Subsequent actions ........................................................200
1041R Joining non-party concurrent wrongdoer in the
action.............................................................................200
1041S Application of Division .................................................200
Division 3—The insider trading prohibitions 202
Subdivision A—Preliminary 202
1042A Definitions.....................................................................202
1042B Application of Division .................................................203
1042C When information is generally available ......................203
1042D When a reasonable person would take information
to have a material effect on price or value of
Division 3 financial products.........................................204
1042E Division 3 financial products taken to be able to be
traded despite suspensions or section 794D
directions.......................................................................204
1042F Inciting, inducing or encouraging an act or
omission constitutes procuring the omission.................205
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1042G Information in possession of officer of body
corporate........................................................................205
1042H Information in possession of partner or employee
of partnership ................................................................206
Subdivision B—The prohibited conduct 206
1043A Prohibited conduct by person in possession of
inside information .........................................................206
1043B Exception for withdrawal from registered scheme ........208
1043C Exception for underwriters ............................................208
1043D Exception for acquisition pursuant to legal
requirement ...................................................................209
1043E Exception for information communicated pursuant
to a legal requirement ....................................................209
1043F Chinese wall arrangements by bodies corporate............209
1043G Chinese wall arrangements by partnerships etc. ............210
1043H Exception for knowledge of person’s own
intentions or activities ...................................................211
1043I Exception for bodies corporate......................................211
1043J Exception for officers or agents of body corporate .......212
1043K Transactions by holder of financial services
licence or a representative of the holder of such a
licence ...........................................................................212
1043L A specific situation in which a compensation order
under section 1317HA may be made.............................213
1043M Defences to prosecution for an offence .........................218
1043N Relief from civil liability ...............................................219
1043O Powers of Court.............................................................219
Division 4—Defences, relief and limits on liability 221
1044A General defence or relief for publishers ........................221
1044B Limit on liability for misleading or deceptive
conduct ..........................................................................221
Division 5—Miscellaneous 224
1045A Exemptions and modifications by regulations...............224
Part 7.11—Title and transfer 225
Division 1—Title to certain securities 225
1070A Nature of shares and certain other interests in a
company or registered scheme ......................................225
1070B Numbering of shares .....................................................226
1070C Matters to be specified in share certificate ....................227
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1070D Loss or destruction of title documents for certain
securities........................................................................227
Division 2—Transfer of certain securities 230
Subdivision A—General provisions 230
1071A Application of the Subdivision to certain securities ......230
1071B Instrument of transfer ....................................................230
1071C Occupation need not appear in transfer document,
register etc. ....................................................................232
1071D Registration of transfer at request of transferor .............233
1071E Notice of refusal to register transfer ..............................234
1071F Remedy for refusal to register transfer or
transmission...................................................................234
1071G Certification of transfers................................................235
1071H Duties of company with respect to issue of
certificates .....................................................................237
Subdivision B—Special provisions for shares 239
1072A Transmission of shares on death (replaceable
rule—see section 135) ...................................................239
1072B Transmission of shares on bankruptcy
(replaceable rule—see section 135) ..............................240
1072C Rights of trustee of estate of bankrupt shareholder........240
1072D Transmission of shares on mental incapacity
(replaceable rule—see section 135) ..............................242
1072E Trustee etc. may be registered as owner of shares .........243
1072F Registration of transfers (replaceable rule—see
section 135) ...................................................................245
1072G Additional general discretion for directors of
proprietary companies to refuse to register
transfers (replaceable rule—see section 135)................246
1072H Notices relating to non-beneficial and beneficial
ownership of shares .......................................................246
Division 3—Transfer of certain securities effected otherwise
than through a prescribed CS facility 250
1073A Application of the Division to certain securities............250
1073B Definitions.....................................................................250
1073C Application of Division to certain bodies as if they
were companies .............................................................251
1073D Regulations may govern transfer of certain
securities........................................................................251
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1073E ASIC may extend regulations to securities not
otherwise covered..........................................................254
1073F Operation of this Division and regulations made
for its purposes ..............................................................255
Division 4—Transfer of financial products effected through
prescribed CS facility 257
1074A Financial products to which this Division applies .........257
1074B Definitions.....................................................................257
1074C Operating rules of prescribed CS facility may deal
with transfer of title .......................................................257
1074D Valid and effective transfer if operating rules
complied with................................................................258
1074E Regulations may govern transfer of financial
products in accordance with operating rules of
prescribed CS facility ....................................................258
1074F Issuer protected from civil liability for person’s
contravention of prescribed CS facility’s
certificate cancellation rules ..........................................261
1074G Operation of this Division and regulations made
for its purposes ..............................................................261
Division 5—Exemptions and modifications 264
1075A ASIC’s power to exempt and modify ............................264
Part 7.12—Miscellaneous 266
Division 1—Qualified privilege 266
1100A Qualified privilege for information given to ASIC........266
1100B Qualified privilege for the conduct of market
licensees and CS facility licensees ................................267
1100C Qualified privilege for information given to
market licensees and CS facility licensees etc. ..............268
1100D Extension of protections given by this Division ............268
Division 2—Other matters 269
1101A Approved codes of conduct ...........................................269
1101B Power of Court to make certain orders ..........................270
1101C Preservation and disposal of records etc........................275
1101D Destruction of records by ASIC ....................................276
1101E Concealing etc. of books ...............................................276
1101F Falsification of records ..................................................277
1101G Precautions against falsification of records ...................278
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1101GA How Part 9.3 applies to books required to be kept
by this Chapter etc.........................................................278
1101H Contravention of Chapter does not generally affect
validity of transactions etc.............................................279
1101I Gaming and wagering laws do not affect validity
of contracts relating to financial products......................279
1101J Delegation .....................................................................280
Chapter 8—Mutual recognition of securities offers 281
Part 8.1—Preliminary 281 1200A Definitions.....................................................................281
Part 8.2—Foreign offers that are recognised in this jurisdiction 283
Division 1—Recognised offers 283
1200B When an offer is a recognised offer...............................283
1200C Conditions that must be met to be a recognised
offer ...............................................................................283
1200D Required documents and information............................285
1200E Warning statement.........................................................286
Division 2—Effect of a recognised offer 287
1200F Effect of a recognised offer ...........................................287
Division 3—Ongoing conditions for recognised offers 289
1200G Offering conditions........................................................289
1200H Address for service condition ........................................293
1200J Dispute resolution condition..........................................294
Division 4—Modification of provisions of this Act 296
1200K Additional operation of section 675 (continuous
disclosure) .....................................................................296
1200L Pre-offer advertising......................................................296
1200M Modification by the regulations.....................................297
Division 5—ASIC’s powers in relation to recognised offers 298
1200N Stop orders ....................................................................298
1200P Ban on making subsequent recognised offers................302
1200Q Offence of breaching an ongoing condition ..................304
Division 6—Miscellaneous 305
1200R Service of documents ....................................................305
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Part 8.3—Offers made under foreign recognition schemes 306 1200S Notice to ASIC..............................................................306
1200T Extension of this Act to recognised jurisdictions ..........306
1200U ASIC stop order for advertising in a recognised
jurisdiction.....................................................................307
Chapter 9—Miscellaneous 309
Part 9.1—Registers and registration of documents 309 1274 Registers........................................................................309
1274AA Register of disqualified company directors and
other officers .................................................................317
1274A Obtaining information from certain registers ................318
1274B Use, in court proceedings, of information from
ASIC’s national database ..............................................319
1274C ASIC certificate.............................................................319
1275 Relodging of lost registered documents ........................320
Part 9.2—Registration of auditors 321
Division 1—Interpretation 321
1276 Definitions.....................................................................321
Division 2—Registration 322
1279 Application for registration as auditor ...........................322
1280 Registration of auditors .................................................322
1280A Approval of auditing competency standard ...................324
1281 Auditor-General taken to be registered as auditor .........325
1285 Register of Auditors ......................................................325
1287 Notification of certain matters .......................................326
1287A Annual statements by registered company auditors.......326
1289 Auditors and other persons to enjoy qualified
privilege in certain circumstances .................................327
Division 2A—Conditions on registration of auditors 330
1289A ASIC may impose conditions on registration ................330
Division 3—Cancellation or suspension of registration 331
1290 Cancellation at request of registered person ..................331
1291 Immediate suspension or cancellation ...........................331
1291A Notice of suspension or cancellation .............................331
1291B ASIC may vary or revoke suspension ...........................332
1292 Powers of Board in relation to auditors .........................332
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1294 Board to give opportunity for hearing etc......................334
1294A Pre-hearing conference..................................................335
1295 Board may remove suspension ......................................336
1296 Notice of Board’s decision ............................................336
1297 Time when Board’s decision comes into effect .............337
1298 Effect of suspension ......................................................338
Division 4—Validation of approval of auditing competency
standard 339
1298P Validation of approval of auditing competency
standard .........................................................................339
1298Q Compensation for acquisition of property .....................339
Part 9.2A—Authorised audit companies 341
Division 1—Registration 341
1299A Application for registration as authorised audit
company ........................................................................341
1299B Eligibility for registration as an authorised audit
company ........................................................................341
1299C Registration as authorised audit company .....................342
1299D Registration may be subject to conditions .....................342
1299E Register of authorised audit companies .........................343
1299F Notification of certain matters .......................................344
1299G Annual statements by authorised audit company...........345
Division 2—Cancellation or suspension of registration 346
1299H Cancellation at request of registered person ..................346
1299I Cancellation or suspension in other cases......................346
1299J Notice of cancellation or suspension .............................346
1299K Time when ASIC’s decision comes into effect..............347
1299L Effect of suspension ......................................................347
1299M Effect of cancellation.....................................................348
Part 9.3—Books 349 1300 Inspection of books .......................................................349
1301 Location of books on computers ...................................350
1303 Court may compel compliance ......................................351
1304 Translations of instruments ...........................................351
1305 Admissibility of books in evidence ...............................351
1306 Form and evidentiary value of books ............................352
1307 Falsification of books ....................................................353
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Part 9.4—Offences 355
Division 1A—Application of the Criminal Code 355
1308A Application of Criminal Code .......................................355
Division 1—Specific offences 356
1308 False or misleading statements ......................................356
1309 False information etc. ....................................................359
1310 Obstructing or hindering ASIC etc. ...............................363
Division 2—Offences generally 364
1311 General penalty provisions ............................................364
1312 Penalties for bodies corporate .......................................365
1313 Penalty notices...............................................................366
1313A Offences committed partly in and partly out of the
jurisdiction.....................................................................370
1314 Continuing offences ......................................................370
1315 Proceedings: how taken.................................................374
1316 Time for instituting criminal proceedings .....................374
1316A Privilege against self-incrimination not available
to bodies corporate in Corporations Act criminal
proceedings ...................................................................375
1317 Certain persons to assist in prosecutions .......................375
Part 9.4AAA—Protection for whistleblowers 377 1317AA Disclosures qualifying for protection under this
Part ................................................................................377
1317AB Disclosure that qualifies for protection not
actionable etc.................................................................378
1317AC Victimisation prohibited................................................379
1317AD Right to compensation...................................................380
1317AE Confidentiality requirements for company,
company officers and employees and auditors ..............380
Part 9.4A—Review by Administrative Appeals Tribunal of
certain decisions 383 1317A Definitions.....................................................................383
1317B Applications for review .................................................383
1317C Excluded decisions........................................................383
1317D Notice of reviewable decision and review rights ...........385
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Part 9.4AA—Infringement notices for alleged contraventions of
continuous disclosure provisions 387 1317DAA Definitions.....................................................................387
1317DAB Purpose and effect of this Part.......................................388
1317DAC Issue of infringement notice ..........................................389
1317DAD Statement of reasons must be given ..............................390
1317DAE Matters to be included in infringement notice ...............391
1317DAF Effect of issue and compliance with infringement
notice.............................................................................394
1317DAG Effect of failure to comply with infringement
notice.............................................................................396
1317DAH Compliance period for infringement notice...................399
1317DAI Withdrawal of infringement notice................................399
1317DAJ Publication in relation to infringement notices ..............401
Part 9.4B—Civil consequences of contravening civil penalty
provisions 403 1317DA Definitions.....................................................................403
1317E Declarations of contravention........................................403
1317F Declaration of contravention is conclusive
evidence ........................................................................407
1317G Pecuniary penalty orders ...............................................407
1317GA Refund orders—contravention of section 962P.............411
1317H Compensation orders—corporation/scheme civil
penalty provisions .........................................................412
1317HA Compensation orders—financial services civil
penalty provisions .........................................................413
1317HB Compensation orders—market integrity rules ...............414
1317J Who may apply for a declaration or order .....................415
1317K Time limit for application for a declaration or
order ..............................................................................416
1317L Civil evidence and procedure rules for declarations
of contravention and civil penalty orders ......................416
1317M Civil proceedings after criminal proceedings ................416
1317N Criminal proceedings during civil proceedings .............417
1317P Criminal proceedings after civil proceedings ................417
1317Q Evidence given in proceedings for penalty not
admissible in criminal proceedings ...............................418
1317R ASIC requiring person to assist .....................................418
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1317S Relief from liability for contravention of civil
penalty provision ...........................................................419
Part 9.5—Powers of Courts 422 1318 Power to grant relief ......................................................422
1319 Power of Court to give directions with respect to
meetings ordered by the Court.......................................423
1322 Irregularities ..................................................................423
1323 Power of Court to prohibit payment or transfer of
money, financial products or other property..................426
1324 Injunctions.....................................................................429
1324A Provisions relating to prosecutions................................432
1324B Order to disclose information or publish
advertisements ...............................................................433
1325 Other orders...................................................................433
1325A Orders if contravention of Chapter 6, 6A, 6B or 6C......436
1325B Court may order bidder to make offers..........................437
1325C Unfair or unconscionable agreements, payments or
benefits ..........................................................................437
1325D Contravention due to inadvertence etc. .........................439
1325E Orders to secure compliance .........................................439
1326 Effect of sections 1323, 1324 and 1325.........................440
1327 Power of Court to punish for contempt of Court ...........440
Part 9.6—Proceedings 441 1330 ASIC’s power to intervene in proceedings ....................441
1331 Civil proceedings not to be stayed.................................441
1332 Standard of proof...........................................................441
1333 Evidence of contravention.............................................442
1335 Costs..............................................................................442
1336 Vesting of property........................................................443
Part 9.6A—Jurisdiction and procedure of Courts 445
Division 1—Civil jurisdiction 445
Subdivision A—Preliminary 445
1337A Operation of Division....................................................445
Subdivision B—Conferral of jurisdiction 446
1337B Jurisdiction of Federal Court and State and
Territory Supreme Courts..............................................446
1337C Jurisdiction of Family Court and State Family
Courts ............................................................................447
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1337D Jurisdiction of courts (decisions to prosecute and
related criminal justice process decisions made by
Commonwealth officers) ...............................................447
1337E Jurisdiction of lower courts ...........................................449
1337F Appeals..........................................................................450
1337G Courts to act in aid of each other ...................................451
Subdivision C—Transfer of proceedings 451
1337H Transfer of proceedings by the Federal Court and
State and Territory Supreme Courts ..............................451
1337J Transfer of proceedings by Family Court and State
Family Courts................................................................453
1337K Transfer of proceedings in lower courts ........................455
1337L Further matters for a court to consider when
deciding whether to transfer a proceeding.....................456
1337M Transfer may be made at any stage................................456
1337N Transfer of documents...................................................457
1337P Conduct of proceedings.................................................457
1337Q Rights of appearance .....................................................458
1337R Limitation on appeals ....................................................458
Subdivision D—Rules of court 459
1337S Rules of the Federal Court.............................................459
1337T Rules of the Supreme Court ..........................................459
1337U Rules of the Family Court .............................................460
Division 2—Criminal jurisdiction 461
1338A Operation of Division....................................................461
1338B Jurisdiction of courts .....................................................461
1338C Laws to be applied.........................................................464
Part 9.7—Unclaimed property 465 1339 ASIC to deal with unclaimed property ..........................465
1340 No liability to pay calls on shares etc. ...........................465
1341 Entitlement to unclaimed property ................................465
1342 Commonwealth or ASIC not liable for loss or
damage ..........................................................................467
1343 Disposal of securities if whereabouts of holder
unknown........................................................................467
1343A Disposal of interests in registered scheme if
whereabouts of member unknown.................................467
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Part 9.9—Miscellaneous 469 1344 Use of ABN...................................................................469
1345A Minister may delegate prescribed functions and
powers under this Act....................................................469
1346 Non-application of rule against perpetuities to
certain schemes .............................................................469
1348 Operation of Life Insurance Act ....................................470
1349 Privilege against exposure to penalty—
disqualification etc. .......................................................470
1350 Compensation for compulsory acquisition ....................474
Part 9.10—Fees imposed by the Corporations (Fees) Act 2001
and the Corporations (Review Fees) Act 2003 475 1351 Fees are payable to the Commonwealth ........................475
1354 Lodgment of document without payment of fee............476
1355 Doing act without payment of fee .................................476
1356 Effect of sections 1354 and 1355 ..................................476
1359 Waiver and refund of fees .............................................477
1360 Debts due to the Commonwealth...................................477
1362 Payment of fee does not give right to inspect or
search ............................................................................477
Part 9.12—Regulations 478 1363 Definitions.....................................................................478
1364 Power to make regulations ............................................478
1365 Scope of particular regulations ......................................480
1366 Verifying or certifying documents ................................480
1367 Documents lodged by an agent......................................481
1367A Publication in the prescribed manner ............................481
1368 Exemptions from Chapter 6D or 7 ................................481
1369 Penalty notices...............................................................482
1369A State termination of reference........................................483
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Financial services and markets Chapter 7
Financial product disclosure and other provisions relating to issue, sale and purchase of
financial products Part 7.9
Preliminary Division 1
Section 1010A
Corporations Act 2001 1
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Chapter 7—Financial services and markets
Part 7.9—Financial product disclosure and other
provisions relating to issue, sale and
purchase of financial products
Division 1—Preliminary
1010A Part generally does not apply to securities
(1) Apart from section 1017F and Divisions 5A, 5B, 5C and 6 (and
provisions of Division 7 that apply in relation to that section or
provisions of those Divisions), nothing in this Part applies in
relation to securities.
Note: Chapters 6CA and 6D provide for disclosure in relation to securities.
(2) Apart from section 1017F and Divisions 5A, 5B and 6, nothing in
this Part applies in relation to debentures, stocks or bonds issued or
proposed to be issued by a government.
Note: These financial products are not securities within the meaning of
section 761A.
1010B Part does not apply to financial products not issued in the
course of a business
(1) Apart from Division 5A, nothing in this Part applies in relation to a
financial product that is not or was not issued, or that will not be
issued, in the course of a business of issuing financial products.
(2) For this purpose, the issue of:
(a) any managed investment product; or
(b) any superannuation product;
is taken to occur in the course of a business of issuing financial
products.
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Division 1 Preliminary
Section 1010BA
2 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1010BA Part does not apply to contribution plans
Apart from section 1017F and Divisions 5A and 6 (and provisions
of Division 7 that apply in relation to that section or provisions of
those Divisions), nothing in this Part applies in relation to
contribution plans.
1010C Special provisions about meaning of sale and offer
(1) For the purposes of this Part, a reference to a sale or purchase of a
financial product is a reference to a sale of the product by, or a
purchase of the product from, a person who has (whether by issue
or otherwise) acquired the product. The issue of a financial product
is not a sale of the financial product.
(2) For the purposes of this Part:
(a) a reference to offering to issue a financial product includes a
reference to inviting an application for the issue of the
financial product; and
(b) a reference to offering to sell a financial product includes a
reference to inviting an offer to purchase the financial
product.
1010D General approach to offence provisions
Division 7 contains provisions creating offences by reference to
various rules contained in Divisions of this Part. However, it does
not create all the offences relating to those rules, as some offences
are created by subsection 1311(1). Where offences are created by
subsection 1311(1) in relation to a rule, this is indicated by a note
at the end of the provision containing the rule.
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financial products Part 7.9
Product Disclosure Statements Division 2
Section 1011A
Corporations Act 2001 3
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Division 2—Product Disclosure Statements
Subdivision A—Preliminary
1011A Jurisidictional scope of Division
(1) Subject to subsection (2), sections 1012A, 1012B and 1012C only
apply in relation to offers and recommendations referred to in those
sections that are received in this jurisdiction.
(2) Section 1012B also applies in relation to issues referred to in
subparagraph 1012B(3)(a)(iii) that are made in this jurisdiction.
(3) The regulations may make provision dealing with the jurisdictional
scope of some or all of the other provisions of this Division. The
other provisions of this Division have effect subject to any such
regulations.
1011B Definitions
In this Division:
issue Statement has the meaning given by subsection 1013A(1).
offer has a meaning affected by sections 1010C and 1011C.
regulated person, in relation to a financial product, means:
(a) an issuer of the financial product; or
(b) a seller of the financial product if the sale takes place in
circumstances described in subsection 1012C(5), (6) or (8)
(secondary sales that require a Product Disclosure
Statement); or
(c) any financial services licensee; or
(d) any authorised representative of a financial services licensee;
or
(f) any person who is not required to hold an Australian
financial services licence because the person is covered by:
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Part 7.9 Financial product disclosure and other provisions relating to issue, sale and
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Division 2 Product Disclosure Statements
Section 1011C
4 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(i) paragraph 911A(2)(j); or
(ii) an exemption in regulations made for the purposes of
paragraph 911A(2)(k); or
(iii) an exemption specified by ASIC for the purposes of
paragraph 911A(2)(n( � or
(g) any person who is required to hold an Australian financial
services licence but who does not hold such a licence.
responsible person for a Product Disclosure Statement has the
meaning given by subsection 1013A(3).
sale has a meaning affected by section 1010C.
sale Statement has the meaning given by subsection 1013A(2).
1011C Treatment of offers of options over financial products
For the purposes of this Division:
(a) an offer of an option over a financial product is not to be
taken to be an offer of the underlying financial product; and
(b) the grant of an option without an offer of the option is taken
to be an offer of the option; and
(c) an offer to grant an option is taken to be an offer to issue the
financial product constituted by the option.
Subdivision B—Requirement for a Product Disclosure
Statement to be given
1012A Obligation to give Product Disclosure Statement—personal
advice recommending particular financial product
Section sets out recommendation situation in which Product
Disclosure Statement required
(1) This section sets out the situations in which giving financial
product advice that consists of, or includes, a recommendation to
acquire a financial product gives rise to an obligation on a
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Product Disclosure Statements Division 2
Section 1012A
Corporations Act 2001 5
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regulated person to give another person a Product Disclosure
Statement for the product.
(2) For the purposes of this Division:
(a) each of the situations is a recommendation situation; and
(b) the relevant conduct for that situation is the making of the
recommendation; and
(c) the client for that situation is the person to whom the advice
is provided.
Personal advice recommending a particular financial product
(3) A regulated person must give a person a Product Disclosure
Statement for a financial product if:
(a) the regulated person provides financial product advice to the
person that consists of, or includes, a recommendation that
the person acquire the financial product; and
(b) the person would acquire the financial product by way of:
(i) the issue of the product to the person (rather than the
transfer of the product to the person); or
(ii) the transfer of the product to the person in
circumstances described in subsection 1012C(5), (6) or
(8) (secondary sales that require a Product Disclosure
Statement); and
(c) the financial product advice is provided to the client as a
retail client; and
(d) the financial product advice is personal advice to the client.
The Product Disclosure Statement must be given at or before the
time when the regulated person provides the advice and must be
given in accordance with this Division.
This section has effect subject to other provisions
(4) This section has effect subject to sections 1012D, 1012DA, 1012E,
1012F, 1012G and 1014E.
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Part 7.9 Financial product disclosure and other provisions relating to issue, sale and
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Division 2 Product Disclosure Statements
Section 1012B
6 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1012B Obligation to give Product Disclosure Statement—situations
related to issue of financial products
Section sets out issue situations in which Product Disclosure
Statement required
(1) This section sets out situations in which:
(a) an offer relating to the issue of a financial product; or
(b) the issue of a financial product;
gives rise to an obligation on a regulated person to give another
person a Product Disclosure Statement for the product.
(2) For the purposes of this Division:
(a) each of the situations is an issue situation; and
(b) the relevant conduct for that situation is the conduct by the
regulated person that gives rise to the obligation to give the
Product Disclosure Statement; and
(c) the client for that situation is the person to whom the
financial product is to be or is issued.
The main issue situations
(3) A regulated person must give a person a Product Disclosure
Statement for a financial product if:
(a) the regulated person:
(i) offers to issue the financial product to the person; or
(ii) offers to arrange for the issue of the financial product to
the person; or
(iii) issues the financial product to the person in
circumstances in which there are reasonable grounds to
believe that the person has not been given a Product
Disclosure Statement for the product; and
(b) the financial product is, or is to be, issued to the person as a
retail client.
The Product Disclosure Statement must be given at or before the
time when the regulated person makes the offer, or issues the
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Product Disclosure Statements Division 2
Section 1012C
Corporations Act 2001 7
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financial product, to the person and must be given in accordance
with this Division.
Note: If a Product Disclosure Statement is given when the offer is made, it
will not need to be given again when the product is issued to the
person (see subsection 1012D(1)) unless the Product Disclosure
Statement that was given is no longer up to date.
Receiving offer to acquire financial product
(4) A regulated person must give a person a Product Disclosure
Statement for a financial product if:
(a) the person makes an offer to the regulated person to acquire
the financial product; and
(b) the person would acquire the financial product by way of the
issue of the product to the person (rather than the transfer of
the product to the person); and
(c) the financial product is to be issued to the person as a retail
client.
The Product Disclosure Statement must be given to the person
before the person becomes bound by a legal obligation to acquire
the financial product pursuant to the offer and must be given in
accordance with this Division.
This section has effect subject to other provisions
(5) This section has effect subject to sections 1012D, 1012DAA,
1012E, 1012F, 1012G and 1014E.
1012C Obligation to give Product Disclosure Statement—offers
related to sale of financial products
Section sets out sale situations in which Product Disclosure
Statement required
(1) This section sets out situations in which an offer relating to the sale
of a financial product gives rise to an obligation on a regulated
person to give another person a Product Disclosure Statement for
the product.
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Part 7.9 Financial product disclosure and other provisions relating to issue, sale and
purchase of financial products
Division 2 Product Disclosure Statements
Section 1012C
8 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) For the purposes of this Division:
(a) each of the situations is a sale situation; and
(b) the relevant conduct for that situation is the offer; and
(c) the client for that situation is the person to whom the product
is to be sold.
Sale offers that require a Product Disclosure Statement
(3) A regulated person must give a person a Product Disclosure
Statement for a financial product if:
(a) the regulated person offers to sell the financial product to the
person; and
(b) a sale of the product to the person pursuant to the offer would
take place in circumstances covered by subsection (5), (6) or
(8); and
(c) the financial product is to be sold to the person as a retail
client.
The Product Disclosure Statement must be given at or before the
time when the regulated person makes the offer and must be given
in accordance with this Division.
(4) A regulated person must give a person a Product Disclosure
Statement for a financial product if:
(a) the person makes an offer to the regulated person to acquire
the financial product; and
(b) the person would acquire the financial product by way of the
transfer of the product to the person; and
(c) a sale of the product to the person pursuant to the offer would
take place in the circumstances described in subsection (5),
(6) or (8); and
(d) the financial product is to be sold to the person as a retail
client.
The Product Disclosure Statement must be given to the person
before the person becomes bound by a legal obligation to acquire
the financial product pursuant to the offer and must be given in
accordance with this Division.
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Product Disclosure Statements Division 2
Section 1012C
Corporations Act 2001 9
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Off-market sale by controller
(5) This subsection covers the circumstances in which:
(a) the seller controls the issuer of the financial product; and
(b) either:
(i) the product is not able to be traded on any licensed
market; or
(ii) although the product is able to be traded on a licensed
market, the offer is not made in the ordinary course of
trading on a licensed market.
Note: See section 50AA for when a person controls a body.
Sale amounting to indirect issue
(6) This subsection covers the circumstances in which:
(a) the offer is made within 12 months after the issue of the
financial product; and
(b) the product was issued without a Product Disclosure
Statement for the product being prepared; and
(c) either:
(i) the issuer issued the product with the purpose of the
person to whom it was issued selling or transferring the
product, or granting, issuing or transferring interests in,
or options or warrants over, the product; or
(ii) the person to whom the product was issued acquired it
with the purpose of selling or transferring the product,
or granting, issuing or transferring interests in, or
options or warrants over, the product.
The purpose test in subsection (6)
(7) For the purposes of subsection (6):
(a) a financial product is taken to be:
(i) issued with the purpose referred to in
subparagraph (6)(c)(i); or
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Part 7.9 Financial product disclosure and other provisions relating to issue, sale and
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Division 2 Product Disclosure Statements
Section 1012C
10 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) acquired with the purpose referred to in
subparagraph (6)(c)(ii);
if there are reasonable grounds for concluding that the
product was issued or acquired with that purpose (whether or
not there were or may have been other purposes for the issue
or acquisition); and
(b) without limiting paragraph (a), a financial product is taken to
be:
(i) issued with the purpose referred to in
subparagraph (6)(c)(i); or
(ii) acquired with the purpose referred to in
subparagraph (6)(c)(ii);
if the financial product, or any financial product of the same
kind that was issued at the same time, is subsequently sold,
or offered for sale, within 12 months after issue, unless it is
proved that the circumstances of the issue and the subsequent
sale or offer are not such as to give rise to reasonable grounds
for concluding that the product was issued or acquired with
that purpose.
Sale amounting to indirect off-market sale by controller
(8) This subsection covers the circumstances in which:
(a) the offer is made within 12 months after the sale of the
financial product by a person (the controller) who controlled
the issuer of the product at the time of the sale; and
(b) either:
(i) at the time of the sale by the controller, the product was
not able to be traded on any licensed market; or
(ii) although the product was able to be traded on a licensed
market at that time, the sale by the controller did not
occur in the ordinary course of trading on a licensed
market; and
(c) a Product Disclosure Statement was not prepared by, or on
behalf of, the controller before the sale of the product by the
controller; and
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Section 1012C
Corporations Act 2001 11
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(d) either:
(i) the controller sold the product with the purpose of the
person to whom it was sold selling or transferring the
product, or granting, issuing or transferring interests in,
or options or warrants over, the product; or
(ii) the person to whom the controller sold the product
acquired it with the purpose of selling or transferring the
product, or granting, issuing or transferring interests in,
or options or warrants over, the product.
Note: See section 50AA for when a person controls a body.
The purpose test in subsection (8)
(9) For the purposes of subsection (8):
(a) a financial product is taken to be:
(i) sold with the purpose referred to in
subparagraph (8)(d)(i); or
(ii) acquired with the purpose referred to in
subparagraph (8)(d)(ii);
if there are reasonable grounds for concluding that the
product was sold or acquired with that purpose (whether or
not there were or may have been other purposes for the sale
or acquisition); and
(b) without limiting paragraph (a), a financial product is taken to
be:
(i) sold with the purpose referred to in
subparagraph (8)(d)(i); or
(ii) acquired with the purpose referred to in
subparagraph (8)(d)(ii);
if the financial product, or any financial product of the same
kind that was sold by the controller at the same time, is
subsequently sold, or offered for sale, within 12 months after
issue, unless it is proved that the circumstances of the initial
sale and the subsequent sale or offer are not such as to give
rise to reasonable grounds for concluding that the product
was sold or acquired (in the initial sale) with that purpose.
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Chapter 7 Financial services and markets
Part 7.9 Financial product disclosure and other provisions relating to issue, sale and
purchase of financial products
Division 2 Product Disclosure Statements
Section 1012D
12 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
This section has effect subject to other provisions
(10) This section has effect subject to sections 1012D, 1012DA, 1012E
and 1014E.
1012D Situations in which Product Disclosure Statement is not
required
Recommendation, issue or sale situation—client has already
received an up to date Product Disclosure Statement
(1) In a recommendation situation, issue situation or sale situation, the
regulated person does not have to give the client a Product
Disclosure Statement if:
(a) the client has already received a Product Disclosure
Statement that contains all of the information that the
first-mentioned Product Disclosure Statement would be
required to contain; or
(b) the regulated person believes on reasonable grounds that
paragraph (a) applies.
Recommendation, issue or sale situation—client has or has access
to up to date information
(2) In a recommendation situation, issue situation or sale situation, the
regulated person does not have to give the client a Product
Disclosure Statement for the financial product if:
(a) the client already holds a financial product of the same kind;
and
(b) the regulated person believes on reasonable grounds that the
client has received, or has, and knows that they have, access
to, all of the information that the first-mentioned Product
Disclosure Statement would be required to contain through:
(i) a Product Disclosure Statement; and
(ii) information provided to the client under section 1017B,
1017C or 1017D or through continuous disclosure under
Chapter 6CA.
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Product Disclosure Statements Division 2
Section 1012D
Corporations Act 2001 13
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Note: Paragraph (a)—see subsection (10).
Recommendation or issue situation—interests in self-managed
superannuation funds
(2A) In a recommendation situation or issue situation, the regulated
person does not have to give the client a Product Disclosure
Statement for the financial product if:
(a) the financial product is an interest in a self-managed
superannuation fund; and
(b) the regulated person believes on reasonable grounds that the
client has received, or has, and knows that they have, access
to, all of the information that the Product Disclosure
Statement would be required to contain.
Recommendation, issue or sale situation—no information required
to be in Product Disclosure Statement
(2B) In a recommendation situation, issue situation or sale situation, the
regulated person does not have to give the client a Product
Disclosure Statement for the financial product if, because of
section 1013F, no information would be required to be included in
the Statement.
Recommendation or issue situation—certain offers to present
holders
(3) In a recommendation situation or issue situation, the regulated
person does not have to give the client a Product Disclosure
Statement for the financial product if:
(a) the client already holds a financial product of the same kind;
and
(b) either:
(i) in a recommendation situation—the advice that
constitutes the relevant conduct relates to an offer made
under a distribution reinvestment plan or switching
facility; or
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(ii) in an issue situation—the offer or issue that constitutes
the relevant conduct is made under a distribution
reinvestment plan or switching facility.
Note: Paragraph (a)—see subsection (10).
Recommendation, issue or sale situation—no consideration to be
provided
(5) In a recommendation situation, an issue situation or a sale
situation, the regulated person does not have to give the client a
Product Disclosure Statement if:
(a) no consideration is to be provided for the issue or sale of the
financial product; and
(b) the financial product is not an option and is:
(i) a managed investment product; or
(ii) a financial product of a kind prescribed by regulations
made for the purposes of this subparagraph.
(6) In a recommendation situation, an issue situation or a sale
situation, the regulated person does not have to give the client a
Product Disclosure Statement if:
(a) the financial product is an option; and
(b) no consideration is to be provided for the issue or sale of the
financial product; and
(c) no consideration is to be provided for the underlying
financial product on the exercise of the option.
Issue or sale situation—takeovers
(7) In an issue situation or a sale situation, the regulated person does
not have to give the client a Product Disclosure Statement if:
(a) the financial product is:
(i) a managed investment product; or
(ii) an option to acquire, by way of transfer, a share in a
body, a debenture of a body or a legal or equitable right
or interest in a share in a body or a debenture of a body;
and
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(b) the offer that constitutes the relevant conduct is made as
consideration for an offer made under a takeover bid under
Chapter 6; and
(c) the offer is accompanied by a bidder’s statement.
Note: Although a Product Disclosure Statement is not needed, disclosures
must be made in the bidder’s document under section 636.
Recommendation, issue or sale situation—responsible entity an
exempt body
(8) In a recommendation situation, an issue situation or a sale
situation, the regulated person does not have to give the client a
Product Disclosure Statement if:
(a) the financial product is a financial product described in
paragraph 764A(1)(ba) (which relates to certain managed
investment schemes that are not registered schemes); and
(b) the holder of the office (by whatever name it is known), in
relation to the managed investment scheme, that corresponds
most closely to the office of responsible entity of a registered
scheme is an exempt body; and
(c) in the case of a recommendation situation or an issue
situation—either:
(i) the recommendation that constitutes the relevant
conduct relates to an offer made by the office holder
referred to in paragraph (b); or
(ii) the offer that constitutes the relevant conduct is made by
or to the office holder referred to in paragraph (b).
Note 1: Section 66A defines exempt body.
Note 2: In the case of a sale situation, there is no additional requirement
equivalent to paragraph (c).
Recommendation or issue situation—interim contracts of insurance
(9) In a recommendation situation or an issue situation, the regulated
person does not have to give the client a Product Disclosure
Statement if the financial product is an interim contract of
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insurance (as defined in subsection 11(2) of the Insurance
Contracts Act 1984).
Note: This does not detract from the obligation to give a Product Disclosure
Statement relating to any contract of insurance that replaces or
supersedes the interim contract.
Recommendation, issue or sale situation—client is associated with
registered scheme
(9A) In a recommendation situation, an issue situation or a sale
situation, the regulated person does not have to give the client a
Product Disclosure Statement if:
(a) the financial product is a managed investment product; and
(b) the client is associated (within the meaning of
subsection (9B)) with the scheme’s responsible entity.
(9B) For the purposes of subsection (9A), the client is associated with
the scheme’s responsible entity if the client is:
(a) a senior manager of the responsible entity or of a related
body corporate; or
(b) a spouse, parent, child, brother or sister of a person who is a
senior manager of the responsible entity or a related body
corporate; or
(c) a body corporate controlled by a person referred to in
paragraph (a) or (b).
Interpretation
(10) For the purposes of this section:
(a) a financial product (other than a managed investment product
or a superannuation product) is of the same kind as another
financial product only if they are both issued:
(i) by the same issuer; and
(ii) on the same terms and conditions (other than price); and
(b) a managed investment product, or a superannuation product,
is of the same kind as another product only if the other
product is an interest in the same scheme or fund; and
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(c) a reference to information that a Product Disclosure
Statement would be required to contain includes a reference
to information that would be required to be in any statement
that the Product Disclosure Statement would be required to
contain.
1012DAA Rights issues for which Product Disclosure Statement is
not required
(1) In a recommendation situation or issue situation, the regulated
person does not have to give the client a Product Disclosure
Statement if:
(a) but for subsection (2), the regulated person would be required
by section 1012B to give a Product Disclosure Statement for
the transfer or issue of a financial product (the relevant
product); and
(b) a determination under subsection (3) was not in force in
relation to the issuer of the relevant product at the time when
the relevant product was issued.
Conditions required for rights issue
(2) The regulated person does not have to give the client a Product
Disclosure Statement if:
(a) the relevant product is being offered under a rights issue; and
(b) the class of the relevant product are quoted securities at the
time at which the offer is made; and
(c) trading in that class of the relevant product on a prescribed
financial market on which they are quoted was not suspended
for more than a total of 5 days during the shorter of the
following periods:
(i) the period during which the class of the relevant product
is quoted;
(ii) the period of 12 months before the day on which the
offer is made; and
(d) no exemption under section 111AS or 111AT covered the
issuer of the relevant product, or any person as director or
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auditor of the issuer, at any time during the relevant period
referred to in paragraph (c); and
(e) no order under section 340 or 341 covered the issuer of the
relevant product, or any person as director or auditor of the
issuer, at any time during the relevant period referred to in
paragraph (c); and
(f) the issuer of the relevant product gives the relevant market
operator for the issuer a written notice that complies with
subsection (7) within the 24 hour period before the relevant
conduct occurs.
Determination by ASIC
(3) ASIC may make a determination under this subsection if ASIC is
satisfied that in the previous 12 months the issuer of the relevant
product contravened any of the following provisions:
(a) the provisions of Chapter 2M as they apply to the registered
scheme in which the relevant product is an interest;
(b) section 674 or 675 as it applies to the registered scheme in
which the relevant product is an interest;
(c) section 1016E, 1021D, 1021E or 1021J;
(d) subsection (10) of this section;
(e) section 1308 as it applies to a notice under subsection (2) of
this section.
(4) The determination must be made in writing and a copy must be
published in the Gazette as soon as practicable after the
determination is made.
(5) The determination made under subsection (3) is not a legislative
instrument.
(6) A failure to publish a copy of the determination does not affect the
validity of the determination.
Requirements for notice
(7) A notice complies with this subsection if the notice:
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(a) states that the relevant product was issued without a Product
Disclosure Statement for the relevant product being prepared;
and
(b) states that the notice is being given under paragraph (2)(f);
and
(c) states that, as a disclosing entity, the issuer of the relevant
product is subject to regular reporting and disclosure
obligations; and
(d) states that, as at the date of the notice, the issuer of the
relevant product has complied with:
(i) the provisions of Chapter 2M as they apply to the
registered scheme in which the relevant product is an
interest; and
(ii) section 674 as it applies to that registered scheme; and
(e) sets out any information that is excluded information as at the
date of the notice (see subsections (8) and (9)); and
(f) states:
(i) the potential effect the issue of the relevant product will
have on the control of the body; and
(ii) the consequences of that effect.
Note 1: A person is taken not to contravene section 1021C if a notice purports
to comply with this subsection but does not actually comply with this
subsection: see subsection 1021C(5).
Note 2: A notice must not be false or misleading in a material particular, or
omit anything that would render it misleading in a material respect:
see sections 1308 and 1309. The issuer has an obligation to correct a
defective notice: see subsection (10) of this section.
(8) For the purposes of subsection (7), excluded information is
information:
(a) that has been excluded from a continuous disclosure notice in
accordance with the listing rules of the relevant market
operator to whom that notice is required to be given; and
(b) that a person would reasonably require for the purpose of
making a decision, as a retail client, whether to acquire the
relevant product.
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Section 1012DA
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(9) The notice given under subsection (2) must contain any excluded
information only to the extent to which it is reasonable for a person
considering, as a retail client, whether to acquire the relevant
product to expect to find the information in a Product Disclosure
Statement.
Obligation to correct defective notice
(10) The issuer of the relevant product contravenes this subsection if:
(a) the notice given under subsection (2) is defective; and
(b) the issuer becomes aware of the defect in the notice within 12
months after the relevant product is issued; and
(c) the issuer does not, within a reasonable time after becoming
aware of the defect, give the relevant market operator a
notice that sets out the information necessary to correct the
defect.
(11) For the purposes of subsection (10), the notice under subsection (2)
is defective if the notice:
(a) does not comply with paragraph (2)(f); or
(b) is false or misleading in a material particular; or
(c) has omitted from it a matter or thing, the omission of which
renders the notice misleading in a material respect.
1012DA Product Disclosure Statement not required for sale
amounting to indirect issue
Product Disclosure Statement not required
(1) In a recommendation situation or sale situation, the regulated
person does not have to give the client a Product Disclosure
Statement if:
(a) but for subsection (5), (11) or (12), the regulated person
would be required by section 1012A or 1012C to give a
Product Disclosure Statement for the relevant product; and
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(b) the transfer or sale of the financial product (the relevant
product) to the client would take place in circumstances
covered by subsection 1012C(6); and
(c) the relevant product was not issued by the issuer with the
purpose referred to in subparagraph 1012C(6)(c)(i); and
(d) a determination under subsection (2) was not in force in
relation to the issuer of the relevant product at the time when
the relevant product was issued.
(1A) In a recommendation situation or sale situation, the regulated
person does not have to give the client a Product Disclosure
Statement if:
(a) but for subsection (5), the regulated person would be required
by section 1012C to give a Product Disclosure Statement for
the transfer or sale of the financial product (the relevant
product); and
(b) the transfer or sale of the relevant product to the client would
take place in circumstances covered by subsection 1012C(8);
and
(c) the relevant product was not sold by the controller with the
purpose referred to in subparagraph 1012C(8)(d)(i); and
(d) a determination under subsection (2) was not in force in
relation to the issuer of the relevant product at the time when
the relevant product was issued.
Determination by ASIC
(2) ASIC may make a determination under this subsection if ASIC is
satisfied that in the previous 12 months the issuer of the relevant
product contravened any of the following provisions:
(a) the provisions of Chapter 2M as they apply to the issuer (or,
if the relevant financial product is an interest in a registered
scheme, as those provisions apply to the scheme);
(b) section 674 or 675 as it applies to the issuer (or, if the
relevant financial product is an interest in a registered
scheme, as that section applies to the scheme);
(c) section 1016E, 1021D, 1021E or 1021J;
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(d) subsection (9) of this section;
(e) section 1308 as it applies to a notice under subsection (5) of
this section.
(3) The determination must be made in writing and a copy must be
published in the Gazette as soon as practicable after the
determination is made.
(4) A failure to publish a copy of the determination does not affect the
validity of the determination.
Transfer or sale of quoted securities—case 1
(5) The regulated person does not have to give the client a Product
Disclosure Statement if:
(a) the relevant product is in a class of financial products that
were quoted securities at all times in the 3 months before the
day on which the relevant product was issued; and
(b) trading in that class of financial products on a prescribed
financial market on which they were quoted was not
suspended for more than a total of 5 days during the shorter
of the period during which the class of financial product was
quoted, and the period of 12 months before the day on which
the relevant product was issued; and
(c) no exemption under section 111AS or 111AT covered the
issue of the relevant product, or any person as director or
auditor of the issuer, at any time during the relevant period
referred to in paragraph (b); and
(d) no order under section 340 or 341 covered the issuer of the
relevant product, or any person as director or auditor of the
issuer, at any time during the relevant period referred to in
paragraph (b); and
(e) either:
(i) if the regulated person is not required under
subsection (1) to give a Product Disclosure Statement—
the issuer of the relevant product gives the relevant
market operator for the issuer a written notice that
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complies with subsection (6) before the relevant
conduct occurs; or
(ii) if the regulated person is not required under
subsection (1A) to give a Product Disclosure
Statement—both the issuer of the relevant product, and
the controller, give the relevant market operator for the
issuer a written notice that complies with subsection (6)
before the relevant conduct occurs.
(6) A notice complies with this subsection if the notice:
(a) is given within 5 business days after the day on which the
relevant product was issued; and
(b) states that the relevant product was issued without a Product
Disclosure Statement for the relevant product being prepared;
and
(c) states that the notice is being given under paragraph (5)(e);
and
(d) states that, as a disclosing entity, the issuer of the relevant
product is subject to regular reporting and disclosure
obligations; and
(e) states that, as at the date of the notice, the issuer of the
relevant product has complied with:
(i) the provisions of Chapter 2M as they apply to the issuer
(or, if the relevant financial product is an interest in a
registered scheme, as those provisions apply to the
scheme); and
(ii) section 674 as it applies to the issuer (or, if the relevant
financial product is an interest in a registered scheme, as
that section applies to the scheme); and
(f) sets out any information that is excluded information as at the
date of the notice (see subsections (7) and (8)).
Note 1: A person is taken not to contravene section 1021C if a notice purports
to comply with this subsection but does not actually comply with this
subsection: see subsection 1021C(5).
Note 2: A notice must not be false or misleading in a material particular, or
omit anything that would render it misleading in a material respect:
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see sections 1308 and 1309. The issuer has an obligation to correct a
defective notice: see subsection (9) of this section.
(7) For the purposes of subsection (6), excluded information is
information:
(a) that has been excluded from a continuous disclosure notice in
accordance with the listing rules of the relevant market
operator to whom that notice is required to be given; and
(b) that a person would reasonably require for the purpose of
making a decision, as a retail client, whether to acquire the
relevant product.
(8) The notice given under subsection (5) must contain any excluded
information only to the extent to which it is reasonable for a person
considering, as a retail client, whether to acquire the relevant
product to expect to find the information in a Product Disclosure
Statement.
Obligation to correct defective notice
(9) The issuer of the relevant product contravenes this subsection if:
(a) the notice given under subsection (5) is defective; and
(b) the issuer becomes aware of the defect in the notice within 12
months after the relevant product is issued; and
(c) the issuer does not, within a reasonable time after becoming
aware of the defect, give the relevant market operator a
notice that sets out the information necessary to correct the
defect.
(10) For the purposes of subsection (9), the notice under subsection (5)
is defective if the notice:
(a) does not comply with paragraph (6)(f); or
(b) is false or misleading in a material particular; or
(c) has omitted from it a matter or thing the omission of which
renders the notice misleading in a material respect.
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Transfer or sale of quoted securities—case 2
(11) The regulated person does not have to give the client a Product
Disclosure Statement if:
(a) the relevant product is in a class of financial products that are
quoted securities of the issuer; and
(b) either:
(i) a Product Disclosure Statement required to be given by
section 1012B is lodged with ASIC on or after the day
on which the relevant product is issued but before the
day on which the relevant conduct occurs; or
(ii) a Product Disclosure Statement required to be given by
section 1012B is lodged with ASIC before the day on
which the relevant product is issued and, on the day on
which the relevant product is issued, the Product
Disclosure Statement is still being used by the issuer of
the relevant product for offers of financial products in
the same class of financial products as the relevant
product; and
(c) the Product Disclosure Statement is for a financial product of
the issuer of the relevant product that is in the same class of
financial products as the relevant product.
Transfer or sale of quoted securities—case 3
(12) The regulated person does not have to give the client a Product
Disclosure Statement if:
(a) a Product Disclosure Statement for a financial product was
given under section 1012B; and
(b) the relevant product was issued to:
(i) a person (the underwriter) named in that Product
Disclosure Statement as an underwriter of the issue of
the financial product; or
(ii) a person nominated by the underwriter; and
(c) the relevant product was issued to the underwriter, or the
person nominated by the underwriter, at or about the time
that persons who applied for the financial product under that
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Product Disclosure Statement were issued with that product;
and
(d) the relevant product is in a class of financial products that
were quoted securities of the issuer.
1012E Small scale offerings of managed investment and other
prescribed financial products (20 issues or sales in 12
months)
(1) This section applies only to financial products that are:
(a) managed investment products; or
(b) financial products of a kind prescribed by regulations made
for the purposes of this paragraph.
(2) Personal offers of financial products do not need a Product
Disclosure Statement under this Part if:
(a) all of the financial products are issued by the same person
(the issuer); and
(b) none of the offers results in a breach of the 20 purchasers
ceiling (see subsections (6) and (7)); and
(c) none of the offers results in a breach of the $2 million ceiling
(see subsections (6) and (7)).
(3) Subsection (2) does not apply to an offer to which
subsection 1012C(6) (sale amounting to indirect issue) or (8) (sale
amounting to indirect sale by controller) applies.
Note: Under section 1012K, ASIC may make a determination aggregating
the transactions of bodies that ASIC considers to be closely related.
(4) If subsection (2) applies to an offer of a financial product, a
recommendation to a person to acquire a financial product in
response to a personal offer of that kind does not need a Product
Disclosure Statement under this Part.
(5) For the purposes of subsections (2) and (4), a personal offer is one
that:
(a) may only be accepted by the person to whom it is made; and
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(b) is made to a person who is likely to be interested in the offer,
having regard to:
(i) previous contact between the person making the offer
and that person; or
(ii) some professional or other connection between the
person making the offer and that person; or
(iii) statements or actions by that person that indicate that
they are interested in offers of that kind.
(6) An offer to issue, or arrange for the issue of, a financial product:
(a) results in a breach of the 20 purchasers ceiling if it results in
the number of people to whom the issuer has issued financial
products exceeding 20 in any 12 month period; and
(b) results in a breach of the $2 million ceiling if it results in the
amount raised by the issuer from issuing financial products
exceeding $2 million in any 12 month period.
(7) An offer by a person to sell a financial product:
(a) results in a breach of the 20 purchasers ceiling if it results in
the number of people to whom the person sells financial
products issued by the issuer of that financial product
exceeding 20 in any 12 month period; and
(b) results in a breach of the $2 million ceiling if it results in the
amount raised by the person from selling financial products
issued by the issuer of that financial product exceeding $2
million in any 12 month period.
(8) In counting issues and sales of the financial products issued by the
issuer, and the amount raised from issues and sales, for the
purposes of subsection (2), disregard issues and sales that result
from offers that:
(a) do not need a Product Disclosure Statement (otherwise than
because of this section); or
(b) are made under a Product Disclosure Statement.
Note: Also see provisions on restrictions on advertising (section 1018A) and
the anti-hawking provisions in section 992A.
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(9) In counting issues and sales of the financial products issued by the
issuer, and the amount raised from issues and sales, for the
purposes of subsection (2), disregard any issues and sales made by
a body if:
(a) the body was a managed investment scheme (but not a
registered scheme) at the time that the offer of interests in the
scheme that resulted in the issues or sales was made; and
(b) the body became a registered scheme within 12 months after
that offer was made; and
(c) the offer would not have required a Product Disclosure
Statement (otherwise than because of this section) if the
managed investment scheme had been a registered scheme at
the time that the offer was made.
(10) In working out the amount of money raised by the issuer from
issuing financial products, include the following:
(a) the amount payable for the financial products at the time
when they are issued;
(b) if the financial product is an option—any amount payable on
the exercise of the option;
(c) if the financial products carry a right to convert the financial
product into other financial products—any amount payable
on the exercise of that right.
(11) If a person relies on subsection (2) to make offers of financial
products without a Product Disclosure Statement under this Part,
the person must not issue, arrange for the issue of, or transfer,
financial products without a Product Disclosure Statement under
this Part if the issue or transfer would result in a breach of the 20
purchasers ceiling or the $2 million ceiling (see subsections (6),
(7), (8), (9) and (10)).
(12) For the purposes of this section, an offer of a financial product is
an offer to:
(a) issue the financial product; or
(b) arrange for the issue of the financial product; or
(c) sell the financial product.
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Product Disclosure Statements Division 2
Section 1012F
Corporations Act 2001 29
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1012F Product Disclosure Statement for certain superannuation
products may be provided later
In a recommendation situation or an issue situation in which the
financial product is a superannuation product of a kind specified in
regulations made for the purposes of this section, the regulated
person:
(a) need not give the client the Product Disclosure Statement at
or before the time when it would otherwise be required to be
given; and
(b) must give the client the Product Disclosure Statement as soon
as is reasonably practicable and in any event within 3 months
after the product is issued to the client; and
(c) need not give the client the Product Disclosure Statement at
all if the client ceases to be a member of the superannuation
fund concerned before the regulated person is required to
give the Product Disclosure Statement under paragraph (b).
1012G Product Disclosure Statement may sometimes be provided
later
(1) The regulated person may deal with a financial product under this
section only if:
(a) the financial product is one for which an application form is
not required under section 1016A and section 1019B (cooling
off period) will apply if the client enters into a legal
obligation to acquire the product pursuant to the
recommendation or offer that constitutes the relevant
conduct; or
(b) the financial product is:
(i) a basic deposit product; or
(ii) a facility for making non-cash payments (see
section 763D) that is related to a basic deposit product;
or
(iii) a financial product of a kind prescribed by regulations
made for the purposes of this subparagraph.
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Division 2 Product Disclosure Statements
Section 1012G
30 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) In a recommendation situation or an issue situation, the regulated
person need not give the client a Product Disclosure Statement for
the financial product at or before the time when it would otherwise
be required to be given if:
(a) the client expressly instructs the regulated person that they
require:
(i) in a recommendation situation—the advice constituting
the recommendation; or
(ii) in an issue situation—the financial product;
to be provided or issued immediately, or by a specified time;
and
(b) it is not reasonably practicable, while complying with the
client’s instructions, to give the client the Product Disclosure
Statement at or before the time when it would otherwise be
required to be given.
The regulated person must comply with subsection (3) instead.
(3) The regulated person must:
(a) at or before the time referred to in paragraph (2)(b), orally
communicate the following information to the client:
(i) the name and contact details of the issuer of the
financial product; and
(ii) information about the essential features of the financial
product; and
(iii) the information that would be required to be in a
Product Disclosure Statement for the financial product
by paragraphs 1013D(1)(c), (d), (g) and (i); and
(b) give the client the Product Disclosure Statement as soon as
practicable after that time, and in any event not later than:
(i) the time when the confirmation requirement (if
applicable) is complied with; or
(ii) the end of the fifth day after the day on which the
financial product was issued or sold to the client.
(3A) The information referred to in paragraph (3)(a) must be
communicated in a clear, concise and effective manner.
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Section 1012H
Corporations Act 2001 31
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) For the purposes of paragraph (3)(b), the confirmation requirement
is complied with when:
(a) the client receives confirmation, as mentioned in
paragraph 1017F(5)(a), of the transaction by which they
acquired the financial product; or
(b) confirmation of that transaction is available to the client by a
facility as mentioned in paragraph 1017F(5)(b).
1012H Obligation to take reasonable steps to ensure that Product
Disclosure Statement is given to person electing to be
covered by group financial product
(1) This section covers the situation in which a financial product:
(a) is issued to a person; and
(b) covers, or is designed to cover, a group of people; and
(c) may cover a particular person (the new group member) if the
person elects to be covered by the financial product.
(2) The issuer must take reasonable steps to ensure that the new group
member is given a Product Disclosure Statement for the financial
product in accordance with this Division before the new group
member makes an election to be covered by the financial product.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) For the purposes of this section, a person is covered by a financial
product if benefits are, or may be, provided under the financial
product directly to:
(a) the person; or
(b) a relative of the person; or
(c) a person nominated by the person.
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Division 2 Product Disclosure Statements
Section 1012I
32 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1012I Obligation to give employer a Product Disclosure Statement
in relation to certain superannuation products and RSA
products
(1) At or before the time when a person (the applicant) becomes a
standard employer-sponsor of a superannuation entity, the person
(the issuer) who is to provide the superannuation products to the
applicant’s employees must give the applicant a Product Disclosure
Statement in accordance with this Division for each of those
superannuation products.
(2) If:
(a) a person (the applicant) applies for the issue of an RSA
product to the employee; and
(b) the applicant has not previously applied to the RSA provider
for the issue to any employee of an RSA product of the same
kind;
the person (the issuer) who is to issue the RSA product to the
employee must, at or before the time when the RSA product is
issued to the employee, give the applicant a Product Disclosure
Statement in accordance with this Division for the RSA product.
(2A) If:
(a) a trustee (the applicant), under Part 24 of the Superannuation
Industry (Supervision) Act 1993, applies on behalf of a
person for the issue of an interest in a relevant
superannuation entity; and
(b) the applicant has not previously applied under that Part for
the issue of an interest in that entity on behalf of any person;
the person (the issuer) who is to issue the interest to the person
must, at or before the time when the interest is issued to the person,
give the applicant a Product Disclosure Statement in accordance
with this Division for the interest.
(2B) If:
(a) a trustee (the applicant), under Part 9 of the Retirement
Savings Accounts Act 1997, applies on behalf of a person for
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the issue of an interest in a relevant superannuation entity;
and
(b) the applicant has not previously applied under that Part for
the issue of an interest in that entity on behalf of any person;
the person (the issuer) who is to issue the interest to the person
must, at or before the time when the interest is issued to the person,
give the applicant a Product Disclosure Statement in accordance
with this Division for the interest.
(3) The issuer does not have to give the applicant a Product Disclosure
Statement under subsection (1), (2), (2A) or (2B) for a financial
product if:
(a) the applicant has already received a Product Disclosure
Statement for that financial product that contains all of the
information that the first-mentioned Product Disclosure
Statement would be required to contain; or
(b) the issuer believes on reasonable grounds that paragraph (a)
applies.
Note: Information in a Supplementary Product Disclosure Statement is taken
to be contained in the Product Disclosure Statement it supplements
(see section 1014D).
(4) The issuer need not give the applicant a Product Disclosure
Statement under subsection (1), (2), (2A) or (2B) in the
circumstances specified in the regulations.
(5) In this section:
(a) terms used in subsection (1) that are defined for the purposes
of the Superannuation Industry (Supervision) Act 1993 have
the same meanings as in that Act; and
(b) terms used in subsection (2) that are defined for the purposes
of the Retirement Savings Accounts Act 1997 have the same
meanings as in that Act; and
(c) relevant superannuation entity has the same meaning as in
section 1016A of this Act.
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Division 2 Product Disclosure Statements
Section 1012IA
34 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1012IA Treatment of arrangements under which a person can
instruct another person to acquire a financial product
Definitions
(1) In this section:
acquirer, in relation to a custodial arrangement, has the meaning
given by the definition of custodial arrangement.
client, in relation to a custodial arrangement, has the meaning
given by the definition of custodial arrangement.
custodial arrangement means an arrangement between a person
(the provider) and another person (the client) (whether or not there
are also other parties to the arrangement) under which:
(a) the client is, or is entitled, to give an instruction that a
particular financial product, or a financial product of a
particular kind, is to be acquired; and
(b) if the client gives such an instruction, a person (the acquirer),
being the provider or a person with whom the provider has or
will have an arrangement, must (subject to any discretion
they have to refuse) acquire the financial product, or a
financial product of that kind; and
(c) if the acquirer acquires the financial product, or a financial
product of that kind, pursuant to an instruction given by the
client, either:
(i) the product is to be held on trust for the client or another
person nominated by the client; or
(ii) the client, or another person nominated by the client, is
to have rights or benefits in relation to the product or a
beneficial interest in the product, or in relation to, or
calculated by reference to, dividends or other benefits
derived from the product.
instruction includes a direction or request.
provider, in relation to a custodial arrangement, has the meaning
given by the definition of custodial arrangement.
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Section 1012IA
Corporations Act 2001 35
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
regulated acquisition means an acquisition of a financial product
pursuant to an instruction by the client under a custodial
arrangement, being an acquisition:
(a) by way of issue by the issuer (the regulated person); or
(b) pursuant to a sale by a person (the regulated person) in
circumstances described in subsection 1012C(5), (6) or (8).
regulated person, in relation to a regulated acquisition of a
financial product, has the meaning given by paragraph (a) or (b) (as
the case requires) of the definition of regulated acquisition.
Obligation on provider to give client a PDS
(2) Before a regulated acquisition of a financial product occurs
pursuant to an instruction given by the client under a custodial
arrangement, the provider must give the client a Product Disclosure
Statement for the product if a Product Disclosure Statement for the
product would, if there were an equivalent direct acquisition by the
client, be required by subsection 1012B(3) or 1012C(3) (see
subsection (3) of this section) to be given to the client by the
regulated person before that acquisition occurred. For this purpose,
an equivalent direct acquisition is an acquisition that would occur
if:
(a) the product were instead being offered for issue or sale direct
to the client by the regulated person for the same price (or for
the appropriate proportion of that price, if the transaction for
the regulated acquisition also covers other products); and
(b) the circumstances of that issue or sale to the client were
otherwise the same as those in which the regulated
acquisition will occur.
Determining whether a PDS would have to be given for an
equivalent direct acquisition
(3) The following provisions apply for the purpose of determining
whether the regulated person would be required by
subsection 1012B(3) or 1012C(3) to give the client a Product
Disclosure Statement for the financial product:
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Division 2 Product Disclosure Statements
Section 1012IA
36 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the effect of the provisions referred to in
subsection 1012B(5) or 1012C(10), as the case requires, as
they have effect subject to the following paragraphs, must be
taken into account;
(b) subsections 1012D(1), (2) and (2A) apply as if references in
those subsections to the regulated person’s belief in relation
to a matter were instead references to the provider’s belief in
relation to that matter;
(c) subsections 1012D(2) and (3) apply as if references to the
client already holding a financial product of the same kind
also included a reference to a person already holding a
financial product of the same kind as a result of an
instruction given by the client under a custodial arrangement;
(d) sections 1012E and 1012F are to be disregarded;
(e) section 1012G has effect in accordance with subsection (4).
Modification of section 1012G
(4) The following provisions apply in relation to section 1012G:
(a) in determining for the purposes of subsection (2) whether the
regulated person would be required by subsection 1012B(3)
or 1012C(3) to give the client a Product Disclosure Statement
for the financial product, subsection 1012G(2) applies as if
the reference to the client instructing the regulated person (in
an issue situation) that they require the financial product to
be provided or issued immediately, or by a specified time,
were instead a reference to the client instructing the provider
that they require the financial product to be acquired
immediately, or by a specified time;
(b) if, because of subsection 1012G(2) as it applies because of
paragraph (a) of this subsection, the provider does not have
to give the client a Product Disclosure Statement for a
financial product before a regulated acquisition of the
financial product occurs pursuant to an instruction given by
the client under a custodial arrangement:
(i) subsection 1012G(2) applies in relation to the provider,
the client and the regulated acquisition as if the
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obligation it imposes to comply with
subsection 1012G(3) were imposed on the provider; and
(ii) subsection 1012G(3) applies in relation to the provider,
the client and the regulated acquisition as if the
reference to the regulated person were instead a
reference to the provider, as if
subparagraph 1012G(3)(b)(i) were omitted and as if the
reference in subparagraph 1012G(3)(b)(ii) to the day on
which the financial product was issued or sold to the
client were instead a reference to the day on which the
regulated acquisition occurs.
Modification of section 1013A
(5) Section 1013A applies in relation to a regulated acquisition as if:
(a) paragraph 1013A(1)(b) also covered a Product Disclosure
Statement that is required to be given by subsection (2) of
this section in relation to an acquisition covered by
paragraph (a) of the definition of regulated acquisition in
subsection (1) of this section; and
(b) paragraph 1013A(2)(b) also covered a Product Disclosure
Statement that is required to be given by subsection (2) of
this section in relation to an acquisition covered by
paragraph (b) of the definition of regulated acquisition in
subsection (1) of this section.
Provider is not an agent for the purposes of section 1015C
(6) For the purposes of the application of section 1015C in relation to a
regulated acquisition, the provider in relation to the relevant
custodial arrangement is taken not to be an agent of the client.
Provider is covered by sections 1015E, 1021F and 1021I
(7) Sections 1015E, 1021F and 1021I apply in relation to a regulated
acquisition as if the references to a regulated person were instead
references to the provider in relation to the relevant custodial
arrangement.
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Division 2 Product Disclosure Statements
Section 1012J
38 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Regulations may provide for other modifications
(8) The regulations may provide for other modifications of provisions
of this Part that are to have effect in relation to regulated
acquisitions.
1012J Information must be up to date
The information in a Product Disclosure Statement must be up to
date as at the time when it is given.
Note: A Supplementary Product Disclosure Statement containing updated
information may be given with a Product Disclosure Statement that
has become out of date. The updated information is taken to be
included in the Product Disclosure Statement (see section 1014D).
1012K Anti-avoidance determinations
(1) ASIC may determine in writing that a number of different bodies
are closely related and that their transactions should be aggregated
for the purposes of this Subdivision. If ASIC does so:
(a) an issue, sale or transfer of financial products of any other
bodies is taken to also be an issue, sale or transfer of the
financial products of each of the other bodies by those
bodies; and
(b) any money received from an issue, sale or transfer of
financial products of any of the bodies is taken to also be
received by each of the other bodies from an issue, sale or
transfer of its own financial products.
ASIC must give written notice of the determination to each of the
bodies.
(2) ASIC may determine in writing that the transactions of a body and
of a person who controls the body should be aggregated for the
purposes of this Subdivision. If ASIC does so:
(a) an issue of financial products of the body is taken to also be
the transfer of the financial products by the controller; and
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(b) any money received from an issue of financial products of
the body is taken to also be received by the controller from a
transfer of the financial products; and
(c) a sale or transfer of financial products of the body by the
controller is taken to also be the issue of the financial
products by the body; and
(d) any money received from a sale or transfer of financial
products of the body by the controller is taken to also be
received by the body from an issue of the financial products.
ASIC must give written notice of the determination to the body and
the controller.
Subdivision C—Preparation and content of Product Disclosure
Statements
1013A Who must prepare Product Disclosure Statement
(1) A Product Disclosure Statement that:
(a) is required to be given by section 1012A (otherwise than in a
situation in which the recommendation concerned relates to
an offer described in subsection 1012C(3) or (4)); or
(b) is required to be given by section 1012B; or
(c) section 1012H requires an issuer to take reasonable steps to
ensure is given to a new group member; or
(d) is required to be given by section 1012I;
must be a document that has been prepared by the issuer of the
financial product. A Product Disclosure Statement of this kind is in
this Division referred to as an issue Statement.
(2) A Product Disclosure Statement that:
(a) is required to be given by section 1012A in a situation in
which the recommendation concerned relates to an offer
described in subsection 1012C(3) or (4)); or
(b) is required to be given by section 1012C;
must be a document that has been prepared by the person making
the offer to sell the financial product. A Product Disclosure
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Section 1013B
40 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Statement of this kind is in this Division referred to as a sale
Statement.
(3) The person who, or on whose behalf, a Product Disclosure
Statement for a financial product is required to be prepared is, in
this Division, referred to as the responsible person for the financial
product.
(4) For the purposes of this Part, a Product Disclosure Statement
prepared on behalf of a person is taken to be prepared by the
person.
1013B Title of Product Disclosure Statement
(1) The title “Product Disclosure Statement” must be used on the cover
of, or at or near the front of, a Product Disclosure Statement.
(2) In any other part of a Product Disclosure Statement, “Product
Disclosure Statement” may be abbreviated to “PDS”.
1013C Product Disclosure Statement content requirements
(1) A Product Disclosure Statement:
(a) must include the following statements and information
required by this Subdivision:
(i) the statements and information required by
section 1013D; and
(ii) the information required by section 1013E; and
(iii) the information required by the other provisions of this
Subdivision; and
(b) may also:
(i) include other information; or
(ii) refer to other information that is set out in another
document.
Note: A Supplementary Product Disclosure Statement containing additional
information may be given with a Product Disclosure Statement that
does not contain all the required information. The additional
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information is taken to be included in the Product Disclosure
Statement (see section 1014D).
(2) The information required by sections 1013D and 1013E need only
be included in the Product Disclosure Statement to the extent to
which it is actually known to:
(a) the responsible person; and
(b) in the case of a sale Statement—the issuer of the financial
product; and
(c) any person named in the Statement as an underwriter of the
issue or sale of the financial product; and
(d) any person:
(i) named in the Statement as a financial services licensee
providing services in relation to the issue or sale of the
financial product; and
(ii) who participated in any way in the preparation of the
Statement; and
(e) any person who has given a consent referred to in
section 1013K in relation to a statement included in the
Statement; and
(f) any person named in the Statement with their consent as
having performed a particular professional or advisory
function; and
(g) if any of the above persons is a body corporate—any director
of that body corporate.
(3) The information included in the Product Disclosure Statement must
be worded and presented in a clear, concise and effective manner.
(4) The responsible person may include in the Product Disclosure
Statement a statement about the association between the financial
product and another person.
(5) The responsible person must not include a statement about the
association between the financial product and a person if:
(a) the statement creates the impression that the financial product
is issued or sold by that other person; and
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Division 2 Product Disclosure Statements
Section 1013D
42 Corporations Act 2001
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(b) the person has not issued or sold the product.
(6) The responsible person must not include a statement about the
association between the financial product and a person if:
(a) the statement creates the impression that the financial product
is guaranteed or underwritten by that other person; and
(b) the person has not guaranteed or underwritten the product.
(7) If the Product Disclosure Statement states that a person provides,
or is to provide, services in relation to the financial product, the
Product Disclosure Statement must clearly distinguish between the
respective roles of that person and the issuer or seller of the
financial product.
1013D Product Disclosure Statement content—main requirements
(1) Subject to this section, subsection 1013C(2) and sections 1013F
and 1013FA, a Product Disclosure Statement must include the
following statements, and such of the following information as a
person would reasonably require for the purpose of making a
decision, as a retail client, whether to acquire the financial product:
(a) a statement setting out the name and contact details of:
(i) the issuer of the financial product; and
(ii) if the Statement is a sale Statement—the seller; and
(b) information about any significant benefits to which a holder
of the product will or may become entitled, the circumstances
in which and times at which those benefits will or may be
provided, and the way in which those benefits will or may be
provided; and
(c) information about any significant risks associated with
holding the product; and
(d) information about:
(i) the cost of the product; and
(ii) any amounts that will or may be payable by a holder of
the product in respect of the product after its acquisition,
and the times at which those amounts will or may be
payable; and
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(iii) if the amounts paid in respect of the financial product
and the amounts paid in respect of other financial
products are paid into a common fund—any amounts
that will or may be deducted from the fund by way of
fees, expenses or charges; and
(e) if the product will or may generate a return to a holder of the
product—information about any commission, or other similar
payments, that will or may impact on the amount of such a
return; and
(f) information about any other significant characteristics or
features of the product or of the rights, terms, conditions and
obligations attaching to the product; and
(g) information about the dispute resolution system that covers
complaints by holders of the product and about how that
system may be accessed; and
(h) general information about any significant taxation
implications of financial products of that kind; and
(i) information about any cooling-off regime that applies in
respect of acquisitions of the product (whether the regime is
provided for by a law or otherwise); and
(j) if the product issuer (in the case of an issue Statement) or the
seller (in the case of a sale Statement) makes other
information relating to the product available to holders or
prospective holders of the product, or to people more
generally—a statement of how that information may be
accessed; and
(k) any other statements or information required by the
regulations; and
(l) if the product has an investment component—the extent to
which labour standards or environmental, social or ethical
considerations are taken into account in the selection,
retention or realisation of the investment; and
(m) unless in accordance with the regulations, for information to
be disclosed in accordance with paragraphs (b), (d) and (e),
any amounts are to be stated in dollars.
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Division 2 Product Disclosure Statements
Section 1013D
44 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) For the purposes of paragraph (1)(d), an amount will or may be
payable in respect of a financial product by the holder of the
financial product if:
(a) the holder will or may have to pay an amount in respect of
the product; or
(b) an amount will or may be deducted from:
(i) a payment to be made by the holder; or
(ii) a payment to be made to the holder; or
(iii) an amount held on the holder’s behalf under the
financial product; or
(c) an account representing the holder’s interest in the financial
product will or may be debited with an amount.
It includes an amount that the holder will or may have to pay, or
that will or may be deducted or debited, as a fee, expense or charge
in relation to a particular transaction in relation to the financial
product.
(2A) For the purposes of paragraph (1)(l), products which have an
investment component include superannuation products, managed
investment products and investment life insurance products.
(3) Subsection (1) requires information to be included in the Product
Disclosure Statement only to the extent to which the requirement is
applicable to the financial product. The Product Disclosure
Statement does not need to indicate that a particular requirement is
not applicable to the financial product.
(4) The regulations may:
(a) provide that a provision of subsection (1) does not apply in a
particular situation; or
(b) provide that particular information is not required by a
provision of subsection (1), either in a particular situation or
generally; or
(c) provide a more detailed statement of the information that is
required by a provision of subsection (1), either in a
particular situation or generally.
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1013DA Information about ethical considerations etc.
ASIC may develop guidelines that must be complied with where a
Product Disclosure Statement makes any claim that labour
standards or environmental, social or ethical considerations are
taken into account in the selection, retention or realisation of the
investment.
1013E General obligation to include other information that might
influence a decision to acquire
Subject to subsection 1013C(2) and sections 1013F and 1013FA, a
Product Disclosure Statement must also contain any other
information that might reasonably be expected to have a material
influence on the decision of a reasonable person, as a retail client,
whether to acquire the product.
1013F General limitations on extent to which information is
required to be included
(1) Despite anything in section 1013D or 1013E, information, or a
statement containing information, is not required to be included in
a Product Disclosure Statement if it would not be reasonable for a
person considering, as a retail client, whether to acquire the
product to expect to find the information in the Statement.
(2) In considering whether it would not be reasonable for a person
considering, as a retail client, whether to acquire the product to
expect to find particular information in the Statement, the matters
that may be taken into account include, but are not limited to:
(a) the nature of the product (including its risk profile); and
(b) the extent to which the product is well understood by the
kinds of person who commonly acquire products of that kind
as retail clients; and
(c) the kinds of things such persons may reasonably be expected
to know; and
(d) if the product is an ED security that is not a continuously
quoted security—the effect of the following provisions:
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Section 1013FA
46 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(i) Chapter 2M as it applies to disclosing entities;
(ii) sections 674 and 675; and
(e) the way in which the product is promoted, sold or distributed;
and
(f) any other matters specified in the regulations.
1013FA Information not required to be included in PDS for
continuously quoted securities
(1) This section applies to a Product Disclosure Statement that relates
to a continuously quoted security.
(2) Despite anything in section 1013D, 1013E or 1013F, information is
not required to be included in the Product Disclosure Statement if:
(a) the information is included in any of the following
documents:
(i) the annual financial report most recently lodged with
ASIC by the issuer of the product;
(ii) any half-year financial report lodged with ASIC by the
issuer of the product after the lodgment of that annual
financial report and before the date of the Product
Disclosure Statement;
(iii) any continuous disclosure notices given by the issuer of
the product after the lodgment of that annual financial
report and before the date of the Product Disclosure
Statement; and
(b) the Product Disclosure Statement:
(i) states that as a disclosing entity, the issuer of the
product is subject to regular reporting and disclosure
obligations; and
(ii) informs people of their right to obtain a copy of any of
the documents referred to in paragraph (a).
If the Product Disclosure Statement informs people of their right to
obtain a copy of the document, the issuer of the product must give
a copy of the document free of charge to anyone who asks for it.
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Corporations Act 2001 47
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(3) ASIC may determine that this section does not apply to Product
Disclosure Statements for continuously quoted securities if ASIC is
satisfied that in the previous 12 months:
(a) the issuer of the continuously quoted securities contravened:
(i) the provisions of Chapter 2M; or
(ii) subsection 674(2) or 675(2); or
(iii) subsection 1012DAA(10) or 1012DA(9); or
(iv) section 1308 as it applies to a notice under
subsection 1012DAA(2) or 1012DA(5); or
(b) the responsible person for the Product Disclosure Statement
contravened section 1016E, 1021D, 1021E or 1021J.
(4) The determination must be made in writing and ASIC must publish
a copy of the determination in the Gazette.
1013G Product Disclosure Statement must be dated
A Product Disclosure Statement must be dated. The date must be:
(a) if a copy of the Product Disclosure Statement has been
lodged with ASIC (see section 1015B)—the date on which it
was so lodged; or
(b) in any other case—the date on which the Product Disclosure
Statement was prepared or its preparation was completed.
1013H Requirements if Product Disclosure Statement states or
implies that financial product will be able to be traded
If a Product Disclosure Statement states or implies that the
financial product will be able to be traded on a financial market
(whether in Australia or elsewhere), the Statement must state that:
(a) the product is able to be traded on that market; or
(b) an application has been made to the operator of that market
for the taking of such action as is necessary to enable the
product to be traded on that market; or
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Section 1013I
48 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) an application of a kind referred to in paragraph (b) will be
made to the operator of that market within 7 days after the
date of the Statement.
1013I Extra requirements if Product Disclosure Statement relates to
managed investment products that are ED securities
(1) This section applies to a Product Disclosure Statement that relates
to managed investment products that are ED securities.
(2) The Product Disclosure Statement must include a statement that:
(a) as a disclosing entity, the scheme is subject to regular
reporting and disclosure obligations; and
(b) copies of documents lodged with ASIC in relation to the
scheme may be obtained from, or inspected at, an ASIC
office.
(3) The Product Disclosure Statement must either:
(a) inform people of their right to obtain a copy of the following
documents:
(i) the annual financial report most recently lodged with
ASIC by the scheme;
(ii) any half-year financial report lodged with ASIC by the
scheme after the lodgment of that annual financial
report and before the date of the Product Disclosure
Statement;
(iii) any continuous disclosure notices given by the scheme
after the lodgment of that annual report and before the
date of the Product Disclosure Statement; or
(b) include, or be accompanied by, a copy of the relevant
document or documents.
(4) If:
(a) the Product Disclosure Statement informs people of their
right to obtain a copy of a document referred to in
subsection (3); and
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(b) a person asks the issuer (in the case of an issue Statement) or
the seller (in the case of a sale Statement) for a copy of the
document;
the issuer or seller must give (see subsection (5)) the person a copy
of the document free of charge as soon as practicable, and in any
event within 5 days, after receiving the person’s request.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(5) In subsection (4), give means give in a way that would satisfy the
requirements of section 1015C if the copy of the document were a
Statement to which that section applied.
1013J Requirements if Statement has been lodged with ASIC
A Product Disclosure Statement, a copy of which has been lodged
with ASIC (see section 1015B), must include a statement that:
(a) a copy of the document has been lodged with ASIC; and
(b) ASIC takes no responsibility for the content of the document.
1013K Requirements relating to consents to certain statements
(1) A Product Disclosure Statement must only include a statement
made by a person, or a statement said in the Product Disclosure
Statement to be based on a statement made by a person, if:
(a) the person has consented to the statement being included in
the Product Disclosure Statement in the form and context in
which it is included; and
(b) the Product Disclosure Statement states that the person has
given this consent; and
(c) the person has not withdrawn this consent before the date of
the Product Disclosure Statement.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Division 2 Product Disclosure Statements
Section 1013L
50 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) The person who prepared the Product Disclosure Statement must
not, without reasonable excuse, fail to keep the consent, or a copy
of it, for the period, and in the manner, required by the regulations.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
1013L Product Disclosure Statement may consist of 2 or more
separate documents given at same time
(1) Subject to this section, a Product Disclosure Statement may be
made up of 2 or more separate documents that are given at the
same time.
(2) Each of the documents must have on the cover of the document, or
at or near the front of the document, a statement:
(a) to the effect that the document is part of a Product Disclosure
Statement; and
(b) that (subject to subsection (3)) identifies the other documents
that make up the Product Disclosure Statement.
(3) If there are or may be different versions of a document referred to
in paragraph (2)(b), the statement required by subsection (2) does
not have to identify any particular one of those versions and may
instead identify the document generically.
Note: For example, if a Product Disclosure Statement is made up of a core
document that is not updated very frequently, and a separate document
providing information about remuneration that is updated more
frequently:
(a) the statement in the core document need only refer to the fact that it, and a separate document about remuneration, make up the Product Disclosure Statement; and
(b) the statement in the document about remuneration need only refer to the fact that it, and a separate document about all other required matters, make up the Product Disclosure Statement.
(4) The requirement of section 1013B (title of Product Disclosure
Statement) is taken to be satisfied if the title “Product Disclosure
Statement” is used on the cover of, or at or near the front of, at
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least one of the documents that make up the Product Disclosure
Statement.
(5) The requirement of section 1013G (dating of Product Disclosure
Statement) must be separately complied with in relation to each of
the documents. If, for any purpose, a single date needs to be
determined as the date of the Product Disclosure Statement as a
whole, that date is the most recent of the dates of those documents.
(6) Section 1015E applies to an alteration to one of the documents as
though the reference in that section to the date specified in the
Product Disclosure Statement were a reference to the date specified
in the document.
(7) The regulations may impose additional requirements to be
complied with if a Product Disclosure Statement is made up of 2 or
more documents.
1013M Combining a Product Disclosure Statement and a Financial
Services Guide in a single document
For provisions about combining a Product Disclosure Statement
and a Financial Services Guide in a single document, see
section 942DA and regulations made for the purposes of that
section.
Subdivision D—Supplementary Product Disclosure Statements
1014A What a Supplementary Product Disclosure Statement is
A Supplementary Product Disclosure Statement is a document by
which a person who has prepared a Product Disclosure Statement
(the PDS) can:
(a) correct a misleading or deceptive statement in the PDS; or
(b) correct an omission from the PDS of information it is
required to contain; or
(c) update, or add to, the information contained in the PDS; or
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Section 1014B
52 Corporations Act 2001
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(d) change a statement of a kind referred to in
paragraph 1016E(1)(a) or (b).
Note: In certain circumstances a Replacement Product Disclosure Statement
may be prepared instead of a Supplementary Product Disclosure
Statement (see Subdivision DA).
1014B Title of Supplementary Product Disclosure Statement
(1) The title “Supplementary Product Disclosure Statement” must be
used on the cover of, or at or near the front of, a Supplementary
Product Disclosure Statement.
(2) In any other part of a Supplementary Product Disclosure
Statement, “Supplementary Product Disclosure Statement” may be
abbreviated to “SPDS”.
1014C Form of Supplementary Product Disclosure Statement
At the beginning of a Supplementary Product Disclosure Statement
there must be:
(a) a statement that it is a Supplementary Product Disclosure
Statement; and
(b) an identification of the Product Disclosure Statement that it
supplements; and
(c) a statement that it is to be read together with that Product
Disclosure Statement and any other specified Supplementary
Disclosure Statements.
1014D Effect of giving person a Supplementary Product Disclosure
Statement
If:
(a) a person is given a Product Disclosure Statement (the PDS);
and
(b) at the same time, or later, they are given a Supplementary
Product Disclosure Statement (the SPDS) that supplements
the PDS;
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the PDS is taken, from when the SPDS is given to the person, to
include the information and statements contained in the SPDS.
1014E Situation in which only a Supplementary Product Disclosure
Statement need be given
If:
(a) apart from this section, a person would be required to give
another person (the client) a Product Disclosure Statement
(the new PDS) relating to a financial product; and
(b) the client has, because of some previous conduct, already
received a Product Disclosure Statement (the earlier PDS)
relating to the financial product; and
(c) the earlier PDS contains some, but not all, of the information
that the new PDS is required to contain;
the person may, instead of giving the client the new PDS, give the
client a Supplementary Product Disclosure Statement that contains
the additional information.
1014F Application of other provisions in relation to Supplementary
Product Disclosure Statements
Sections 1013A, 1013G, 1013H, 1013J and 1013K, and
subsections 1013C(3) to (7), apply in relation to a Supplementary
Product Disclosure Statement in the same way as they apply to a
Product Disclosure Statement.
Subdivision DA—Replacement Product Disclosure Statements
1014G Application of this Subdivision—stapled securities
This Subdivision applies if:
(a) a Product Disclosure Statement has been lodged in relation to
an offer for the issue or sale of an interest in a managed
investment scheme; and
(b) the interest can only be transferred together with one or more
securities; and
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Section 1014H
54 Corporations Act 2001
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(c) a disclosure document has been lodged in relation to an offer
for the issue or sale of the security (or securities).
1014H What a Replacement Product Disclosure Statement is
A Replacement Product Disclosure Statement is a document that
replaces the Product Disclosure Statement (the earlier PDS)
mentioned in paragraph 1014G(a) in order to:
(a) correct a misleading or deceptive statement in the earlier
PDS; or
(b) correct an omission from the earlier PDS of information it is
required to contain; or
(c) update, or add to, the information contained in the earlier
PDS; or
(d) change a statement of a kind referred to in
paragraph 1016E(1)(a) or (b).
1014J Consequences of lodging a Replacement Product Disclosure
Statement
If a Replacement Product Disclosure Statement is prepared in
accordance with section 1014K and lodged with ASIC as provided
by Subdivision E (in its application under section 1014L), a
reference to a Product Disclosure Statement is taken to be a
reference to the Replacement Product Disclosure Statement for the
purposes of the application of this Act to events that occur after the
lodgment.
Note: This section means, for example, that offers made after lodgment of
the Replacement Product Disclosure Statement must be accompanied
by copies of the Replacement Product Disclosure Statement and not
the earlier PDS.
1014K Form, content and preparation of Replacement Product
Disclosure Statements
(1) At the beginning of a Replacement Product Disclosure Statement,
there must be:
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(a) a statement that it is a Replacement Product Disclosure
Statement; and
(b) an identification of the Product Disclosure Statement it
replaces.
(2) The title “Replacement Product Disclosure Statement” must be
used on the cover of, or at or near the front of, a Replacement
Product Disclosure Statement.
(3) In any other part of a Replacement Product Disclosure Statement,
“Replacement Product Disclosure Statement” may be abbreviated
to “RPDS”.
(4) Otherwise, section 1012J and Subdivision C (apart from
section 1013B) apply in relation to a Replacement Product
Disclosure Statement in the same way as they apply to a Product
Disclosure Statement.
Note: Section 1012J provides that the information in a Product Disclosure
Statement must be up to date at the time it is given. Subdivision C
deals with the preparation and content of Product Disclosure
Statements.
1014L Giving, lodgment and notice of Replacement Product
Disclosure Statements
Subdivision E applies in relation to a Replacement Product
Disclosure Statement in the same way as it applies to a Product
Disclosure Statement that is required to be lodged with ASIC under
section 1015B.
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Division 2 Product Disclosure Statements
Section 1015A
56 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Subdivision E—Other requirements relating to Product
Disclosure Statements and Supplementary Product
Disclosure Statements
1015A Subdivision applies to Product Disclosure Statements and
Supplementary Product Disclosure Statements
This Subdivision applies to Product Disclosure Statements and to
Supplementary Product Disclosure Statements. Both kinds of
document are referred to in this Subdivision as a Statement.
1015B Some Statements must be lodged with ASIC
(1) A copy of a Statement must have been lodged with ASIC (in
accordance with the requirements of subsection (2) for consents)
before the Statement is given to a person for the purposes of a
provision of this Part if:
(a) the following subparagraphs apply:
(i) the financial product is a managed investment product;
and
(ii) the Statement states or implies that the product will be
able to be traded on a financial market; and
(iii) the Statement meets the requirements set out in
section 1013H; or
(b) the financial product is a managed investment product that
can be traded on a financial market; or
(c) the financial product is a financial product of a kind specified
in regulations made for the purposes of this paragraph.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) The lodgment of a Statement with ASIC requires the consent of:
(a) whether it is an issue Statement or a sale Statement:
(i) if the responsible person is a body corporate—every
director of the responsible person; or
(ii) otherwise—the responsible person; and
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(b) if it is a sale Statement:
(i) if the issuer of the financial product concerned is a body
corporate—every director of the issuer; or
(ii) otherwise—the issuer of the financial product
concerned.
1015C How a Statement is to be given
(1) A Statement:
(a) must be:
(i) given to a person, or the person’s agent, personally; or
(ii) sent to the person, or the person’s agent, at an address
(including an electronic address) or fax number
nominated by the person or the agent; and
(b) may be printed or be in electronic form.
(2) For the purposes of this section, the Statement is sent to a person at
an address if, and only if:
(a) the Statement is sent to the address; and
(b) either:
(i) the envelope or other container in which the Statement
is sent; or
(ii) the message that accompanies the Statement;
is addressed to the person.
(3) The Statement may be given or sent to the person’s agent only if
the agent is not acting as the person’s agent in one of the following
capacities:
(a) a financial services licensee;
(b) an authorised representative of a financial services licensee;
(d) a person who is not required to hold an Australian financial
services licence because the person is covered by:
(i) paragraph 911A(2)(j); or
(ii) an exemption in regulations made for the purposes of
paragraph 911A(2)(k); or
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Section 1015D
58 Corporations Act 2001
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(iii) an exemption specified by ASIC for the purposes of
paragraph 911A(2)(n( �
(e) a person who is required to hold an Australian financial
services licence but who does not hold such a licence;
(f) an employee, director or other representative of a person
referred to in paragraph (a), (b), (d) or (e).
(4) The regulations may provide for alternative ways of giving a
Statement to a person.
(5) The regulations may specify requirements as to:
(a) the manner in which a Statement may be given to a person;
and
(b) the presentation, structure and format for a Statement that is
to be given in electronic form.
The giving of the Statement is not effective unless those
requirements are satisfied.
1015D Notice, retention and access requirements for Statement that
does not need to be lodged
(1) This section applies to a Statement if section 1015B does not
require a copy of the Statement to be lodged with ASIC.
(2) The responsible person for the Statement (other than the trustee of
a self-managed superannuation fund) must lodge a notice with
ASIC, in electronic form, advising of the occurrence of any of the
following events as soon as practicable, and in any event within 5
business days, after the occurrence of the event:
(a) except in the case of a Supplementary Product Disclosure
Statement—a copy of the Statement is first given to someone
in a recommendation, issue or sale situation;
(b) a change is made to fees and charges set out in the Statement;
(c) the financial product to which the Statement relates ceases to
be available to be recommended or offered to new clients in a
recommendation, issue or sale situation.
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Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: The fees and charges set out in a Product Disclosure Statement may be
changed by a Supplementary Product Disclosure Statement (see
section 1014A).
(3) The responsible person for the Statement must keep a copy of the
Statement for the period of 7 years after the date of the Statement.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) During that period the responsible person:
(a) must make a copy of the Statement available to ASIC if
asked to do so by ASIC; and
(b) must comply with any reasonable request from any other
person for a copy of the Statement.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
1015E Altering a Statement after its preparation and before giving it
to a person
(1) A regulated person must not, in purported compliance with a
provision of this Part, give a person a Statement that has been
altered (otherwise than pursuant to paragraph (b)) after the date of
the Statement if either or both of the following paragraphs applies:
(a) the alteration was not made by, or with the authority of, the
issuer or seller, as the case requires, of the financial products;
(b) the alteration is a material alteration and the date of the
Statement has not been changed to:
(i) if a copy of the altered Statement has been lodged with
ASIC (see subsection (2))—the date on which it was so
lodged; or
(ii) in any other case—the date on which the alteration was
made.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Division 2 Product Disclosure Statements
Section 1016A
60 Corporations Act 2001
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(2) If the alteration is a material alteration to a Statement that has been
lodged with ASIC under section 1015B, that section applies to the
altered Statement as if it were a new Statement.
Subdivision F—Other rights and obligations related to Product
Disclosure Statements
1016A Provisions relating to use of application forms
(1) In this section:
defective, in relation to a Product Disclosure Statement as at a
particular time, means that the Product Disclosure Statement, if it
had been given to a person at that time, would have been defective
as defined in Subdivision A of Division 7.
Note: Information in a Supplementary Product Disclosure Statement is taken
to be contained in the Product Disclosure Statement it supplements
(see section 1014D).
eligible application, in relation to a restricted issue or restricted
sale of a relevant financial product, means an application that
satisfies the following requirements:
(a) the application is made using an application form; and
(b) the application form used to apply for the product:
(i) was included in, or accompanied, a Product Disclosure
Statement (relating to the product) that was given to the
applicant and that was not defective as at the time when
the application was made; or
(ii) was copied, or directly derived, by the applicant from a
form referred to in subparagraph (i); and
(c) all other applicable requirements (if any) in regulations made
for the purposes of this paragraph are satisfied in relation to
the application.
Note: Information in a Supplementary Product Disclosure Statement is taken
to be contained in the Product Disclosure Statement it supplements
(see section 1014D).
relevant financial product means:
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(a) a managed investment product; or
(b) a superannuation product; or
(c) an investment life insurance product; or
(d) an RSA product; or
(db) a margin lending facility; or
(e) a financial product of a kind specified in regulations made for
the purposes of this paragraph.
relevant superannuation entity means a superannuation entity of a
kind specified in regulations made for the purposes of this
definition.
restricted issue means an issue of a relevant financial product to a
person as a retail client, other than an issue covered by either of the
following paragraphs:
(a) an issue in a situation, or pursuant to an offer made in a
situation, to which a subsection, other than subsection (1), of
section 1012D applies; or
(b) an issue in a situation, or pursuant to an offer made in a
situation, to which section 1012E or 1012F applies.
restricted sale means a sale of a relevant financial product pursuant
to an offer that:
(a) is of a kind described in subsection 1012C(3) or (4); and
(b) is not made in a situation to which a subsection, other than
subsection (1), of section 1012D applies.
RSA provider has the same meaning as in the Retirement Savings
Accounts Act 1997.
standard employer-sponsor has the same meaning as in the
Superannuation Industry (Supervision) Act 1993.
standard employer-sponsored fund has the same meaning as in the
Superannuation Industry (Supervision) Act 1993.
standard employer-sponsored member has the same meaning as in
the Superannuation Industry (Supervision) Act 1993.
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Division 2 Product Disclosure Statements
Section 1016A
62 Corporations Act 2001
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(2) A person (the issuer or seller) must only make a restricted issue or
a restricted sale of a relevant financial product to a person (the
recipient) if:
(a) the issue or sale is made pursuant to an eligible application
made to the issuer or seller by the recipient; or
(b) it is a restricted issue in relation to which the following
conditions are satisfied:
(i) the financial product is an interest in a relevant
superannuation entity;
(ii) the interest is issued pursuant to an application made to
the issuer by a standard employer-sponsor of the entity
on the recipient’s behalf;
(iii) if the application is the first application for the issue of a
superannuation interest made to the issuer by the
standard employer-sponsor on behalf of any person—
the application is an eligible application; or
(c) it is a restricted issue in relation to which the following
conditions are satisfied:
(i) the financial product is an interest in a relevant
superannuation entity;
(ii) the interest is issued pursuant to an application made to
the issuer by another trustee under Part 24 of the
Superannuation Industry (Supervision) Act 1993 on the
recipient’s behalf;
(iii) if the application is the first application under Part 24 of
that Act made to the issuer by the other trustee on behalf
of any person—the application is an eligible
application; or
(d) it is a restricted issue in relation to which the following
conditions are satisfied:
(i) the financial product is an interest in a relevant
superannuation entity;
(ii) the interest is issued pursuant to an application made to
the issuer by an RSA provider under Part 9 of the
Retirement Savings Accounts Act 1997 on the
recipient’s behalf;
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(iii) if the application is the first application under Part 9 of
that Act made to the issuer by the RSA provider on
behalf of any person—the application is an eligible
application; or
(e) it is a restricted issue in relation to which the following
conditions are satisfied:
(i) the financial product is an RSA product;
(ii) the interest is issued pursuant to an application made to
the issuer by an employer (within the meaning of the
Retirement Savings Accounts Act 1997) of the recipient;
(iii) if the application is the first application for the issue of
an RSA product of that kind made to the issuer by the
employer on behalf of any person—the application is an
eligible application;
(iv) all other applicable requirements (if any) in regulations
made for the purposes of this subparagraph are satisfied
in relation to the application; or
(f) the issue or sale occurs in a situation covered by regulations
made for the purposes of this paragraph.
Note 1: This subsection does not apply to an issue or sale pursuant to
paragraph 1016E(2)(c) (see subsection 1016E(2C)).
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) The trustee of a relevant superannuation entity must only permit a
person to become a standard employer-sponsor of the entity if:
(a) the person applied to become a standard employer-sponsor of
the entity using an application form; and
(b) the application form used to apply to become a standard
employer-sponsor:
(i) was included in, or accompanied, a Product Disclosure
Statement (relating to an interest in the entity) that was
given to the person and that was not defective as at the
time when the application was made; or
(ii) was copied, or directly derived, by the person from a
form referred to in subparagraph (i).
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Division 2 Product Disclosure Statements
Section 1016B
64 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note 1: Information in a Supplementary Product Disclosure Statement is taken
to be contained in the Product Disclosure Statement it supplements
(see section 1014D).
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) The regulations may:
(a) provide for defences to offences based on subsection (2) or
(3); and
(b) provide for additional offences relating to the receipt or
non-receipt of applications or application forms.
Note 1: A defendant bears an evidential burden in relation to a defence. See
subsection 13.3(3) of the Criminal Code.
Note 2: For the limit on penalties for offences against the regulations, see
paragraph 1364(2)(w).
1016B If Statement lodged with ASIC, financial product is not to be
issued or sold before specified period
(1) If:
(a) a copy of a Product Disclosure Statement has been lodged
with ASIC; and
(b) the financial product to which the Statement relates is not
able to be traded on any financial market (whether in
Australia or elsewhere);
the responsible person must not issue or sell a financial product,
pursuant to an application made in response to the Statement, until
the period of 7 days (or that period as extended under
subsection (2)) after lodgment of the Statement has ended.
Note 1: This subsection does not apply to an issue or sale pursuant to
paragraph 1016E(2)(c) (see subsection 1016E(2C)).
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) ASIC may extend the period by notice in writing to the responsible
person. The period as extended must end no more than 14 days
after lodgment.
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Section 1016C
Corporations Act 2001 65
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1016C Minimum subscription condition must be fulfilled before
issue or sale
If a Product Disclosure Statement for a financial product states that
a financial product to which the Statement relates will not be
issued or sold unless:
(a) applications for a minimum number of financial products of
that kind are received; or
(b) a minimum amount is raised;
the responsible person must not issue or sell a financial product of
that kind, pursuant to an application made in response to the
Statement, if that condition has not been satisfied. For the purpose
of working out whether the condition has been satisfied, a person
who has agreed to take a financial product as underwriter is taken
to have applied for that product.
Note 1: Statements in a Supplementary Product Disclosure Statement are
taken to be contained in the Product Disclosure Statement it
supplements (see section 1014D).
Note 1A: This subsection does not apply to an issue or sale pursuant to
paragraph 1016E(2)(c) (see subsection 1016E(2C)).
Note 2: Failure to comply with this section is an offence (see
subsection 1311(1)).
1016D Condition about ability to trade on a market must be fulfilled
before issue or sale
(1) If a Product Disclosure Statement for a financial product states or
implies that a financial product to which the Statement relates will
be able to be traded on a financial market (whether in Australia or
elsewhere), the responsible person must only issue or sell a
financial product of that kind, pursuant to an application made in
response to the Statement, if:
(a) the product is able to be traded on that market; or
(b) an application has, within 7 days after the relevant date (see
subsection (3)), been made to the operator of that market for
the taking of such action as is necessary to enable financial
products of that kind to be traded on that market.
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Section 1016D
66 Corporations Act 2001
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Paragraph (b) ceases to apply to the financial product at the end of
the period of 3 months starting on the relevant date.
Note 1: Statements in a Supplementary Product Disclosure Statement are
taken to be contained in the Product Disclosure Statement it
supplements (see section 1014D).
Note 1A: This subsection does not apply to an issue or sale pursuant to
paragraph 1016E(2)(c) (see subsection 1016E(2C)).
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Issue or transfer void if quotation condition not fulfilled
(2) If a Product Disclosure Statement for a financial product states or
implies that the financial product is to be quoted on a financial
market (whether in Australia or elsewhere) and:
(a) an application has not, within 7 days after the relevant date
(see subsection (3)), been made to the operator of that market
for the taking of such action as is necessary to enable
financial products of that kind to be traded on that market; or
(b) the product is not able to be traded on that market at the end
of 3 months after the relevant date;
then:
(c) an issue or transfer to a person of a financial product of that
kind is void if:
(i) the issue or transfer is pursuant to an application made
in response to the Statement; or
(ii) the person should have been given the Statement; and
(d) if:
(i) an issue or transfer of a financial product to a person is
void because of paragraph (c); and
(ii) the responsible person received money from that person
on account of the issue or transfer—the responsible
person must, as soon as practicable, return the money to
that person.
Note 1: Paragraphs (c) and (d) do not apply to an issue or sale pursuant to
paragraph 1016E(2)(c) (see subsection 1016E(2C)).
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Section 1016E
Corporations Act 2001 67
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Note 2: Failure to comply with paragraph (d) is an offence (see
subsection 1311(1)).
The relevant date
(3) For the purposes of this section, the relevant date in relation to an
express or implied statement is:
(a) if the statement is express or implied in a Product Disclosure
Statement, disregarding the effect of section 1014D—the
date of the Product Disclosure Statement; or
(b) if the statement is express or implied in a Supplementary
Product Disclosure Statement—the date of the
Supplementary Product Disclosure Statement; or
(c) if the statement is express or implied in a Replacement
Product Disclosure Statement (whether or not it is express or
implied in the earlier Product Disclosure Statement it
replaces)—the date of the Replacement Product Disclosure
Statement.
1016E Choices open to person making the offer if disclosure
condition not met or Product Disclosure Statement
defective
(1) This section applies if:
(a) a Product Disclosure Statement for a financial product states
that a financial product to which the Statement relates will
not be issued or sold unless:
(i) applications for a minimum number of financial
products of that kind are received; or
(ii) a minimum amount is raised;
and that condition is not satisfied within 4 months after the
relevant date (see subsections (3) and (4)); or
(b) a Product Disclosure Statement for a financial product states
or implies that a financial product to which the Statement
relates will be able to be traded on a financial market
(whether in Australia or elsewhere) and:
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Section 1016E
68 Corporations Act 2001
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(i) an application has not, within 7 days after the relevant
date (see subsection (4)), been made to the operator of
that market for the taking of such action as is necessary
to enable financial products of that kind to be traded on
that market; or
(ii) at the end of the period of 3 months starting on the
relevant date, financial products of that kind are not able
to be traded on that market; or
(c) in relation to a Product Disclosure Statement for a financial
product, the responsible person becomes aware that the
Product Disclosure Statement was defective as at the time
when it was prepared, or that it became or has become
defective as at some later time.
Note: Information and statements in a Supplementary Product Disclosure
Statement are taken to be contained in the Product Disclosure
Statement it supplements (see section 1014D).
(2) If this section applies, the responsible person must, in relation to
any application for financial products of the relevant kind that is
made in response to the Product Disclosure Statement (the first
Product Disclosure Statement) and that has not resulted in an issue
or sale of financial products of that kind, comply with one of the
following paragraphs:
(a) the responsible person must repay the money they received
from the applicant; or
(aa) the responsible person must give the applicant:
(i) a new Product Disclosure Statement for the financial
products, and an additional statement that identifies the
respects in which the new Product Disclosure Statement
is materially different from the first Product Disclosure
Statement; and
(ii) 1 month to withdraw their application and be repaid; or
(b) the responsible person must give the applicant:
(i) a Supplementary Product Disclosure Statement that
changes the statement referred to in paragraph (1)(a) or
(b), or that corrects the deficiency referred to in
paragraph (1)(c); and
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(ii) 1 month to withdraw their applications and be repaid; or
(ba) the responsible person must issue or sell the financial
products to the applicant and give them:
(i) a new Product Disclosure Statement for the financial
products, and an additional statement that identifies the
respects in which the new Product Disclosure Statement
is materially different from the first Product Disclosure
Statement; and
(ii) 1 month to return the financial products and be repaid;
or
(c) the responsible person must issue or sell the financial
products to the applicant and give them:
(i) a Supplementary Product Disclosure Statement that
changes the statement referred to in paragraph (1)(a) or
(b), or that corrects the deficiency referred to in
paragraph (1)(c); and
(ii) 1 month to return the financial products and be repaid.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: If the responsible person chooses the option given by paragraph (aa)
or (b), that option does not require the responsible person to wait until
the end of the month referred to in subparagraph (aa)(ii) or (b)(ii)
before going ahead and issuing or selling the financial products to the
applicant if the applicant indicates before then that they still wish to
proceed with the application.
Note 3: However, if the responsible person chooses the option given by
paragraph (aa) or (b), whether the responsible person may go ahead
and issue or sell the financial products to the applicant at the end of
the month referred to in subparagraph (aa)(ii) or (b)(ii) (or earlier, as
mentioned in note 2) is affected by this subsection and sections 1016A
to 1016E (including as those provisions are affected by
subsections (2A) and (2B) of this section).
Note 4: If the responsible person chooses the option given by paragraph (c),
sections 1016A to 1016D do not prohibit the issue or sale of the
financial products under that paragraph (see subsection (2C) of this
section).
(2A) If, in accordance with paragraph (2)(aa), the responsible person
gives the applicant a new Product Disclosure Statement for the
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Section 1016E
70 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
financial products and the additional statement referred to in
subparagraph (2)(aa)(i):
(a) subsection (2), and sections 1016B, 1016C, 1016D and
1016E, apply in relation to the application, from the time
when the applicant is given the new Product Disclosure
Statement (the correction time), as if the application had
been made in response to the new Product Disclosure
Statement; and
(b) if:
(i) the reason for giving the new Product Disclosure
Statement was that the responsible person became
aware that the first Product Disclosure Statement was
defective as at the time when it was prepared, or had
become defective by the time the application was made;
and
(ii) the financial products are relevant financial products as
defined in section 1016A;
section 1016A applies in relation to the application, from the
correction time, as if the first Product Disclosure Statement
had instead contained the content of the new Product
Disclosure Statement.
Note 1: Because of paragraph (a):
(a) if this section applies to the new Product Disclosure Statement, the responsible person’s ability to proceed to issue or sell the financial products pursuant to the application will be affected by subsection (2), and by sections 1016B, 1016C and 1016D, as those provisions apply in relation to the new Product Disclosure Statement (even though the application was actually made in response to the first Product Disclosure Statement); and
(b) sections 1016B, 1016C and 1016D, as they relate to the first Product Disclosure Statement, cease to apply in relation to the application.
Note 2: Because of paragraph (b), the application may be an eligible
application as defined in section 1016A, even though the first Product
Disclosure Statement was actually defective as at the time when the
application was made.
(2B) If:
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(a) in accordance with paragraph (2)(b), the responsible person
gives the applicant a Supplementary Product Disclosure
Statement that relates to the financial products; and
(b) the reason for giving the Supplementary Product Disclosure
Statement was that the responsible person became aware that
the first Product Disclosure Statement was defective as at the
time when it was prepared, or had become defective by the
time the application was made; and
(c) the financial products are relevant financial products as
defined in section 1016A;
section 1016A applies in relation to the application, from the time
when the applicant is given the Supplementary Product Disclosure
Statement, as if the Supplementary Product Disclosure Statement
had been given to the applicant before the application was made.
Note 1: Because of this subsection and section 1014D (information in a
Supplementary Product Disclosure Statement is taken to be contained
in the Product Disclosure Statement it supplements), the application
may be an eligible application as defined in section 1016A, even
though the Supplementary Product Disclosure Statement was not
actually given until after the time when the application was made.
Note 2: The responsible person’s ability to proceed to issue or sell the
financial products pursuant to the application will be affected by
subsection (2), and by sections 1016B, 1016C and 1016D, as those
provisions apply in relation to the first Product Disclosure Statement
as affected by the Supplementary Product Disclosure Statement and
any other Supplementary Product Disclosure Statements.
(2BA) If Subdivision DA applies:
(a) for the purposes of subsection (2), instead of giving the
applicant a Supplementary Product Disclosure Statement, the
responsible person may give the applicant a Replacement
Product Disclosure Statement; and
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Section 1016E
72 Corporations Act 2001
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(b) if the responsible person gives the applicant a Replacement
Product Disclosure Statement, subsection (2B) applies as if
references in that subsection to a Supplementary Product
Disclosure Statement were references to the Replacement
Product Disclosure Statement.
(2C) If the responsible person chooses to comply with paragraph (2)(c),
nothing in sections 1016A to 1016D applies to the issue or sale of
the financial products under that paragraph.
Note: This subsection affects the elements of the offences under
sections 1016A to 1016D, and so it is not an exception in relation to
which a defendant bears an evidential burden under subsection 13.3(3)
of the Criminal Code.
(3) For the purpose of working out whether the condition referred to in
paragraph (1)(a) has been satisfied, a person who has agreed to
take a financial product as an underwriter is taken to have applied
for that financial product.
(4) For the purposes of paragraphs (1)(a) and (b), the relevant date in
relation to an express or implied statement is:
(a) if the statement is express or implied in a Product Disclosure
Statement, disregarding the effect of section 1014D—the
date of the Product Disclosure Statement; or
(b) if the statement is express or implied in a Supplementary
Product Disclosure Statement—the date of the
Supplementary Product Disclosure Statement; or
(c) if the statement is express or implied in a Replacement
Product Disclosure Statement (whether or not it is express or
implied in the earlier Product Disclosure Statement it
replaces)—the date of the Replacement Product Disclosure
Statement.
(5) For the purposes of this section, defective, when used in relation to
a Product Disclosure Statement at a particular time, means that the
Product Disclosure Statement, if it had been given to a person at
that time, would have been defective as defined in Subdivision A
of Division 7.
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Product Disclosure Statements Division 2
Section 1016F
Corporations Act 2001 73
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: Information in a Supplementary Product Disclosure Statement is taken
to be contained in the Product Disclosure Statement it supplements
(see section 1014D).
1016F Remedies for person acquiring financial product under
defective Product Disclosure Document
(1) Subject to this section, if a financial product is issued or sold to a
person (the client) in contravention of section 1016E, the client has
the right to return the product and to have the money they paid to
acquire the product repaid. This is so even if the responsible person
is being wound up.
(2) If the responsible person:
(a) is a body corporate; and
(b) does not repay the money as required by subsection (1);
the directors of the responsible person are personally liable to
repay the money.
(3) The right to return the product must be exercised by notifying the
responsible person in one of the following ways:
(a) in writing; or
(b) electronically; or
(c) in any other way specified in the regulations.
Also, if the regulations require the client to comply with other
requirements in order to exercise the right to return the product,
those other requirements must be complied with.
(4) The right to return the product can only be exercised during the
period of 1 month starting on the date of the issue or sale of the
product to the client.
(5) On the exercise of the right to return the product:
(a) if the product is constituted by a legal relationship between
the client and the issuer of the product—that relationship is,
by force of this section, terminated with effect from that time
without penalty to the client; and
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Division 2 Product Disclosure Statements
Section 1016F
74 Corporations Act 2001
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(b) any contract for the acquisition of the product by the client is,
by force of this section, terminated with effect from that time
without penalty to the client.
(6) The regulations may provide for consequences and obligations (in
addition to those provided for by subsection (5)) to apply if the
right to return a financial product is exercised.
(7) The regulations may do any or all of the following:
(a) provide that a specified subclass of financial products that
would otherwise be covered by this section is excluded from
this section;
(b) provide additional requirements to be satisfied before this
section applies in relation to a class or subclass of financial
products;
(c) provide that this section does not apply in relation to the
provision of a financial product in specified circumstances.
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Other disclosure obligations of the issuer of a financial product Division 3
Section 1017A
Corporations Act 2001 75
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Division 3—Other disclosure obligations of the issuer of a
financial product
1017A Obligation to give additional information on request
Obligation to give information
(1) The following people may request the person who is the
responsible person for a Product Disclosure Statement for a
financial product under Division 2 to provide further information
about the product:
(a) a person who:
(i) has been or should have been given, or who has
obtained, the Product Disclosure Statement for the
financial product; and
(ii) is not a holder of the financial product;
(b) a financial services licensee;
(c) an authorised representative of a financial services licensee;
(e) a person who is not required to hold an Australian financial
services licence because the person is covered by:
(i) paragraph 911A(2)(j); or
(ii) an exemption in regulations made for the purposes of
paragraph 911A(2)(k); or
(iii) an exemption specified by ASIC for the purposes of
paragraph 911A(2)(l).
(2) The responsible person must give the person the information if:
(a) the financial product is offered in this jurisdiction or the
Product Disclosure Statement is given or obtained in this
jurisdiction; and
(b) the responsible person has previously made the information
generally available to the public; and
(c) the information might reasonably influence a person’s
decision, as a retail client, whether to acquire a financial
product to which the Statement relates; and
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Section 1017A
76 Corporations Act 2001
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(d) it is reasonably practicable for the responsible person to give
the person the information; and
(e) the person pays any charge payable under subsection (5).
The responsible person does not need to give information that is
contained in the Product Disclosure Statement.
Note 1: Paragraph (b)—This requirement means that the responsible person
does not have to disclose material that is confidential because it is:
(a) an internal working document; or
(b) personal information about another person; or
(c) a trade secret or other information that has a commercial value that would be reduced or destroyed by the disclosure; or
(d) material that the responsible person owes another a person a duty not to disclose.
Note 2: Information in a Supplementary Product Disclosure Statement is taken
to be contained in the Product Disclosure Statement it supplements
(see section 1014D).
(3) The responsible person must take reasonable steps to ensure that,
as soon as practicable after receiving the request, and in any event
within one month, subsection (2) is complied with.
Manner of giving information
(4) The responsible person may give the person making the request the
information:
(a) by making a document containing the information available
for inspection by the person:
(i) at a suitable place (having adequate facilities for the
person to inspect and photocopy the document); and
(ii) during normal business hours; or
(b) in some other way that is agreed between the responsible
person and the person making the request.
Issuer or seller may charge for giving information
(5) The responsible person may require the person making the request
to pay a charge for obtaining the information.
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(6) The amount of the charge must not exceed the reasonable costs that
the responsible person incurs that are reasonably related to giving
the information (including any costs incurred in photocopying the
document containing the information).
Note: This would include the costs of searching for, obtaining and collating
the information.
1017B Ongoing disclosure of material changes and significant events
Issuer to notify holders of changes and events
(1) If:
(a) a person (the holder) acquired a financial product as a retail
client (whether or not it was acquired from the issuer); and
(b) either:
(i) the financial product was offered in this jurisdiction; or
(ii) the holder applied for the financial product in this
jurisdiction; and
(c) the product is not specified in regulations made for the
purposes of this paragraph; and
(d) the circumstances in which the product was acquired are not
specified in regulations made for the purposes of this
paragraph;
the issuer must, in accordance with subsections (3) to (8), notify
the holder of changes and events referred to in subsection (1A).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
The changes and events that must be notified
(1A) The changes and events that must be notified are:
(a) any material change to a matter, or significant event that
affects a matter, being a matter that would have been required
to be specified in a Product Disclosure Statement for the
financial product prepared on the day before the change or
event occurs; and
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78 Corporations Act 2001
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(b) any other change, event or other matter of a kind specified in
regulations made for the purposes of this paragraph; and
(c) without limiting paragraph (a) or (b)—any replacement of a
kind specified in regulations made for the purposes of this
paragraph of a beneficial interest of a class that is a MySuper
product with a beneficial interest of another class in a
superannuation entity.
Note: Paragraph (a) applies whether or not a Product Disclosure Statement
for the financial product was in fact prepared (or required to be
prepared) on the day before the change or event occurs.
(2) The issuer does not need to give the notice if the financial product
is a managed investment product that is an ED security.
Note 1: The continuous disclosure provisions in Chapter 6CA
(sections 674-677) apply to managed investment products that are ED
securities.
Note 2: A defendant bears an evidential burden in relation to the matters in
this subsection.
(3) The issuer must notify the holder in one of the following ways:
(a) in writing; or
(b) electronically; or
(c) in a way specified in the regulations.
(4) The notice must give the holder the information that is reasonably
necessary for the holder to understand the nature and effect of the
change or event.
Time for notifying holders
(5) The time within which the issuer must give the notice is set out in
the following table:
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Time for giving notice of change or event
Nature of change or event Time for giving notice
1 Change or event is not an
increase in fees or charges
Subject to subsection (6),
before the change or event
occurs or as soon as
practicable after, but not more
than 3 months after, the
change or event occurs
2 Change is an increase in fees
or charges
30 days before the change
takes effect
(6) If the change or event is not an increase in fees or charges, the
notice may be given more than 3 months after the change or event
occurs if:
(a) the issuer reasonably believes that the event is not adverse to
the holder’s interests and accordingly the holder would not
be expected to be concerned about the delay in receiving the
information; and
(b) the notice is given no later than 12 months after the change or
event occurs.
(7) If the change or event might result in an increase in fees or charges,
this section applies to the change or event as if it would result in an
increase in fees or charges.
(8) In any proceedings against the issuer for an offence based on
subsection (1), it is a defence if the issuer took reasonable steps to
ensure that the other person would be notified of the matters
required by subsection (1) in accordance with subsections (3) to
(8).
Note: A defendant bears an evidential burden in relation to the matters in
subsection (8). See subsection 13.3(3) of the Criminal Code.
(9) In this section:
fees or charges does not include fees or charges payable under a
law of the Commonwealth or of a State or Territory.
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Section 1017BA
80 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
MySuper product has the same meaning as in the Superannuation
Industry (Supervision) Act 1993.
1017BA Trustees of regulated superannuation funds—obligation to
make product dashboard publicly available
(1) The trustee, or the trustees, of a regulated superannuation fund that
has 5 or more members must ensure:
(a) that a product dashboard for each of the fund’s MySuper
products and choice products is publicly available at all times
on the fund’s website; and
(b) that each product dashboard sets out the information required
by subsection (2) or (3); and
(c) that the information set out in each product dashboard about
fees and other costs is updated within 14 days after the end of
a period prescribed by the regulations; and
(d) that the other information set out in each product dashboard
is updated within 14 days after any change to the
information; and
(e) if the regulations prescribe the way in which information is to
be set out in a product dashboard—that each product
dashboard sets out the information in accordance with the
regulations.
(2) The product dashboard for a MySuper product must set out:
(a) the following, worked out in accordance with the regulations
in relation to the period or periods prescribed by the
regulations:
(i) a return target or return targets for the product;
(ii) a return or returns for the product;
(iii) a comparison or comparisons between return targets and
returns for the product;
(iv) the level of investment risk that applies to the product;
(v) a statement of fees and other costs in relation to the
product; and
(b) any other information prescribed by the regulations.
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Corporations Act 2001 81
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(3) Subject to subsection (4), the product dashboard for a choice
product must set out:
(a) the following for each investment option offered within the
choice product, worked out in accordance with the
regulations in relation to the period or periods prescribed by
the regulations:
(i) a return target or return targets for the investment
option;
(ii) a return or returns for the investment option;
(iii) a comparison or comparisons between return targets and
returns for the investment option;
(iv) the level of investment risk that applies to the
investment option;
(v) a statement of fees and other costs in relation to the
investment option; and
(b) any other information prescribed by the regulations.
(4) Subsection (3) does not apply to an investment option within a
choice product if:
(a) the assets of the fund that are invested under the option are
invested only in one or more of the following:
(i) a life policy under which contributions and accumulated
earnings may not be reduced by negative investment
returns or any reduction in the value of assets in which
the policy is invested;
(ii) a life policy under which the benefit to a member (or a
relative or dependant of a member) is based only on the
realisation of a risk, not the performance of an
investment;
(iii) an investment account contract the only beneficiaries of
which are a member, and relatives and dependants of a
member; or
(b) the sole purpose of the investment option is the payment of a
pension to members who have satisfied a condition of release
of benefits specified in a standard made under
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Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
paragraph 31(2)(h) of the Superannuation Industry
(Supervision) Act 1993; or
(c) the assets of the fund that are invested under the option are
invested only in another single asset.
(4A) The regulations may prescribe circumstances in which assets of a
regulated superannuation fund are, or are not, to be treated as
invested in a single asset for the purposes of paragraph (4)(c).
(5) In this section:
choice product has the same meaning as in the Superannuation
Industry (Supervision) Act 1993.
fee, in relation to a MySuper product or a choice product offered
by a regulated superannuation fund, means a fee (other than an
activity fee, an advice fee or an insurance fee within the meaning
of the Superannuation Industry (Supervision) Act 1993) that may
be charged by the trustee, or the trustees, of the regulated
superannuation fund in relation to the product under that Act.
investment account contract has the same meaning as in the Life
Insurance Act 1995.
life policy has the same meaning as in the Life Insurance Act 1995.
member, in relation to a regulated superannuation fund, has the
same meaning as in the Superannuation Industry (Supervision) Act
1993.
MySuper product has the same meaning as in the Superannuation
Industry (Supervision) Act 1993.
pension has the same meaning as in the Superannuation Industry
(Supervision) Act 1993.
regulated superannuation fund has the same meaning as in the
Superannuation Industry (Supervision) Act 1993.
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Corporations Act 2001 83
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1017BB Trustees of registrable superannuation entities—obligation
to make information relating to investment of assets
publicly available
(1) The trustee, or the trustees, of a registrable superannuation entity
(other than a pooled superannuation trust) must make the following
information publicly available on the entity’s website no later than
90 days after each reporting day:
(a) information that is sufficient to identify each of the financial
products or other property in which assets, or assets derived
from assets, of the entity are invested, at the end of the
reporting day;
(b) the value of the assets, or assets derived from assets, of the
entity, at the end of the reporting day, that are invested in
each of the financial products or other property.
(2) Information made publicly available under subsection (1) in
respect of a reporting day must continue to be made publicly
available on the registrable superannuation entity’s website until
information relating to the next reporting day is made publicly
available under subsection (1).
(3) If the regulations prescribe the way in which information made
publicly available under subsection (1) must be organised, the
information must be organised in accordance with the regulations.
(4) The regulations may provide that investment in a financial product
or other property is not a material investment in circumstances
prescribed by the regulations.
(5) If regulations are made for the purposes of subsection (4),
information relating to the investment of a financial product or
other property in the prescribed circumstances is not required to be
made publicly available under subsection (1).
(6) In this section:
reporting day means 30 June and 31 December each year.
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Section 1017BC
84 Corporations Act 2001
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1017BC Obligations relating to investment of assets of registrable
superannuation entities—general rule about giving notice
and providing information
(1) This section applies if:
(a) a person (the first party) enters into an arrangement with
another person (the second party); and
(b) under the terms of the arrangement, the first party acquires a
financial product from the second party; and
(c) the first party acquires the financial product in this
jurisdiction; and
(d) the first party knows, or reasonably ought to know, that an
asset that is the subject of the arrangement is, or is derived
from, an asset of a registrable superannuation entity; and
(e) the arrangement is not of a kind prescribed by the regulations
as an arrangement to which this section does not apply.
Obligation of first party
(2) The first party must, at the time the arrangement is entered into,
notify the second party of the following:
(a) that an asset that is the subject of the arrangement is, or is
derived from, the assets of a registrable superannuation
entity;
(b) details of the trustee, or the trustees, of the registrable
superannuation entity.
Obligations of second party
(3) If the second party is notified by the first party in accordance with
subsection (2), the second party must provide the trustee, or the
trustees, of the registrable superannuation entity with information
about:
(a) the financial product acquired by the first party; and
(b) if the second party knows, or reasonably ought to know, that:
(i) an asset about which the second party was notified by
the first party will be used, by the second party or
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Corporations Act 2001 85
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another person, to acquire another financial product—
that financial product; or
(ii) an asset about which the second party was notified by
the first party will be used, by the second party or
another person, to acquire property other than a
financial product—that other property;
sufficient to allow the trustee, or the trustees, of the registrable
superannuation entity to satisfy the obligation under
section 1017BB.
Obligation of agent of first party
(4) If the financial product is acquired in this jurisdiction on behalf of
the first person by a person (the agent) other than a person who is
the provider or acquirer under a custodial arrangement:
(a) the agent must notify the second party in accordance with
subsection (2) on behalf of the first party; and
(b) if the agent so notifies the second party, the first party is
taken to have satisfied the obligation under that subsection.
Definitions
(5) In this section:
acquirer, in relation to a custodial arrangement, has the same
meaning as in subsection 1012IA(1).
custodial arrangement has the same meaning as in
subsection 1012IA(1).
provider, in relation to a custodial arrangement, has the same
meaning as in subsection 1012IA(1).
1017BD Obligations relating to investment of assets of registrable
superannuation entities—giving notice to providers under
custodial arrangements
(1) This section applies if:
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(a) a person (the first party) enters into an arrangement (the core
arrangement) with another person (the second party); and
(b) under the terms of the core arrangement, the second party is
the provider under a custodial arrangement under which the
first party is a client; and
(c) the first party knows, or reasonably ought to know that, under
the custodial arrangement, a financial product may be
acquired in this jurisdiction; and
(d) the first party knows, or reasonably ought to know, that an
asset that is the subject of the core arrangement is, or is
derived from, an asset of a registrable superannuation entity;
and
(e) the core arrangement is not of a kind prescribed by the
regulations as an arrangement to which this section does not
apply.
(2) The first party must, at the time the core arrangement is entered
into, notify the second party of the following:
(a) that an asset that is the subject of the core arrangement is, or
is derived from, the assets of a registrable superannuation
entity;
(b) details of the trustee, or the trustees, of the registrable
superannuation entity.
Note: Section 1017BC may apply in relation to an arrangement under which
the second party, or an acquirer under the custodial arrangement,
actually acquires the financial product.
(3) In this section:
acquirer, in relation to a custodial arrangement, has the same
meaning as in subsection 1012IA(1).
client, in relation to a custodial arrangement, has the same meaning
as in subsection 1012IA(1).
custodial arrangement has the same meaning as in
subsection 1012IA(1).
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Corporations Act 2001 87
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provider, in relation to a custodial arrangement, has the same
meaning as in subsection 1012IA(1).
1017BE Obligations relating to investment of assets of registrable
superannuation entities—giving notice to acquirers under
custodial arrangements
(1) This section applies if:
(a) a person (the first party) enters into an arrangement (the core
arrangement) with another person (the second party); and
(b) under the terms of the core arrangement, the second party is
the acquirer in relation to a custodial arrangement under
which the first party is the provider; and
(c) the first party knows, or reasonably ought to know that, under
the core arrangement, the second party may acquire a
financial product in this jurisdiction; and
(d) the first party knows, or reasonably ought to know, that an
asset that is the subject of the core arrangement is, or is
derived from, an asset of a registrable superannuation entity;
and
(e) the core arrangement is not of a kind prescribed by the
regulations as an arrangement to which this section does not
apply.
(2) The first party must, at the time the core arrangement is entered
into, notify the second party of the following:
(a) that an asset that is the subject of the core arrangement is, or
is derived from, the assets of a registrable superannuation
entity;
(b) details of the trustee, or the trustees, of the registrable
superannuation entity.
Note: Section 1017BC may apply in relation to an arrangement under which
the second party actually acquires the financial product.
(3) In this section:
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Section 1017C
88 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
acquirer, in relation to a custodial arrangement, has the same
meaning as in subsection 1012IA(1).
custodial arrangement has the same meaning as in
subsection 1012IA(1).
provider, in relation to a custodial arrangement, has the same
meaning as in subsection 1012IA(1).
1017C Information for existing holders of superannuation products
and RSA products
Application
(1) This section applies to the issuer of a financial product if the
product is:
(a) a superannuation product; or
(b) an RSA product.
Information for concerned person related to a superannuation
product
(2) If the financial product is a superannuation product, then, subject to
subsection (4), the issuer must, on request by a concerned person,
give the concerned person information that the concerned person
reasonably requires for the purposes of:
(a) understanding any benefit entitlements that the concerned
person may have, has or used to have under the
superannuation product; or
(b) understanding the main features of:
(i) the relevant sub-plan; or
(ii) if there is no relevant sub-plan—the superannuation
entity; or
(c) making an informed judgment about the management and
financial condition of:
(i) the superannuation entity; and
(ii) the relevant sub-plan (if any); or
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(d) making an informed judgment about the investment
performance of:
(i) the relevant sub-plan; or
(ii) if there is no relevant sub-plan—the superannuation
entity; or
(e) understanding the particular investments of:
(i) the superannuation entity; and
(ii) the relevant sub-plan (if any).
The information must be given in accordance with the other
requirements of this section.
Note 1: Subsection (9) defines concerned person and relevant sub-plan.
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Information for concerned person related to an RSA product
(2A) If the financial product is an RSA product, then, subject to
subsection (4), the issuer must, on request by a concerned person,
give the concerned person information that the concerned person
reasonably requires for the purposes of:
(a) understanding any benefit entitlements that the concerned
person may have, has or used to have under the RSA product;
or
(b) understanding the main features of the RSA product.
The information must be given in accordance with the other
requirements of this section.
Note 1: Subsection (9) defines concerned person.
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Information for employer-sponsor related to a superannuation
product
(3) If the financial product is a superannuation product, then, subject to
subsection (4), the issuer must, on request by an employer-sponsor,
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give the employer-sponsor information that the employer-sponsor
reasonably requires for the purposes of:
(a) understanding the kinds of benefits to which the
employer-sponsor’s employees are entitled or will or may
become entitled; or
(b) understanding the main features of:
(i) the relevant sub-plan; or
(ii) if there is no relevant sub-plan—the superannuation
entity; or
(c) making an informed judgment about the management and
financial condition of:
(i) the superannuation entity; and
(ii) the relevant sub-plan (if any); or
(d) making an informed judgment about the investment
performance of:
(i) the relevant sub-plan; or
(ii) if there is no relevant sub-plan—the superannuation
entity; or
(e) a matter related to the Superannuation Guarantee
(Administration) Act 1992.
The information must be given in accordance with the other
requirements of this section.
Note 1: Subsection (9) defines relevant sub-plan.
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Information for employer related to an RSA product
(3A) If the financial product is an RSA product, then, subject to
subsection (4), the issuer must, on request by an employer who
made an application to acquire the RSA product on behalf of an
employee, give the employer information that the employer
reasonably requires for the purposes of:
(a) understanding the kinds of benefits to which the employer’s
employees are entitled or will or may become entitled; or
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(b) understanding the main features of the RSA product; or
(c) a matter related to the Superannuation Guarantee
(Administration) Act 1992.
The information must be given in accordance with the other
requirements of this section.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Exceptions
(4) This section does not require (and does not, by implication,
authorise) the disclosure of:
(a) internal working documents of the issuer; or
(b) information or documents that would disclose, or tend to
disclose:
(i) personal information of another person if, in the
circumstances, the disclosure would be unreasonable; or
(ii) trade secrets or other information having a commercial
value that would be reduced or destroyed by the
disclosure; or
(c) information or documents in relation to which the issuer
owes to another person a duty of non-disclosure.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection. See subsection 13.3(3) of the Criminal Code.
Specific requirements
(5) The issuer must, on request in writing by a person who is a
concerned person, an employer-sponsor (if the financial product is
a superannuation product) or an employer referred to in
subsection (3A) (if the financial product is an RSA product), give
the person:
(a) a copy of a prescribed document (to the extent the issuer has
access to the document) specified in the request; or
(b) prescribed information (to the extent to which the issuer has
or has access to the information) specified in the request.
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The document or information must be given in accordance with the
other requirements of this section.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(6) Subsection (5) does not apply if the issuer is the trustee of a
self-managed superannuation fund.
Documents may be made available for inspection
(7) It is sufficient compliance with a requirement imposed by this
section on the issuer to give information, or to give a copy of a
document, to a person (the client) if:
(a) a document containing the information; or
(b) a copy of the document;
is made available for inspection by the issuer:
(c) at a suitable place (having adequate facilities for the person
to inspect and photocopy the document); and
(d) during normal business hours;
or as otherwise agreed between the issuer for the financial product
and the client.
Time for compliance
(8) The issuer must comply with a request to give information, or a
copy of a document, as soon as practicable. The issuer must, in any
event, make reasonable efforts to comply with the request within 1
month of receiving the request.
Definitions
(9) In this section:
concerned person:
(a) in relation to a superannuation product—means a person
who:
(i) is, or was within the preceding 12 months, a member of
the superannuation entity; or
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(ii) is a beneficiary of the superannuation entity; or
(b) in relation to an RSA product—means a person who:
(i) is, or was within the preceding 12 months, a holder of
the RSA product; or
(ii) has a right or a claim under the RSA product.
relevant sub-plan, in relation to a superannuation product, has the
meaning given by the regulations.
1017D Periodic statements for retail clients for financial products
that have an investment component
(1) If:
(a) a person (the holder) of a financial product acquired the
financial product as a retail client (whether or not it was
acquired from the issuer); and
(b) the product is:
(i) a managed investment product; or
(ii) a superannuation product; or
(iii) an RSA product; or
(iv) an investment life insurance product; or
(v) a deposit product; or
(va) a margin lending facility; or
(vi) specified in regulations made for the purposes of this
paragraph; and
(c) either:
(i) the financial product was offered in this jurisdiction; or
(ii) the holder applied for the financial product in this
jurisdiction;
the issuer of the product must, in accordance with subsections (2)
to (6), give the holder a periodic statement for each reporting
period during which the holder holds the product.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) The following provisions apply in relation to reporting periods:
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(a) each reporting period lasts for a period, not exceeding 1 year,
determined by the issuer;
(b) the first reporting period starts when the holder acquired the
product;
(c) each subsequent reporting period starts at the end of the
preceding reporting period;
(d) if the holder ceases to hold the product, the period starting at
the end of the preceding reporting period and ending when
the holder ceases to hold the product is a reporting period.
(3) The periodic statement must be given as soon as practicable after,
and in any event within 6 months after, the end of the reporting
period to which it relates.
(4) The periodic statement must give the holder the information that
the issuer reasonably believes the holder needs to understand his or
her investment in the financial product.
(5) The periodic statement must include the following if they are
relevant to the financial product:
(a) opening and closing balances for the reporting period;
(b) the termination value of the investment at the end of the
reporting period (to the extent to which it is reasonably
practicable to calculate that value for the investment or a
component of the investment);
(c) details of transactions in relation to the product during the
reporting period as required by regulations made for the
purposes of this paragraph;
(d) any increases in contributions in relation to the financial
product by the holder or another person during the reporting
period;
(e) return on investment during the reporting period (on an
individual basis if reasonably practicable to do so and
otherwise on a fund basis);
(f) details of any change in circumstances affecting the
investment that has not been notified since the previous
periodic statement;
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(g) details prescribed by regulations made for the purposes of
this paragraph.
(5A) Unless in accordance with the regulations:
(a) for information to be disclosed in accordance with
paragraphs (5)(a), (b), (c), (d) and (e), any amounts are to be
stated in dollars; and
(b) for any other information in relation to amounts paid by the
holder of the financial product during the period, any
amounts are to be stated in dollars.
(6) The periodic statement must be given in one of the following ways:
(a) in writing; or
(b) electronically; or
(c) in a way specified in the regulations.
(7) The periodic statement need not be given if the issuer has already
given the holder all the information that would be included in the
periodic statement if it were to be given.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection.
1017DA Trustees of superannuation entities—regulations may
specify additional obligations to provide information
(1) The regulations may:
(a) require the trustee of a superannuation entity to do all or any
of the following:
(i) provide information to the holder of a superannuation
product (being an interest in that entity) with
information relating to the management, financial
condition and investment performance of the entity
and/or of any relevant sub-plan (within the meaning of
section 1017C);
(ii) provide information to the holder or former holder of a
superannuation product (being an interest in that entity),
or to any other person to whom benefits under the
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Section 1017DA
96 Corporations Act 2001
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product are payable, with information relating to his or
her benefit entitlements;
(iii) provide information to the holder of a superannuation
product (being an interest in the entity) with information
about arrangements for dealing with inquiries and/or
complaints relating to the product; or
(b) require an RSA provider to do either or both of the
following:
(i) provide information to the holder or former holder of an
RSA product provided by the RSA provider, or to any
other person to whom benefits under the product are
payable, with information relating to his or her benefit
entitlements;
(ii) provide information to the holder of an RSA product
provided by the RSA provider with information about
arrangements for dealing with inquiries and/or
complaints relating to the product.
(2) Without limiting subsection (1), regulations made for the purposes
of that subsection may deal with all or any of the following:
(a) what information is to be provided;
(b) when information is to be provided;
(c) how information is to be provided.
(3) The trustee of a superannuation entity, or an RSA provider, must
provide information in accordance with any applicable
requirements of regulations made for the purposes of
subsection (1).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) In this section:
RSA provider has the same meaning as in the Retirement Savings
Accounts Act 1997.
superannuation entity has the same meaning as in the
Superannuation Industry (Supervision) Act 1993.
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1017E Dealing with money received for financial product before the
product is issued
(1) This section applies to money paid to:
(a) an issuer (the product provider) of financial products; or
(b) a seller (the product provider) of financial products in
relation to which the seller has prepared a Product Disclosure
Statement;
if:
(c) the money is paid to acquire, or acquire an increased interest
in, one or more of those financial products from the product
provider (whether or not the acquisition would be by a person
as a retail client); and
(d) the product provider does not, for whatever reason, issue or
transfer the product or products, or the increased interest,
immediately after receiving the money; and
(e) either:
(i) the financial product or increased interest was offered in
this jurisdiction; or
(ii) the application for the financial product or increased
interest was made in this jurisdiction; or
(iii) the money was received in this jurisdiction.
(2) The product provider must ensure that the money is paid into an
account that satisfies these requirements:
(a) the account is:
(i) with an Australian ADI; or
(ii) of a kind prescribed by regulations made for the
purposes of this paragraph;
and is designated as an account for the purposes of this
section of this Act; and
(b) the only money paid into the account is:
(i) money to which this section applies; or
(ii) interest on the amount from time to time standing to the
credit of the account; and
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(c) if regulations made for the purposes of this paragraph impose
additional requirements—the requirements so imposed by the
regulations.
The money must be paid into the account on the day it is received
by the product provider, or on the next business day.
Note: See section 1021O for related offences.
(2A) Subject to subsection (2C), the money is taken to be held in trust
by the product provider for the benefit of the person who paid the
money.
(2C) The regulations may:
(a) provide that subsection (2A) does not apply in relation to
money in specified circumstances; and
(b) provide for matters relating to the taking of money to be held
in trust (including, for example, terms on which the money is
taken to be held in trust and circumstances in which it is no
longer taken to be held in trust).
(3) The money must only be taken out of the account if:
(a) it is taken out for the purpose of return to the person by
whom it was paid; or
(b) the product is issued or transferred to, or in accordance with
the instructions of, that person; or
(c) it is taken out for a purpose specified by regulations made for
the purposes of this paragraph; or
(d) it is taken out in a situation specified by regulations made for
the purposes of this paragraph.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) The product provider must:
(a) return the money; or
(b) issue or transfer the product to, or in accordance with the
instructions of, the person who paid the money; or
(c) if the money is taken out:
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(i) for a purpose specified by regulations made for the
purposes of paragraph (3)(c); or
(ii) in a situation specified by regulations made for the
purposes of paragraph (3)(d);
do any action required, by regulations made for the purposes
of this paragraph, after taking out that money;
either:
(d) before the end of one month starting on the day on which the
money was received; or
(e) if it is not reasonably practicable to do so before the end of
that month—by the end of such longer period as is
reasonable in the circumstances.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(5) The product provider may, for the purposes of this section,
maintain a single account or 2 or more accounts.
(6) Nothing in this section, or in regulations made for the purposes of
this section, makes the body (not being the product provider) that
the account is with under paragraph (2)(a) subject to any liability
merely because of a failure by the product provider to comply with
any of the provisions of this section or those regulations.
1017F Confirming transactions
Transactions to which this section applies
(1) This section applies in relation to a transaction involving a
financial product if:
(a) a person (the holder) acquired the product as a retail client;
and
(b) the transaction is:
(i) the transaction by which the holder acquired the
product; or
(ii) a transaction that occurs while the holder holds the
product, including a transaction by which the holder
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100 Corporations Act 2001
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disposes of all or part of the product (and see also
subsection (3)); and
(c) the transaction is not one that does not require confirmation
because of subsection (4); and
(d) the holder has not, in accordance with regulations made for
the purposes of paragraph (9)(d), waived their right to be
provided with confirmation of the transaction; and
(e) either:
(i) the financial product was offered to, or acquired by, the
holder in this jurisdiction; or
(ii) the transaction takes place in this jurisdiction.
Note: This section extends to financial products that are securities (see
section 1010A).
Obligation to confirm transactions
(2) The person (the responsible person) specified in column 3 of an
item in the following table must provide the holder with
confirmation of the transaction specified in column 2 of the same
item. The confirmation must be provided in accordance with
subsections (5) to (8).
Who bears the obligation to confirm a transaction
Item Transaction Whose obligation?
1 transaction by which the holder acquired
the financial product, unless that
transaction was a sale pursuant to an offer
to which section 1012C applies
the issuer of the product
2 transaction by which the holder acquired
the financial product, where that
transaction was a sale pursuant to an offer
to which section 1012C applies
the seller of the product
3 any other transaction in relation to the
financial product that occurs while the
holder holds the product, other than a
disposal of all or part of the product
the issuer of the product
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Who bears the obligation to confirm a transaction
Item Transaction Whose obligation?
4 transaction by which the holder disposes of
all or part of the financial product
the person specified in the
regulations made for the
purposes of this item
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Examples of transactions that are covered by
subparagraph (1)(b)(ii)
(3) Without limiting the generality of subparagraph (1)(b)(ii), the
transactions that are covered by that subparagraph include:
(a) varying the terms of the financial product while the holder
holds the product (unless subsection (4) provides that the
variation does not require confirmation); and
(b) the redemption or surrender of the financial product from or
by the holder.
Transactions that do not require confirmation
(4) The following transactions do not require confirmation:
(a) a transaction consisting solely of an additional contribution
towards the financial product in either of the following
circumstances:
(i) the timing and amount, or method of calculating the
amount, of the additional contribution was agreed on
when the product was acquired by the holder;
(ii) the additional contribution is an amount that is payable
under the terms of the product because of an increase in
an external factor, such as a person’s salary, an inflation
index or a rate of a tax or levy;
(b) if the financial product is a security—a transaction consisting
solely of a variation of the rights attaching to the security;
(c) if the financial product is a deposit product—any of the
following transactions:
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(i) a withdrawal from the deposit product pursuant to a
cheque drawn on the account;
(ii) a deposit to, or withdrawal from, the deposit product
under a direct credit arrangement or a direct debit
arrangement;
(iii) crediting interest to the deposit product;
(iv) debiting the deposit product for fees or charges in
respect of the product or transactions involving the
product;
(v) debiting the deposit product for charges or duties on
deposits into, or withdrawals from, the product that are
payable under a law of the Commonwealth or of a State
or Territory;
(vi) a transaction of a kind specified in regulations made for
the purposes of this subparagraph;
(d) a variation of the terms of all financial products in the class
to which the financial product belongs;
(e) a transaction of a kind specified in regulations made for the
purposes of this paragraph.
Note 1: Because of subparagraph (a)(i), confirmation is not required, e.g., for
regular monthly contributions to a superannuation fund.
Note 2: A defendant bears an evidential burden in relation to the matters in
this subsection.
Confirmation may be provided on a transaction-by-transaction
basis or by means of a standing facility
(5) Confirmation of a transaction must be provided:
(a) by confirming the transaction in accordance with
subsections (6) to (8), to the holder as soon as is reasonably
practicable after the transaction occurs; or
(b) subject to subsection (5A), by providing the holder with
access to a facility through which they can, for themselves,
get a confirmation of the transaction in accordance with
subsections (6) to (8) as soon as is reasonably practicable
after the transaction occurs.
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An arrangement under which the holder may request or require
another person to provide a confirmation does not count as a
facility that satisfies paragraph (b).
When confirmation may be provided by means of a standing
facility
(5A) Confirmation may only be provided by means of a facility as
mentioned in paragraph (5)(b) if:
(a) the holder concerned has agreed that confirmation of
transactions involving the product may be provided by means
of the facility; or
(b) the holder concerned:
(i) has, in accordance with the applicable requirements (if
any) in regulations made for the purposes of this
subparagraph, been informed, by or on behalf of the
responsible person, about the facility and its availability
to the holder as a means of obtaining confirmation of
transactions involving the product; and
(ii) has not advised the responsible person that the holder
does not agree to use the facility as a means of obtaining
such confirmations.
Means of confirmation
(6) The confirmation of the transaction:
(a) must be:
(i) in writing; or
(ii) electronic; or
(iii) in some other form applicable under regulations made
for the purposes of this paragraph; and
(b) may be provided:
(i) in a case to which paragraph (5)(a) applies—directly by
the responsible person or through another person (such
as a financial services licensee); or
(ii) in a case to which paragraph (5)(b) applies—through a
facility provided directly by the responsible person, or
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provided on behalf of the responsible person by
someone else.
Content of confirmation
(7) The confirmation of the transaction must give the holder the
information that the responsible person reasonably believes the
holder needs (having regard to the information the holder has
received before the transaction) to understand the nature of the
transaction.
(8) Without limiting subsection (7), the confirmation of the transaction
must:
(a) identify the issuer and the holder; and
(b) if required to be given by a person other than the issuer—
identify that person; and
(c) give details of the transaction, including:
(i) the date of the transaction; and
(ii) a description of the transaction; and
(iii) subject to regulations made for the purposes of this
subparagraph—any amount paid or payable by the
holder in relation to the transaction; and
(iv) subject to any regulations made for the purposes of this
subparagraph—any taxes and stamp duties payable in
relation to the transaction; and
(d) give any other details prescribed by regulations made for the
purposes of this paragraph.
Regulations may provide for modification or waiver of
confirmation obligation
(9) The regulations may do all or any of the following:
(a) modify subsection (2) to change the person required to
provide confirmation of a transaction;
(b) modify subsections (5) and (6) to expand on or change the
way in which confirmation of a transaction must be provided
in particular circumstances;
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(c) modify subsections (7) and (8) to expand on or change the
information that must be included in the confirmation of a
transaction in particular circumstances;
(d) specify the circumstances in which a person may waive the
right to be provided with confirmation of a transaction, and
specify how such a waiver may be made.
1017G Certain product issuers and regulated persons must meet
appropriate dispute resolution requirements
(1) If:
(a) particular financial products are, or have been, available for
acquisition (whether by issue or sale) by a person or persons
as retail clients; and
(b) the issue or sale of those products is not covered by an
Australian financial services licence;
both the issuer, and any regulated person obliged under
subsection 1012C(5), (6) or (8) to give a retail client a Product
Disclosure Statement for one or more of those financial products,
must each have a dispute resolution system complying with
subsection (2).
Note 1: If the issue of particular financial products is covered by an Australian
financial services licence, the requirement to have a dispute resolution
system relating to the issue of the products is imposed by
paragraph 912A(1)(g).
Note 2: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) To comply with this subsection, a dispute resolution system must
consist of:
(a) an internal dispute resolution procedure that:
(i) complies with standards, and requirements, made or
approved by ASIC in accordance with regulations made
for the purposes of this subparagraph; and
(ii) covers complaints, against the person required to have
the system, made by retail clients in relation to financial
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services provided in relation to any of those products;
and
(b) membership of one or more external dispute resolution
schemes that:
(i) is, or are, approved by ASIC in accordance with
regulations made for the purposes of this subparagraph;
and
(ii) covers, or together cover, complaints (other than
complaints that may be dealt with by the
Superannuation Complaints Tribunal established by
section 6 of the Superannuation (Resolution of
Complaints) Act 1993), against the person required to
have the system, made by retail clients in relation to
financial services provided in relation to any of those
products.
(3) Regulations made for the purposes of subparagraph (2)(a)(i) or
(2)(b)(i) may also deal with the variation or revocation of:
(a) standards or requirements made by ASIC; or
(b) approvals given by ASIC.
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Section 1018A
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Division 4—Advertising for financial products
1018A Advertising or other promotional material for financial
product must refer to Product Disclosure Statement
Advertisements and promotional material must identify issuer (or
issuer and seller) and refer to Product Disclosure Statement
(1) Subject to this section, if a particular financial product is available
for acquisition by persons as retail clients (whether or not it is also
available for acquisition by persons as wholesale clients) by way of
issue, or pursuant to sale offers to which section 1012C applies or
will apply, a person must only:
(a) advertise the product; or
(b) publish a statement that is reasonably likely to induce people
to acquire the product;
if the advertisement or statement:
(c) identifies:
(i) if the product is available by way of issue—the issuer of
the product; or
(ii) if the product is available pursuant to sale offers to
which section 1012C applies or will apply—the issuer
of the product and the seller of the product; and
(d) indicates that a Product Disclosure Statement for the product
is available and where it can be obtained; and
(e) indicates that a person should consider the Product
Disclosure Statement in deciding whether to acquire, or to
continue to hold, the product.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Subject to this section, if a particular financial product, or proposed
financial product, is not available for acquisition by persons as
retail clients but it is reasonably likely that the product will become
so available (whether or not it is, or will also become, available for
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acquisition by persons as wholesale clients) by way of issue, or
pursuant to sale offers to which section 1012C will apply, a person
must only:
(a) advertise the product; or
(b) publish a statement that is reasonably likely to induce people
to acquire the product;
if the advertisement or statement:
(c) identifies:
(i) if the product is likely to be so available by way of
issue—the issuer of the product; or
(ii) if the product is likely to be so available pursuant to sale
offers to which section 1012C will apply—the issuer of
the product and the seller of the product; and
(d) indicates that a Product Disclosure Statement for the product
will be made available when the product is released or
otherwise becomes available; and
(e) indicates when and where the Product Disclosure Statement
is expected to be made available; and
(f) indicates that a person should consider the Product
Disclosure Statement in deciding whether to acquire, or
continue to hold, the product.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: Subsection (2) has an extended operation in relation to recognised
offers under Chapter 8 (see subsection 1200L(4)).
Distribution of disclosure document
(3) A person may distribute a Product Disclosure Statement without
contravening subsection (1) or (2). This does not apply if an order
under section 1020E is in force in relation to the product.
Note 1: A defendant bears an evidential burden in relation to the matters in
this section. See subsection 13.3(3) of the Criminal Code.
Note 2: Subsection (3) has an extended operation in relation to recognised
offers under Chapter 8 (see subsection 1200L(5)).
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General exceptions
(4) An advertisement or publication does not contravene subsection (1)
or (2) if it:
(a) relates to a financial product that is able to be traded on a
financial market and consists of a notice or report by the
issuer of the product, or one of its officers, about its affairs to
the market operator; or
(b) consists solely of a notice or report of a general meeting of
the issuer; or
(c) consists solely of a report about the issuer that is published
by the issuer and:
(i) does not contain information that materially affects
affairs of the issuer, other than information previously
made available in a Product Disclosure Statement that
has been distributed or disclosure document that has
been lodged with ASIC, an annual report or a notice or
report referred to in paragraph (a) or (b); and
(ii) does not refer (whether directly or indirectly) to the
offer of the financial product; or
(d) is a news report, or is genuine comment, in the media relating
to:
(i) a Product Disclosure Statement that has been distributed
or disclosure document that has been lodged with ASIC;
or
(ii) information contained in such a Statement or document;
or
(iii) a notice or report covered by paragraph (a), (b) or (c); or
(e) is a report about the financial products of the issuer published
by someone who is not:
(i) the issuer; or
(ii) acting at the instigation of, or by arrangement with, the
issuer; or
(iii) a director of the issuer; or
(iv) a person who has an interest in the success of the issue
or sale of the financial product.
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Part 7.9 Financial product disclosure and other provisions relating to issue, sale and
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Division 4 Advertising for financial products
Section 1018B
110 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Paragraphs (d) and (e) do not apply if anyone gives consideration
or another benefit for publishing the report.
Note: A defendant bears an evidential burden in relation to the matters in
this section. See subsection 13.3(3) of the Criminal Code.
Liability of publishers
(5) A person does not contravene subsection (1) or (2) by publishing
an advertisement or statement if the person:
(a) publishes it in the ordinary course of a media business; and
(b) did not know, and had no reason to suspect, that its
publication would amount to a contravention of a provision
of this section.
Note: A defendant bears an evidential burden in relation to the matters in
this section. See subsection 13.3(3) of the Criminal Code.
Meaning of media
(6) For the purposes of this section, the media consists of:
(a) newspapers and magazines; and
(b) radio and television broadcasting services; and
(c) electronic services (including services provided through the
internet) that:
(i) are operated on a commercial basis; and
(ii) are similar to newspapers, magazines or radio or
television broadcasts.
1018B Prohibition on advertising personal offers covered by
section 1012E
(1) A person must not advertise an offer, or intended offer, of financial
products that would not need a Product Disclosure Statement
because of section 1012E.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Advertising for financial products Division 4
Section 1018B
Corporations Act 2001 111
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) A person does not contravene subsection (1) by publishing an
advertisement or statement if the person:
(a) publishes it in the ordinary course of a media business; and
(b) did not know, and had no reason to suspect, that a Product
Disclosure Statement was needed.
For this purpose, media has the same meaning as it has in
section 1018A.
Note: A defendant bears an evidential burden in relation to the matters in
this section. See subsection 13.3(3) of the Criminal Code.
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Part 7.9 Financial product disclosure and other provisions relating to issue, sale and
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Division 5 Cooling-off periods
Section 1019A
112 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—Cooling-off periods
1019A Situations in which this Division applies
(1) Subject to subsection (2), this Division applies if:
(a) a financial product of one of the following classes is provided
in this jurisdiction to a person as a retail client after the
commencement of this Chapter:
(i) risk insurance products;
(ii) investment life insurance products;
(iii) managed investment products;
(iv) superannuation products;
(v) RSA products; and
(b) the product is provided to the person:
(i) by way of issue; or
(ii) by way of sale pursuant to an offer to which
section 1012C applies.
(2) The regulations may do any or all of the following:
(a) provide that a specified subclass of financial products that
would otherwise be covered by a subparagraph of
paragraph (1)(a) are excluded from that subparagraph;
(b) provide additional requirements to be satisfied before this
Division applies in relation to a class or subclass of financial
products;
(c) provide that this Division does not apply in relation to the
provision of a financial product in specified circumstances.
(3) In this Division:
(a) the person referred to in paragraph (1)(a) is the client; and
(b) the person who issues or sells the product to the client is the
responsible person.
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Cooling-off periods Division 5
Section 1019B
Corporations Act 2001 113
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1019B Cooling-off period for return of financial product
(1) Subject to this section, the client has the right to return the
financial product to the responsible person and to have the money
they paid to acquire the product repaid. This is so even if the
responsible person is being wound up.
(2) The right to return the product must be exercised by notifying the
responsible person in one of the following ways:
(a) in writing; or
(b) electronically; or
(c) in any other way specified in the regulations.
Also, if the regulations require the client to comply with other
requirements in order to exercise the right to return the product,
those other requirements must be complied with.
(3) The right to return the product can only be exercised during the
period of 14 days starting on the earlier of:
(a) the time when the confirmation requirement (if applicable) is
complied with; or
(b) the end of the 5th day after the day on which the product was
issued or sold to the client.
(4) For the purposes of subsection (3), the confirmation requirement is
complied with when:
(a) the client receives confirmation, as mentioned in
paragraph 1017F(5)(a), of the transaction by which they
acquired the product; or
(b) confirmation of that transaction is available to the client by a
facility as mentioned in paragraph 1017F(5)(b).
(5) The right to return the product (and have money paid to acquire it
repaid) cannot be exercised at any time after:
(a) the client has (whether before or after the start of the period
referred to in subsection (3)) exercised a right or power that
they have under the terms applicable to the product; or
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Part 7.9 Financial product disclosure and other provisions relating to issue, sale and
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Division 5 Cooling-off periods
Section 1019B
114 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the time (whether before or after the start of the period
referred to in subsection (3)) at which, under the terms
applicable to the product, the client’s rights or powers in
respect of the product end.
Note: So, e.g.:
(a) if the product is a contract of insurance, the right to return cannot be exercised after the client has made a claim under the contract of insurance; and
(b) if the product is a contract of insurance covering a period of only one week, the right to return cannot be exercised after the end of that week.
(5A) The regulations may specify other circumstances in which the right
to return the product (and have money paid to acquire it repaid)
cannot be exercised.
(6) On the exercise of the right to return the product:
(a) if the product is constituted by a legal relationship between
the client and the issuer of the product—that relationship is,
by force of this section, terminated with effect from that time
without penalty to the client; and
(b) any contract for the acquisition of the product by the client is,
by force of this section, terminated with effect from that time
without penalty to the client.
(7) The regulations may provide for consequences and obligations (in
addition to those provided for by subsection (6)) to apply if the
right to return a financial product is exercised.
(8) The regulations may provide that, in specified circumstances, the
amount to be repaid on exercise of the right to return a financial
product is to be increased or reduced in accordance with the
regulations.
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Unsolicited offers to purchase financial products off-market Division 5A
Section 1019C
Corporations Act 2001 115
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5A—Unsolicited offers to purchase financial
products off-market
1019C Definitions
In this Division:
date of offer has the meaning given by subsection 1019I(1).
offeree, in relation to an offer to which this Division applies, has
the meaning given by subsection 1019D(1).
offeror, in relation to an offer to which this Division applies, has
the meaning given by subsection 1019D(1).
offer to which this Division applies means an offer to which this
Division applies because of section 1019D.
1019D Offers to which this Division applies
(1) This Division applies to an offer in relation to which the following
paragraphs are satisfied:
(a) the offer is an unsolicited offer to purchase a financial
product made by a person (the offeror) to another person (the
offeree);
(b) the offer is made otherwise than on a licensed market;
(c) one or more of the following apply:
(i) the offer is made in the course of a business of
purchasing financial products;
(ii) the offeror was not in a personal or business relationship
with the offeree before the making of the offer;
(iii) the offer is made in circumstances specified in
regulations made for the purposes of this subparagraph;
(d) the offer is not:
(i) made to the issuer of the financial products; or
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Division 5A Unsolicited offers to purchase financial products off-market
Section 1019E
116 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) to buy back shares under a buy-back authorised by
section 257A; or
(iii) made under a compromise or arrangement approved at a
meeting held as a result of an order under
subsection 411(1) or (1A); or
(iv) to acquire securities under an off-market bid; or
(v) to compulsorily acquire or buy out securities under
Chapter 6A; or
(vi) to acquire shares from a dissenting shareholder under
section 414; or
(vii) made in relation to particular financial products that are
specified in regulations made for the purposes of this
subparagraph; or
(viii) made in circumstances that are specified in regulations
made for the purposes of this subparagraph;
(e) the offer is made or received in this jurisdiction.
(2) The regulations may clarify:
(a) when an offer is, or is not, made in the course of a business
of purchasing financial products; or
(b) when an offeror was, or was not, in a previous personal or
business relationship with an offeree.
Regulations made for the purposes of this subsection have effect
despite anything else in this section.
1019E How offers are to be made
(1) An offer to which this Division applies must not be made
otherwise than by sending an offer document in printed or
electronic form to the offeree in accordance with the following
requirements:
(a) the document must be sent to an address of the offeree
(which may be an electronic address);
(b) either the envelope or the container in which it is sent, or the
message that accompanies it, must be addressed to the
offeree.
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Unsolicited offers to purchase financial products off-market Division 5A
Section 1019F
Corporations Act 2001 117
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) The offer document must be sent to the offeree as soon as
practicable after the date of offer.
1019F Prohibition on inviting offers to sell
A person must not invite another person to make an offer to sell a
financial product in circumstances in which, if the invitation were
instead an offer to purchase the financial product, that offer would
be an offer to which this Division applies.
1019G Duration and withdrawal of offers
(1) An offer to which this Division applies:
(a) must remain open for at least 1 month after the date of offer;
and
(b) cannot remain open for more than 12 months after the date of
offer.
(2) The offer may be withdrawn by the offeror at any time, but not
within 1 month of the date of offer.
(3) The offer may only be withdrawn by the offeror by sending a
withdrawal document in printed or electronic form to the offeree in
accordance with paragraphs 1019E(1)(a) and (b). The withdrawal
document must identify the offeror and be dated.
(4) A purported withdrawal of the offer contrary to subsection (2) or
(3) is ineffective.
1019H Terms of offer cannot be varied
(1) The terms of an offer to which this Division applies, as set out in
the offer document, cannot be varied.
(2) A purported variation of the terms of the offer is ineffective.
(3) This section does not:
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Division 5A Unsolicited offers to purchase financial products off-market
Section 1019I
118 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) affect the offeror’s obligation under section 1019J to update
the market value of the financial product to which the offer
relates; or
(b) prevent the offeror from withdrawing the offer in accordance
with section 1019G or paragraph 1019J(2)(a) and making
another offer on different terms; or
(c) prevent the offeree from making a counter-offer on different
terms.
1019I Contents of offer document
(1) The offer document by which an offer to which this Division
applies is made must identify the offeror and be dated (this date is
the date of offer).
(2) The offer document must also contain the following:
(a) the price at which the offeror wishes to purchase the financial
products;
(b) if the financial product is able to be traded on a licensed
market and there is a market value for the product as traded
on that market—the market value of the product as at the date
of offer;
(c) if paragraph (b) does not apply—a fair estimate of the value
of the product as at the date of offer, and an explanation of
the basis on which that estimate was made;
(d) the period during which the offer remains open (which must
be consistent with subsection 1019G(1));
(e) a statement to the effect that the offer may be withdrawn by
sending a withdrawal document to the offeree, but generally
not within 1 month of the date of offer;
(f) any other information specified in regulations made for the
purposes of this paragraph.
(3) The regulations may clarify:
(a) the manner in which a fair estimate of the value of a financial
product (see paragraph (2)(c)) is to be worked out; and
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Unsolicited offers to purchase financial products off-market Division 5A
Section 1019J
Corporations Act 2001 119
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the level of detail required in the explanation of the basis on
which the estimate was made.
Regulations made for the purposes of this subsection have effect
despite anything else in this section.
(4) The offer document must be worded and presented in a clear,
concise and effective manner.
1019J Obligation to update market value
(1) This section applies if:
(a) the offer document by which an offer to which this Division
applies is made states the market value of the financial
product to which the offer relates as at the date of the offer;
and
(b) while the offer remains open, there is an increase or decrease
in the market value of the product when compared to:
(i) unless subparagraph (ii) applies—the market value (the
currently stated value) stated as mentioned in
paragraph (a); or
(ii) if this section has previously applied in relation to the
offer and one or more supplementary offer documents
have been sent to the offeree—the market value (the
currently stated value) stated as mentioned in
paragraph (3)(c) in the supplementary offer document
most recently sent to the offeree; and
(c) the increase or decrease, expressed as a percentage of the
currently stated value, exceeds the percentage specified in the
regulations for the purposes of this paragraph.
(2) The offeror must, within 10 business days of this section applying
because of a particular increase or decrease in value:
(a) withdraw the offer by sending a withdrawal document, in
printed or electronic form, to the offeree in accordance with
paragraphs 1019E(1)(a) and (b):
(i) that identifies the offeror and that is dated; and
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Division 5A Unsolicited offers to purchase financial products off-market
Section 1019K
120 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) that contains a statement to the effect that the offer is
withdrawn because of a change in the market value of
the product, and that withdrawal for this reason is
permitted even within 1 month of the date of offer; or
(b) send a supplementary offer document (see subsection (3)) in
printed or electronic form to the offeree in accordance with
paragraphs 1019E(1)(a) and (b).
Nothing in section 1019G affects the effectiveness of a withdrawal
of the offer under paragraph (a) of this subsection.
(3) A supplementary offer document must:
(a) identify the offer to which it relates; and
(b) be dated; and
(c) state the market value of the financial product to which the
offer relates as at that date; and
(d) state the price that was stated in the offer document as
required by paragraph 1019I(2)(a), and contain a statement to
the effect that this is still the price at which the offeror wishes
to purchase the product and that the terms of the offer remain
unchanged; and
(e) contain a statement to the effect that the document has been
prepared because the market value of the product has
changed.
(4) A supplementary offer document must be worded and presented in
a clear, concise and effective manner.
(5) In this section, a reference to stating a market value of a financial
product includes a reference to purporting to state the market value
of the product.
1019K Rights if requirements of Division not complied with
First situation covered by this section—offers to which this
Division applies
(1) This section applies if, in relation to an offer to which this Division
applies, the offeree (the seller) accepts the offer and enters into a
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Unsolicited offers to purchase financial products off-market Division 5A
Section 1019K
Corporations Act 2001 121
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
contract for the sale of the financial product to the offeror (the
buyer), and one or more of the following paragraphs applies:
(a) section 1019E was not complied with in relation to the offer;
(b) the offer was accepted after the period referred to in
paragraph 1019G(1)(b);
(c) the offeror gave the offeree an offer document and either:
(i) the offer document did not comply with section 1019I;
or
(ii) there was a misleading or deceptive statement in the
offer document;
(d) in a situation to which section 1019J applies, either:
(i) subsection 1019J(2) was not complied with; or
(ii) subsection 1019J(2) was complied with, but the offeree
did not receive the withdrawal document, or the
supplementary offer document, as the case requires,
until after the offeree had accepted the offer;
(e) in a situation to which section 1019J applies, the offeror gave
the offeree a supplementary offer document and either:
(i) the supplementary offer document did not comply with
subsection 1019J(3); or
(ii) there was a misleading or deceptive statement in the
supplementary offer document.
Second situation covered by this section—invitations prohibited by
section 1019F
(2) This section applies if, in response to an invitation prohibited by
section 1019F, a person (the seller) makes an offer to sell a
financial product to the person who made the invitation (the
buyer), and that person accepts the offer and enters into a contract
for the purchase of that financial product from the seller.
Seller’s right to refuse to transfer, or to seek the return of, the
financial product
(3) The seller has:
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Division 5A Unsolicited offers to purchase financial products off-market
Section 1019K
122 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the right to refuse to transfer the financial product to the
buyer; or
(b) if the seller has already transferred the financial product to
the buyer—the right to have the financial product returned to
the seller, if the buyer still holds the product.
The seller’s right under paragraph (a) or (b) is conditional on the
seller repaying any money that has been paid to the seller for the
purchase of the financial product.
How the seller’s right is to be exercised
(4) The seller’s right under subsection (3) must be exercised by
notifying the buyer in one of the following ways:
(a) in writing;
(b) electronically;
(c) in any other way specified in regulations made for the
purposes of this paragraph.
Also, if the regulations require the seller to comply with other
requirements in order to exercise that right, those other
requirements must be complied with.
(5) The seller’s right under subsection (3) can only be exercised during
the period of 30 days starting on the day the contract was entered
into.
Effect of exercise of seller’s right
(6) On the exercise of the seller’s right under subsection (3), the
contract referred to in subsection (1) or (2) is, by force of this
section, terminated from that time without penalty to the seller.
Regulations may provide for certain matters
(7) The regulations may provide for consequences and obligations (in
addition to those provided for by subsection (6)) to apply if the
seller’s right under subsection (3) is exercised.
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Unsolicited offers to purchase financial products off-market Division 5A
Section 1019K
Corporations Act 2001 123
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(8) The regulations may provide that, in specified circumstances, the
amount to be repaid as mentioned in subsection (3) is to be
increased or reduced in accordance with the regulations.
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Part 7.9 Financial product disclosure and other provisions relating to issue, sale and
purchase of financial products
Division 5B Disclosure etc. in relation to short sales covered by securities lending
arrangement of listed section 1020B products
Section 1020AA
124 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5B—Disclosure etc. in relation to short sales
covered by securities lending arrangement of
listed section 1020B products
Note: Section 1020B prohibits certain short sales of section 1020B products.
1020AA Definitions
(1) In this Division:
crossing: a crossing of section 1020B products is a sale of
section 1020B products made by a financial services licensee:
(a) on behalf of both the buyer and the seller of the products; or
(b) on behalf of the buyer of the products and on its own behalf
as seller of the products; or
(c) on behalf of the seller of the products and on its own behalf
as buyer of the products.
section 1020B products has the meaning given by
subsection 1020B(1).
securities lending arrangement means an arrangement under
which:
(a) one entity (the lender) agrees that it will:
(i) deliver particular securities, managed investment
products or other financial products to another entity
(the borrower) or to an entity nominated by the
borrower; and
(ii) vest title in those products in the entity to which they
are delivered; and
(b) the borrower agrees that it will, after the lender does the
things mentioned in paragraph (a):
(i) deliver the products (or equivalent products) to the
lender or to an entity nominated by the lender; and
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listed section 1020B products Division 5B
Section 1020AB
Corporations Act 2001 125
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) vest title in those products (or those equivalent
products) in the entity to which they are delivered.
(2) To avoid doubt, for the purposes of this Division, treat the entering
into of an agreement to sell section 1020B products as the sale of
the products.
(3) To avoid doubt, for the purposes of this Division, treat a financial
services licensee as making a sale on behalf of a person if the sale
is, in economic substance, made by the licensee for the person.
Example: A request that the sale be made is passed from the person to the
financial services licensee through a chain of intermediaries.
(4) For the purposes of this Division, treat a crossing of section 1020B
products as being made on a licensed market.
1020AB Seller disclosure
(1) Subsection (3) applies if:
(a) either:
(i) a financial services licensee, on behalf of a person (the
seller), makes a sale in this jurisdiction of
section 1020B products on a licensed market to a buyer;
or
(ii) a financial services licensee (the seller), on its own
behalf, makes a sale in this jurisdiction of section 1020B
products on a licensed market to a buyer; and
(b) before the time of the sale, the seller had entered into or
gained the benefit of a securities lending arrangement; and
(c) at the time of the sale, the seller intends that the securities
lending arrangement will ensure that some or all the
section 1020B products can be vested in the buyer; and
(d) the following requirements are satisfied (if applicable):
(i) if regulations made for the purposes of this
subparagraph specify a kind of section 1020B product—
the section 1020B products are of that kind;
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Division 5B Disclosure etc. in relation to short sales covered by securities lending
arrangement of listed section 1020B products
Section 1020AC
126 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) if regulations made for the purposes of this
subparagraph specify a kind of section 1020B product—
the section 1020B products are not of that kind;
(iii) if regulations made for the purposes of this
subparagraph specify circumstances in which the sale is
made—the sale is made in those circumstances.
(2) Subsection (3) applies regardless of whether the seller is inside or
outside Australia.
Offence
(3) The seller must:
(a) give the entity mentioned in subsection (4) particulars
specified in the regulations in relation to the circumstances
mentioned in paragraphs (1)(a), (b) and (c); and
(b) do so:
(i) on or before the time specified in the regulations; and
(ii) in the manner specified in the regulations.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) The entity is:
(a) if subparagraph (1)(a)(i) applies:
(i) the financial services licensee mentioned in that
subparagraph; or
(ii) if the regulations specify another entity—that entity; or
(b) if subparagraph (1)(a)(ii) applies:
(i) the operator of the licensed market mentioned in that
subparagraph; or
(ii) if the regulations specify another entity—that entity.
1020AC Licensee disclosure
(1) Subsection (2) applies if:
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Section 1020AD
Corporations Act 2001 127
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the seller mentioned in subparagraph 1020AB(1)(a)(i) gives a
financial services licensee information in accordance with
section 1020AB in relation to a sale of section 1020B
products on a licensed market; and
(b) the following requirements are satisfied (if applicable):
(i) if regulations made for the purposes of this
subparagraph specify a kind of section 1020B product—
the section 1020B products are of that kind;
(ii) if regulations made for the purposes of this
subparagraph specify a kind of section 1020B product—
the section 1020B products are not of that kind;
(iii) if regulations made for the purposes of this
subparagraph specify circumstances in which the sale is
made—the sale is made in those circumstances.
Offence
(2) The financial services licensee must:
(a) give the entity mentioned in subsection (3) particulars
specified in the regulations in relation to the circumstances
mentioned in paragraph (1)(a); and
(b) do so:
(i) on or before the time specified in the regulations; and
(ii) in the manner specified in the regulations.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) The entity is:
(a) the operator of the licensed market mentioned in
paragraph (1)(a); or
(b) if the regulations specify another entity—that entity.
1020AD Public disclosure of information
(1) Subsection (2) applies if:
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Section 1020AD
128 Corporations Act 2001
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(a) any of the following apply, in relation to a sale of
section 1020B products on a licensed market:
(i) the seller mentioned in subparagraph 1020AB(1)(a)(ii)
gives information to the operator of a licensed market
(or to another entity) in accordance with
section 1020AB;
(ii) the financial services licensee mentioned in
paragraph 1020AC(1)(a) gives information to the
operator of a licensed market (or to another entity) in
accordance with section 1020AC;
(iii) if regulations for the purposes of
subparagraph 1020AB(4)(a)(ii) provide that the entity to
which information is to be given in accordance with
section 1020AB is the operator of a licensed market (or
another entity)—the seller mentioned in
subparagraph 1020AB(1)(a)(i) gives information to the
operator (or other entity) in accordance with that
section; and
(b) the following requirements are satisfied (if applicable):
(i) if regulations made for the purposes of this
subparagraph specify a kind of section 1020B product—
the section 1020B products are of that kind;
(ii) if regulations made for the purposes of this
subparagraph specify a kind of section 1020B product—
the section 1020B products are not of that kind;
(iii) if regulations made for the purposes of this
subparagraph specify circumstances in which the sale is
made—the sale is made in those circumstances.
Offence
(2) The operator (or the other entity) must:
(a) make a public disclosure of particulars specified in the
regulations in relation to the information mentioned in
paragraph (1)(a); and
(b) do so:
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Section 1020AE
Corporations Act 2001 129
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(i) on or before the time specified in the regulations; and
(ii) in the manner specified in the regulations.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
1020AE Licensee’s obligation to ask seller about short sale
The financial services licensee must not make a sale in this
jurisdiction of section 1020B products on a licensed market if:
(a) the sale is on behalf of a person (the seller); and
(b) the seller will be obliged under section 1020AB to give the
financial services licensee information in relation to the sale;
and
(c) either or both of the following apply:
(i) before making the sale, the financial services licensee
failed to ask the seller, orally or in writing, whether the
seller will be obliged under section 1020AB to give the
financial services licensee information in relation to the
sale;
(ii) before making the sale, the financial services licensee
failed to record, in writing, the seller’s answer.
Note 1: Failure to comply with this section is an offence (see
subsection 1311(1)).
Note 2: For the definition of writing, see section 25 of the Acts Interpretation
Act 1901. For the application of the Acts Interpretation Act 1901 to
this Act, see section 5C of this Act.
1020AF Regulations
(1) Regulations made for the purposes of this Division may specify a
matter or thing differently for different kinds of persons, things or
circumstances. For example, the regulations may:
(a) specify a matter or thing differently for different kinds of
sellers mentioned in subsection 1020AB(1) or 1020AC(1);
and
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Section 1020AF
130 Corporations Act 2001
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(b) specify a time differently for different kinds of
circumstances.
Note: For specification by class, see subsection 13(3) of the Legislative
Instruments Act 2003.
(2) Subsection (1) does not limit the regulations that may be made for
the purposes of this Division.
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Section 1020AG
Corporations Act 2001 131
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Division 5C—Information about CGS depository interests
1020AG Jurisdictional scope of Division
(1) Section 1020AI applies only in relation to recommendations
received in this jurisdiction.
(2) The regulations may make provision dealing with the jurisdictional
scope of some or all of the other provisions of this Division. The
other provisions of this Division have effect subject to any such
regulations.
1020AH Definitions
In this Division:
CGS depository interest information website means a website that
is prescribed by the regulations for the purposes of this definition.
information statement for a class of CGS depository interests
means a document that:
(a) contains a statement that the document is an information
statement for that class for the purposes of this Division; and
(b) contains information about all CGS depository interests of
that class (whether or not it also contains information about
CGS depository interests of another class); and
(c) is prepared by the Commonwealth; and
(d) is published on the CGS depository interest information
website.
regulated person, in relation to a CGS depository interest, means:
(a) an issuer of the CGS depository interest; or
(b) any financial services licensee; or
(c) any authorised representative of a financial services licensee;
or
(d) any person who is not required to hold an Australian
financial services licence because the person is covered by:
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Section 1020AI
132 Corporations Act 2001
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(i) paragraph 911A(2)(j); or
(ii) an exemption in regulations made for the purposes of
paragraph 911A(2)(k); or
(iii) an exemption specified by ASIC for the purposes of
paragraph 911A(2)(n( � or
(e) any person who is required to hold an Australian financial
services licence but who does not hold such a licence.
1020AI Requirement to give information statements for CGS
depository interest if recommending acquisition of
interest
(1) A regulated person must give a person (the client) each
information statement for a class of CGS depository interests if:
(a) the regulated person provides financial product advice to the
client that consists of, or includes, a recommendation that the
client acquire a CGS depository interest of that class; and
(b) the financial product advice is provided to the client as a
retail client; and
(c) the financial product advice is personal advice to the client.
Each information statement must be given at or before the time
when the regulated person provides the advice and must be given
in accordance with this Division.
Note: If the recommendation is to acquire CGS depository interests of a
class for which there is an information statement and that is a subset
of a wider class of CGS depository interests for which there is another
information statement, the regulated person must give the client both
information statements.
(2) However, the regulated person does not have to give the client an
information statement for a class of CGS depository interests if:
(a) the client has already received that statement; or
(b) the regulated person reasonably believes that the client has
received that statement.
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Section 1020AI
Corporations Act 2001 133
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Strict liability offence of failing to give statement
(3) A regulated person commits an offence if:
(a) the regulated person is required by this section to give
another person an information statement for a class of CGS
depository interests; and
(b) the regulated person does not give the other person, in
accordance with section 1020AK, that statement by the time
the regulated person is required to do so.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (2). See subsection 13.3(3) of the Criminal Code.
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Ordinary offence of failing to give statement
(5) A regulated person commits an offence if:
(a) the regulated person is required by this section to give
another person an information statement for a class of CGS
depository interests; and
(b) the regulated person does not give the other person, in
accordance with section 1020AK, that statement by the time
the regulated person is required to do so.
Note: A defendant bears an evidential burden in relation to the matter in
subsection (2).
Defence for authorised representative
(6) In any proceedings against an authorised representative of a
financial services licensee for an offence based on subsection (3) or
(5), it is a defence if:
(a) the licensee had provided the representative with information
or instructions about the giving of information statements for
a class of CGS depository interests; and
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134 Corporations Act 2001
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(b) the representative’s failure to give an information statement
for that class occurred because the representative was acting
in reliance on that information or those instructions; and
(c) the representative’s reliance on that information or those
instructions was reasonable.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (6). See subsection 13.3(3) of the Criminal Code.
Offence of failing to ensure authorised representative gives
statement
(7) A financial services licensee commits an offence if the licensee
does not take reasonable steps to ensure that an authorised
representative of the licensee complies with the representative’s
obligations under this section to give each information statement
for a class of CGS depository interests as and when required by
this section.
1020AJ Information statement given must be up to date
A regulated person must not, in purported compliance with this
Division, give a person at a time a document that:
(a) purports to be an information statement for a class of CGS
depository interests; and
(b) is not an information statement for that class published at that
time on the CGS depository interest information website.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
1020AK How an information statement is to be given
(1) An information statement for a class of CGS depository interests:
(a) must be:
(i) given to a person, or the person’s agent, personally; or
(ii) sent to the person, or the person’s agent, at an address
(including an electronic address) or fax number
nominated by the person or the agent; and
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Corporations Act 2001 135
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(b) may be printed or be in electronic form.
(2) For the purposes of this section, the information statement is sent
to a person at an address if, and only if:
(a) the information statement is sent to the address; and
(b) either:
(i) the envelope or other container in which the information
statement is sent; or
(ii) the message that accompanies the information
statement;
is addressed to the person.
(3) The information statement may be given or sent to the person’s
agent only if the agent is not acting as the person’s agent in one of
the following capacities:
(a) a financial services licensee;
(b) an authorised representative of a financial services licensee;
(c) a person who is not required to hold an Australian financial
services licence because the person is covered by:
(i) paragraph 911A(2)(j); or
(ii) an exemption in regulations made for the purposes of
paragraph 911A(2)(k); or
(iii) an exemption specified by ASIC for the purposes of
paragraph 911A(2)(n( �
(d) a person who is required to hold an Australian financial
services licence but who does not hold such a licence;
(e) an employee, director or other representative of a person
referred to in paragraph (a), (b), (c) or (d).
(4) The regulations may provide for other ways of giving an
information statement for a class of CGS depository interests.
(5) The regulations may specify requirements as to the manner in
which an information statement for a class of CGS depository
interests may be given to a person. The giving of the information
statement is not effective unless those requirements are satisfied.
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Section 1020AL
136 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1020AL Civil action for loss or damage
(1) A person (the client) who suffers loss or damage for a reason
described in column 1 of an item of the table may recover the
amount of the loss or damage by action begun against a person
indicated in column 2 of that item within 6 years after the loss or
damage was suffered.
Recovery of amount of loss or damage
Column 1
Reason for loss or damage
Column 2
Person amount may be recovered
from
1 The client was not given an information
statement for a class of CGS depository
interests as and when required by this
Division
The person required to give the
statement or, if that person was an
authorised representative of a
financial services licensee, each such
licensee responsible for the person’s
conduct (see subsection (2))
2 The client was given at a time, in
purported compliance with this
Division, a document that:
(a) purported to be an information
statement for a class of CGS
depository interests; and
(b) was not an information statement for
that class that was published at that
time on the CGS depository interest
information website
Each person who:
(a) directly or indirectly caused or
contributed to the giving of the
document; and
(b) did not take reasonable steps to
ensure that the document given
would be an information
statement published at that time
on the CGS depository interest
information website
(2) A financial services licensee is responsible for the conduct of an
authorised representative of the licensee for the purposes of item 1
of the table in subsection (1), and the authorised representative is
not liable under that item, if:
(a) the authorised representative is not an authorised
representative of any other financial services licensee; or
(b) the licensee is responsible (alone or jointly and severally with
other financial services licensees) for the authorised
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representative’s conduct under section 917C, disregarding
sections 917D and 917F.
(3) This section does not affect any liability that a person has under
any other law.
Other orders
(4) The court dealing with an action under subsection (1) may, in
addition to awarding loss or damage under that subsection and if it
thinks it necessary in order to do justice between the parties:
(a) make an order declaring void a contract entered into by the
client referred to in that subsection for or relating to a
financial product or a financial service; and
(b) if it makes an order under paragraph (a)—make such other
order or orders as it thinks are necessary or desirable because
of that order.
(5) Without limiting paragraph (4)(b), the orders that may be made
under that paragraph include (but are not limited to) an order for
the return of money paid by a person, and/or an order for payment
of an amount of interest specified in, or calculated in accordance
with, the order.
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Division 6 Miscellaneous
Section 1020A
138 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 6—Miscellaneous
1020A Offers etc. relating to certain managed investment schemes
not to be made in certain circumstances
(1) A person must not engage in conduct of a kind referred to in
subsection (2) in relation to a financial product described in
paragraph 764A(1)(ba) (which relates to certain managed
investment schemes that are not registered schemes) if the
managed investment scheme concerned needs to be, or will need to
be, registered and has not been registered. This is so even if it is
proposed to register the scheme.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Subject to subsection (3), the kinds of conduct that must not be
engaged in in relation to such a managed investment product are as
follows:
(a) making a recommendation, as described in
subsection 1012A(3), that is received in this jurisdiction;
(b) making an offer, as described in subsection 1012B(3) or
1012C(3), that is received in this jurisdiction;
(c) accepting an offer, made as described in subsection 1012B(3)
or (4), that was received in this jurisdiction.
(3) Subsection (2) does not apply to a recommendation or offer made
in a situation to which a subsection of section 1012D, other than
subsection 1012D(1), applies.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection. See subsection 13.3(3) of the Criminal Code.
1020B Prohibition of certain short sales of securities, managed
investment products and certain other financial products
(1) In this section and in Division 5B:
section 1020B products means:
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(a) securities; or
(b) managed investment products; or
(c) financial products referred to in paragraph 764A(1)(j); or
(d) financial products of any other kind prescribed by regulations
made for the purposes of this definition.
(2) Subject to this section and the regulations, a person must only, in
this jurisdiction, sell section 1020B products to a buyer if, at the
time of the sale:
(a) the person has or, if the person is selling on behalf of another
person, that other person has; or
(b) the person believes on reasonable grounds that the person
has, or if the person is selling on behalf of another person,
that other person has;
a presently exercisable and unconditional right to vest the products
in the buyer.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) For the purposes of subsection (2):
(a) a person who, at a particular time, has a presently exercisable
and unconditional right to have section 1020B products
vested in the person, or in accordance with the directions of
the person, has at that time a presently exercisable and
unconditional right to vest the products in another person;
and
(b) a right of a person to vest section 1020B products in another
person is not conditional merely because the products are
subject to a security interest in favour of another person to
secure the repayment of money.
(4) Subsection (2) does not apply in relation to a sale of section 1020B
products by a person who, before the time of sale, has entered into
a contract to buy those products and who has a right to have those
products vested in the person that is conditional only upon all or
any of the following:
(a) payment of the consideration in respect of the purchase;
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Section 1020D
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(b) the receipt by the person of a proper instrument of transfer in
respect of the products;
(c) the receipt by the person of the documents that are, or are
documents of title to, the products.
(7) For the purposes of this section, a person who:
(a) purports to sell section 1020B products; or
(b) offers to sell section 1020B products; or
(c) holds himself, herself or itself out as entitled to sell
section 1020B products; or
(d) instructs a financial services licensee to sell section 1020B
products;
is taken to sell the products.
1020D Part cannot be contracted out of
A condition of a contract for the acquisition of a financial product
is void if it provides that a party to the contract is:
(a) required or bound to waive compliance with any requirement
of this Part (or of regulations made for the purposes of this
Part); or
(b) if the acquisition occurs in circumstances in which the party
is required by a provision of this Part to have been given a
Product Disclosure Statement for the product—taken to have
notice of any contract, document or matter not specifically
referred to in a Product Disclosure Statement or
Supplementary Product Disclosure Statement given to the
party.
1020E Stop orders by ASIC
(1) This section applies if:
(a) either:
(i) a disclosure document or statement is defective (see
subsection (11)); or
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(ia) a disclosure document or statement does not comply
with a requirement of this Part that it be worded and
presented in a clear, concise and effective manner; or
(ii) an advertisement or statement of a kind referred to in
subsection 1018A(1) or (2) that relates to financial
products is defective (see subsection (11)); or
(b) an issuer of financial products is in breach of section 1017G;
or
(c) information made publicly available under section 1017BA
or 1017BB, or provided under subsection 1017BC(3), is
defective (see subsection (11)).
(2) ASIC may order that:
(a) if paragraph (1)(a) applies—specified conduct in respect of
the financial products to which the document, advertisement
or statement relates; or
(b) if paragraph (1)(b) applies—specified conduct in respect of
financial products issued by that issuer; or
(c) if paragraph (1)(c) applies—specified conduct in respect of
the financial products or other property to which the
information relates;
must not be engaged in while the order is in force.
(3) The order may include a statement that specified conduct engaged
in contrary to the order will be regarded as not complying with the
requirements of a specified provision of this Part.
(4) Before making an order under subsection (2), ASIC must:
(a) hold a hearing; and
(b) give a reasonable opportunity to any interested people to
make oral or written submissions to ASIC on whether an
order should be made.
(5) If ASIC considers that any delay in making an order under
subsection (2) pending the holding of a hearing would be
prejudicial to the public interest, ASIC may make an interim order
under that subsection. The interim order may be made without
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holding a hearing and lasts for 21 days after the day on which it is
made unless revoked before then.
(6) At any time during the hearing, ASIC may make an interim order
under subsection (2). The interim order lasts until:
(a) ASIC makes an order under subsection (2) after the
conclusion of the hearing; or
(b) the interim order is revoked;
whichever happens first.
(7) The order under subsection (2) must be in writing and must be
served on:
(a) unless paragraph (b), (c) or (d) applies—the issuer of the
financial products concerned; or
(b) if paragraph (1)(a) applies and the document, advertisement
or statement relates to a sale or proposed sale of the financial
products—the seller of the financial products; or
(c) if subparagraph (1)(a)(i) applies and the disclosure document
or statement is an offer document of a kind referred to in
section 1019E or a supplementary offer document of a kind
referred to in section 1019J—the offeror referred to in
subsection 1019D(1); or
(d) if paragraph (1)(c) applies—the person who made the
information publicly available or who provided the
information.
(8) The person on whom the order is served must take reasonable steps
to ensure that other people who engage in conduct to which the
order applies are aware of the order.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(9) The person on whom the order is served, or a person who is aware
of the order, must not engage in conduct contrary to the order.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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(10) If the person on whom the order is served, or a person who is
aware of the order, engages in conduct contrary to the order, any
relevant statement included in the order under subsection (3) has
effect accordingly. This applies in addition to any other
consequence that is provided for by this Act.
(11) In this section:
defective:
(a) in relation to a disclosure document or statement—has the
same meaning as in Subdivision B of Division 7; and
(b) in relation to an advertisement or statement of a kind referred
to in subsection 1018A(1) or (2) that relates to financial
products—means:
(i) there is a misleading or deceptive statement in the
advertisement or statement; or
(ii) there is an omission from the advertisement or statement
of material required by paragraph 1018A(1)(c), (d) or
(e), or paragraph 1018A(2)(c), (d), (e) or (f), to be
included in the advertisement or statement; and
(c) in relation to information made publicly available under
section 1017BA—means:
(i) the information has not been updated as required by that
section; or
(ii) the information is otherwise misleading or deceptive; or
(iii) there is an omission from the information; and
(d) in relation to information made publicly available under
section 1017BB or information provided under
section 1017BC—means:
(i) the information is misleading or deceptive; or
(ii) there is an omission from the information.
disclosure document or statement has the same meaning as it has
in Subdivision B of Division 7.
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Section 1020F
144 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1020F Exemptions and modifications by ASIC
(1) ASIC may:
(a) exempt a person or class of persons from all or specified
provisions of this Part; or
(b) exempt a financial product or a class of financial products
from all or specified provisions of this Part; or
(c) declare that this Part applies in relation to a person or a
financial product, or a class of persons or financial products,
as if specified provisions were omitted, modified or varied as
specified in the declaration.
(4) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
(5) An exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette.
(6) If conduct (including an omission) of a person would not have
constituted an offence if a particular declaration under
paragraph (1)(c) had not been made, that conduct does not
constitute an offence unless, before the conduct occurred (in
addition to complying with the gazettal requirement of
subsection (5)):
(a) the text of the declaration was made available by ASIC on
the internet; or
(b) ASIC gave written notice setting out the text of the
declaration to the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with
before the conduct occurred.
(7) For the purpose of this section, the provisions of this Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
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(b) any provisions of Part 10.2 (transitional provisions) that
relate to provisions of this Part.
Note: Because of section 761H, a reference to this Part or Part 10.2 also
includes a reference to regulations or other instruments made for the
purposes of this Part or Part 10.2 (as the case requires).
(8) To avoid doubt, a declaration under paragraph (1)(c) may specify
omissions, modifications or variations that have any or all of the
following effects:
(a) suspending, prohibiting or limiting:
(i) any form of short selling of financial products; or
(ii) any transaction that has the same or substantially similar
market effect as a short sale of financial products;
(b) varying requirements under this Part that apply to:
(i) any form of short selling of financial products; or
(ii) any transaction that has the same or substantially similar
market effect as a short sale of financial products;
(c) removing some or all requirements under this Part that apply
to:
(i) any form of short selling of financial products; or
(ii) any transaction that has the same or substantially similar
market effect as a short sale of financial products;
(d) imposing requirements that apply to:
(i) any form of short selling of financial products; or
(ii) any transaction that has the same or substantially similar
market effect as a short sale of financial products.
1020G Exemptions and modifications by regulations
(1) The regulations may:
(a) exempt a person or class of persons from all or specified
provisions of this Part; or
(b) exempt a financial product or a class of financial products
from all or specified provisions of this Part; or
(c) provide that this Part applies as if specified provisions were
omitted, modified or varied as specified in the regulations.
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Section 1020G
146 Corporations Act 2001
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(3) For the purpose of this section, the provisions of this Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 10.2 (transitional provisions) that
relates to provisions of this Part.
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Section 1021A
Corporations Act 2001 147
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Division 7—Enforcement
Subdivision A—Offences
1021A Overview
This Subdivision contains provisions creating offences by
reference to various rules contained in preceding Divisions of this
Part. However, it does not create all the offences relating to those
rules, as some offences are created by subsection 1311(1). Where
offences are created by subsection 1311(1) in relation to a rule, this
is indicated by a note at the end of the provision containing the
rule.
1021B Definitions
(1) In this Subdivision:
defective, in relation to a disclosure document or statement, means:
(a) there is a misleading or deceptive statement in the disclosure
document or statement; or
(b) if it is a Product Disclosure Statement—there is an omission
from the Product Disclosure Statement of material required
by section 1013C, other than material required by
section 1013B or 1013G; or
(c) if it is a Supplementary Product Disclosure Statement that is
given for the purposes of section 1014E—there is an
omission from the Supplementary Product Disclosure
Statement of material required by that section; or
(d) if it is information required by paragraph 1012G(3)(a)—there
is an omission from the information of material required by
that paragraph;
being a statement, or an omission, that is or would be materially
adverse from the point of view of a reasonable person considering
whether to proceed to acquire the financial product concerned.
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Section 1021B
148 Corporations Act 2001
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Note: In determining whether a Product Disclosure Statement is defective,
the effect of section 1014D must be taken into account (section 1014D
takes information and statements in a Supplementary Product
Disclosure Statement to be included in the Product Disclosure
Statement it supplements).
disclosure document or statement means:
(a) a Product Disclosure Statement; or
(b) a Supplementary Product Disclosure Statement; or
(c) information required by paragraph 1012G(3)(a).
regulated person has the same meaning as it has in Division 2.
(1A) For the avoidance of doubt, if section 1012J (information must be
up to date) is not complied with in relation to a Product Disclosure
Statement, then, for the purposes of the definition of defective in
subsection (1):
(a) if the circumstance constituting the non-compliance is that
particular information included in the Product Disclosure
Statement is not as up to date as section 1012J requires it to
be—the information so included constitutes a misleading
statement in the Product Disclosure Statement; and
(b) if the circumstance constituting the non-compliance is a
failure to include particular information that was not
previously required to be included in the Product Disclosure
Statement—the failure to include the information constitutes
an omission from the Statement of material required by
section 1013C.
Note 1: The effect of section 1014D (information in a Supplementary Product
Disclosure Statement is taken to be contained in the Product
Disclosure Statement it supplements) must be taken into account in
determining whether section 1012J is complied with in relation to a
Product Disclosure Statement.
Note 2: Whether the inclusion of out of date information, or the failure to
include information, results in the Product Disclosure Statement being
defective as defined in subsection (1) depends on whether the
materiality test set out in that definition is satisfied.
(2) In this Subdivision, a reference (including in the definitions in
subsection (1)) to a document or statement, or to information, of a
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kind referred to in a paragraph of the definition of disclosure
document or statement in subsection (1) includes a reference to
something purporting to be a document or statement, or to be
information, of that kind.
1021C Offence of failing to give etc. a disclosure document or
statement
Strict liability offence
(1) A person (the providing entity) commits an offence if:
(a) the providing entity:
(i) is required by a provision of this Part to give another
person a Product Disclosure Statement or a
Supplementary Product Disclosure Statement (the
required disclosure document or statement); or
(ii) is required by paragraph 1012G(3)(a) to orally
communicate information (the required disclosure
document or statement) to another person; and
(b) the providing entity does not:
(i) if subparagraph (a)(i) applies—give (in accordance with
section 1015C) the other person anything purporting to
be the required disclosure document or statement by the
time they are required to do so; or
(ii) if subparagraph (a)(ii) applies—orally communicate to
the other person anything purporting to be the
information required by paragraph 1012G(3)(a) by the
time they are required to do so.
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D, 1012DAA, 1012DA and 1012E.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Ordinary offence
(3) A person (the providing entity) commits an offence if:
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Section 1021C
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(a) the providing entity:
(i) is required by a provision of this Part to give another
person a Product Disclosure Statement or a
Supplementary Product Disclosure Statement (the
required disclosure document or statement); or
(ii) is required by paragraph 1012G(3)(a) to orally
communicate information (the required disclosure
document or statement) to another person; and
(b) the providing entity does not:
(i) if subparagraph (a)(i) applies—give (in accordance with
section 1015C) the other person anything purporting to
be the required disclosure document or statement by the
time they are required to do so; or
(ii) if subparagraph (a)(ii) applies—orally communicate to
the other person anything purporting to be the
information required by paragraph 1012G(3)(a) by the
time they are required to do so.
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D, 1012DAA, 1012DA and 1012E.
Defence for authorised representative
(4) In any proceedings against an authorised representative of a
financial services licensee for an offence based on subsection (1) or
(3), it is a defence if:
(a) the licensee had provided the representative with information
or instructions about the giving or communication of
disclosure documents or statements; and
(b) the representative’s failure to give or communicate the
required disclosure document or statement occurred because
the representative was acting in reliance on that information
or those instructions; and
(c) the representative’s reliance on that information or those
instructions was reasonable.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (4). See subsection 13.3(3) of the Criminal Code.
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Section 1021D
Corporations Act 2001 151
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Circumstances in which a person is taken not to contravene this
section
(5) If:
(a) a person does not give another person a Product Disclosure
Statement for a financial product because of
section 1012DAA or 1012DA; and
(b) a notice was given under subsection 1012DAA(2) or
1012DA(5); and
(c) the notice purported to comply with subsection 1012DAA(7)
or 1012DA(6) but did not actually comply with that
subsection;
the person is taken not to contravene this section.
1021D Offence of preparer of defective disclosure document or
statement giving the document or statement knowing it to
be defective
(1) A person commits an offence if:
(a) the person prepares (or has someone else prepare for them) a
disclosure document or statement (not being information
required by paragraph 1012G(3)(a)); and
(b) the person knows that the disclosure document or statement
is defective; and
(c) the person:
(i) gives (see subsection (3)) another person the disclosure
document or statement in circumstances in which it is
required by a provision of this Part to be given to the
other person; or
(ii) gives (see subsection (3)), or makes available to,
another person the disclosure document or statement
reckless as to whether the other person will or may rely
on the information in it.
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D, 1012DAA, 1012DA and 1012E.
(2) A person commits an offence if:
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Section 1021E
152 Corporations Act 2001
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(a) the person prepares (or has someone else prepare for them) a
disclosure document or statement (not being information
required by paragraph 1012G(3)(a)); and
(b) the person knows that the disclosure document or statement
is defective; and
(c) the person gives (see subsection (3)), or makes available to,
another person the disclosure document or statement,
reckless as to whether the other person, or someone else, will
or may give it, or make it available, to another person as
mentioned in subparagraph (1)(c)(i) or (ii).
(3) In this section, give means give by any means (including orally),
and is not limited to giving in accordance with section 1015C.
1021E Offence of preparer of defective disclosure document or
statement giving the document or statement (whether or
not known to be defective)
(1) A person commits an offence if:
(a) the person prepares (or has someone else prepare for them) a
disclosure document or statement (not being information
required by paragraph 1012G(3)(a)); and
(b) the disclosure document or statement is defective; and
(c) the person:
(i) gives (see subsection (5)) another person the disclosure
document or statement in circumstances in which it is
required by a provision of this Part to be given to the
other person; or
(ii) gives (see subsection (5)), or makes available to,
another person a disclosure document or statement,
reckless as to whether the other person will or may rely
on the information in it.
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D, 1012DAA, 1012DA and 1012E.
(2) A person commits an offence if:
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(a) the person prepares (or has someone else prepare for them) a
disclosure document or statement (not being information
required by paragraph 1012G(3)(a)); and
(b) the disclosure document or statement is defective; and
(c) the person gives (see subsection (5)), or makes available to,
another person the disclosure document or statement,
reckless as to whether the other person, or someone else, will
or may give it, or make it available, to another person as
mentioned in subparagraph (1)(c)(i) or (ii).
(3) For the purposes of an offence based on subsection (1) or (2), strict
liability applies to the physical element of the offence specified in
paragraph (1)(b) or (2)(b).
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) In any proceedings against a person for an offence based on
subsection (1) or (2), it is a defence if the person took reasonable
steps to ensure that the disclosure document or statement would not
be defective.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (4). See subsection 13.3(3) of the Criminal Code.
(5) In this section, give means give by any means (including orally),
and is not limited to giving in accordance with section 1015C.
1021F Offence of regulated person (other than preparer) giving
disclosure document or statement knowing it to be
defective
(1) A regulated person commits an offence if:
(a) another person prepares (or has someone else prepare for
them) a disclosure document or statement (not being
information required by paragraph 1012G(3)(a)); and
(b) the regulated person knows that the disclosure document or
statement is defective; and
(c) the regulated person:
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Section 1021FA
154 Corporations Act 2001
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(i) gives (see subsection (2)) another person the disclosure
document or statement in circumstances in which it is
required by a provision of this Part to be given to the
other person; or
(ii) gives (see subsection (2)), or makes available to,
another person the disclosure document or statement,
reckless as to whether the other person will or may rely
on the information in it.
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D, 1012DAA, 1012DA and 1012E.
(2) In this section, give means give by any means (including orally),
and is not limited to giving in accordance with section 1015C.
1021FA Paragraph 1012G(3)(a) obligation—offences relating to
communication of information
Offence where information known to be defective
(1) A person (the providing entity) commits an offence if:
(a) the providing entity communicates information required by
paragraph 1012G(3)(a) to another person in circumstances in
which the providing entity is required to do so; and
(b) the providing entity knows that the information is defective.
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D and 1012E.
Offence whether or not information known to be defective
(2) A person (the providing entity) commits an offence if:
(a) the providing entity communicates information required by
paragraph 1012G(3)(a) to another person in circumstances in
which the providing entity is required to do so; and
(b) the information is defective.
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D and 1012E.
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Section 1021FB
Corporations Act 2001 155
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(3) For the purposes of an offence based on subsection (2), strict
liability applies to the physical element of the offence specified in
paragraph (2)(b).
Note: For strict liability, see section 6.1 of the Criminal Code.
Defences
(4) In any proceedings against a person for an offence based on
subsection (1) or (2), it is a defence if the person took reasonable
steps to ensure that the information communicated would not be
defective.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (4). See subsection 13.3(3) of the Criminal Code.
(5) In any proceedings against a person for an offence based on
subsection (2), it is a defence if the information communicated was
defective because of information, or an omission from information,
provided to the person (whether in a document or otherwise) by the
issuer of the financial product concerned.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (5). See subsection 13.3(3) of the Criminal Code.
1021FB Paragraph 1012G(3)(a) obligation—offences relating to
information provided by product issuer for
communication by another person
Product issuer knows information is defective
(1) The issuer of a financial product commits an offence if:
(a) the issuer provides information (whether in a document or
otherwise) relating to the product to a person:
(i) for the purpose of the information being communicated
under paragraph 1012G(3)(a); or
(ii) knowing that it is likely that the information will be so
communicated; and
(b) the issuer knows that, if the person communicates the
provided information for the purpose of
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Section 1021FB
156 Corporations Act 2001
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paragraph 1012G(3)(a), the information communicated will
be defective.
Product issuer knows information is not all the required
information
(2) The issuer of a financial product commits an offence if:
(a) the issuer provides information (whether in a document or
otherwise) relating to the product to a person:
(i) for the purpose of it being communicated under
paragraph 1012G(3)(a); or
(ii) knowing that it is likely that it will be so communicated;
and
(b) the provided information relates to a matter or matters, but
the issuer knows that it is not all of the information relating
to the matter or matters that is required to be so
communicated; and
(c) the issuer is reckless as to whether the person will or may
communicate information for the purposes of
paragraph 1012G(3)(a) on the basis that the provided
information is all the information relating to the matter or
matters that is required to be so communicated.
Product issuer provides information that results in information
required by paragraph 1012G(3)(a) being defective
(3) The issuer of a financial product commits an offence if:
(a) the issuer provides information (whether in a document or
otherwise) relating to the product to a person:
(i) for the purpose of it being communicated under
paragraph 1012G(3)(a); or
(ii) knowing that it is likely that it will be so communicated;
and
(b) the person communicates the information for the purpose of
paragraph 1012G(3)(a); and
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(c) the information communicated is defective because it
includes the provided information (whether or not it is
defective for other reasons).
(4) For the purposes of an offence based on subsection (3), strict
liability applies to the physical element of the offence specified in
paragraph (3)(c).
Note: For strict liability, see section 6.1 of the Criminal Code.
Defence to subsection (3) offence
(5) In any proceedings against the issuer of a financial product for an
offence based on subsection (3), it is a defence if the issuer took
reasonable steps to ensure that the information they provided
would not be such as to make the information communicated for
the purpose of paragraph 1012G(3)(a) defective.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (5). See subsection 13.3(3) of the Criminal Code.
Product issuer does not provide all the required information
(6) The issuer of a financial product commits an offence if:
(a) the issuer provides information (whether in a document or
otherwise) relating to the product to a person:
(i) for the purpose of it being communicated under
paragraph 1012G(3)(a); or
(ii) knowing that it is likely that it will be so communicated;
and
(b) the provided information relates to a matter or matters, but it
is not all of the information relating to the matter or matters
that is required to be so communicated; and
(c) the person communicates information for the purpose of
paragraph 1012G(3)(a) on the basis that the provided
information is all the information relating to the matter or
matters that is required to be so communicated; and
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Section 1021G
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(d) the information communicated is defective because it
includes only that information about the matter or matters
(whether or not it is also defective for other reasons).
(7) For the purposes of an offence based on subsection (6), strict
liability applies to the physical elements of the offence specified in
paragraphs (6)(b) and (d).
Note: For strict liability, see section 6.1 of the Criminal Code.
Defence to subsection (6) offence
(8) In any proceedings against the issuer of a financial product for an
offence based on subsection (6), it is a defence if the issuer took
reasonable steps to ensure that the information they provided about
the matter or matters would be all the information about the matter
or matters that would be required by paragraph 1012G(3)(a) to be
communicated.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (8). See subsection 13.3(3) of the Criminal Code.
1021G Offence of financial services licensee failing to ensure
authorised representative gives etc. disclosure documents
or statements as required
A financial services licensee commits an offence if the licensee
does not take reasonable steps to ensure that an authorised
representative of the licensee complies with their obligations under
this Part to give or communicate disclosure documents or
statements as and when required by this Part.
1021H Offences if a Product Disclosure Statement (or
Supplementary PDS) does not comply with certain
requirements
(1) A person commits an offence if:
(a) the person prepares (or has someone else prepare for them) a
Product Disclosure Statement, a Supplementary Product
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Section 1021I
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Disclosure Statement or a Replacement Product Disclosure
Statement (the disclosure document); and
(b) the disclosure document does not comply with:
(i) if it is a Product Disclosure Statement—section 1013B
or 1013G or subsection 942DA(3); or
(ii) if it is a Supplementary Product Disclosure Statement—
section 1013G, 1014B or 1014C; or
(iii) if it is a Replacement Product Disclosure Statement—
subsection 942DA(3), section 1013G or
subsection 1014K(1), (2) or (3); and
(c) the person:
(i) gives (see subsection (3)) another person the disclosure
document in circumstances in which it is required by a
provision of this Part to be given to the other person; or
(ii) gives (see subsection (3)), or makes available to,
another person the disclosure document, reckless as to
whether the other person will or may rely on the
information in it; or
(iii) gives (see subsection (3)), or makes available to,
another person the disclosure document, reckless as to
whether the other person, or someone else, will or may
give it, or make it available, to another person as
mentioned in subparagraph (i) or (ii).
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D, 1012DAA, 1012DA and 1012E.
(2) For the purposes of an offence based on subsection (1), strict
liability applies to paragraph (b) of that subsection.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) In this section, give means give by any means (including orally),
and is not limited to giving in accordance with section 1015C.
1021I Offence of giving disclosure document or statement that has
not been prepared by the appropriate person
(1) A regulated person commits an offence if:
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Section 1021J
160 Corporations Act 2001
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(a) the regulated person:
(i) gives (see subsection (2)) another person a disclosure
document or statement (not being information required
by paragraph 1012G(3)(a)) in circumstances in which it
is required by a provision of this Part to be given to the
other person; or
(ii) gives (see subsection (2)), or makes available to,
another person a disclosure document or statement (not
being information required by paragraph 1012G(3)(a)),
reckless as to whether the other person will or may rely
on the information in it; and
(b) the disclosure document or statement has not been prepared
by, or on behalf of, the person required by section 1013A to
prepare it.
Note: A defendant bears an evidential burden in relation to the matters in
sections 1012D, 1012DAA, 1012DA and 1012E.
(2) In this section, give means give by any means (including orally),
and is not limited to giving in accordance with section 1015C.
1021J Offences if preparer etc. of disclosure document or statement
becomes aware that it is defective
(1) A person commits an offence if:
(a) the person prepares (or has someone else prepare for them) a
disclosure document or statement (not being information
required by paragraph 1012G(3)(a)); and
(b) the person becomes aware that the disclosure document or
statement is defective; and
(c) the person does not, as soon as practicable, take reasonable
steps to ensure that any regulated person to whom the
disclosure document or statement has been provided for
further distribution is given a direction that satisfies one of
more of the following subparagraphs:
(i) a direction not to distribute the disclosure document or
statement;
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Section 1021K
Corporations Act 2001 161
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(ii) if it is a Product Disclosure Statement—a direction not
to distribute the Product Disclosure Statement unless it
is accompanied by a Supplementary Product Disclosure
Statement that corrects the deficiency;
(iii) if it is a Product Disclosure Statement or a
Supplementary Product Disclosure Statement—a
direction not to distribute the Product Disclosure
Statement or Supplementary Product Disclosure
Statement without first altering it in a way that is
specified in the direction, being a way that corrects the
deficiency and that complies with section 1015E.
(2) A regulated person commits an offence if:
(a) the person is given a direction referred to in paragraph (1)(c);
and
(b) the person does not comply with the direction.
(3) A regulated person commits an offence if:
(a) a disclosure document or statement (not being information
required by paragraph 1012G(3)(a)) has been provided to the
person for distribution; and
(b) the person becomes aware that the disclosure document or
statement is defective; and
(c) the person does not take reasonable steps to notify the person
by whom, or on whose behalf, the disclosure document or
statement was prepared of the particulars of the deficiency.
(4) In this section, a reference to distributing a disclosure document or
statement includes (but is not limited to) giving the document or
statement to another person in purported compliance with a
requirement of this Part.
1021K Offence of unauthorised alteration of Product Disclosure
Statement (or Supplementary PDS)
(1) A person commits an offence if:
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Section 1021L
162 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the person engages in conduct that results in an alteration of a
Product Disclosure Statement or a Supplementary Product
Disclosure Statement that has been prepared by or on behalf
of another person (the responsible person); and
(b) the alteration results in the Product Disclosure Statement or
Supplementary Product Disclosure Statement becoming
defective, or more defective than it previously was; and
(c) the alteration is not made with the authority of the
responsible person; and
(d) either:
(i) the person, in purported compliance with a provision of
this Part, gives (see subsection (2)) the altered Product
Disclosure Statement or Supplementary Product
Disclosure Statement to another person; or
(ii) the person gives (see subsection (2)), or makes available
to, another person the altered Product Disclosure
Statement or Supplementary Product Disclosure
Statement, reckless as to whether the other person will
or may rely on the information in it; or
(iii) the person gives (see subsection (2)), or makes available
to, another person the altered Product Disclosure
Statement or Supplementary Product Disclosure
Statement, reckless as to whether the other person, or
someone else, will or may give it, or make it available,
to another person as mentioned in subparagraph (i) or
(ii).
(2) In this section, give means give by any means (including orally),
and is not limited to giving in accordance with section 1015C.
1021L Offences of giving, or failing to withdraw, consent to
inclusion of defective statement
(1) A person commits an offence if:
(a) they consent to the inclusion of a statement (the consented
material) in a Product Disclosure Statement or a
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Section 1021L
Corporations Act 2001 163
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Supplementary Product Disclosure Statement as mentioned
in paragraph 1013K(1)(a); and
(b) either:
(i) there is a misleading or deceptive statement in the
consented material; or
(ii) there is an omission of information from the consented
material; and
(c) the statement or omission is or would be materially adverse
from the point of view of a reasonable person considering
whether to proceed to acquire the financial product
concerned.
(2) A person commits an offence if:
(a) they consent to the inclusion of a statement (the consented
material) in a Product Disclosure Statement or a
Supplementary Product Disclosure Statement as mentioned
in paragraph 1013K(1)(a); and
(b) they become aware that either:
(i) there is a misleading or deceptive statement in the
consented material; or
(ii) there is an omission of information from the consented
material;
being a statement, or an omission, that:
(iii) is or would be materially adverse from the point of view
of a reasonable person considering whether to proceed
to acquire the financial product concerned; or
(iv) results in the Product Disclosure Statement or the
Supplementary Product Disclosure Statement being
defective, or more defective than it would otherwise be;
and
(c) they do not withdraw their consent after becoming aware of
the matter mentioned in paragraph (b).
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Division 7 Enforcement
Section 1021M
164 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1021M Offences relating to keeping and providing copies of Product
Disclosure Statements (or Supplementary PDSs)
Strict liability offence
(1) A person commits an offence if:
(a) the person is required by section 1015D:
(i) to notify ASIC that a Product Disclosure Statement or a
Supplementary Product Disclosure Statement is in use;
or
(ii) to keep a copy of a Product Disclosure Statement or a
Supplementary Product Disclosure Statement for a
particular period; or
(iii) to make a copy of a Product Disclosure Statement or a
Supplementary Product Disclosure Statement available
to ASIC; or
(iv) to comply with a request from a person for a copy of a
Product Disclosure Statement or a Supplementary
Product Disclosure Statement; and
(b) the person does not comply with that requirement.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Ordinary offence
(3) A person commits an offence if:
(a) the person is required by section 1015D:
(i) to notify ASIC that a Product Disclosure Statement or a
Supplementary Product Disclosure Statement is in use;
or
(ii) to keep a copy of a Product Disclosure Statement or a
Supplementary Product Disclosure Statement for a
particular period; or
(iii) to make a copy of a Product Disclosure Statement or a
Supplementary Product Disclosure Statement available
to ASIC; or
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Section 1021N
Corporations Act 2001 165
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(iv) to comply with a request from a person for a copy of a
Product Disclosure Statement or a Supplementary
Product Disclosure Statement; and
(b) the person does not comply with that requirement.
1021N Offence of failing to provide additional information
requested under section 1017A
A person (the responsible person) commits an offence if:
(a) a request is made to them by another person, in accordance
with subsection 1017A(1), to provide further information
about a financial product; and
(b) the responsible person is required by subsection 1017A(2) to
give the other person the information; and
(c) the other person has paid any charge in respect of the request,
being a charge that is in accordance with
subsections 1017A(5) and (6); and
(d) the responsible person does not take reasonable steps to
ensure that, as soon as practicable after receiving the request,
and in any event within one month, the information is
provided to the other person in accordance with
subsection 1017A(4).
1021NA Offences relating to obligation to make product dashboard
publicly available
Failure to comply with obligation to make product dashboard
publicly available
(1) A person commits an offence if:
(a) the person is a trustee of a regulated superannuation fund;
and
(b) as trustee, the person is required, under section 1017BA, to
ensure that a product dashboard for each of the fund’s
MySuper products and choice products is made publicly
available on the fund’s website; and
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Section 1021NA
166 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) a product dashboard for each of the fund’s MySuper products
and choice products is not made publicly available as
required by that section.
Offence where information known to be defective
(2) A person commits an offence if:
(a) the person is a trustee of a regulated superannuation fund;
and
(b) a product dashboard is made publicly available on the fund’s
website in purported compliance with section 1017BA; and
(c) the person knows that:
(i) the information set out in the product dashboard has not
been updated as required by that section; or
(ii) the information set out in the product dashboard is
otherwise misleading or deceptive; or
(iii) there is an omission from the information set out in the
product dashboard.
Offence whether or not information known to be defective
(3) A person commits an offence if:
(a) the person is a trustee of a regulated superannuation fund;
and
(b) a product dashboard is made publicly available on the fund’s
website in purported compliance with section 1017BA; and
(c) either:
(i) the information set out in the product dashboard has not
been updated as required by that section; or
(ii) the information set out in the product dashboard is
otherwise misleading or deceptive; or
(iii) there is an omission from the information set out in the
product dashboard.
(4) For the purposes of an offence based on subsection (3), strict
liability applies to the physical element of the offence specified in
any of subparagraphs (3)(c)(i) to (iii).
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Section 1021NA
Corporations Act 2001 167
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Note: For strict liability, see section 6.1 of the Criminal Code.
Defences
(5) In any proceedings against a trustee of a regulated superannuation
fund for an offence based on subparagraph (2)(c)(iii) or (3)(c)(iii),
it is a defence if:
(a) the trustee or another trustee of the fund took reasonable
steps to ensure that there would not be an omission from the
information set out in the product dashboard; or
(b) both of the following apply:
(i) the information was omitted because it was not up to
date;
(ii) the trustee or another trustee of the fund took reasonable
steps to obtain up-to-date information; or
(c) both of the following apply:
(i) the information was omitted because it would have been
misleading or deceptive;
(ii) the trustee or another trustee of the fund took reasonable
steps to obtain information that would not have been
misleading or deceptive.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (5). See subsection 13.3(3) of the Criminal Code.
(6) In any proceedings against a trustee of a regulated superannuation
fund for an offence based on subparagraph (3)(c)(i), it is a defence
if the trustee or another trustee of the fund took reasonable steps to
ensure that the information set out in the product dashboard was
updated as required by section 1017BA.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (6). See subsection 13.3(3) of the Criminal Code.
(7) In any proceedings against a trustee of a regulated superannuation
fund for an offence based on subparagraph (3)(c)(ii), it is a defence
if the trustee or another trustee of the fund took reasonable steps to
ensure that the information set out in the product dashboard would
not be misleading or deceptive.
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Section 1021NB
168 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: A defendant bears an evidential burden in relation to the matters in
subsection (7). See subsection 13.3(3) of the Criminal Code.
1021NB Offences relating to obligation to make superannuation
investment information publicly available
Failure to comply with obligation to make information publicly
available
(1) A person commits an offence if:
(a) the person is a trustee of a registrable superannuation entity;
and
(b) as trustee, the person is required, under section 1017BB, to
make information publicly available on the entity’s website;
and
(c) the information is not made publicly available as required by
that section.
Offence where information known to be defective
(2) A person commits an offence if:
(a) the person is a trustee of a registrable superannuation entity;
and
(b) as trustee, the person is required, under section 1017BB, to
make information publicly available; and
(c) information is made publicly available in purported
compliance with that requirement; and
(d) the trustee knows that:
(i) the information is misleading or deceptive; or
(ii) there is an omission from the information.
Offence whether or not information known to be defective
(3) A person commits an offence if:
(a) the person is a trustee of a registrable superannuation entity;
and
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(b) as trustee, the person is required, under section 1017BB, to
make information publicly available; and
(c) information is made publicly available in purported
compliance with that requirement; and
(d) either:
(i) the information is misleading or deceptive; or
(ii) there is an omission from the information.
(4) For the purposes of an offence based on subsection (3), strict
liability applies to the physical element of the offence specified in
subparagraph (3)(d)(i) or (ii).
Note: For strict liability, see section 6.1 of the Criminal Code.
Defences
(5) In any proceedings against a trustee of a registrable superannuation
entity for an offence based on subsection (1), it is a defence if the
information would have been made publicly available but for the
fact that the trustee or another trustee of the entity was unable to
obtain the information after taking reasonable steps to do so.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (5). See subsection 13.3(3) of the Criminal Code.
(6) In any proceedings against a trustee of a registrable superannuation
entity for an offence based on subparagraph (2)(d)(ii) or (3)(d)(ii),
it is a defence if:
(a) there was an omission from the information made publicly
available because the trustee or another trustee of the entity
was unable to obtain the information after taking reasonable
steps to do so; or
(b) both of the following apply:
(i) the information was omitted because it would have been
misleading or deceptive;
(ii) the trustee or another trustee of the entity took
reasonable steps to obtain information that would not
have been misleading or deceptive.
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Section 1021NC
170 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: A defendant bears an evidential burden in relation to the matters in
subsection (6). See subsection 13.3(3) of the Criminal Code.
(7) In any proceedings against a trustee of a registrable superannuation
entity for an offence based on subparagraph (3)(d)(i), it is a
defence if the trustee or another trustee of the entity took
reasonable steps to ensure that the information made publicly
available would not be misleading or deceptive.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (7). See subsection 13.3(3) of the Criminal Code.
1021NC Offences relating to obligations under sections 1017BC,
1017BD and 1017BE
Failure to notify
(1) A person commits an offence if:
(a) the person is required to notify another person under
subsection 1017BC(2) or (4) or section 1017BD or 1017BE;
and
(b) the person does not notify, and is not taken to have notified,
the other person as required by that provision.
Failure to provide information
(2) A person commits an offence if:
(a) the person is required to provide another person with
information under subsection 1017BC(3); and
(b) the person does not provide the other person with the
information as required by that subsection.
Information provided known to be defective
(3) A person commits an offence if:
(a) the person:
(i) notifies another person of information as required by
subsection 1017BC(2) or (4) or section 1017BD or
1017BE; or
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(ii) provides information (whether in a document or
otherwise) to another person as required by
subsection 1017BC(3); and
(b) the person knows that:
(i) the information provided is misleading or deceptive; or
(ii) there is an omission from the information provided.
Information provided defective
(4) A person commits an offence if:
(a) the person:
(i) notifies another person of information as required by
subsection 1017BC(2) or (4) or section 1017BD or
1017BE; or
(ii) provides information (whether in a document or
otherwise) to another person as required by
subsection 1017BC(3); and
(b) either:
(i) the information provided is misleading or deceptive; or
(ii) there is an omission from the information provided.
(5) For the purposes of an offence based on subsection (4), strict
liability applies to the physical element of the offence specified in
subparagraph (4)(b)(i) or (ii).
Note: For strict liability, see section 6.1 of the Criminal Code.
Defences
(6) In any proceedings against a person for an offence based on
subparagraph (3)(b)(ii) or (4)(b)(ii), it is a defence if:
(a) the person took reasonable steps to ensure that there would
not be an omission from the information provided; or
(b) both of the following apply:
(i) the information was omitted because it would have been
misleading or deceptive;
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Section 1021O
172 Corporations Act 2001
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(ii) the person took reasonable steps to obtain information
that would not have been misleading or deceptive.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (6). See subsection 13.3(3) of the Criminal Code.
(7) In any proceedings against a person for an offence based on
subparagraph (4)(b)(i), it is a defence if the person took reasonable
steps to ensure that the information provided would not be
misleading or deceptive.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (7). See subsection 13.3(3) of the Criminal Code.
1021O Offences of issuer or seller of financial product failing to pay
money into an account as required
Strict liability offence
(1) An issuer or seller of financial products commits an offence if:
(a) the issuer or seller is required by subsection 1017E(2) to pay
particular money into an account in accordance with that
subsection; and
(b) the issuer or seller does not pay the money into an account in
accordance with that subsection.
(2) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Ordinary offence
(3) An issuer or seller of financial products commits an offence if:
(a) the issuer or seller is required by subsection 1017E(2) to pay
particular money into an account in accordance with that
subsection; and
(b) the issuer or seller does not pay the money into an account in
accordance with that subsection.
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Section 1021P
Corporations Act 2001 173
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1021P Offences relating to offers to which Division 5A applies
Failure to comply with requirements of section 1019E relating to
how offers are made
(1) A person commits an offence if:
(a) the person makes an offer; and
(b) the offer is an offer to which Division 5A applies (see
section 1019D); and
(c) in making the offer, the person fails to comply with a
requirement of section 1019E.
Contravening section 1019F by inviting offers to sell
(2) A person commits an offence if:
(a) the person invites another person to make an offer to sell a
financial product; and
(b) in making the invitation, the person contravenes
section 1019F.
Failure to comply with requirements of section 1019G relating to
duration and withdrawal of offers
(3) A person commits an offence if:
(a) the person makes an offer; and
(b) the offer is an offer to which Division 5A applies (see
section 1019D); and
(c) any of the following apply:
(i) the offer does not remain open for the period required
by paragraph 1019G(1)(a);
(ii) the offer remains open for longer than is permitted by
paragraph 1019G(1)(b);
(iii) in purporting to withdraw the offer, the person fails to
comply with a requirement of subsection 1019G(2) or
(3).
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Section 1021P
174 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Failure to comply with requirements of section 1019I relating to
price or value
(4) A person commits an offence if:
(a) the person makes an offer; and
(b) the offer is an offer to which Division 5A applies (see
section 1019D); and
(c) the person gives the offeree an offer document; and
(d) either:
(i) the offer document does not comply with
paragraph 1019I(2)(a), (b) or (c); or
(ii) material of a kind referred to in paragraph 1019I(2)(a),
(b) or (c) that is included in the offer document is
misleading or deceptive.
Failure to comply with other requirements of section 1019I
(5) A person commits an offence if:
(a) the person makes an offer; and
(b) the offer is an offer to which Division 5A applies (see
section 1019D); and
(c) the person gives the offeree an offer document; and
(d) either:
(i) the offer document does not comply with
subsection 1019I(1), or paragraph 1019I(2)(d), (e) or
(f); or
(ii) material of a kind referred to in subsection 1019I(1), or
paragraph 1019I(2)(d), (e) or (f), that is included in the
offer document is misleading or deceptive.
Failure to comply with requirements of section 1019J
(6) A person commits an offence if:
(a) the person makes an offer; and
(b) the offer is an offer to which Division 5A applies (see
section 1019D); and
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(c) section 1019J applies because of an increase or decrease in
the market value of the financial product to which the offer
relates; and
(d) one of the following subparagraphs applies:
(i) the person fails to comply with subsection 1019J(2) in
relation to that increase or decrease; or
(ii) the person gives the offeree a supplementary offer
document in relation to that increase or decrease, but
that document does not comply with
subsection 1019J(3); or
(iii) the person gives the offeree a supplementary offer
document in relation to that increase or decrease, but
material of a kind referred to in subsection 1019J(3) that
is included in that document is misleading or deceptive.
Subdivision B—Civil liability
1022A Definitions
(1) In this Subdivision:
defective, in relation to a disclosure document or statement, means:
(a) there is a misleading or deceptive statement in the disclosure
document or statement; or
(b) if it is a Product Disclosure Statement—there is an omission
from the Product Disclosure Statement of material required
by section 1013C, other than material required by
section 1013B or 1013G; or
(c) if it is a Supplementary Product Disclosure Statement that is
given for the purposes of section 1014E—there is an
omission from the Supplementary Product Disclosure
Statement of material required by that section; or
(d) if it is information required by paragraph 1012G(3)(a)—there
is an omission from the information of material required by
that paragraph; or
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Section 1022A
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(e) if it is an offer document of a kind referred to in
section 1019E—there is an omission from the document of
material required by section 1019I; or
(f) if it is a supplementary offer document of a kind referred to
in section 1019J—there is an omission from the document of
material required by subsection 1019J(3).
Note: In determining whether a Product Disclosure Statement is defective,
the effect of section 1014D must be taken into account (section 1014D
takes information and statements in a Supplementary Product
Disclosure Statement to be included in the Product Disclosure
Statement it supplements).
disclosure document or statement means:
(a) a Product Disclosure Statement; or
(b) a Supplementary Product Disclosure Statement; or
(c) information required by paragraph 1012G(3)(a); or
(d) an offer document of a kind referred to in section 1019E; or
(e) a supplementary offer document of a kind referred to in
section 1019J.
regulated person has the same meaning as it has in Division 2.
(1A) For the avoidance of doubt, if section 1012J (information must be
up to date) is not complied with in relation to a Product Disclosure
Statement, then, for the purposes of the definition of defective in
subsection (1):
(a) if the circumstance constituting the non-compliance is that
particular information included in the Product Disclosure
Statement is not as up to date as section 1012J requires it to
be—the information so included constitutes a misleading
statement in the Product Disclosure Statement; and
(b) if the circumstance constituting the non-compliance is a
failure to include particular information that was not
previously required to be included in the Product Disclosure
Statement—the failure to include the information constitutes
an omission from the Statement of material required by
section 1013C.
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Section 1022B
Corporations Act 2001 177
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: The effect of section 1014D (information in a Supplementary Product
Disclosure Statement is taken to be contained in the Product
Disclosure Statement it supplements) must be taken into account in
determining whether section 1012J is complied with in relation to a
Product Disclosure Statement.
(2) In this Subdivision, a reference (including in the definitions in
subsection (1)) to a document or statement, or to information, of a
kind referred to in a paragraph of the definition of disclosure
document or statement in subsection (1) includes a reference to
something purporting to be a document or statement, or to be
information, of that kind.
1022B Civil action for loss or damage
(1) This section applies in the following situations:
(a) a person:
(i) is required by a provision of this Part to give another
person (the client) a Product Disclosure Statement or a
Supplementary Product Disclosure Statement (the
required disclosure document or statement); and
(ii) does not give (in accordance with section 1015C) the
client anything purporting to be the required disclosure
document or statement by the time they are required to
do so; or
(aa) a person makes an offer to which Division 5A applies (see
section 1019D) to another person (the client) otherwise than
by sending the client an offer document in accordance with
section 1019E; or
(ab) a person makes an invitation prohibited by section 1019F to
another person (the client); or
(ac) a person:
(i) is required by subsection 1019J(2), in relation to an
offer made to another person (the client), to send the
client a withdrawal document or a supplementary offer
document; and
(ii) does not send (in accordance with paragraphs
1019E(1)(a) and (b)) the client anything purporting to
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be either of those things by the time they are required to
do so; or
(b) a person:
(i) is required by paragraph 1012G(3)(a) to orally
communicate information (the required disclosure
document or statement) to another person (the client);
and
(ii) does not orally communicate to the other person
anything purporting to be the information required by
that paragraph by the time they are required to do so; or
(c) a person:
(i) gives another person (the client) a disclosure document
or statement (other than an offer document of a kind
referred to in section 1019E or a supplementary offer
document of a kind referred to in section 1019J) that is
defective in circumstances in which a disclosure
document or statement is required by a provision of this
Part to be given to the client; or
(ia) makes an offer to which Division 5A applies (see
section 1019D) by sending another person (the client)
an offer document in accordance with section 1019E,
but that offer document is defective; or
(ib) in a situation to which section 1019J applies, sends a
person (the client) a supplementary offer document in
accordance with that section but that supplementary
offer document is defective; or
(ii) is a regulated person and gives, or makes available to,
another person (the client) a disclosure document or
statement, being a Product Disclosure Statement or a
Supplementary Product Disclosure Statement, that is
defective, reckless as to whether the client will or may
rely on the information in it; or
(d) a person:
(i) gives consent to the inclusion of a statement in a
Product Disclosure Statement or a Supplementary
Product Disclosure Statement as mentioned in
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subsection 1021L(1), disregarding
paragraph 1021L(1)(c); or
(ii) does not take reasonable steps to withdraw such a
statement as mentioned in subsection 1021L(2),
disregarding subparagraphs 1021L(2)(b)(iii) and (iv); or
(e) a person contravenes section 1017B or 1017D; or
(f) a person is required by section 1017BA to make information
publicly available on a regulated superannuation fund’s
website and any of the following circumstances apply:
(i) the information is not made publicly available as
required by that section;
(ii) the information made publicly available is not updated
as required by that section;
(iii) the information made publicly available is misleading or
deceptive;
(iv) there is an omission from the information made publicly
available; or
(g) a person is required by section 1017BB to make information
publicly available on a registrable superannuation entity’s
website and any of the following circumstances apply:
(i) the information is not made publicly available as
required by that section;
(ii) the information made publicly available is misleading or
deceptive;
(iii) there is an omission from the information made publicly
available; or
(h) a person is required by subsection 1017BC(3) to provide
information to another person and any of the following
circumstances apply:
(i) the person does not provide the information as required
by that subsection;
(ii) the information provided is misleading or deceptive;
(iii) there is an omission from the information provided.
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Section 1022B
180 Corporations Act 2001
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In paragraph (c), give means give by any means (including orally),
and is not limited to giving in accordance with section 1015C or
paragraph 1012G(3)(a).
(2) In a situation to which this section applies, if a person suffers loss
or damage:
(a) if paragraph (1)(a) applies—because the client was not given
the disclosure document or statement that they should have
been given; or
(aa) if paragraph (1)(aa) applies—because the client was not sent
an offer document in accordance with section 1019E; or
(ab) if paragraph (1)(ab) applies—because the client received an
invitation prohibited by section 1019F rather than being sent
an offer document in accordance with section 1019E; or
(ac) if paragraph (1)(ac) applies—because the client was not sent
a withdrawal document or a supplementary offer document
as required by subsection 1019J(2); or
(b) if paragraph (1)(b) applies—because the information required
by paragraph 1012G(3)(a) was not communicated to the
client; or
(c) if paragraph (1)(c) applies—because the disclosure document
or statement the client was given or sent was defective; or
(d) if paragraph (1)(d) applies—because the consent referred to
in that paragraph was given, or was not withdrawn, as the
case requires; or
(e) if paragraph (1)(e) applies—because of the contravention
referred to in that paragraph; or
(f) if paragraph (1)(f), (g) or (h) apply—because of any of the
circumstances mentioned in those paragraphs;
the person may recover the amount of the loss or damage by action
against the, or a, liable person (see subsections (3) to (5)), whether
or not that person (or anyone else) has been convicted of an
offence in respect of the matter referred to in paragraph (a), (aa),
(ab), (ac), (b), (c), (d), (e) or (f).
(3) For the purposes of subsection (2), the, or a, liable person is:
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(a) if paragraph (1)(a), (aa), (ab), (ac) or (b) applies—subject to
subsection (4), the person first-referred to in that paragraph;
or
(aa) if paragraph (1)(c) applies and the disclosure document or
statement is information required by
paragraph 1012G(3)(a)—subject to subsection (5A), the
person first-referred to in paragraph (1)(c) of this section; or
(b) if paragraph (1)(c) (other than subparagraph (1)(c)(ia) or (ib))
applies and the disclosure document or statement is not
information required by paragraph 1012G(3)(a)—subject to
subsection (5):
(i) the person by whom, or on whose behalf, the disclosure
document or statement was prepared; and
(ii) each other person involved in the preparation of the
disclosure document or statement who, directly or
indirectly, caused the disclosure document or statement
to be defective or contributed to it being defective; or
(ba) if subparagraph (1)(c)(ia) or (ib) applies—the person who
made the offer; or
(c) if paragraph (1)(d) applies—the person who gave the
consent; or
(d) if paragraph (1)(e) applies—the person who contravened the
provision concerned; or
(e) if paragraph (1)(f) applies—the trustee, or the trustees, of the
regulated superannuation fund on whose website the
information was required to be made publicly available; or
(f) if paragraph (1)(g) applies—the trustee, or the trustees, of the
registrable superannuation entity on whose website the
information was required to be made publicly available; or
(g) if paragraph (1)(h) applies—the person who was required to
provide the information.
(4) If paragraph (1)(a) or (b) applies, or paragraph (1)(c) applies so far
as it relates to information required by paragraph 1012G(3)(a), and
the person who would, but for this subsection, be the liable person
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Section 1022B
182 Corporations Act 2001
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is an authorised representative, the authorised representative is not
the liable person and the following paragraphs apply:
(a) if the authorised representative is an authorised representative
of only one financial services licensee—that financial
services licensee is the liable person;
(b) if the authorised representative is an authorised representative
of more than one financial services licensee:
(i) if, under the rules in section 917C, one of those
licensees is responsible for the person’s conduct—that
licensee is the (or a) liable person; or
(ii) if, under the rules in section 917C, 2 or more of those
licensees are jointly and severally responsible for the
person’s conduct—each of those licensees is a liable
person.
(4A) For the purposes of paragraph (4)(b):
(a) section 917C is taken to apply, despite section 917F; and
(b) section 917D is taken not to apply.
(5) If:
(a) paragraph (1)(c) (other than subparagraph (1)(c)(ia) or (ib))
applies; and
(b) an alteration was made to the disclosure document or
statement (not being information required by
paragraph 1012G(3)(a)) before it was given to the client; and
(c) the alteration made the disclosure document or statement
defective, or more defective than it would otherwise have
been; and
(d) the alteration was not made by, or with the authority of, the
person who would, but for this subsection, be a liable person
because of subparagraph (3)(b)(i);
then, so far as a person has suffered loss or damage because the
disclosure document or statement was defective because of the
alteration, the person who made the alteration is a liable person,
rather than the person referred to in paragraph (d).
(5A) If:
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(a) paragraph (3)(aa) applies; and
(b) the person referred to in that paragraph is not the issuer, or an
authorised representative of the issuer, of the financial
product to which the required disclosure document or
statement relates; and
(c) the required disclosure document or statement was defective
because of information, or an omission from information,
provided to that person (whether in a document or otherwise)
by the issuer of the product;
the issuer of the product is the liable person, rather than the person
who would otherwise be the liable person because of
paragraph (3)(aa) or subsection (4).
(6) An action under subsection (2) may be begun at any time within 6
years after the day on which the cause of action arose.
(7) A person is not liable under subsection (2) in a situation described
in paragraph (1)(c) if the person took reasonable steps to ensure
that the disclosure document or statement would not be defective.
(7A) If subsection (5A) applies, the issuer of the financial product is not
liable under subsection (2) if the issuer took reasonable steps to
ensure that the information provided as mentioned in
paragraph (5A)(c) would not be such as to make the required
disclosure document or statement defective.
(7B) A person is not liable under subsection (2) in a situation described
in subparagraph (1)(f)(iii), (g)(ii) or (h)(ii) if the person took
reasonable steps to ensure that the information would not be
misleading or deceptive.
(7C) A person is not liable under subsection (2) in a situation described
in subparagraph (1)(f)(iv), (g)(iii) or (h)(iii) if the person took
reasonable steps to ensure that there would not be an omission
from the information.
(8) This section does not affect any liability that a person has under
any other law.
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Division 7 Enforcement
Section 1022C
184 Corporations Act 2001
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1022C Additional powers of court to make orders
(1) The court dealing with an action under subsection 1022B(2) may,
in addition to awarding loss or damage under that subsection and if
it thinks it necessary in order to do justice between the parties:
(a) make an order declaring void a contract entered into by the
client referred to in that subsection for or relating to a
financial product or a financial service; and
(b) if it makes an order under paragraph (a)—make such other
order or orders as it thinks are necessary or desirable because
of that order.
(2) Without limiting paragraph (1)(b), the orders that may be made
under that paragraph include (but are not limited to) an order for
the return of money paid by a person, and/or an order for payment
of an amount of interest specified in, or calculated in accordance
with, the order.
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Preliminary Division 1
Section 1040A
Corporations Act 2001 185
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Part 7.10—Market misconduct and other
prohibited conduct relating to financial
products and financial services
Division 1—Preliminary
1040A Content of Part
This Part deals in Division 2 with various kinds of prohibited
conduct, other than insider trading. The insider trading prohibitions
are contained in Division 3.
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Division 2 The prohibited conduct (other than insider trading prohibitions)
Section 1041A
186 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—The prohibited conduct (other than insider
trading prohibitions)
1041A Market manipulation
A person must not take part in, or carry out (whether directly or
indirectly and whether in this jurisdiction or elsewhere):
(a) a transaction that has or is likely to have; or
(b) 2 or more transactions that have or are likely to have;
the effect of:
(c) creating an artificial price for trading in financial products on
a financial market operated in this jurisdiction; or
(d) maintaining at a level that is artificial (whether or not it was
previously artificial) a price for trading in financial products
on a financial market operated in this jurisdiction.
Note 1: Failure to comply with this section is an offence (see
subsection 1311(1)).
Note 2: This section is also a civil penalty provision (see section 1317E). For
relief from liability to a civil penalty relating to this section, see
section 1317S.
1041B False trading and market rigging—creating a false or
misleading appearance of active trading etc.
(1) A person must not do, or omit to do, an act (whether in this
jurisdiction or elsewhere) if that act or omission has or is likely to
have the effect of creating, or causing the creation of, a false or
misleading appearance:
(a) of active trading in financial products on a financial market
operated in this jurisdiction; or
(b) with respect to the market for, or the price for trading in,
financial products on a financial market operated in this
jurisdiction.
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Corporations Act 2001 187
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Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)). For defences to a prosecution based on this
subsection, see Division 4.
Note 2: This subsection is also a civil penalty provision (see section 1317E).
For relief from liability to a civil penalty relating to this subsection,
see Division 4 and section 1317S.
(1A) For the purposes of the application of the Criminal Code in relation
to an offence based on subsection (1):
(a) intention is the fault element for the physical element
consisting of doing or omitting to do an act as mentioned in
that subsection; and
(b) recklessness is the fault element for the physical element
consisting of having, or being likely to have, the effect of
creating, or causing the creation of, a false or misleading
appearance as mentioned in that subsection.
Note 1: For intention, see section 5.2 of the Criminal Code.
Note 2: For recklessness, see section 5.4 of the Criminal Code.
(2) For the purposes of subsection (1), a person is taken to have
created a false or misleading appearance of active trading in
particular financial products on a financial market if the person:
(a) enters into, or carries out, either directly or indirectly, any
transaction of acquisition or disposal of any of those financial
products that does not involve any change in the beneficial
ownership of the products; or
(b) makes an offer (the regulated offer) to acquire or to dispose
of any of those financial products in the following
circumstances:
(i) the offer is to acquire or to dispose of at a specified
price; and
(ii) the person has made or proposes to make, or knows that
an associate of the person has made or proposes to
make:
(A) if the regulated offer is an offer to acquire—an
offer to dispose of; or
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Division 2 The prohibited conduct (other than insider trading prohibitions)
Section 1041C
188 Corporations Act 2001
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(B) if the regulated offer is an offer to dispose of—
an offer to acquire;
the same number, or substantially the same number, of
those financial products at a price that is substantially
the same as the price referred to in subparagraph (i).
Note: The circumstances in which a person creates a false or misleading
appearance of active trading in particular financial products on a
financial market are not limited to the circumstances set out in this
subsection.
(3) For the purposes of paragraph (2)(a), an acquisition or disposal of
financial products does not involve a change in the beneficial
ownership if:
(a) a person who had an interest in the financial products before
the acquisition or disposal; or
(b) an associate of such a person;
has an interest in the financial products after the acquisition or
disposal.
(4) The reference in paragraph (2)(a) to a transaction of acquisition or
disposal of financial products includes:
(a) a reference to the making of an offer to acquire or dispose of
financial products; and
(b) a reference to the making of an invitation, however
expressed, that expressly or impliedly invites a person to
offer to acquire or dispose of financial products.
1041C False trading and market rigging—artificially maintaining
etc. trading price
(1) A person must not (whether in this jurisdiction or elsewhere) enter
into, or engage in, a fictitious or artificial transaction or device if
that transaction or device results in:
(a) the price for trading in financial products on a financial
market operated in this jurisdiction being maintained, inflated
or depressed; or
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Corporations Act 2001 189
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(b) fluctuations in the price for trading in financial products on a
financial market operated in this jurisdiction.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)). For defences to a prosecution based on this
subsection, see Division 4.
Note 2: This subsection is also a civil penalty provision (see section 1317E).
For relief from liability to a civil penalty relating to this subsection,
see Division 4 and section 1317S.
(2) In determining whether a transaction is fictitious or artificial for the
purposes of subsection (1), the fact that the transaction is, or was at
any time, intended by the parties who entered into it to have effect
according to its terms is not conclusive.
1041D Dissemination of information about illegal transactions
A person must not (whether in this jurisdiction or elsewhere)
circulate or disseminate, or be involved in the circulation or
dissemination of, any statement or information to the effect that the
price for trading in financial products on a financial market
operated in this jurisdiction will, or is likely to, rise or fall, or be
maintained, because of a transaction, or other act or thing done, in
relation to those financial products, if:
(a) the transaction, or thing done, constitutes or would constitute
a contravention of section 1041A, 1041B, 1041C, 1041E or
1041F; and
(b) the person, or an associate of the person:
(i) has entered into such a transaction or done such an act
or thing; or
(ii) has received, or may receive, directly or indirectly, a
consideration or benefit for circulating or disseminating,
or authorising the circulation or dissemination of, the
statement or information.
Note 1: Failure to comply with this section is an offence (see
subsection 1311(1)). For defences to a prosecution based on this
section, see Division 4.
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Division 2 The prohibited conduct (other than insider trading prohibitions)
Section 1041E
190 Corporations Act 2001
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Note 2: This section is also a civil penalty provision (see section 1317E). For
relief from liability to a civil penalty relating to this section, see
Division 4 and section 1317S.
1041E False or misleading statements
(1) A person must not (whether in this jurisdiction or elsewhere) make
a statement, or disseminate information, if:
(a) the statement or information is false in a material particular
or is materially misleading; and
(b) the statement or information is likely:
(i) to induce persons in this jurisdiction to apply for
financial products; or
(ii) to induce persons in this jurisdiction to dispose of or
acquire financial products; or
(iii) to have the effect of increasing, reducing, maintaining
or stabilising the price for trading in financial products
on a financial market operated in this jurisdiction; and
(c) when the person makes the statement, or disseminates the
information:
(i) the person does not care whether the statement or
information is true or false; or
(ii) the person knows, or ought reasonably to have known,
that the statement or information is false in a material
particular or is materially misleading.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)). For defences to a prosecution based on this
subsection, see Division 4.
Note 2: Failure to comply with this subsection may also lead to civil liability
under section 1041I. For relief from liability under that section, see
Division 4.
(2) For the purposes of the application of the Criminal Code in relation
to an offence based on subsection (1), paragraph (1)(a) is a
physical element, the fault element for which is as specified in
paragraph (1)(c).
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The prohibited conduct (other than insider trading prohibitions) Division 2
Section 1041F
Corporations Act 2001 191
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(3) For the purposes of an offence based on subsection (1), strict
liability applies to subparagraphs (1)(b)(i), (ii) and (iii).
Note: For strict liability, see section 6.1 of the Criminal Code.
1041F Inducing persons to deal
(1) A person must not, in this jurisdiction, induce another person to
deal in financial products:
(a) by making or publishing a statement, promise or forecast if
the person knows, or is reckless as to whether, the statement
is misleading, false or deceptive; or
(b) by a dishonest concealment of material facts; or
(c) by recording or storing information that the person knows to
be false or misleading in a material particular or materially
misleading if:
(i) the information is recorded or stored in, or by means of,
a mechanical, electronic or other device; and
(ii) when the information was so recorded or stored, the
person had reasonable grounds for expecting that it
would be available to the other person, or a class of
persons that includes the other person.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)). For defences to a prosecution based on this
subsection, see Division 4.
Note 2: Failure to comply with this subsection may also lead to civil liability
under section 1041I. For relief from liability under that section, see
Division 4.
(2) In this section:
dishonest means:
(a) dishonest according to the standards of ordinary people; and
(b) known by the person to be dishonest according to the
standards of ordinary people.
(3) This section applies in relation to the following conduct as if that
conduct were dealing in financial products:
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Division 2 The prohibited conduct (other than insider trading prohibitions)
Section 1041G
192 Corporations Act 2001
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(a) applying to become a standard employer-sponsor (within the
meaning of the Superannuation Industry (Supervision) Act
1993) of a superannuation entity (within the meaning of that
Act);
(b) permitting a person to become a standard employer-sponsor
(within the meaning of the Superannuation Industry
(Supervision) Act 1993) of a superannuation entity (within
the meaning of that Act);
(c) applying, on behalf of an employee (within the meaning of
the Retirement Savings Accounts Act 1997), for the employee
to become the holder of an RSA product.
1041G Dishonest conduct
(1) A person must not, in the course of carrying on a financial services
business in this jurisdiction, engage in dishonest conduct in relation
to a financial product or financial service.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Note 2: Failure to comply with this subsection may also lead to civil liability
under section 1041I.
(2) In this section:
dishonest means:
(a) dishonest according to the standards of ordinary people; and
(b) known by the person to be dishonest according to the
standards of ordinary people.
1041H Misleading or deceptive conduct (civil liability only)
(1) A person must not, in this jurisdiction, engage in conduct, in
relation to a financial product or a financial service, that is
misleading or deceptive or is likely to mislead or deceive.
Note 1: Failure to comply with this subsection is not an offence.
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Section 1041H
Corporations Act 2001 193
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Note 2: Failure to comply with this subsection may lead to civil liability under
section 1041I. For limits on, and relief from, liability under that
section, see Division 4.
(2) The reference in subsection (1) to engaging in conduct in relation
to a financial product includes (but is not limited to) any of the
following:
(a) dealing in a financial product;
(b) without limiting paragraph (a):
(i) issuing a financial product;
(ii) publishing a notice in relation to a financial product;
(iii) making, or making an evaluation of, an offer under a
takeover bid or a recommendation relating to such an
offer;
(iv) applying to become a standard employer-sponsor
(within the meaning of the Superannuation Industry
(Supervision) Act 1993) of a superannuation entity
(within the meaning of that Act);
(v) permitting a person to become a standard
employer-sponsor (within the meaning of the
Superannuation Industry (Supervision) Act 1993) of a
superannuation entity (within the meaning of that Act);
(vi) a trustee of a superannuation entity (within the meaning
of the Superannuation Industry (Supervision) Act 1993)
dealing with a beneficiary of that entity as such a
beneficiary;
(vii) a trustee of a superannuation entity (within the meaning
of the Superannuation Industry (Supervision) Act 1993)
dealing with an employer-sponsor (within the meaning
of that Act), or an associate (within the meaning of that
Act) of an employer-sponsor, of that entity as such an
employer-sponsor or associate;
(viii) applying, on behalf of an employee (within the meaning
of the Retirement Savings Accounts Act 1997), for the
employee to become the holder of an RSA product;
(ix) an RSA provider (within the meaning of the Retirement
Savings Accounts Act 1997) dealing with an employer
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products and financial services
Division 2 The prohibited conduct (other than insider trading prohibitions)
Section 1041I
194 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(within the meaning of that Act), or an associate (within
the meaning of that Act) of an employer, who makes an
application, on behalf of an employee (within the
meaning of that Act) of the employer, for the employee
to become the holder of an RSA product, as such an
employer;
(x) carrying on negotiations, or making arrangements, or
doing any other act, preparatory to, or in any way
related to, an activity covered by any of
subparagraphs (i) to (ix).
(3) Conduct:
(a) that contravenes:
(i) section 670A (misleading or deceptive takeover
document); or
(ii) section 728 (misleading or deceptive fundraising
document); or
(iii) section 1021NA, 1021NB or 1021NC; or
(b) in relation to a disclosure document or statement within the
meaning of section 953A; or
(c) in relation to a disclosure document or statement within the
meaning of section 1022A;
does not contravene subsection (1). For this purpose, conduct
contravenes the provision even if the conduct does not constitute
an offence, or does not lead to any liability, because of the
availability of a defence.
1041I Civil action for loss or damage for contravention of
sections 1041E to 1041H
(1) A person who suffers loss or damage by conduct of another person
that was engaged in in contravention of section 1041E, 1041F,
1041G or 1041H may recover the amount of the loss or damage by
action against that other person or against any person involved in
the contravention, whether or not that other person or any person
involved in the contravention has been convicted of an offence in
respect of the contravention.
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Section 1041I
Corporations Act 2001 195
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(1A) Subsection (1) has effect subject to section 1044B.
Note: Section 1044B may limit the amount that the person may recover for a
contravention of section 1041H (Misleading or deceptive conduct)
from the other person or from another person involved in the
contravention.
(1B) Despite subsection (1), if:
(a) a person (the claimant) makes a claim under subsection (1)
in relation to:
(i) economic loss; or
(ii) damage to property;
caused by conduct of another person (the defendant) that was
done in contravention of section 1041H; and
(b) the claimant suffered the loss or damage:
(i) as a result partly of the claimant’s failure to take
reasonable care; and
(ii) as a result partly of the conduct referred to in
paragraph (a); and
(c) the defendant:
(i) did not intend to cause the loss or damage; and
(ii) did not fraudulently cause the loss or damage;
the damages that the claimant may recover in relation to the loss or
damage are to be reduced to the extent to which the court thinks
just and equitable having regard to the claimant’s share in the
responsibility for the loss or damage.
Note: Division 2A also applies proportionate liability to a claim for damages
under this section for a contravention of section 1041H.
(2) An action under subsection (1) may be begun at any time within 6
years after the day on which the cause of action arose.
(3) This section does not affect any liability that a person has under
any other law.
(4) Section 1317S (which provides for relief from liability) applies in
relation to liability under subsection (1) as if:
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Division 2 The prohibited conduct (other than insider trading prohibitions)
Section 1041J
196 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) the sections referred to in subsection (1) were civil penalty
provisions; and
(b) proceedings under subsection (1) were eligible proceedings.
Note: Relief from liability under this section may also be available
(depending on the circumstances) under Division 4.
1041J Sections of this Division have effect independently of each
other
Subject to any express provision to the contrary, the various
sections in this Division have effect independently of each other,
and nothing in any of the sections limits the scope or application of
any of the other sections.
1041K Division applies to certain conduct to the exclusion of State
Fair Trading Acts provisions
(1) This section applies to conduct:
(a) that contravenes:
(i) section 670A (misleading or deceptive takeover
document); or
(ii) section 728 (misleading or deceptive fundraising
document); or
(iii) section 1021NA, 1021NB or 1021NC; or
(b) that relates to a disclosure document or statement within the
meaning of section 953A; or
(c) that relates to a disclosure document or statement within the
meaning of section 1022A.
For this purpose, conduct contravenes the provision even if the
conduct does not constitute an offence, or does not lead to any
liability, because of the availability of a defence.
(2) This Division operates in relation to conduct to which this section
applies to the exclusion of the provisions of the State Fair Trading
Act of any State or Territory.
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Section 1041L
Corporations Act 2001 197
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2A—Proportionate liability for misleading and
deceptive conduct
1041L Application of Division
(1) This Division applies to a claim (an apportionable claim) if the
claim is a claim for damages made under section 1041I for:
(a) economic loss; or
(b) damage to property;
caused by conduct that was done in a contravention of
section 1041H.
(2) For the purposes of this Division, there is a single apportionable
claim in proceedings in respect of the same loss or damage even if
the claim for the loss or damage is based on more than one cause of
action (whether or not of the same or a different kind).
(3) In this Division, a concurrent wrongdoer, in relation to a claim, is
a person who is one of 2 or more persons whose acts or omissions
(or act or omission) caused, independently of each other or jointly,
the damage or loss that is the subject of the claim.
(4) For the purposes of this Division, apportionable claims are limited
to those claims specified in subsection (1).
(5) For the purposes of this Division, it does not matter that a
concurrent wrongdoer is insolvent, is being wound up or has
ceased to exist or died.
1041M Certain concurrent wrongdoers not to have benefit of
apportionment
(1) Nothing in this Division operates to exclude the liability of a
concurrent wrongdoer (an excluded concurrent wrongdoer) in
proceedings involving an apportionable claim if:
(a) the concurrent wrongdoer intended to cause the economic
loss or damage to property that is the subject of the claim; or
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Section 1041N
198 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the concurrent wrongdoer fraudulently caused the economic
loss or damage to property that is the subject of the claim.
(2) The liability of an excluded concurrent wrongdoer is to be
determined in accordance with the legal rules (if any) that (apart
from this Division) are relevant.
(3) The liability of any other concurrent wrongdoer who is not an
excluded concurrent wrongdoer is to be determined in accordance
with the provisions of this Division.
1041N Proportionate liability for apportionable claims
(1) In any proceedings involving an apportionable claim:
(a) the liability of a defendant who is a concurrent wrongdoer in
relation to that claim is limited to an amount reflecting that
proportion of the damage or loss claimed that the court
considers just having regard to the extent of the defendant’s
responsibility for the damage or loss; and
(b) the court may give judgment against the defendant for not
more than that amount.
(2) If the proceedings involve both an apportionable claim and a claim
that is not an apportionable claim:
(a) liability for the apportionable claim is to be determined in
accordance with the provisions of this Division; and
(b) liability for the other claim is to be determined in accordance
with the legal rules, if any, that (apart from this Division) are
relevant.
(3) In apportioning responsibility between defendants in the
proceedings:
(a) the court is to exclude that proportion of the damage or loss
in relation to which the plaintiff is contributorily negligent
under any relevant law; and
(b) the court may have regard to the comparative responsibility
of any concurrent wrongdoer who is not a party to the
proceedings.
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Section 1041O
Corporations Act 2001 199
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(4) This section applies in proceedings involving an apportionable
claim whether or not all concurrent wrongdoers are parties to the
proceedings.
(5) A reference in this Division to a defendant in proceedings includes
any person joined as a defendant or other party in the proceedings
(except as a plaintiff) whether joined under this Division, under
rules of court or otherwise.
1041O Defendant to notify plaintiff of concurrent wrongdoer of
whom defendant aware
(1) If:
(a) a defendant in proceedings involving an apportionable claim
has reasonable grounds to believe that a particular person (the
other person) may be a concurrent wrongdoer in relation to
the claim; and
(b) the defendant fails to give the plaintiff, as soon as
practicable, written notice of the information that the
defendant has about:
(i) the identity of the other person; and
(ii) the circumstances that may make the other person a
concurrent wrongdoer in relation to the claim; and
(c) the plaintiff unnecessarily incurs costs in the proceedings
because the plaintiff was not aware that the other person may
be a concurrent wrongdoer in relation to the claim;
the court hearing the proceedings may order that the defendant pay
all or any of those costs of the plaintiff.
(2) The court may order that the costs to be paid by the defendant be
assessed on an indemnity basis or otherwise.
1041P Contribution not recoverable from defendant
A defendant against whom judgment is given under this Division
as a concurrent wrongdoer in relation to an apportionable claim:
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Section 1041Q
200 Corporations Act 2001
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(a) cannot be required to contribute to any damages or
contribution recovered from another concurrent wrongdoer in
respect of the apportionable claim (whether or not the
damages or contribution are recovered in the same
proceedings in which judgment is given against the
defendant); and
(b) cannot be required to indemnify any such wrongdoer.
1041Q Subsequent actions
(1) In relation to an apportionable claim, nothing in this Division or
any other law prevents a plaintiff who has previously recovered
judgment against a concurrent wrongdoer for an apportionable part
of any damage or loss from bringing another action against any
other concurrent wrongdoer for that damage or loss.
(2) However, in any proceedings in respect of any such action, the
plaintiff cannot recover an amount of damages that, having regard
to any damages previously recovered by the plaintiff in respect of
the damage or loss, would result in the plaintiff receiving
compensation for damage or loss that is greater than the damage or
loss actually sustained by the plaintiff.
1041R Joining non-party concurrent wrongdoer in the action
(1) The court may give leave for any one or more persons to be joined
as defendants in proceedings involving an apportionable claim.
(2) The court is not to give leave for the joinder of any person who
was a party to any previously concluded proceedings in respect of
the apportionable claim.
1041S Application of Division
Nothing in this Division:
(a) prevents a person being held vicariously liable for a
proportion of an apportionable claim for which another
person is liable; or
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Corporations Act 2001 201
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(b) prevents a partner from being held severally liable with
another partner for that proportion of an apportionable claim
for which the other partner is liable; or
(c) affects the operation of any other Act to the extent that it
imposes several liability on any person in respect of what
would otherwise be an apportionable claim.
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Part 7.10 Market misconduct and other prohibited conduct relating to financial
products and financial services
Division 3 The insider trading prohibitions
Section 1042A
202 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—The insider trading prohibitions
Subdivision A—Preliminary
1042A Definitions
In this Division:
able to be traded has a meaning affected by section 1042E.
Division 3 financial products means:
(a) securities; or
(b) derivatives; or
(c) interests in a managed investment scheme; or
(ca) debentures, stocks or bonds issued or proposed to be issued
by a government; or
(d) superannuation products, other than those prescribed by
regulations made for the purposes of this paragraph; or
(e) any other financial products that are able to be traded on a
financial market.
generally available, in relation to information, has the meaning
given by section 1042C.
information includes:
(a) matters of supposition and other matters that are
insufficiently definite to warrant being made known to the
public; and
(b) matters relating to the intentions, or likely intentions, of a
person.
inside information means information in relation to which the
following paragraphs are satisfied:
(a) the information is not generally available;
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Section 1042B
Corporations Act 2001 203
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(b) if the information were generally available, a reasonable
person would expect it to have a material effect on the price
or value of particular Division 3 financial products.
material effect, in relation to a reasonable person’s expectations of
the effect of information on the price or value of Division 3
financial products, has the meaning given by section 1042D.
procure has a meaning affected by section 1042F.
relevant Division 3 financial products, in relation to particular
inside information, means the Division 3 financial products
referred to in paragraph (b) of the definition of inside information.
1042B Application of Division
This Division applies to:
(a) acts and omissions within this jurisdiction in relation to
Division 3 financial products (regardless of where the issuer
of the products is formed, resides or located and of where the
issuer carries on business); and
(b) acts and omissions outside this jurisdiction (and whether in
Australia or not) in relation to Division 3 financial products
issued by:
(i) a person who carries on business in this jurisdiction; or
(ii) a body corporate that is formed in this jurisdiction.
1042C When information is generally available
(1) For the purposes of this Division, information is generally
available if:
(a) it consists of readily observable matter; or
(b) both of the following subparagraphs apply:
(i) it has been made known in a manner that would, or
would be likely to, bring it to the attention of persons
who commonly invest in Division 3 financial products
of a kind whose price might be affected by the
information; and
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Section 1042D
204 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) since it was made known, a reasonable period for it to
be disseminated among such persons has elapsed; or
(c) it consists of deductions, conclusions or inferences made or
drawn from either or both of the following:
(i) information referred to in paragraph (a);
(ii) information made known as mentioned in
subparagraph (b)(i).
(2) None of the paragraphs of subsection (1) limits the generality of
any of the other paragraphs of that subsection.
1042D When a reasonable person would take information to have a
material effect on price or value of Division 3 financial
products
For the purposes of this Division, a reasonable person would be
taken to expect information to have a material effect on the price
or value of particular Division 3 financial products if (and only if)
the information would, or would be likely to, influence persons
who commonly acquire Division 3 financial products in deciding
whether or not to acquire or dispose of the first-mentioned
financial products.
1042E Division 3 financial products taken to be able to be traded
despite suspensions or section 794D directions
Particular Division 3 financial products that are ordinarily able to
be traded on a licensed market are taken, for the purposes of this
Division, to be able to be traded on that market even though
trading in those products on that market is suspended by action
taken by the market licensee, or is contrary to a direction given to
the market licensee by ASIC under subsection 794D(2) or 798J(2).
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Section 1042F
Corporations Act 2001 205
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1042F Inciting, inducing or encouraging an act or omission
constitutes procuring the omission
(1) For the purposes of this Division, but without limiting the meaning
that the expression procure has apart from this section, if a person
incites, induces, or encourages an act or omission by another
person, the first-mentioned person is taken to procure the act or
omission by the other person.
(2) Subsection (1) does not limit the application in relation to
provisions in this Division of:
(a) section 6 of the Crimes Act 1914; or
(b) section 11.1, 11.2, 11.2A, 11.4 or 11.5 of the Criminal Code.
1042G Information in possession of officer of body corporate
(1) For the purposes of this Division:
(a) a body corporate is taken to possess any information which
an officer of the body corporate possesses and which came
into his or her possession in the course of the performance of
duties as such an officer; and
(b) if an officer of a body corporate knows any matter or thing
because he or she is an officer of the body corporate, it is to
be presumed that the body corporate knows that matter or
thing; and
(c) if an officer of a body corporate, in that capacity, is reckless
as to a circumstance or result, it is to be presumed that the
body corporate is reckless as to that circumstance or result;
and
(d) for the purposes of paragraph 1043M(2)(b), if an officer of a
body corporate ought reasonably to know any matter or thing
because he or she is an officer of the body corporate, it is to
be presumed that the body corporate ought reasonably to
know that matter or thing.
(2) This section does not limit the application of section 769B in
relation to this Division.
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Division 3 The insider trading prohibitions
Section 1042H
206 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1042H Information in possession of partner or employee of
partnership
(1) For the purposes of this Division:
(a) a member of a partnership is taken to possess any
information:
(i) which another member of the partnership possesses and
which came into the other member’s possession in the
other member’s capacity as a member of the
partnership; or
(ii) which an employee of the partnership possesses and
which came into his or her possession in the course of
the performance of duties as such an employee; and
(b) if a member or employee of a partnership knows any matter
or thing because the member or employee is such a member
or employee, it is to be presumed that every member of the
partnership knows that matter or thing; and
(c) if a member or employee of a partnership, in that capacity, is
reckless as to a circumstance or result, it is to be presumed
that every member of the partnership is reckless as to that
circumstance or result; and
(d) for the purposes of paragraph 1043M(2)(b), if a member or
employee of a partnership ought reasonably to know any
matter or thing because he or she is such a member or
employee, it is to be presumed that every member of the
partnership ought reasonably to know that matter or thing.
(2) This section does not limit the application of section 769B in
relation to this Division.
Subdivision B—The prohibited conduct
1043A Prohibited conduct by person in possession of inside
information
(1) Subject to this Subdivision, if:
(a) a person (the insider) possesses inside information; and
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(b) the insider knows, or ought reasonably to know, that the
matters specified in paragraphs (a) and (b) of the definition of
inside information in section 1042A are satisfied in relation
to the information;
the insider must not (whether as principal or agent):
(c) apply for, acquire, or dispose of, relevant Division 3 financial
products, or enter into an agreement to apply for, acquire, or
dispose of, relevant Division 3 financial products; or
(d) procure another person to apply for, acquire, or dispose of,
relevant Division 3 financial products, or enter into an
agreement to apply for, acquire, or dispose of, relevant
Division 3 financial products.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)). For defences to a prosecution based on this
subsection, see section 1043M.
Note 2: This subsection is also a civil penalty provision (see section 1317E).
For relief from liability to a civil penalty relating to this subsection,
see sections 1043N and 1317S.
(2) Subject to this Subdivision, if:
(a) a person (the insider) possesses inside information; and
(b) the insider knows, or ought reasonably to know, that the
matters specified in paragraphs (a) and (b) of the definition of
inside information in section 1042A are satisfied in relation
to the information; and
(c) relevant Division 3 financial products are able to be traded on
a financial market operated in this jurisdiction;
the insider must not, directly or indirectly, communicate the
information, or cause the information to be communicated, to
another person if the insider knows, or ought reasonably to know,
that the other person would or would be likely to:
(d) apply for, acquire, or dispose of, relevant Division 3 financial
products, or enter into an agreement to apply for, acquire, or
dispose of, relevant Division 3 financial products; or
(e) procure another person to apply for, acquire, or dispose of,
relevant Division 3 financial products, or enter into an
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Section 1043B
208 Corporations Act 2001
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agreement to apply for, acquire, or dispose of, relevant
Division 3 financial products.
Note 1: Failure to comply with this subsection is an offence (see
subsection 1311(1)). For defences to a prosecution based on this
subsection, see section 1043M.
Note 2: This subsection is also a civil penalty provision (see section 1317E).
For relief from liability to a civil penalty relating to this subsection,
see sections 1043N and 1317S.
(3) For the purposes of the application of the Criminal Code in relation
to an offence based on subsection (1) or (2):
(a) paragraph (1)(a) is a physical element, the fault element for
which is as specified in paragraph (1)(b); and
(b) paragraph (2)(a) is a physical element, the fault element for
which is as specified in paragraph (2)(b).
1043B Exception for withdrawal from registered scheme
Subsection 1043A(1) does not apply in respect of a member’s
withdrawal from a registered scheme if the amount paid to the
member on withdrawal is calculated (so far as is reasonably
practicable) by reference to the underlying value of the assets of
the financial or business undertaking or scheme, common
enterprise, investment contract or time-sharing scheme to which
the member’s interest relates, less any reasonable charge for
acquiring the member’s interest.
1043C Exception for underwriters
(1) Subsection 1043A(1) does not apply in respect of:
(a) applying for or acquiring securities or managed investment
products under an underwriting agreement or a
sub-underwriting agreement; or
(b) entering into an agreement referred to in paragraph (a); or
(c) disposing of securities or managed investment products
acquired under an agreement referred to in paragraph (a).
(2) Subsection 1043A(2) does not apply in respect of:
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Section 1043D
Corporations Act 2001 209
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(a) the communication of information in relation to securities or
managed investment products to a person solely for the
purpose of procuring the person to enter into an underwriting
agreement in relation to any such securities or managed
investment products; or
(b) the communication of information in relation to securities or
managed investment products by a person who may be
required under an underwriting agreement to apply for or
acquire any such securities or managed investment products
if the communication is made to another person solely for the
purpose of procuring the other person to do either or both of
the following:
(i) enter into a sub-underwriting agreement in relation to
any such securities or managed investment products;
(ii) apply for any such securities or managed investment
products.
1043D Exception for acquisition pursuant to legal requirement
Subsection 1043A(1) does not apply in respect of the acquisition of
financial products pursuant to a requirement imposed by this Act.
1043E Exception for information communicated pursuant to a legal
requirement
Subsection 1043A(2) does not apply in respect of the
communication of information pursuant to a requirement imposed
by the Commonwealth, a State, a Territory or any regulatory
authority.
1043F Chinese wall arrangements by bodies corporate
A body corporate does not contravene subsection 1043A(1) by
entering into a transaction or agreement at any time merely because
of information in the possession of an officer or employee of the
body corporate if:
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Section 1043G
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(a) the decision to enter into the transaction or agreement was
taken on its behalf by a person or persons other than that
officer or employee; and
(b) it had in operation at that time arrangements that could
reasonably be expected to ensure that the information was
not communicated to the person or persons who made the
decision and that no advice with respect to the transaction or
agreement was given to that person or any of those persons
by a person in possession of the information; and
(c) the information was not so communicated and no such advice
was so given.
1043G Chinese wall arrangements by partnerships etc.
(1) The members of a partnership do not contravene
subsection 1043A(1) by entering into a transaction or agreement at
any time merely because one or more (but not all) of the members,
or an employee or employees of the partnership, are in actual
possession of information if:
(a) the decision to enter into the transaction or agreement was
taken on behalf of the partnership by any one or more of the
following persons:
(i) a member or members who are taken to have possessed
the information merely because another member or
other members, or an employee or employees of the
partnership, were in possession of the information;
(ii) an employee or employees of the partnership who was
not or were not in possession of the information; and
(b) the partnership had in operation at that time arrangements
that could reasonably be expected to ensure that the
information was not communicated to the person or persons
who made the decision and that no advice with respect to the
transaction or agreement was given to that person or any of
those persons by a person in possession of the information;
and
(c) the information was not so communicated and no such advice
was so given.
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Section 1043H
Corporations Act 2001 211
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(2) A member of a partnership does not contravene
subsection 1043A(1) by entering into a transaction or agreement
otherwise than on behalf of the partnership merely because the
member is taken to possess information that is in the possession of
another member or an employee of the partnership.
1043H Exception for knowledge of person’s own intentions or
activities
A natural person does not contravene subsection 1043A(1) by
entering into a transaction or agreement in relation to financial
products issued by another person merely because the person is
aware that he or she proposes to enter into, or has previously
entered into or proposed to enter into, one or more transactions or
agreements in relation to financial products issued by the other
person or by a third person.
1043I Exception for bodies corporate
(1) A body corporate does not contravene subsection 1043A(1) by
entering into a transaction or agreement in relation to financial
products issued by another person merely because the body
corporate is aware that it proposes to enter into, or has previously
entered into or proposed to enter into, one or more transactions or
agreements in relation to financial products issued by the other
person or by a third person.
(2) Subject to subsection (3), a body corporate does not contravene
subsection 1043A(1) by entering into a transaction or agreement in
relation to financial products issued by another person merely
because an officer or employee of the body corporate is aware that
the body corporate proposes to enter into, or has previously entered
into or proposed to enter into, one or more transactions or
agreements in relation to financial products issued by the other
person or by a third person.
(3) Subsection (2) does not apply unless the officer or employee of the
body corporate became aware of the matters referred to in that
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Division 3 The insider trading prohibitions
Section 1043J
212 Corporations Act 2001
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subsection in the course of the performance of duties as such an
officer or employee.
1043J Exception for officers or agents of body corporate
(1) Subject to subsection (2), a person (the first person) does not
contravene subsection 1043A(1) by entering into a transaction or
agreement on behalf of a person (the second person) in relation to
financial products issued by another person (the third person)
merely because the first person is aware that the second person
proposes to enter into, or has previously entered into or proposed to
enter into, one or more transactions or agreements in relation to
financial products issued by the third person or by a fourth person.
(2) Subsection (1) does not apply unless the first person became aware
of the matters referred to in that subsection in the course of the
performance of duties as an officer or employee of the second
person or in the course of acting as an agent of the second person.
1043K Transactions by holder of financial services licence or a
representative of the holder of such a licence
A person (the agent) does not contravene subsection 1043A(1) by
applying for, acquiring, or disposing of, or entering into an
agreement to apply for, acquire, or dispose of, financial products
that are able to be traded on a licensed market if:
(a) the agent is a financial services licensee or a representative of
a financial services licensee; and
(b) the agent entered into the transaction or agreement concerned
on behalf of another person (the principal) under a specific
instruction by the principal to enter into that transaction or
agreement; and
(c) the licensee had in operation, at the time when that
transaction or agreement was entered into, arrangements that
could reasonably be expected to ensure that any information
in the possession of the licensee, or of any representative of
the licensee, as a result of which the person in possession of
the information would be prohibited by subsection 1043A(1)
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The insider trading prohibitions Division 3
Section 1043L
Corporations Act 2001 213
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from entering into that transaction or agreement was not
communicated to the agent and that no advice with respect to
the transaction or agreement was given to the principal or to
the agent by a person in possession of the information; and
(d) the information was not so communicated and no such advice
was so given; and
(e) the principal is not an associate of the licensee or of any
representative of the licensee;
but nothing in this section affects the application of
subsection 1043A(1) in relation to the principal.
1043L A specific situation in which a compensation order under
section 1317HA may be made
Situation to which this section applies
(1) If:
(a) a person (the insider) possesses information that is not
generally available but, if the information were generally
available, a reasonable person would expect it to have a
material effect on the price or value of Division 3 financial
products (other than derivatives); and
(b) the insider knows that, or is reckless as to whether:
(i) the information is not generally available; and
(ii) if the information were generally available, it might
have a material effect on the price or value of those
Division 3 financial products; and
(c) the insider (whether as principal or agent) in contravention of
subsection 1043A(1):
(i) applies for, acquires, or disposes of, or enters into an
agreement to apply for, acquire, or dispose of, any such
Division 3 financial products; or
(ii) procures another person to apply for, acquire, or dispose
of, or to enter into an agreement to apply for, acquire, or
dispose of, any such Division 3 financial products;
the following subsections apply.
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Part 7.10 Market misconduct and other prohibited conduct relating to financial
products and financial services
Division 3 The insider trading prohibitions
Section 1043L
214 Corporations Act 2001
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Compensation for damage suffered by person applying for the
Division 3 financial products
(2) If the insider applied for or agreed to apply for, or procured another
person to apply for or to agree to apply for, the Division 3 financial
products, the issuer of the products may, by action under
section 1317HA, recover as compensation for damage suffered by
the issuer, the amount (if any) by which the price described in the
first of the following paragraphs was less than the price described
in the second of those paragraphs:
(a) the price at which the products were applied for, or agreed to
be applied for, by the insider or the other person;
(b) the price at which they would have been likely to have been
disposed of in a disposal made at the time of the application
or the time of the agreement, as the case may be, if the
information had been generally available.
The action may be taken against the insider, the other person or
any other person involved in the contravention.
Compensation for damage suffered by person disposing of the
Division 3 financial products
(3) If the insider acquired or agreed to acquire, or procured another
person to acquire or to agree to acquire, the Division 3 financial
products from a person (in this subsection and subsection (5) called
the disposer) who did not possess the information, the disposer
may, by action under section 1317HA, recover, as compensation
for damage suffered by the disposer, the amount (if any) by which
the price described in the first of the following paragraphs was less
than the price described in the second of those paragraphs:
(a) the price at which the financial products were acquired, or
agreed to be acquired, by the insider or the other person from
the disposer;
(b) the price at which they would have been likely to have been
acquired in an acquisition made at the time of the
first-mentioned acquisition or the time of the agreement, as
the case may be, if the information had been generally
available.
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Section 1043L
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The action may be taken against the insider, the other person or
any other person involved in the contravention.
Compensation for damage suffered by person acquiring the
Division 3 financial products
(4) If the insider disposed of or agreed to dispose of, or procured
another person to dispose of or to agree to dispose of, the
Division 3 financial products to a person (in this subsection and
subsection (5) called the acquirer) who did not possess the
information, the acquirer may, by action under section 1317HA,
recover, as compensation for damage suffered by the acquirer, the
amount (if any) by which the price described in the first of the
following paragraphs was greater than the price described in the
second of those paragraphs:
(a) the price at which the financial products were disposed of, or
agreed to be disposed of, by the insider or the other person to
the acquirer;
(b) the price at which they would have been likely to have been
disposed of in a disposal made at the time of the
first-mentioned disposal or the time of the agreement, as the
case may be, if the information had been generally available.
The action may be taken against the insider, the other person or
any other person involved in the contravention.
Additional situations in which issuer may recover
(5) In addition to any action that may be brought as provided by
subsection (3) or (4), the issuer of the financial products may, in
the case of an acquisition or disposal of, or an agreement to acquire
or dispose of, the financial products by the insider or another
person in the circumstances mentioned in that subsection, by action
under section 1317HA, recover, as compensation for damage
suffered by the issuer:
(a) in the case of an acquisition or agreement to acquire the
financial products—the amount (if any) by which the price
described in the first of the following subparagraphs was less
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Part 7.10 Market misconduct and other prohibited conduct relating to financial
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Division 3 The insider trading prohibitions
Section 1043L
216 Corporations Act 2001
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than the price described in the second of those
subparagraphs:
(i) the price at which the financial products were acquired,
or agreed to be acquired, by the insider or other person
from the disposer;
(ii) the price at which they were likely to have been
acquired in an acquisition made at the time of the
first-mentioned acquisition or the time of the agreement,
as the case may be, if the information had been
generally available; or
(b) in the case of a disposal or an agreement to dispose of
financial products—the amount (if any) by which the price
described in the first of the following subparagraphs was
greater than the price described in the second of those
subparagraphs:
(i) the price at which the financial products were disposed
of, or agreed to be disposed of, by the insider or other
person to the acquirer;
(ii) the price at which they would have been likely to have
been disposed of at the time of the first-mentioned
disposal or the time of the agreement, as the case may
be, if the information had been generally available.
The action may be taken against the insider, the other person or
any other person involved in the contravention.
ASIC may take action for benefit of issuer
(6) ASIC may, if it considers that it is in the public interest to do so,
bring an action in accordance with subsection (2) or (5) in the
name of, and for the benefit of, an issuer of Division 3 financial
products for the recovery of an amount that the issuer is entitled to
recover by virtue of that subsection.
Relief from liability
(7) In an action brought against a person in accordance with this
section because the person entered into, or procured another person
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to enter into, a transaction or agreement at a time when certain
information was in the first-mentioned person’s possession, the
court may relieve the person wholly or partly from liability if it
appears to the court that the information came into the
first-mentioned person’s possession solely as a result of the
information having been made known as mentioned in
subparagraph 1042C(1)(b)(i).
Special provision for registered schemes—treatment of amount
recovered in respect of subsection (2) loss
(8) If:
(a) the responsible entity for a registered scheme; or
(b) ASIC in the name of, and for the benefit of, the responsible
entity for a registered scheme;
brings an action in accordance with subsection (2) in respect of a
subscription for, or any agreement to subscribe for, any interests in
the scheme, any amount recovered in the action:
(c) is to be held by the responsible entity on behalf of the
persons who, at the time of the subscription or agreement,
had rights or interests in the relevant financial or business
undertaking or scheme, common enterprise, investment
contract or time-sharing scheme; and
(d) is to be held on their behalf in the respective proportions that,
at that time, their individual rights or interests bore to the
total of all those rights or interests.
Special provision for registered schemes—treatment of amount
recovered in respect of subsection (5) loss
(9) If:
(a) the responsible entity for a registered scheme; or
(b) ASIC in the name of, and for the benefit of, the responsible
entity for a registered scheme;
brings an action in accordance with subsection (5) in respect of an
acquisition or disposal of, or an agreement to acquire or dispose of,
interests in the scheme, any amount recovered in the action:
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products and financial services
Division 3 The insider trading prohibitions
Section 1043M
218 Corporations Act 2001
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(c) is to be held by the responsible entity on behalf of the
persons who, at the time of the disposal, acquisition or
agreement, had rights or interests in the relevant financial or
business undertaking or scheme, common enterprise,
investment contract or time-sharing scheme; and
(d) is to be held on their behalf in the respective proportions that,
at that time, their individual rights or interests bore to the
total of all those rights or interests.
(10) Any right of action that a person has by virtue of this section is in
addition to any right that any other person has under
section 1317HA.
1043M Defences to prosecution for an offence
(1) In a prosecution of a person for an offence based on
subsection 1043A(1) or (2), it is not necessary for the prosecution
to prove the non-existence of facts or circumstances which, if they
existed, would, by virtue of section 1043B, 1043C, 1043D, 1043E,
1043F, 1043G, 1043H, 1043I, 1043J or 1043K, preclude the act or
omission from constituting a contravention of subsection 1043A(1)
or (2), as the case may be, but it is a defence if the facts or
circumstances existed.
Note: A defendant bears an evidential burden in relation to the facts or
circumstances. See subsection 13.3(3) of the Criminal Code.
(2) In a prosecution brought against a person for an offence based on
subsection 1043A(1) because the person entered into, or procured
another person to enter into, a transaction or agreement at a time
when certain information was in the first-mentioned person’s
possession:
(a) it is a defence if the information came into the
first-mentioned person’s possession solely as a result of the
information having been made known as mentioned in
subparagraph 1042C(1)(b)(i); and
(b) it is a defence if the other party to the transaction or
agreement knew, or ought reasonably to have known, of the
information before entering into the transaction or agreement.
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The insider trading prohibitions Division 3
Section 1043N
Corporations Act 2001 219
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Note: A defendant bears an evidential burden in relation to the matters
referred to in paragraphs (a) and (b). See subsection 13.3(3) of the
Criminal Code.
(3) In a prosecution against a person for an offence based on
subsection 1043A(2) because the person communicated
information, or caused information to be communicated, to another
person:
(a) it is a defence if the information came into the
first-mentioned person’s possession solely as a result of the
information having been made known as mentioned in
subparagraph 1042C(1)(b)(i); and
(b) it is a defence if the other person knew, or ought reasonably
to have known, of the information before the information was
communicated.
Note: A defendant bears an evidential burden in relation to the matters
referred to in paragraphs (a) and (b). See subsection 13.3(3) of the
Criminal Code.
1043N Relief from civil liability
In proceedings against a person under Part 9.4B (including under
section 1317HA) relating to a contravention of
subsection 1043A(1) or (2), the court may relieve the person
wholly or partly from liability if it appears to the court that:
(a) in any case—the circumstances in any of the sections referred
to in subsection 1043M(1) applied; or
(b) in the case of subsection 1043A(1)—the circumstance
referred to in paragraph 1043M(2)(a) or (b) applied; or
(c) in the case of subsection 1043A(2)—the circumstance
referred to in paragraph 1043M(3)(a) or (b) applied.
1043O Powers of Court
If, in a proceeding instituted under this Act, the Court finds that a
contravention of section 1043A has occurred, the Court may, in
addition to any other orders that it may make under any other
provision of this Act, make such order or orders as it thinks just,
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Part 7.10 Market misconduct and other prohibited conduct relating to financial
products and financial services
Division 3 The insider trading prohibitions
Section 1043O
220 Corporations Act 2001
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including, but without limiting the generality of the above, any one
or more of the following orders:
(a) an order restraining the exercise of rights attached to
Division 3 financial products;
(b) an order restraining the issue of Division 3 financial
products;
(c) an order restraining the acquisition or disposal of Division 3
financial products;
(d) an order directing the disposal of Division 3 financial
products;
(e) an order vesting Division 3 financial products in ASIC;
(f) an order cancelling an agreement for the acquisition or
disposal of Division 3 financial products;
(g) an order cancelling an Australian financial services licence;
(h) for the purpose of securing compliance with any other order
made under this section, an order directing a person to do or
refrain from doing a specified act.
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financial services Part 7.10
Defences, relief and limits on liability Division 4
Section 1044A
Corporations Act 2001 221
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Division 4—Defences, relief and limits on liability
1044A General defence or relief for publishers
(1) It is a defence to a prosecution for an offence based on a provision
of this Part committed by the publication of an advertisement if:
(a) the defendant was, at that time, a person whose business it
was to publish or arrange for the publication of
advertisements; and
(b) they received the advertisement for publication in the
ordinary course of that business and did not know, and had
no reason to believe, that its publication would amount to an
offence against that provision.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (1). See subsection 13.3(3) of the Criminal Code.
(2) In proceedings against a person under:
(a) Part 9.4B (including under section 1317H or 1317HA)
relating to a contravention of a civil penalty provision that is
in this Part; or
(b) section 1041I relating to a contravention of a provision to
which that section applies;
the court may relieve the person wholly or partly from liability if it
appears to the court that the circumstances mentioned in
paragraphs (1)(a) and (b) applied.
1044B Limit on liability for misleading or deceptive conduct
State or Territory professional standards law limits liability
(1) A professional standards law of a State, the Australian Capital
Territory or the Northern Territory applies to limit occupational
liability relating to an action for contravention of section 1041H in
the same way as it limits occupational liability arising under a law
of the State or Territory.
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Part 7.10 Market misconduct and other prohibited conduct relating to financial
products and financial services
Division 4 Defences, relief and limits on liability
Section 1044B
222 Corporations Act 2001
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Note: Section 1041H prohibits misleading or deceptive conduct by a person
in relation to a financial product or financial service.
(2) However, the professional standards law applies for that purpose:
(a) only in relation to a scheme that was prescribed by the
regulations at the time (the contravention time) of the
contravention; and
(b) as if the scheme were in force under that law at the
contravention time in the form the scheme would have been
in if:
(i) the scheme had not been amended or revoked under that
law since the scheme was first prescribed; and
(ii) the modifications (if any) prescribed by the regulations
at the contravention time had been made to the scheme.
Which State’s or Territory’s professional standards law applies?
(3) For the purposes of working out whether a professional standards
law of a particular State or Territory applies under subsection (1) in
relation to a particular contravention of section 1041H, choice of
law rules operate in relation to the contravention in the same way
as they operate in relation to a tort.
Definitions
(4) In this section:
modifications includes additions, omissions and substitutions.
occupation includes profession and trade.
occupational association means a body:
(a) that represents the interests of persons who have the same
occupation; and
(b) whose membership is limited principally to such persons.
occupational liability means civil liability arising directly or
vicariously from anything done or omitted by a member of an
occupational association in the course of his or her occupation.
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professional standards law means a law providing for the
limitation of occupational liability by reference to schemes for
limiting that liability that were formulated and published in
accordance with that law.
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Part 7.10 Market misconduct and other prohibited conduct relating to financial
products and financial services
Division 5 Miscellaneous
Section 1045A
224 Corporations Act 2001
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Division 5—Miscellaneous
1045A Exemptions and modifications by regulations
(1) The regulations may:
(a) exempt a person or class of persons from all or specified
provisions of this Part; or
(b) exempt a financial product or a class of financial products
from all or specified provisions of this Part; or
(c) provide that this Part applies as if specified provisions were
omitted, modified or varied as specified in the regulations.
(2) For the purpose of this section, the provisions of this Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 10.2 (transitional provisions) that
relate to provisions of this Part.
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Title and transfer Part 7.11
Title to certain securities Division 1
Section 1070A
Corporations Act 2001 225
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Part 7.11—Title and transfer
Division 1—Title to certain securities
1070A Nature of shares and certain other interests in a company or
registered scheme
(1) A share, other interest of a member in a company or interest of a
person in a registered scheme:
(a) is personal property; and
(b) is transferable or transmissible as provided by:
(i) the company’s, or scheme’s, constitution; or
(ii) the operating rules of a prescribed CS facility if they are
applicable; and
(c) is capable of devolution by will or by operation of law.
(2) Paragraph (1)(c) has effect subject to:
(a) in the case of a company:
(i) the company’s constitution (if any); and
(ii) any replaceable rules that apply to the company; and
(iii) the operating rules of a prescribed CS facility if they
apply to the share or interest; and
(b) in the case of a scheme:
(i) the scheme’s constitution; and
(ii) the operating rules of a prescribed CS facility if they
apply to the interest.
(3) Subject to subsection (1):
(a) the laws applicable to ownership of, and dealing with,
personal property apply to a share, other interest of a member
in a company or interest of a person in a registered scheme as
they apply to other property; and
(b) equitable interests in respect of a share, interest of a member
in a company or other interest of a person in a registered
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Part 7.11 Title and transfer
Division 1 Title to certain securities
Section 1070B
226 Corporations Act 2001
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scheme may be created, dealt with and enforced as in the
case of other personal property.
(4) For the purposes of any law, a share, other interest of a member in
a company or interest of a person in a registered scheme is taken to
be situated:
(a) if the share, interest in a company, or interest in a registered
scheme is entered on the register kept under section 169—in
the State or Territory where that register is kept; or
(b) if the share or interest in the company is entered on an
overseas branch register kept under section 178—in the
foreign country where that register is kept.
1070B Numbering of shares
(1) Except as provided in subsection (2), a company must ensure that
each share in the company is distinguished by an appropriate
number.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) Despite subsection (1):
(a) if at any time all the issued shares in a company, or all the
issued shares in a company of a particular class:
(i) are fully paid up; and
(ii) rank equally for all purposes;
none of those shares is required to have a distinguishing
number so long as each of those shares remains fully paid up,
and ranks equally for all purposes with all shares of the same
class for the time being issued and fully paid up; and
(b) if:
(i) all the issued shares in a company are evidenced by
certificates in accordance with section 1070C; and
(ii) each certificate is distinguished by an appropriate
number; and
(iii) that number is recorded in the register of members;
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none of those shares is required to have a distinguishing
number; and
(c) a share need not have a distinguishing number if the
operating rules of a prescribed CS facility through which it is
able to be transferred provide that the share need not have a
distinguishing number.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection. See subsection 13.3(3) of the Criminal Code.
1070C Matters to be specified in share certificate
(1) A company must ensure that a certificate it issues specifying the
shares held by a member of the company states:
(a) the name of the company and the fact that it is registered
under this Act; and
(b) the class of the shares; and
(c) the amount (if any) unpaid on the shares.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) A certificate issued in accordance with subsection (1) specifying
shares held by a member of a company is prima facie evidence of
the title of the member to the shares.
(3) A failure to comply with subsection (1) does not affect the rights of
a holder of shares.
1070D Loss or destruction of title documents for certain securities
(1) This section applies to the following securities:
(a) shares in a company;
(b) debentures of a company;
(c) interests in a registered scheme.
(2) This section applies to an interest in a registered scheme as if:
(a) references to a company were instead references to the
responsible entity of the registered scheme; and
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Section 1070D
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(b) references to the directors of a company were instead
references to the directors of the responsible entity of the
registered scheme.
(3) A company must, in accordance with subsection (4), issue a
duplicate certificate or other title document for securities if:
(a) the certificate or document is lost or destroyed; and
(b) the owner of the securities applies to the company for the
duplicate in accordance with subsection (5); and
(c) the owner complies with any requirements made in
accordance with subsection (6).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) The company must issue the duplicate:
(a) if the company requires the payment of an amount not
exceeding the amount prescribed by regulations made for the
purposes of this paragraph—within 21 days after the payment
is received by the company or within such longer period as
ASIC approves; or
(b) in a case to which paragraph (a) does not apply—within 21
days after the application is made or within such longer
period as ASIC approves.
(5) The application must be accompanied by:
(a) a statement in writing that the certificate or other document:
(i) has been lost or destroyed; and
(ii) has not been pledged, sold or otherwise disposed of; and
(b) if the certificate or other document has been lost—a
statement in writing that proper searches have been made;
and
(c) an undertaking in writing that if the certificate or other
document is found or received by the owner it will be
returned to the company.
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Title to certain securities Division 1
Section 1070D
Corporations Act 2001 229
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(6) The directors of the company may, before accepting an application
for the issue of a duplicate certificate, require the applicant to do
either or both of the following:
(a) place an advertisement in a daily newspaper circulating in a
place specified by the directors stating that:
(i) the certificate or other document has been lost or
destroyed; and
(ii) the owner intends, after the end of 14 days after the
publication of the advertisement, to apply to the
company for a duplicate certificate;
(b) give a bond for an amount equal to at least the current market
value of the securities indemnifying the company against loss
following the production of the original certificate or other
document.
(7) If:
(a) a certificate or other title document for securities is cancelled
in reliance on the operating rules of a prescribed CS facility;
and
(b) having regard to those provisions, the certificate or other
document should not have been cancelled;
this section applies to the certificate or other document as though it
were destroyed on its cancellation.
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Chapter 7 Financial services and markets
Part 7.11 Title and transfer
Division 2 Transfer of certain securities
Section 1071A
230 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Transfer of certain securities
Subdivision A—General provisions
1071A Application of the Subdivision to certain securities
(1) This Subdivision applies to the following securities:
(a) shares in a company;
(b) debentures of a company;
(c) interests in a registered scheme.
(2) This Subdivision applies to an interest in a registered scheme as if:
(a) references to a company were instead references to the
responsible entity of the registered scheme; and
(b) references to the constitution of a company were instead
references to the constitution of the registered scheme; and
(c) references to members of a company were instead references
to members of the registered scheme.
1071B Instrument of transfer
(1) This section does not apply to a transfer of a security through a
prescribed CS facility.
(2) Subject to subsection (5), a company must only register a transfer
of securities if a proper instrument of transfer (see subsections (3)
and (4)) has been delivered to the company. This is so despite:
(a) anything in its constitution; or
(b) anything in a deed relating to debentures.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(3) An instrument of transfer is not a proper instrument of transfer for
the purposes of subsection (2) if it does not show the details,
specified in the regulations, in relation to the company concerned.
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Transfer of certain securities Division 2
Section 1071B
Corporations Act 2001 231
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(4) If the transfer of the securities is covered by Division 3 of this Part,
then (in addition to subsection (3)), the instrument is not a proper
instrument of transfer for the purposes of subsection (2) unless it is
a sufficient transfer of the securities under regulations made for the
purposes of that Division.
(5) Subsection (2) does not prejudice the power of the company to
register, as the holder of securities, a person to whom the right to
the securities has devolved by will or by operation of law.
(6) Subsections (7) to (13) deal with a transfer of a security of a dead
holder by the dead holder’s personal representative. They deal with
the transfer differently depending on whether the personal
representative is a local representative or not.
(7) The personal representative is a local representative if the
representative is duly constituted as a personal representative under
the law of the State or Territory in which the security is situated.
Note: Subsection 1070A(4) provides that the security is situated where the
relevant register is kept.
(8) If the personal representative is a local representative, a transfer of
the security by the representative is as valid as if the representative
had been registered as the holder of the security at the time when
the instrument of transfer was executed.
(9) If:
(a) the personal representative is not a local representative; and
(b) the representative:
(i) executes an instrument of transfer of the security to the
representative or to another person; and
(ii) delivers the instrument to the company; and
(iii) delivers to the company with the instrument a statement
in writing made by the representative to the effect that,
to the best of the representative’s knowledge,
information and belief, no grant of representation of the
estate of the deceased holder has been applied for or
made in the State or Territory in which the security is
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Part 7.11 Title and transfer
Division 2 Transfer of certain securities
Section 1071C
232 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
located and no application for such a grant will be
made; and
(c) the statement is made within 3 months immediately before
the date on which the statement is delivered to the company;
the company must (subject to subsection (10)) register the transfer
and pay to the representative any dividends or other money accrued
in respect of the security up to the time when the instrument was
executed.
(10) Subsection (9) does not operate so as to require the company to do
anything that it would not have been required to do if the personal
representative were a local representative.
(11) A transfer or payment made under subsection (9) and a receipt or
acknowledgment of such a payment is, for all purposes, as valid
and effectual as if the personal representative were a local
representative.
(12) For the purposes of this section, an application by a personal
representative of a dead person for registration as the holder of a
security in place of the dead person is taken to be an instrument of
transfer effecting a transfer of the security to the personal
representative.
(13) The production to a company of a document that is, under the law
of a State or Territory, sufficient evidence of probate of the will, or
letters of administration of the estate, of a dead person having been
granted to a person, is sufficient evidence of the grant (for the
company’s purposes). This is so despite:
(a) anything in its constitution; or
(b) in a deed relating to debentures.
1071C Occupation need not appear in transfer document, register
etc.
(1) A document transferring securities need not state the occupation of
the transferor or transferee and, if it is signed by a person, the
signature need not be witnessed.
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Transfer of certain securities Division 2
Section 1071D
Corporations Act 2001 233
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) Subsection (1) applies despite anything in:
(a) the constitution of:
(i) a company; or
(ii) a body referred to in paragraph 1073C(a) or (b); or
(b) the terms and conditions on which securities are created or
issued.
(3) The omission from a register, certificate, document transferring
securities or other document relating to a security, of a statement of
the occupation of a person who is, or is entitled to be, registered as
the holder of the security does not breach any law, constitution,
trust deed or other document relating to the securities.
1071D Registration of transfer at request of transferor
(1) A written application by the transferor of a security of a company
for the transferee’s name to be entered in the appropriate register is
as effective (for the company’s purposes) as if it were an
application by the transferee. The application is subject to the same
conditions as it would be if it had been made by the transferee.
(2) If the transferor of a security of a company requests the company
in writing to do so, the company must, by written notice, require a
person who has possession, custody or control of either or both of
the following:
(a) any title documents for the security;
(b) the instrument of transfer of the security;
to bring it or them into the office of the company within a specified
period, to have the document cancelled or rectified and the transfer
registered or otherwise dealt with.
(3) The period specified under subsection (2) must be not less than 7
and not more than 28 days after the date of the notice.
(4) If a person refuses or fails to comply with a notice given under
subsection (2), the transferor may apply to the Court for the issue
of a summons for that person to appear before the Court and show
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Part 7.11 Title and transfer
Division 2 Transfer of certain securities
Section 1071E
234 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
cause why the documents mentioned in the notice should not be
delivered up or produced as required by the notice.
(5) The Court may:
(a) if the person appears:
(i) examine the person upon oath or affirmation; and
(ii) receive other evidence; and
(b) if the person does not appear after being duly served with the
summons—receive evidence in the person’s absence; and
(c) in either case order the person to deliver up such documents
to the company upon such terms or conditions as the Court
considers just and reasonable.
The costs of the summons and of proceedings on the summons are
in the discretion of the Court.
(6) Lists of documents required to be brought in under subsection (2)
but not brought in in accordance with a requirement made under
subsection (2) or delivered up in accordance with an order under
subsection (5), must be:
(a) exhibited in the office of the company; and
(b) advertised in the Gazette and in such newspapers and at such
times as the company thinks fit.
1071E Notice of refusal to register transfer
If a company refuses to register a transfer of a security of the
company, it must, within 2 months after the date on which the
transfer was lodged with it, give the transferee notice of the refusal.
Note: Failure to comply with this section is an offence (see
subsection 1311(1)).
1071F Remedy for refusal to register transfer or transmission
(1) If a relevant authority in relation to a company:
(a) refuses or fails to register; or
(b) refuses or fails to give its consent or approval to the
registration of;
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Transfer of certain securities Division 2
Section 1071G
Corporations Act 2001 235
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
a transfer or transmission of securities of the company, the
transferee or transmittee may apply to the Court for an order under
this section.
(2) If the Court is satisfied on the application that the refusal or failure
was without just cause, the Court may:
(a) order that the transfer or transmission be registered; or
(b) make such other order as it thinks just and reasonable,
including:
(i) in the case of a transfer or transmission of shares—an
order providing for the purchase of the shares by a
specified member of the company or by the company;
and
(ii) in the case of a purchase by the company—an order
providing for the reduction accordingly of the capital of
the company.
(3) In this section:
relevant authority, in relation to a company, means:
(a) a person who has, 2 or more persons who together have, or a
body that has, authority to register a transfer or transmission
of securities of the company; or
(b) a person, 2 or more persons, or a body, whose consent or
approval is required before a transfer or transmission of
securities of the company is registered.
1071G Certification of transfers
(1) The certification by a company of an instrument of transfer of
securities of the company:
(a) is taken as a representation by the company to any person
acting on the faith of the certification that there have been
produced to the company such documents as on the face of
them show prima facie title to the securities in the transferor
named in the instrument of transfer; and
(b) is not taken as a representation that the transferor has any
title to the securities.
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Part 7.11 Title and transfer
Division 2 Transfer of certain securities
Section 1071G
236 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) If a person acts on the faith of a false certification by a company
made negligently, the company is under the same liability to the
person as if the certification had been made fraudulently.
(3) A certification may be expressed to be limited to 42 days or any
longer period from the date of certification. If it is, the company
and its officers and employees are not, in the absence of fraud,
liable in respect of the registration of any transfer of securities
comprised in the certification after the end of:
(a) the period so limited; or
(b) any extension of that period given by the company;
if the instrument of transfer has not, within that period, been
lodged with the company for registration.
(4) For the purposes of this section:
(a) an instrument of transfer is taken to be certified if it bears the
words “certificate lodged” or words to the like effect; and
(b) the certification of an instrument of transfer is taken to be
made by a company if:
(i) the person issuing the instrument is a person authorised
to issue certified instruments of transfer on the
company’s behalf; and
(ii) the certification is signed by a person authorised to
certify transfers on the company’s behalf or by an
officer of the company or of a body corporate so
authorised; and
(c) a certification that purports to be authenticated by a person’s
signature or initials (whether handwritten or not) is taken to
be signed by the person unless it is shown that the signature
or initials:
(i) was not or were not placed there by the person; and
(ii) was not or were not placed there by any other person
authorised to use the signature or initials;
for the purpose of certifying transfers on the company’s
behalf.
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Transfer of certain securities Division 2
Section 1071H
Corporations Act 2001 237
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1071H Duties of company with respect to issue of certificates
(1) Subject to subsection (2), within 2 months after a company issues a
security, the company must:
(a) complete and have ready for delivery to the holder of the
security all the appropriate certificates or other title
documents in connection with the issue of the security; and
(b) unless otherwise instructed by the holder, send or deliver the
completed certificates or other title documents to:
(i) the holder; or
(ii) if the holder has instructed the company in writing to
send them to a nominated person—that person.
Paragraph (a) has effect in relation to shares subject to the
conditions on which the shares are issued.
(2) If the operating rules of a prescribed CS facility include a provision
to the effect that:
(a) no document is required by subsection (1) to be completed
and delivered by a company in relation to the issue of a
security in specified circumstances; or
(b) the only document required by subsection (1) to be
completed and delivered by a company in relation to the
issue of a security in specified circumstances is the document
required by the provision;
the provision has effect accordingly.
(3) Within one month after the date on which a transfer of a security is
lodged with a company, the company must:
(a) complete and have ready for delivery to the transferee all the
appropriate transfer and title documents in connection with
the transfer; and
(b) unless otherwise instructed by the transferee, send or deliver
the completed documents to:
(i) the transferee; or
(ii) if the transferee has instructed the company in writing to
send them to a nominated person—that person.
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Part 7.11 Title and transfer
Division 2 Transfer of certain securities
Section 1071H
238 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
This subsection does not apply to a transfer that the company is for
any reason entitled to refuse to register and does not register.
(4) The only document required by subsection (3) to be completed and
delivered by a company in relation to a transfer covered by the
operating rules of a prescribed CS facility is the document (if any)
that those rules require to be completed and delivered.
(5) A company need not comply:
(a) with subsection (1) in relation to the issue of a security; or
(b) with subsection (3) in relation to a transfer of a security;
if the person to whom the security is issued, or the transferee, has:
(c) applied to ASIC for the making of a declaration under this
subsection; and
(d) been declared by ASIC, by writing published in the Gazette,
to be a person in relation to whom this section does not
apply.
(6) If:
(a) either:
(i) if subsection (1) applies—the holder referred to in that
subsection serves a notice on the company requiring the
company to remedy a contravention of that subsection;
or
(ii) if subsection (3) applies—the transferee referred to in
that subsection serves a notice on the company requiring
the company to remedy a contravention of that
subsection; and
(b) the company fails to remedy the contravention within 10
days after the service of the notice; and
(c) the person entitled to have the documents delivered to him or
her applies to the Court for an order under this subsection;
the Court may make an order directing the company and any
officer or employee of the company to remedy the contravention
within such period as is specified in the order.
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Transfer of certain securities Division 2
Section 1072A
Corporations Act 2001 239
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(7) An order under subsection (6) may provide that all costs of, and
incidental to, the application are to be borne by:
(a) the company; or
(b) any officer or employee of the company who was involved in
the contravention;
in such proportions as the Court thinks just and reasonable.
Subdivision B—Special provisions for shares
1072A Transmission of shares on death (replaceable rule—see
section 135)
If shares not held jointly
(1) If a shareholder who does not own shares jointly dies, the company
will recognise only the personal representative of the deceased
shareholder as being entitled to the deceased shareholder’s interest
in the shares.
(2) If the personal representative gives the directors the information
they reasonably require to establish the representative’s entitlement
to be registered as holder of the shares:
(a) the personal representative may:
(i) by giving a written and signed notice to the company,
elect to be registered as the holder of the shares; or
(ii) by giving a completed transfer form to the company,
transfer the shares to another person; and
(b) the personal representative is entitled, whether or not
registered as the holder of the shares, to the same rights as
the deceased shareholder.
(3) On receiving an election under subparagraph (2)(a)(i), the
company must register the personal representative as the holder of
the shares.
(4) A transfer under subparagraph (2)(a)(ii) is subject to the same rules
(for example, about entitlement to transfer and registration of
transfers) as apply to transfers generally.
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Part 7.11 Title and transfer
Division 2 Transfer of certain securities
Section 1072B
240 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
If shares held jointly
(5) If a shareholder who owns shares jointly dies, the company will
recognise only the survivor as being entitled to the deceased
shareholder’s interest in the shares. The estate of the deceased
shareholder is not released from any liability in respect of the
shares.
1072B Transmission of shares on bankruptcy (replaceable rule—see
section 135)
(1) If a person entitled to shares because of the bankruptcy of a
shareholder gives the directors the information they reasonably
require to establish the person’s entitlement to be registered as
holder of the shares, the person may:
(a) by giving a written and signed notice to the company, elect to
be registered as the holder of the shares; or
(b) by giving a completed transfer form to the company, transfer
the shares to another person.
(2) On receiving an election under paragraph (1)(a), the company must
register the person as the holder of the shares.
(3) A transfer under paragraph (1)(b) is subject to the same rules (for
example, about entitlement to transfer and registration of transfers)
as apply to transfers generally.
(4) This section has effect subject to the Bankruptcy Act 1966.
1072C Rights of trustee of estate of bankrupt shareholder
(1) If:
(a) because of the Bankruptcy Act 1966, a share in a company,
being part of the property of a bankrupt, vests in the trustee
of the bankrupt’s estate; and
(b) the bankrupt is the registered holder of that share;
this section applies whether or not the trustee has been registered
as the holder of the share.
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Transfer of certain securities Division 2
Section 1072C
Corporations Act 2001 241
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) On producing such information as the company’s directors
properly require, the trustee is entitled to:
(a) the same dividends and other benefits; and
(b) the same rights, for example, but without limitation, rights in
relation to:
(i) meetings of the company; or
(ii) documents, including notices of such meetings; or
(iii) voting; or
(iv) inspection of the company’s records;
as the bankrupt would be entitled to if he or she were not a
bankrupt.
(3) The trustee has the same rights:
(a) to transfer the share; and
(b) to require a person to do an act or give a consent in
connection with completing or registering a transfer of the
share;
as the bankrupt would have if he or she were not a bankrupt.
(4) If the trustee transfers the share, the transfer is as valid as if the
trustee had been registered as the holder of the share when the
trustee executed the instrument of transfer.
(5) A person or body whose consent or approval is required for the
transfer of shares in the company must not unreasonably withhold
consent or approval for the transfer of the share by the trustee.
(6) If:
(a) the company’s constitution requires:
(i) the share to be offered for purchase to a member of the
company; or
(ii) an invitation to buy the share to be issued to such a
member; and
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Part 7.11 Title and transfer
Division 2 Transfer of certain securities
Section 1072D
242 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) as at the end of a reasonable period after the trustee so offers
the share, or so issues such an invitation, no such member
has agreed to buy the share from the trustee at a reasonable
price;
the trustee may sell and transfer the share to a person other than
such a member.
(7) A provision of the company’s constitution is void as against the
trustee in so far as, apart from this section, it would affect rights
attached to the share:
(a) because the bankrupt is a bankrupt; or
(b) because of some event that led to the bankrupt becoming, or
that indicated that the bankrupt was about to become, or
might be about to become, a bankrupt; or
(c) for reasons including a reason referred to in paragraph (a) or
(b).
(8) Nothing in this section limits the generality of anything else in it.
(9) This section has effect despite anything in the company’s
constitution.
1072D Transmission of shares on mental incapacity (replaceable
rule—see section 135)
(1) If a person entitled to shares because of the mental incapacity of a
shareholder gives the directors the information they reasonably
require to establish the person’s entitlement to be registered as the
holder of the shares:
(a) the person may:
(i) by giving a written and signed notice to the company,
elect to be registered as the holder of the shares; or
(ii) by giving a completed transfer form to the company,
transfer the shares to another person; and
(b) the person is entitled, whether or not registered as the holder
of the shares, to the same rights as the shareholder.
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Section 1072E
Corporations Act 2001 243
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) On receiving an election under subparagraph (1)(a)(i), the
company must register the person as the holder of the shares.
(3) A transfer under subparagraph (1)(a)(ii) is subject to the same rules
(for example, about entitlement to transfer and registration of
transfers) as apply to transfers generally.
1072E Trustee etc. may be registered as owner of shares
(1) In this section:
share, in relation to a body corporate, means a share in the body
that is registered in a register kept in this jurisdiction.
(2) A trustee, executor or administrator of the estate of a dead person
who was the registered holder of a share in a corporation may be
registered as the holder of that share as trustee, executor or
administrator of that estate.
(3) A trustee, executor or administrator of the estate of a dead person
who was entitled in equity to a share in a corporation may, with the
consent of:
(a) the corporation; and
(b) the registered holder of that share;
be registered as the holder of that share as trustee, executor or
administrator of that estate.
(4) If:
(a) a person (the administrator) is appointed, under a law of a
State or Territory relating to the administration of the estates
of persons who, through mental or physical infirmity, are
incapable of managing their affairs, to administer the estate
of a person who is so incapable; and
(b) the incapable person is the registered holder of a share in a
corporation;
the administrator may be registered as the holder of that share as
administrator of that estate.
(5) If:
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Section 1072E
244 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) a person (the administrator) is appointed, under a law of a
State or Territory relating to the administration of the estates
of a person who, through mental or physical infirmity, are
incapable of managing their affairs, to administer the estate
of a person who is so incapable; and
(b) the incapable person is entitled in equity to a share in a
corporation;
the administrator may, with the consent of the corporation and of
the registered holder of that share, be registered as the holder of the
share as administrator of that estate.
(6) If:
(a) by virtue of the Bankruptcy Act 1966, a share in a body
corporate, being the property of a bankrupt, vests in the
Official Trustee in Bankruptcy; and
(b) the bankrupt is the registered holder of that share;
the Official Trustee may be registered as the holder of that share as
the Official Trustee in Bankruptcy.
(7) If:
(a) by virtue of the Bankruptcy Act 1966, a share in a body
corporate, being the property of a bankrupt, vests in the
Official Trustee in Bankruptcy; and
(b) the bankrupt is entitled in equity to that share;
the Official Trustee may, with the consent of the body and of the
registered holder of that share, be registered as the holder of that
share as the Official Trustee in Bankruptcy.
(8) A person registered under subsection (2), (3), (4), (5), (6) or (7), is,
while registered as mentioned in that subsection:
(a) subject to the same liabilities in respect of the share as those
to which he, she or it would have been subject if the share
had remained, or had been, as the case requires, registered in
the name of the dead person, the incapable person or the
bankrupt, as the case may be; and
(b) subject to no other liabilities in respect of the share.
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Section 1072F
Corporations Act 2001 245
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(9) Shares in a corporation registered in a register and held by a trustee
in respect of a particular trust may, with the consent of the
corporation, be marked in the register in such a way as to identify
them as being held in respect of the trust.
(10) Except as provided in this section and section 169:
(a) no notice of a trust, whether express, implied or constructive,
must be entered on a register kept in this jurisdiction or be
receivable by ASIC; and
(b) no liabilities are affected by anything done under a preceding
subsection of this section or under section 169; and
(c) nothing so done affects the body corporate concerned with
notice of a trust.
(11) A person must, within one month after beginning to hold shares in
a proprietary company as trustee for, or otherwise on behalf of or
on account of, a body corporate, serve on the company notice in
writing that the person so holds the shares.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
1072F Registration of transfers (replaceable rule—see section 135)
(1) A person transferring shares remains the holder of the shares until
the transfer is registered and the name of the person to whom they
are being transferred is entered in the register of members in
respect of the shares.
(2) The directors are not required to register a transfer of shares in the
company unless:
(a) the transfer and any share certificate have been lodged at the
company’s registered office; and
(b) any fee payable on registration of the transfer has been paid;
and
(c) the directors have been given any further information they
reasonably require to establish the right of the person
transferring the shares to make the transfer.
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Section 1072G
246 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) The directors may refuse to register a transfer of shares in the
company if:
(a) the shares are not fully-paid; or
(b) the company has a lien on the shares.
(4) The directors may suspend registration of transfers of shares in the
company at the times and for the periods they determine. The
periods of suspension must not exceed 30 days in any one calendar
year.
1072G Additional general discretion for directors of proprietary
companies to refuse to register transfers (replaceable
rule—see section 135)
The directors of a proprietary company may refuse to register a
transfer of shares in the company for any reason.
1072H Notices relating to non-beneficial and beneficial ownership of
shares
(1) If, upon registration of a transfer of shares in a company, the
transferee would hold non-beneficially particular shares (the
relevant shares), being all or any of the shares to which the
transfer relates, the transferee must only lodge the instrument of
transfer with the company for registration of the transfer if the
instrument of transfer includes a notice that:
(a) contains a statement to the effect that, upon registration of
the transfer, the transferee will hold the relevant shares
non-beneficially; and
(b) sets out particulars of the relevant shares; and
(c) is signed by or on behalf of the transferee.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) The fact that a person has failed to comply with subsection (1) does
not affect the validity of the registration of a transfer of shares in a
company.
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(3) If:
(a) an instrument of transfer of shares in a company includes a
notice of the kind referred to in paragraph (1)(c) and is
lodged with the company for registration of the transfer; and
(b) upon registration of the transfer, the transferee holds
beneficially particular shares (in this subsection called the
relevant shares), being all or any of the shares particulars of
which are set out in the notice;
then, before the end of 14 days beginning on registration of the
transfer, the transferee must, whether or not the transferee begins
before the end of that period to hold all or any of the relevant
shares non-beneficially, give to the company a notice that:
(c) sets out the name and address of the transferee; and
(d) contains a statement to the effect that, as from registration of
the transfer, the transferee holds the relevant shares
beneficially; and
(e) sets out particulars of the relevant shares; and
(f) is signed by or on behalf of the transferee.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(4) If:
(a) an instrument of transfer of shares in a company is lodged
with the company for registration of the transfer; and
(b) upon registration of the transfer, the transferee holds
non-beneficially particular shares (in this subsection called
the relevant shares), being all or any of the shares to which
the instrument of transfer relates (other than, in a case in
which the instrument of transfer includes a notice of the kind
referred to in paragraph (1)(c), the shares particulars of which
are set out in the notice);
then, before the end of 14 days beginning on registration of the
transfer, the transferee must, whether or not the transferee begins
before the end of that period to hold any of the relevant shares
beneficially, give to the company a notice that:
(c) sets out the name and address of the transferee; and
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(d) contains a statement to the effect that, as from registration of
the transfer, the transferee holds the relevant shares
non-beneficially; and
(e) sets out particulars of the relevant shares; and
(f) is signed by or on behalf of the transferee.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(5) If:
(a) at a particular time, a person holds beneficially shares in a
company; and
(b) immediately after that time, the person holds non-beneficially
particular shares (in this subsection called the relevant
shares), being all or any of the shares referred to in
paragraph (a);
then, before the end of 14 days beginning at that time, the person
must, whether or not the person recommences before the end of
that period to hold any of the relevant shares beneficially, give to
the company a notice that:
(c) sets out the name and address of the person; and
(d) contains a statement to the effect that, after that time, the
person holds the relevant shares non-beneficially; and
(e) specifies that time and sets out particulars of the relevant
shares; and
(f) is signed by or on behalf of the person.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(6) If:
(a) at a particular time, a person holds non-beneficially shares in
a company; and
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(b) immediately after that time, the person holds beneficially
particular shares (in this subsection called the relevant
shares), being all or any of the shares referred to in
paragraph (a);
then, before the end of 14 days beginning at that time, the person
must, whether or not the person recommences before the end of
that period to hold any of the relevant shares non-beneficially, give
to the company a notice that:
(c) sets out the name and address of the person; and
(d) contains a statement to the effect that, after that time, the
person holds the relevant shares beneficially; and
(e) specifies that time and sets out particulars of the relevant
shares; and
(f) is signed by or on behalf of the person.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(7) In proceedings under, or for an offence based on a provision of,
this section, a person is, unless the contrary is established,
presumed to have been aware at a particular time of a circumstance
of which an employee or agent of the person, being an employee or
agent having duties or acting in relation to the transfer to, or
ownership by, the person of a share or shares in the company
concerned, was aware at that time.
(8) For the purposes of this section and of section 169:
(a) if, at a particular time, a person:
(i) holds shares in a capacity other than that of sole
beneficial owner; or
(ii) without limiting the generality of subparagraph (i),
holds shares as trustee for, as nominee for, or otherwise
on behalf of or on account of, another person;
the first-mentioned person is taken to hold the shares
non-beneficially at that time; and
(b) a person who holds shares at a particular time is taken to hold
the shares beneficially at that time unless the person holds the
shares non-beneficially at that time.
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Section 1073A
250 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Transfer of certain securities effected
otherwise than through a prescribed CS facility
1073A Application of the Division to certain securities
(1) This Division applies to the following securities:
(a) shares in a company;
(b) debentures of a company;
(c) interests in a registered scheme, being interests that are
covered by regulations made for the purposes of this
paragraph;
(d) rights (whether existing or future, and whether contingent or
not) to acquire, by way of issue, a security referred to in
paragraph (a), (b) or (c) (whether or not on payment of any
money or for any other consideration);
(da) a CGS depository interest;
(db) a simple corporate bonds depository interest;
(e) securities declared by ASIC under section 1073E to be
securities to which the regulations apply.
(2) This Division applies to an interest in a registered scheme as if:
(a) references to a company were instead references to the
responsible entity of the registered scheme; and
(b) references to the constitution of a company were instead
references to the constitution of the registered scheme; and
(c) references to members of a company were instead references
to members of the registered scheme.
1073B Definitions
In this Division, unless the contrary intention appears:
transfer of a financial product means:
(a) a change in the ownership of the financial product; or
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Section 1073C
Corporations Act 2001 251
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(b) if the financial product is a right—the renunciation and
transfer of the right.
transfer document for the transfer of a financial product means a
document, or electronic message or other electronic
communication, by which the financial product is transferred.
1073C Application of Division to certain bodies as if they were
companies
This Division applies to the following as if they were companies:
(a) a body corporate (other than a company) that:
(i) is incorporated in a State or Territory in this
jurisdiction; and
(ii) is prescribed by regulations made for the purposes of
this subparagraph;
(b) an unincorporated society, association or body, that:
(i) is formed or established in a State or Territory in this
jurisdiction; and
(ii) is included in the official list of a licensed market; and
(iii) is prescribed by regulations made for the purposes of
this paragraph.
1073D Regulations may govern transfer of certain securities
(1) The regulations may make provision in relation to transfers of
securities that are not effected through a prescribed CS facility.
Regulations may make provision in relation to the transfer of
securities
(2) The regulations may specify:
(a) the way in which a security may be transferred, including:
(i) the forms (if any) to be used; and
(ii) what amounts to a proper or sufficient transfer of a
security; and
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Section 1073D
252 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the legal effect of a proper or sufficient transfer of a security;
and
(c) the rights, liabilities and obligations of a person in relation to
the transfer of a security, including the rights, liabilities and
obligations of:
(i) the transferor and transferee; and
(ii) any other person involved in the transfer; and
(d) the circumstances in which a person will be taken to be
involved in the transfer of a security for the purposes of the
regulations; and
(e) the circumstances in which a person is required not to
register, or give effect to, a transfer.
Sufficient transfer
(3) Without limiting paragraph (2)(a), the regulations may:
(a) specify the requirements for a document to be a sufficient
transfer of a security; and
(b) provide that a document meeting specified requirements may
be used:
(i) as a proper instrument of transfer for the purposes of
section 1071B; and
(ii) as an instrument of transfer for the purposes of any
other law or instrument governing or relating to the
security.
Rights and liabilities in relation to transfer
(4) Without limiting paragraph (2)(c), the regulations may provide that
a person:
(a) is taken to have:
(i) agreed to do, to accept or to be bound by a particular
thing; or
(ii) done a particular thing; or
(iii) given particular warranties; or
(iv) done particular things on behalf of another person; or
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Corporations Act 2001 253
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(b) is taken to be authorised to do particular things on behalf of
another person; or
(c) is taken to be bound by a particular act; or
(d) is liable to indemnify another person against particular loss
or damage; or
(e) is entitled to assume a particular matter without inquiry.
Person involved in transfer
(5) Without limiting paragraph (2)(d), the regulations may provide for
any of the following to be taken to be involved in a transfer of
securities:
(a) a person who carries on a financial services business and who
arranges for the transfer; and
(b) a person who operates a financial market on which the
securities are sold; and
(c) a person who operates a licensed CS facility through which
the securities are transferred; and
(d) a company with which the transfer is lodged for registration;
and
(e) an associate of a person who is involved in the transfer.
The regulations may specify the circumstances in which a person
will be taken to be an associate of another person for the purposes
of the regulations.
Offences
(6) Without limiting subsection (2), the regulations may provide for
offences in relation to:
(a) the use, or purported use, of a stamp of a person who:
(i) carries on a financial services business; or
(ii) operates a financial market; or
(iii) operates a clearing and settlement facility; or
(b) the execution of a document, or the transmission of an
electronic message or other electronic communication, that
may be used as a sufficient transfer under this Division; or
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Section 1073E
254 Corporations Act 2001
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(c) the lodgment of a transfer document or title document for a
security with the issuer of the security; or
(d) the use of identifying codes in relation to transfers of
securities.
Jurisdiction
(7) The regulations may apply to conduct engaged in in this
jurisdiction or elsewhere.
1073E ASIC may extend regulations to securities not otherwise
covered
(1) ASIC may, by writing, declare that:
(a) particular securities; or
(b) a particular class of securities;
are securities to which this Division, and regulations made for the
purposes of section 1073D, apply.
Note: The securities in respect of which a declaration under this subsection
may be made are not limited to those covered by paragraphs
1073A(1)(a) to (db).
(2) ASIC may specify in the declaration modifications of the
regulations that are to have effect in relation to the application of
this Division and the regulations to the securities, or the class of
securities, to which the declaration relates.
(3) A declaration under subsection (1) has effect accordingly.
(4) ASIC must cause a copy of a declaration under subsection (1) to be
published in the Gazette.
(5) If conduct (including an omission) of a person would not have
constituted an offence if a particular declaration under
subsection (1) had not been made, that conduct does not constitute
an offence unless, before the conduct occurred (in addition to
complying with the gazettal requirement of subsection (4)):
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Corporations Act 2001 255
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(a) the text of the declaration was made available by ASIC on
the internet; or
(b) ASIC gave written notice setting out the text of the
declaration to the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with
before the conduct occurred.
1073F Operation of this Division and regulations made for its
purposes
(1) This section deals with the effect of the provisions of:
(a) this Division; and
(b) the regulations made for the purposes of this Division.
(2) The provisions apply in relation to a transfer of securities despite
anything to the contrary in:
(a) this Act (other than this Division); or
(b) another law, or instrument, relating to the transfer of the
securities.
(3) Except as provided in the provisions, the provisions do not affect
the terms and conditions on which securities are sold.
(4) Nothing in the provisions affects any right of the issuer of a
security to refuse:
(a) to acknowledge or register a person as the holder of a
security; or
(b) to issue a security to a person;
on a ground other than an objection to the form of document, or
electronic message or other electronic communication, that is
lodged with or sent to the issuer and purports to transfer the
security to the person.
(5) The registration of a transfer, or the issue, of a security by means
of a transfer effected in accordance with regulations made for the
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Section 1073F
256 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
purposes of this Division does not breach any law, constitution,
trust deed or other instrument relating to financial products.
(6) Nothing in the provisions prevents or affects the use of:
(a) any other form of transfer of securities; or
(b) any other mode of executing a document transferring
securities;
that is otherwise permitted by law.
(7) A transfer of a security by or to a trustee or legal representative
may be effected by means of a transfer in accordance with
regulations made for the purposes of this Division. The transfer
may be so effected despite the means required by any law or the
provisions of the instrument (if any) creating, or having effect in
relation to, the trust or will under which the trustee or legal
representative is appointed.
(8) In subsection (7):
legal representative means:
(a) the executor, original or by representation, of a will of a dead
person; or
(b) the administrator of the estate of a dead person.
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Section 1074A
Corporations Act 2001 257
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Transfer of financial products effected through
prescribed CS facility
1074A Financial products to which this Division applies
This Division only applies in relation to particular financial
products and a prescribed CS facility if regulations made for the
purposes of this section provide that all financial products, or a
class of financial products that includes the financial products, are
financial products to which this Division applies in relation to the
prescribed CS facility (whether or not they are also products to
which this Division applies in relation to other prescribed CS
facilities).
1074B Definitions
In this Division, unless the contrary intention appears:
transfer of a financial product has the meaning given by
section 1073B.
transfer document for the transfer of a financial product has the
meaning given by section 1073B.
1074C Operating rules of prescribed CS facility may deal with
transfer of title
(1) The operating rules of a prescribed CS facility may deal with the
transfer of financial products through the facility.
(2) Without limiting subsection (1), the operating rules of a prescribed
CS facility may deal with the way in which a financial product may
be transferred, including specifying:
(a) the financial products that may be transferred through the
facility; and
(b) how financial products are transferred through the facility;
and
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Section 1074D
258 Corporations Act 2001
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(c) the person or body (if any) authorised to determine whether a
transfer substantially complies with the operating rules of the
facility.
(3) Nothing in subsection (1) or (2) confers a discretion to deal with a
matter in the operating rules of a prescribed CS facility if there is
an obligation under section 822A for that matter to be dealt with in
those rules.
1074D Valid and effective transfer if operating rules complied with
(1) If a transfer of a financial product is effected:
(a) through a prescribed CS facility; and
(b) in accordance with the operating rules of the facility;
the transfer is valid and effective for the purposes of any law or
instrument governing or relating to the way in which the financial
product may be transferred.
(2) For the purposes of this section, the transfer of a financial product
is taken to be, and always to have been, effected in accordance
with the operating rules of a prescribed CS facility if the person or
body authorised to do so under those rules determines that the
transfer substantially complies with those rules.
1074E Regulations may govern transfer of financial products in
accordance with operating rules of prescribed CS facility
Transfers that regulations may deal with
(1) The regulations may make provision in relation to transfers of
financial products effected:
(a) through a prescribed CS facility; and
(b) in accordance with the operating rules of the facility.
Regulations may make provision in relation to the transfer of
financial products
(2) The regulations may specify:
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Section 1074E
Corporations Act 2001 259
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(a) the legal effect of a transfer of a financial product through the
facility in accordance with its operating rules; and
(b) the rights, liabilities and obligations of a person in relation to
the transfer of a financial product through the facility,
including the rights, liabilities and obligations of:
(i) the transferor and transferee; and
(ii) any other person involved in the transfer; and
(c) the circumstances in which a person will be taken to be
involved in the transfer of a financial product for the
purposes of the regulations; and
(d) the circumstances in which a person is required not to
register, or give effect to, a transfer through the facility; and
(e) the circumstances in which a person is required not to refuse
or fail to register, or give effect to, a transfer through the
facility; and
(f) the circumstances in which a transfer through the facility will
be taken to have been made in accordance with the rules of a
prescribed CS facility; and
(g) the circumstances in which a person will be taken to be the
holder of a financial product for the purposes of:
(i) a meeting; or
(ii) paying or transferring money or property to a person
because the person holds or held a financial product; or
(iii) issuing a financial product to a person because the
person holds or held a financial product; or
(iv) conferring a right on a person because the person holds
or held a financial product.
Rights and liabilities in relation to transfer
(3) Without limiting paragraph (2)(b), the regulations may provide that
a person:
(a) is taken to have:
(i) agreed to do, to accept or to be bound by a particular
thing; or
(ii) done a particular thing; or
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Section 1074E
260 Corporations Act 2001
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(iii) given particular warranties; or
(iv) done particular things on behalf of another person; or
(b) is taken to be authorised to do particular things on behalf of
another person (even if the person has died); or
(c) is taken to be bound by a particular act; or
(d) is liable to indemnify another person against particular loss
or damage; or
(e) is entitled to assume a particular matter without inquiry.
Person involved in transfer
(4) Without limiting paragraph (2)(c), the regulations may provide for
any of the following to be taken to be involved in a transfer of a
financial product:
(a) a person who carries on a financial services business and who
arranges for the transfer;
(b) a person who operates a financial market on which the
financial product is sold;
(c) a person who operates a licensed CS facility through which
the product is transferred;
(d) the issuer of the product;
(e) an associate of a person who is involved in the transfer.
The regulations may specify the circumstances in which a person
will be taken to be an associate of another person for the purposes
of the regulations.
Offences
(5) Without limiting subsection (2), the regulations may provide for
offences in relation to:
(a) the lodgment of a transfer document or title document for a
financial product with the issuer of the product; or
(b) the use of identifying codes in relation to transfers of
financial products; or
(c) contraventions of the operating rules of a prescribed CS
facility.
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Section 1074F
Corporations Act 2001 261
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Civil liability
(6) The regulations may also:
(a) provide for the liability of a person who contravenes the
operating rules of a prescribed CS facility to compensate a
person for loss or damage the person suffers because of the
conduct engaged in in contravention of those rules; and
(b) specify the period within which an action for compensation
must be begun.
(7) The regulations do not affect a liability that a person has under any
other law.
Jurisdiction
(8) The regulations may apply to conduct engaged in in this
jurisdiction or elsewhere.
1074F Issuer protected from civil liability for person’s contravention
of prescribed CS facility’s certificate cancellation rules
If:
(a) a person contravenes the certificate cancellation provisions of
a prescribed CS facility in relation to the transfer of a
particular financial product through the facility; and
(b) the issuer of the financial product is not involved in the
contravention;
the issuer is not liable to an action or other proceeding for damages
in relation to the person’s contravention.
1074G Operation of this Division and regulations made for its
purposes
(1) This section deals with the effect of the provisions of:
(a) this Division; and
(b) the regulations made for the purposes of this Division.
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Section 1074G
262 Corporations Act 2001
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(2) The provisions apply in relation to a transfer of financial products
despite anything to the contrary in:
(a) this Act (other than this Division); or
(b) another law, or instrument, relating to the transfer of the
financial products.
(3) Except as provided in the provisions, the provisions do not affect
the terms and conditions on which financial products are sold.
(4) Nothing in the provisions (other than in regulations made for the
purpose of paragraph 1074E(2)(e)) affects any right of the issuer of
a financial product to refuse:
(a) to acknowledge or register a person as the holder of a
financial product; or
(b) to issue a financial product to a person;
on a ground other than an objection to the form of document, or
electronic message or other electronic communication, that is
lodged with or sent to the issuer and purports to transfer the
financial product to the person.
(5) The registration of a transfer, or the issue, of a financial product by
means of a transfer effected in accordance with the operating rules
of a prescribed CS facility does not breach any law, constitution,
trust deed or other instrument relating to financial products.
(6) Nothing in the provisions (other than in regulations made for the
purpose of paragraph 1074E(2)(d)) prevents or affects the use of:
(a) any other form of transfer of financial products; or
(b) any other mode of executing a document transferring
financial products;
that is otherwise permitted by law.
(7) A transfer of a financial product by or to a trustee or legal
representative may be effected by means of a transfer in
accordance with the operating rules of a prescribed CS facility
despite any law or the provisions of the instrument (if any)
creating, or having effect in relation to, the trust or will under
which the trustee or legal representative is appointed.
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Transfer of financial products effected through prescribed CS facility Division 4
Section 1074G
Corporations Act 2001 263
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(8) In subsection (7):
legal representative means:
(a) the executor, original or by representation, of a will of a dead
person; or
(b) the administrator of the estate of a dead person.
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Part 7.11 Title and transfer
Division 5 Exemptions and modifications
Section 1075A
264 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—Exemptions and modifications
1075A ASIC’s power to exempt and modify
(1) ASIC may:
(a) exempt specified financial products, or a specified class of
financial products, from a provision of this Part; or
(b) declare that this Part applies to specified financial products,
or a specified class of financial products, as if specified
provisions were omitted, modified or varied as specified in
the declaration.
(2) ASIC’s power to grant an exemption or make a declaration under
this section may be exercised in relation to financial products, or a
class of financial products, only if ASIC is satisfied that:
(a) if the exemption were granted or the declaration were made,
the interests of the holders of those financial products, or of
financial products in that class, would continue to have
adequate protection; and
(b) the granting of the exemption or the making of the
declaration would make the transfer of those financial
products, or of financial products in that class, more efficient.
(3) The exemption or declaration may:
(a) apply to all or specified provisions of this Part; and
(b) apply to all persons, specified persons, or a specified class of
persons; and
(c) relate to all financial products, specified financial products or
a specified class of financial products; and
(d) relate to any other matter generally or as specified.
(4) An exemption may apply unconditionally or subject to specified
conditions. A person to whom a condition specified in an
exemption applies must comply with the condition. The Court may
order the person to comply with the condition in a specified way.
Only ASIC may apply to the Court for the order.
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Section 1075A
Corporations Act 2001 265
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(5) The exemption or declaration must be in writing and ASIC must
publish notice of it in the Gazette.
(6) If conduct (including an omission) of a person would not have
constituted an offence if a particular declaration under
paragraph (1)(b) had not been made, that conduct does not
constitute an offence unless, before the conduct occurred (in
addition to complying with the gazettal requirement of
subsection (5)):
(a) the text of the declaration was made available by ASIC on
the internet; or
(b) ASIC gave written notice setting out the text of the
declaration to the person.
In a prosecution for an offence to which this subsection applies, the
prosecution must prove that paragraph (a) or (b) was complied with
before the conduct occurred.
(7) For the purposes of this section, the provisions of this Part include:
(a) definitions in this Act, or in the regulations, as they apply to
references in this Part; and
(b) any provisions of Part 10.2 (transitional provisions) that
relate to provisions of this Part.
Note: Because of section 761H, a reference to this Part or Part 10.2 also
includes a reference to regulations or other instruments made for the
purposes of this Part or Part 10.2 (as the case requires).
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Part 7.12 Miscellaneous
Division 1 Qualified privilege
Section 1100A
266 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 7.12—Miscellaneous
Division 1—Qualified privilege
1100A Qualified privilege for information given to ASIC
(1) A person has qualified privilege in respect of the giving of any
information to ASIC that the person:
(a) is required to give under this Chapter or regulations made for
the purposes of this Chapter; or
(b) gives in relation to a contravention or suspected
contravention of subsection 798H(1) (complying with market
integrity rules).
(2) A person or body that is:
(a) a market licensee; or
(b) a CS facility licensee; or
(c) a person acting under an arrangement to operate a licensed
market or supervise a licensed CS facility; or
(d) a foreign person or body responsible for the supervision of
the operation in a foreign country of a financial market or
clearing and settlement facility;
also has qualified privilege in respect of the giving of any
information to ASIC in connection with the performance or
exercise of ASIC’s functions or powers under, or in relation to, this
Chapter or regulations made for the purposes of this Chapter.
(3) A person or body that has qualified privilege under subsection (1)
or (2) in respect of conduct is also not liable for any action based
on breach of confidence in relation to that conduct.
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Section 1100B
Corporations Act 2001 267
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1100B Qualified privilege for the conduct of market licensees and
CS facility licensees
(1) A market licensee, or CS facility licensee, has qualified privilege in
respect of actions (including the giving of information) done in
connection with:
(a) the performance, or purported performance, of the licensee’s
obligations under this Act; or
(b) the exercise or performance, or purported exercise or
performance, of the licensee’s powers, functions or
obligations under the operating rules of the market or facility
concerned, if the licensee believes, on reasonable grounds,
that the action is necessary:
(i) in the case of a market licensee—to ensure the market
operates in a fair, orderly and transparent way; or
(ii) in the case of a CS facility licensee—to ensure the
facility’s services are provided in a fair and effective
manner or to reduce systemic risk in the provision of
those services.
(2) A market licensee, or CS facility licensee, has qualified privilege in
respect of the giving of information:
(a) to the operator of a financial market (regardless of where the
market is operated) for the purpose of assisting the operator
to ensure that market operates in a fair, orderly and
transparent way; or
(b) to the operator of a clearing and settlement facility
(regardless of where the facility is operated) for the purpose
of assisting the operator to ensure that facility’s services are
provided in a fair and effective manner or to reduce systemic
risk.
(3) Despite subsections (1) and (2), a market licensee does not have
qualified privilege in respect of the giving of information if:
(a) an entity included on the market’s official list gave the
information to the licensee under a provision of this Act or of
the market’s operating rules; and
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Section 1100C
268 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) this Act, or those rules, expressly or impliedly authorised the
entity to limit the purposes for which it gave the information
to the licensee; and
(c) when giving the information to the licensee, the entity limited
those purposes as so authorised; and
(d) the giving of the information by the licensee is not solely for
one or more of the limited purposes.
(4) The protections given by this section apply to the giving of
information whether or not the recipient of the information has an
interest in the information.
1100C Qualified privilege for information given to market licensees
and CS facility licensees etc.
A person has qualified privilege in respect of the giving of
information if:
(a) the person gives the information to any of the following
persons or bodies:
(i) a market licensee;
(ii) a CS facility licensee;
(iii) a person acting under an arrangement to operate a
licensed market or supervise a licensed CS facility;
(iv) a foreign person or body responsible for the supervision
of the operation in a foreign country of a financial
market or clearing and settlement facility; and
(b) the information is in relation to a contravention or suspected
contravention of this Act or the operating rules of the market
or facility concerned.
1100D Extension of protections given by this Division
The protections given by this Division to a person or body in
respect of conduct extend to officers, employees and
representatives of the person or body.
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Section 1101A
Corporations Act 2001 269
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Division 2—Other matters
1101A Approved codes of conduct
(1) ASIC may, on application, approve codes of conduct that relate to
any aspect of the activities of:
(a) financial services licensees; or
(b) authorised representatives of financial services licensees; or
(c) issuers of financial products;
being activities in relation to which ASIC has a regulatory
responsibility. The approval must be in writing.
(2) ASIC may, on application, approve a variation of an approved code
of conduct. The approval must be in writing.
(3) ASIC must not approve a code of conduct, or a variation of a code
of conduct, unless it is satisfied that:
(a) the code, or the code as proposed to be varied, is not
inconsistent with this Act or any other law of the
Commonwealth under which ASIC has regulatory
responsibilities; and
(b) it is appropriate to approve the code, having regard to the
following matters, and to any other matters that ASIC
considers are relevant:
(i) the ability of the applicant to ensure that persons who
hold out that they comply with the code will comply
with the code as in force from time to time; and
(ii) the desirability of codes of conduct being harmonised to
the greatest extent possible.
(4) ASIC may revoke an approval of a code of conduct:
(a) on application by the person who applied for the approval; or
(b) if ASIC is no longer satisfied as mentioned in subsection (3).
The revocation must be in writing.
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Section 1101B
270 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1101B Power of Court to make certain orders
Court’s power to make orders in relation to certain contraventions
(1) The Court may make such order, or orders, as it thinks fit if:
(a) on the application of ASIC, it appears to the Court that a
person:
(i) has contravened a provision of this Chapter, or any
other law relating to dealing in financial products or
providing financial services; or
(ii) has contravened a condition of an Australian market
licence, Australian CS facility licence, Australian
derivative trade repository licence or Australian
financial services licence; or
(iii) has contravened a provision of the operating rules, or
the compensation rules (if any), of a licensed market or
of the operating rules of a licensed CS facility; or
(v) has contravened a condition on an exemption from the
requirement to hold an Australian market licence or an
Australian CS facility licence; or
(vi) is about to do an act with respect to dealing in financial
products or providing a financial service that, if done,
would be such a contravention; or
(b) on the application of a market licensee, it appears to the
Court that a person has contravened the operating rules, or
the compensation rules (if any), of a licensed market operated
by the licensee; or
(c) on the application of a CS facility licensee, it appears to the
Court that a person has contravened a provision of the
operating rules of a licensed CS facility operated by the
licensee; or
(d) on the application of a person aggrieved by an alleged
contravention by another person of subsection 798H(1)
(complying with market integrity rules) or a provision of the
operating rules, or the compensation rules (if any), of a
licensed market, it appears to the Court that:
(i) the other person did contravene the provision; and
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(ii) the applicant is aggrieved by the contravention.
However, the Court can only make such an order if the Court is
satisfied that the order would not unfairly prejudice any person.
Note: For examples of orders the Court could make, see subsection (4).
(2) For the purposes of paragraph (1)(d), if a body corporate
contravenes a provision of the operating rules of a licensed market,
a person who holds financial products of the body corporate that
are able to be traded on the licensed market is taken to be a person
aggrieved by the contravention.
(3) Subsection (2) does not limit the circumstances in which a person
may be aggrieved by a contravention for the purposes of
paragraph (1)(d).
Examples of orders the Court may make
(4) Without limiting subsection (1), some examples of orders the Court
may make under subsection (1) include:
(a) an order restraining a person from carrying on a business, or
doing an act or classes of acts, in relation to financial
products or financial services, if the person has persistently
contravened, or is continuing to contravene:
(i) a provision or provisions of this Chapter; or
(ii) a provision or provisions of any other law relating to
dealing in financial products or providing financial
services; or
(iii) a condition on an Australian market licence, Australian
CS facility licence, Australian derivative trade
repository licence or Australian financial services
licence; or
(v) a condition of an exemption from a requirement to hold
an Australian market licence or Australian CS facility
licence; or
(vi) a provision of the operating rules, or the compensation
rules (if any), of a licensed market or of the operating
rules of a licensed CS facility; or
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(b) an order giving directions about complying with a provision
of the market integrity rules, or of the derivative transaction
rules or the derivative trade repository rules, or a provision of
the operating rules, or the compensation rules (if any), of a
licensed market or of the operating rules of a licensed CS
facility to a person (or the directors of the body corporate, if
the person is a body corporate) who contravened the
provision; and
(c) an order requiring a person to disclose to the public or to
specified persons, in accordance with the order, specified
information that the person to whom the order is directed
possesses or to which that person has access, if the person:
(i) contravened a provision of the market integrity rules, or
of the derivative transaction rules or the derivative trade
repository rules, or a provision of the operating rules of
a licensed market or a condition relating to the
disclosure or provision of information; or
(ii) was involved in such a contravention; and
(d) an order requiring a person to publish advertisements in
accordance with the order at that person’s expense, if the
person:
(i) contravened a provision of the market integrity rules, or
of the derivative transaction rules or the derivative trade
repository rules, or a provision of the operating rules of
a licensed market, or a condition relating to the
disclosure or provision of information; or
(ii) was involved in such a contravention; and
(e) an order restraining a person from acquiring, disposing of or
otherwise dealing with any financial products that are
specified in the order; and
(f) an order restraining a person from providing any financial
services that are specified in the order; and
(g) an order appointing a receiver of property (see
subsection (9)) of a financial services licensee; and
(h) an order declaring a contract relating to financial products or
financial services to be void or voidable; and
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Corporations Act 2001 273
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(i) an order directing a person to do or refrain from doing a
specified act, if that order is for the purpose of securing
compliance with any other order under this section; and
(j) any ancillary order considered to be just and reasonable in
consequence of the making of an order under any of the
preceding provisions of this subsection.
Interim orders
(5) Before considering an application to the Court under
subsection (1), the Court may make an interim order of the kind
applied for to apply pending the determination of the application, if
in the opinion of the Court it is desirable to do so.
(6) However, if ASIC, a market licensee or a CS facility licensee
applies for an order under subsection (1), the Court must not
require the applicant, or any other person, to give any undertakings
as to damages as a condition of making an interim order under
subsection (5).
Power to give notice of applications
(7) Before making an order under subsection (1), the Court may do
either or both of the following:
(a) direct that notice of the application be given to such persons
as it thinks fit;
(b) direct that notice of the application be published in such
manner as it thinks fit.
Powers of receivers appointed under Court orders
(8) A person appointed by order of the Court under subsection (1) as a
receiver of the property (see subsection (12)) of a financial services
licensee:
(a) may require the financial services licensee to:
(i) deliver to the person any property of which the person
has been appointed receiver; or
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274 Corporations Act 2001
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(ii) give to the person all information concerning that
property that may reasonably be required; and
(b) may acquire and take possession of any property of which the
person has been appointed receiver; and
(c) may deal with any property that the person has acquired, or
of which the person has taken possession, in any way in
which the financial services licensee might lawfully have
dealt with the property; and
(d) has such other powers in respect of the property as the Court
specifies in the order.
Duty to comply with order
(10) A person must not, without reasonable excuse, contravene:
(a) an order under this section; or
(b) a requirement imposed under paragraph (8)(a) or (8)(d) by a
receiver appointed by order of the Court under
subsection (1).
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Power to rescind or vary order
(11) The Court may rescind or vary an order made by it under this
section or suspend the operation of such an order.
(12) In this section:
compensation rules has the same meaning as in Part 7.5.
property, in relation to a financial services licensee, includes:
(a) money; or
(b) financial products; or
(c) documents of title to financial products; or
(d) other property;
entrusted to, or received on behalf of, any other person by the
financial services licensee or another person in the course of, or in
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Section 1101C
Corporations Act 2001 275
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connection with, a financial services business carried on by the
financial services licensee.
1101C Preservation and disposal of records etc.
Registers
(1) A person who is required by a provision of this Chapter to keep a
register in relation to a business carried on by the person must
preserve it for 5 years after the day on which the last entry was
made in the register.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Financial records
(2) A person who is required by a provision of this Chapter to keep
any financial record in relation to a business carried on by the
person must preserve it for 7 years after the transactions covered
by the record are completed.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Other records
(3) A person who is required by a provision of this Chapter or the
regulations to keep any other record must preserve it for 5 years
after the day on which the last entry was made in the record.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
Exceptions
(4) Registers and records must be preserved in accordance with this
section (even if the person stops carrying on the business to which
they relate during the period for which they must be preserved),
unless:
(a) the regulations provide that those documents, or a class to
which they belong, need not be preserved; and
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Section 1101D
276 Corporations Act 2001
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(b) any conditions specified in or under those regulations have
been complied with.
Note: A defendant bears an evidential burden in relation to the matters in
this subsection. See subsection 13.3(3) of the Criminal Code.
1101D Destruction of records by ASIC
ASIC may destroy or otherwise dispose of any document that is
lodged under, or for the purposes of, a provision of this Chapter if:
(a) ASIC is of the opinion that it is no longer necessary or
desirable to retain it; and
(b) it has been in the possession of ASIC for such period as is
specified in the regulations, either generally or in relation to a
particular document or class of documents.
1101E Concealing etc. of books
(1) A person must not:
(a) conceal, destroy, mutilate or alter a book:
(i) relating to the business carried on by a financial services
licensee or an authorised representative of such a
licensee; or
(ii) required under a provision of this Chapter to be kept by
a market licensee, a CS facility licensee, a financial
services licensee or an authorised representative of a
financial services licensee; or
(b) send such a book out of this jurisdiction.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(2) In any proceedings against a person for an offence based on
subsection (1), it is a defence if the person did not act with intent
to:
(a) defraud; or
(b) defeat the objects of this Chapter; or
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(c) prevent, delay or obstruct the carrying out of an examination,
investigation or audit, or the exercise of a power, under this
Chapter.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (2). See subsection 13.3(3) of the Criminal Code.
1101F Falsification of records
(1A) A person must not engage in conduct that results in the falsification
of:
(a) a book required to be kept by a provision of this Chapter; or
(b) a register or any accounting or other record referred to in
section 1101C.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(1) If matter that is used, or intended to be used, in connection with:
(a) the keeping of a book required to be kept by a provision of
this Chapter; or
(b) a register or any accounting or other record referred to in
section 1101C;
is recorded or stored in an illegible form by means of a mechanical
device, an electronic device or any other device, a person must not:
(c) record or store by means of that device matter that the person
knows to be false in a material particular or materially
misleading; or
(d) destroy, remove or falsify matter that is recorded or stored by
means of that device, or has been prepared for the purpose of
being recorded or stored, or for use in compiling other matter
to be recorded or stored, by means of that device; or
(e) fail to record or store matter by means of that device, with
intent to falsify any entry made or intended to be compiled,
wholly or in part, from that matter.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Section 1101G
278 Corporations Act 2001
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(2) In any proceedings against a person for an offence based on
subsection (1A) or (1), it is a defence if it is proved that the person
acted honestly and that in all the circumstances the act or omission
constituting the offence should be excused.
Note: A defendant bears an evidential burden in relation to the matters in
subsection (2). See subsection 13.3(3) of the Criminal Code.
1101G Precautions against falsification of records
A person required by a provision of this Chapter to keep a book or
record must take reasonable precautions for guarding against
falsification of the book or record and for facilitating discovery of
any falsification.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
1101GA How Part 9.3 applies to books required to be kept by this
Chapter etc.
(1) In this section:
Chapter 7 book means:
(a) a book (by whatever name it is known) that a provision of
this Chapter requires to be kept; or
(b) a document lodged under, or for the purposes of, a provision
of this Chapter; or
(c) a book relating to the business carried on by a financial
services licensee or an authorised representative of a
financial services licensee; or
(d) a register or accounting record referred to in section 1101C.
(2) Part 9.3 does not apply in relation to a Chapter 7 book except as
provided in the following paragraphs:
(a) section 1303 applies to a Chapter 7 book;
(b) section 1305, and subsections 1306(5) and (6), apply to a
Chapter 7 book as if references in section 1305 to a body
corporate were instead references to a person;
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Section 1101H
Corporations Act 2001 279
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(c) regulations made for the purposes of this paragraph may
provide that other provisions of Part 9.3 apply in relation to a
Chapter 7 book, or a class of Chapter 7 books, with such
modifications (if any) as are specified in the regulations.
1101H Contravention of Chapter does not generally affect validity
of transactions etc.
(1) Subject to subsection (2), a failure to comply with any requirement
of this Chapter (including requirements in regulations made for the
purposes of this Chapter) does not affect the validity or
enforceability of any transaction, contract or other arrangement.
(2) Subsection (1) has effect subject to any express provision to the
contrary in:
(a) this Chapter; or
(b) regulations made for the purposes of another provision of this
Chapter; or
(c) regulations referred to in subsection (3).
(3) Regulations made for the purposes of this subsection may provide
that a failure to comply with a specified requirement referred to in
subsection (1) has a specified effect on the validity or
enforceability of a transaction, contract or arrangement.
1101I Gaming and wagering laws do not affect validity of contracts
relating to financial products
Despite any law of a State or Territory in this jurisdiction about
gaming and wagering:
(a) a person may enter into a contract that is a financial product;
and
(b) the contract is valid and enforceable.
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Section 1101J
280 Corporations Act 2001
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1101J Delegation
The Minister may delegate any of the Minister’s powers under this
Chapter to:
(a) ASIC; or
(b) a member of ASIC (within the meaning of section 9 of the
Australian Securities and Investments Commission Act
2001); or
(c) a staff member (within the meaning given by subsection 5(1)
of that Act) who is an SES employee (within the meaning of
section 34 of the Public Service Act 1999) or who holds an
office or position that is at a level equivalent to that of an
SES employee.
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Section 1200A
Corporations Act 2001 281
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Chapter 8—Mutual recognition of securities
offers
Part 8.1—Preliminary
1200A Definitions
(1) In this Chapter:
foreign recognition scheme means the provisions of a law of a
recognised jurisdiction that are prescribed by the regulations as
comprising a foreign recognition scheme for the purposes of this
Chapter.
law of a recognised jurisdiction includes law of part of a
recognised jurisdiction.
offer securities includes:
(a) invite applications for the issue of securities; and
(b) invite offers to purchase securities.
offeror, of securities, means:
(a) in relation to an offer of a kind prescribed by the
regulations—a person of a kind prescribed by the regulations;
and
(b) otherwise—the person who has the capacity, or who agrees,
to issue or transfer the securities if the offer is accepted.
recognised jurisdiction means a foreign country prescribed by the
regulations as a recognised jurisdiction.
recognised offer has the meaning given by section 1200B.
securities means:
(a) a share in a body; or
(b) a debenture of a body; or
(c) an interest in a managed investment scheme; or
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Chapter 8 Mutual recognition of securities offers
Part 8.1 Preliminary
Section 1200A
282 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(d) a legal or equitable right or interest in a security or interest
covered by paragraph (a), (b) or (c); or
(e) an option to acquire, by way of issue, an interest or right
covered by paragraph (a), (b), (c) or (d).
(2) For the purposes of this Chapter, paragraph (b) of the definition of
debenture in section 9 is taken to include a reference to an
undertaking by an institution, authorised by or under the law of a
recognised jurisdiction as a deposit-taking institution (however
described), to repay money deposited with it, or lent to it, in the
ordinary course of its banking business.
(3) For the purposes of this Chapter:
(a) paragraph (c) of the definition of managed investment
scheme in section 9 is taken to include a reference to a
partnership that, if this Act applied to it, would not need to be
incorporated or formed under an Australian law because of
regulations made for the purposes of subsection 115(2); and
(b) paragraph (i) of the definition of managed investment
scheme in section 9 is taken to include a reference to a
scheme operated by an institution, authorised by or under the
law of a recognised jurisdiction as a deposit-taking institution
(however described), in the ordinary course of its banking
business.
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Foreign offers that are recognised in this jurisdiction Part 8.2
Recognised offers Division 1
Section 1200B
Corporations Act 2001 283
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 8.2—Foreign offers that are recognised in this
jurisdiction
Division 1—Recognised offers
1200B When an offer is a recognised offer
(1) An offer of securities becomes a recognised offer, in relation to a
recognised jurisdiction, on the day the offer is first made in this
jurisdiction, if the conditions in section 1200C are met in relation
to the offer on that day.
(2) The offer continues to be a recognised offer after that day, even if a
condition in section 1200C ceases to be met after that day.
(3) If, at the time an offer is first made in this jurisdiction, the offer
would be a recognised offer but for a failure to meet the condition
in subsection 1200C(5) or (6) that ASIC is satisfied is minor or
technical, ASIC may declare in writing that the offer is a
recognised offer within the meaning of subsection (1).
(4) If ASIC makes a declaration under subsection (3) in relation to an
offer, the condition is taken to have been met at the time the offer
was first made in this jurisdiction.
(5) A declaration under subsection (3) is not a legislative instrument.
1200C Conditions that must be met to be a recognised offer
(1) For the purposes of subsection 1200B(1), the conditions that must
be met are those set out in this section.
(2) The person offering the securities must be:
(a) a person incorporated by or under the law of the recognised
jurisdiction; or
(b) a natural person resident in the recognised jurisdiction; or
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Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 1 Recognised offers
Section 1200C
284 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) a legal person established by or under the law of the
recognised jurisdiction; or
(d) a person of a kind prescribed by regulations made in relation
to the recognised jurisdiction for the purposes of this
paragraph.
(3) The person offering the securities must not be banned under
section 1200P.
(4) The offer must be an offer of a kind prescribed by the regulations
in relation to the recognised jurisdiction.
(5) At least 14 days before the day on which the offer is first made in
this jurisdiction, the person making the offer must have lodged
with ASIC:
(a) a notice in the prescribed form (if any) of the person’s
intention to make a recognised offer; and
(b) the documents and information required to be lodged under
section 1200D.
(6) If:
(a) before the offer is first made in this jurisdiction; and
(b) after a document or information was lodged with ASIC under
section 1200D;
either:
(c) an event of a kind mentioned in the table in
subsection 1200G(9) happened; or
(d) the address for service in this jurisdiction of the person
proposing to offer the securities changed;
the person making the offer must have lodged with ASIC:
(e) if paragraph (c) applies—the document or information that
would have been required to have been lodged under
subsection 1200G(9) for the event if that subsection had
applied; and
(f) if paragraph (d) applies—the changed address for service.
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Foreign offers that are recognised in this jurisdiction Part 8.2
Recognised offers Division 1
Section 1200D
Corporations Act 2001 285
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1200D Required documents and information
(1) For the purposes of paragraph 1200C(5)(b), the documents and
information required to be lodged under this section are:
(a) any offer document required by the law of the recognised
jurisdiction; and
(b) the warning statement that is to be included with an offer
document in this jurisdiction (which, if regulations are in
force for the purposes of section 1200E, must comply with
those regulations); and
(c) unless paragraph (d) applies—the constitution of the body
whose securities are to be the subject of the offer; and
(d) if the securities that are to be the subject of the offer are
interests in a managed investment scheme, rights or interests
in such interests, or options to acquire such interests by way
of issue—the constituent document of the scheme; and
(e) details, in the prescribed form (if any), of any exemption
from the securities law of the recognised jurisdiction that
applies, but not exclusively, to the offer or to the offeror in
relation to the offer; and
(f) if the offeror is relying on subsection (2)—notice of the
document or information that is not being lodged because of
the offeror’s reliance on that subsection; and
(g) an address for service in this jurisdiction, in the prescribed
form (if any); and
(h) a copy of any exemption from the securities law of the
recognised jurisdiction that applies exclusively to the offer or
to the offeror; and
(i) any other documents or information prescribed by the
regulations.
(2) For the purposes of this Chapter, a person is taken to have lodged a
document or information under this section if:
(a) the document or information has been lodged under
Division 2 or 3 of Part 5B.2; or
(b) the document or information is not required to be lodged
because of section 601CDA or 601CTA.
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 1 Recognised offers
Section 1200E
286 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(3) For the purposes of this Chapter, a person is taken to have lodged a
document or information under this section if the person lodged the
document or information in compliance with subsection 1200C(6).
1200E Warning statement
The regulations may, in relation to offer documents used in this
jurisdiction for recognised offers, prescribe either or both of the
following:
(a) statements to be included with those documents that relate to
the status of an offer as a recognised offer and the laws that
regulate the offer;
(b) details to be given in statements to be included with those
documents that relate to the status of an offer as a recognised
offer and the laws that regulate the offer.
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Effect of a recognised offer Division 2
Section 1200F
Corporations Act 2001 287
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Effect of a recognised offer
1200F Effect of a recognised offer
(1) The provisions listed in the table do not apply, in relation to a
recognised offer, to the things specified in the table for those
provisions.
Note: Recognised offers must comply with Division 3 instead.
Provisions that do not apply in relation to a recognised offer
Item These provisions: do not apply, in relation to the offer, to:
1 Chapter 2L if the recognised offer is an offer of debentures—
the offeror.
2 Chapter 5C if the recognised offer is an offer of interests in a
managed investment scheme—the operator of the
managed investment scheme.
3 Chapter 6D, other than
sections 736 and 738
(a) the recognised offer; or
(b) the offeror of the recognised offer; or
(c) any offer document for the offer.
4 Parts 7.6, 7.7 and 7.8,
other than
section 992AA
(a) the issue or disposal of a security under the
recognised offer; or
(b) general advice (within the meaning of
Chapter 7) contained in any offer document
for the offer; or
(c) general advice contained in an advertisement
for the recognised offer issued by, or on
behalf of, the offeror; or
(d) the provision of a custodial or depository
service (within the meaning of Chapter 7) in
relation to interests in a managed investment
scheme that are the subject of the recognised
offer.
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 2 Effect of a recognised offer
Section 1200F
288 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Provisions that do not apply in relation to a recognised offer
Item These provisions: do not apply, in relation to the offer, to:
5 Part 7.9, other than
sections 1020AB,
1020AC, 1020AD and
1020B
the offeror of the recognised offer.
(2) Despite subsection (1), the regulations may:
(a) apply a provision listed in the table in subsection (1) to a
person or class of persons; or
(b) apply a provision listed in the table in subsection (1) to a
security or class of securities; or
(c) provide that a provision listed in the table in subsection (1)
applies with the modifications specified in the regulations.
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Ongoing conditions for recognised offers Division 3
Section 1200G
Corporations Act 2001 289
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 3—Ongoing conditions for recognised offers
1200G Offering conditions
When the offering conditions apply
(1) The offering conditions in this section apply in relation to a
recognised offer until the recognised offer closes in this
jurisdiction.
Note: Failure to comply with an offering condition is an offence (see
sections 1200Q and 1311).
Offering conditions
(2) The offer must be made in the recognised jurisdiction as well as in
this jurisdiction.
(3) The offeror must meet the conditions in subsections 1200C(2) and
(3).
(4) The offer must meet the condition in subsection 1200C(4).
(5) The offer must comply with the law of the recognised jurisdiction.
(6) There must be no person concerned in the management of the
offeror:
(a) who is disqualified from managing corporations for the
purposes of Part 2D.6; or
(b) who is disqualified from being concerned in the management
of the offeror under the law of the recognised jurisdiction; or
(c) who is subject to a banning order under section 920A; or
(d) who is subject to a court order under paragraph 921A(2)(a).
(7) An offer document provided to a person in this jurisdiction must
have included with it:
(a) the warning statement lodged under subsection 1200D(1) for
that offer document; or
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Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 3 Ongoing conditions for recognised offers
Section 1200G
290 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) if a changed warning statement is lodged with ASIC under
subsection 1200G(9)—the changed warning statement.
(8) The offeror must, on request by a person in this jurisdiction,
provide a copy of the constitution or constituent document lodged
under paragraph 1200D(1)(c) or (d).
(9) If an event mentioned in an item of this table occurs in relation to
the offer or offeror, the offeror must lodge with ASIC the
document, statement or notice specified in the table for that event,
by the time specified for that event.
Offering condition under subsection (9)
Item If: the offeror must lodge
with ASIC:
by this time:
1 a change is made to an
offer document, or any
other document,
required by the law of
the recognised
jurisdiction in relation
to the offer
a copy of the document
as changed
no later than 7 days
after the day on which
the offeror notified (or
should have notified)
the home regulator of
the change.
2 a change is made to the
warning statement that
is included with the
offer document in this
jurisdiction
a copy of the warning
statement as changed
no later than 7 days
after the day on which
the offeror notified (or
should have notified)
the home regulator of
the change.
3 a supplementary or
replacement offer
document is required
by the law of the
recognised jurisdiction
a copy of the
supplementary or
replacement offer
document
no later than 7 days
after the day on which
the supplementary or
replacement offer
document is (or should
have been) lodged with
the home regulator.
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Ongoing conditions for recognised offers Division 3
Section 1200G
Corporations Act 2001 291
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Offering condition under subsection (9)
Item If: the offeror must lodge
with ASIC:
by this time:
4 a change is made to the
constitution or
constituent document
lodged under
paragraph 1200D(1)(c)
or (d)
a copy of the
constitution or
constituent document
as changed
no later than 7 days
after the day on which
the offeror notified (or
should have notified)
the home regulator of
the change.
5 the home regulator
makes, changes or
revokes an exemption
that applies, but not
exclusively, to the offer
or the offeror under the
law of the recognised
jurisdiction
written notice in the
prescribed form (if
any) of the details of
the exemption, change
or revocation
no later than 14 days
after the making,
change or revocation
occurs.
6 the home regulator
makes, changes or
revokes an exemption
that applies exclusively
to the offer or the
offeror under the law
of the recognised
jurisdiction
a copy of the
exemption, the
exemption as changed,
or notice in the
prescribed form (if
any) of the details of
the revocation
no later than 7 days
after the making,
change or revocation
occurs.
7 the home regulator
begins enforcement
action, or exercises a
power it has under law,
in relation to the
offeror or offer
written notice in the
prescribed form (if
any) of the details of
the action taken or
power exercised
no later than 7 days
after the action is taken
or the power is
exercised.
(10) For the purposes of this Chapter, a person is taken to have lodged a
document under subsection (9) if:
(a) the document has been lodged under Division 2 or 3 of
Part 5B.2; or
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Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 3 Ongoing conditions for recognised offers
Section 1200G
292 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the document is not required to be lodged because of
section 601CDA or 601CTA.
(11) If:
(a) an event mentioned in the table in subsection (9) occurs
while the offering conditions in this section apply; and
(b) the time by which an offeror is required to lodge a document,
statement or notice with ASIC because of that event is after
the offering conditions cease to apply;
then, for the purposes of this section and paragraph 1200Q(1)(b),
the offering conditions are taken to continue to apply until that
time in relation to the offer to the extent necessary to require the
offeror to lodge the document, statement or information by that
time.
(12) The offer must meet any other conditions prescribed by the
regulations.
Home regulator
(13) For the purposes of subsection (9), the home regulator for a
recognised jurisdiction is an authority in the recognised jurisdiction
whose functions under the law of the recognised jurisdiction
include functions equivalent to any of those of ASIC under this Act
and that is prescribed by the regulations as the home regulator for
that jurisdiction.
(14) If there is more than one authority in a recognised jurisdiction
whose functions include functions under the law of the recognised
jurisdiction equivalent to any of those of ASIC under this Act and
that is prescribed under subsection (13), the regulations may
prescribe the matters in relation to which that authority is to be
regarded as the home regulator.
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Section 1200H
Corporations Act 2001 293
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1200H Address for service condition
When the address for service condition applies
(1) The address for service condition in this section applies in relation
to a recognised offer:
(a) until the end of the last day on which a person who resides in
this jurisdiction could acquire securities under the offer; and
(b) if a person who resides in this jurisdiction acquires securities
under the offer—at all times when the offeror’s records
indicate that someone who resides in this jurisdiction holds
securities in the class of securities that was the subject of the
recognised offer.
Note: Failure to comply with the address for service condition is an offence
(see sections 1200Q and 1311).
Address for service condition
(2) The offeror must lodge with ASIC written notice, in the prescribed
form (if any), of any change in its address for service in this
jurisdiction, no later than the end of the seventh day after the day
on which the address changed.
(3) If:
(a) the offeror’s address for service in this jurisdiction changes
while the address for service condition in this section applies;
and
(b) the time by which the offeror is required to lodge notice with
ASIC because of the change is after the address for service
condition ceases to apply;
then, for the purposes of this section and
subparagraph 1200Q(2)(b)(i), the address for service condition is
taken to continue to apply until that time to the extent necessary to
require the offeror to lodge notice by that time.
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 3 Ongoing conditions for recognised offers
Section 1200J
294 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1200J Dispute resolution condition
When the dispute resolution condition applies
(1) The dispute resolution condition in this section applies, to a person
who is or who has been the offeror of a recognised offer, at all
times when the person’s records indicate that someone who resides
in this jurisdiction holds securities in the class of securities that
was the subject of the recognised offer.
Note: Failure to comply with the dispute resolution condition is an offence
(see sections 1200Q and 1311).
Dispute resolution condition
(2) The person must have a dispute resolution process that complies
with subsection 1017G(2), if the recognised offer was an offer of:
(a) interests in a managed investment scheme; or
(b) rights or interests in such interests, or options to acquire such
interests by way of issue.
Exemption from the dispute resolution condition
(3) ASIC may, on application by a person in the prescribed form (if
any), grant the person an exemption from the dispute resolution
condition in this section, subject to any conditions specified in the
exemption.
(4) If ASIC grants a person an exemption under subsection (3), then,
for the purposes of this Chapter, the person is taken to comply with
the dispute resolution condition in this section for so long as the
exemption is in force.
(5) ASIC may, in relation to an exemption under subsection (3):
(a) vary, or impose, a condition in relation to the exemption; or
(b) revoke the exemption.
(6) A variation, imposition or revocation under subsection (5) takes
effect:
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Ongoing conditions for recognised offers Division 3
Section 1200J
Corporations Act 2001 295
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) if the person has an address for service in this jurisdiction—
when it is served on the person at that address; or
(b) if the person does not have an address for service in this
jurisdiction—on publication in the Gazette.
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 4 Modification of provisions of this Act
Section 1200K
296 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Modification of provisions of this Act
1200K Additional operation of section 675 (continuous disclosure)
In relation to a disclosing entity that has been the offeror of a
recognised offer, section 675 also has the operation it would have
if paragraph 675(2)(c) were replaced by the following paragraph:
(c) the information is not required, by the law of the recognised
jurisdiction to which the offer relates, to be included in a
supplementary or replacement offer document; and
1200L Pre-offer advertising
Offers that need a disclosure document
(1) Subsection 734(4) also has the operation it would have if:
(a) the reference in that subsection to a disclosure document that
has been lodged with ASIC were a reference to an offer
document lodged with ASIC for the purposes of this Chapter;
and
(b) the reference in that subsection to section 739 were a
reference to section 1200N.
(2) Subsection 734(5) also has the operation it would have if:
(a) references in that subsection to a disclosure document were
references to an offer document that complies with the law of
a recognised jurisdiction; and
(b) references in that subsection to completing an application
form were references to completing an application process
under the law of that recognised jurisdiction.
(3) Subsection 734(6) also has the operation it would have if:
(a) references in that subsection to a disclosure document were
references to an offer document lodged with ASIC for the
purposes of this Chapter; and
(b) references in that subsection to completing an application
form were references to completing an application process
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Modification of provisions of this Act Division 4
Section 1200M
Corporations Act 2001 297
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
under the law of the recognised jurisdiction to which the
offer relates.
Offers that need a Product Disclosure Statement
(4) Subsection 1018A(2) also has the operation it would have if:
(a) a reference in that subsection to a Product Disclosure
Statement were a reference to an offer document that
complies with the law of a recognised jurisdiction; and
(b) a reference in that subsection to sale offers to which
section 1012C will apply were a reference to sale offers to
which section 1012C would apply if the financial product,
when made available, were not made available under a
recognised offer.
(5) Subsection 1018A(3) also has, in relation to subsection 1018A(2),
the operation it would have if:
(a) the reference in that subsection to a Product Disclosure
Statement were a reference to an offer document that
complies with the law of a recognised jurisdiction; and
(b) the reference to section 1020E were a reference to
section 1200N.
1200M Modification by the regulations
The regulations may modify a provision of this Act in relation to
its application in respect of a recognised offer or a proposed offer
of securities that may become a recognised offer.
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 5 ASIC’s powers in relation to recognised offers
Section 1200N
298 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 5—ASIC’s powers in relation to recognised offers
1200N Stop orders
(1) If, in relation to a thing mentioned in an item of this table, ASIC is
satisfied of the matters specified in the table item for that thing,
ASIC may make either or both of the orders specified in the table
item about that thing.
Stop orders
Item If, in relation to: ASIC is satisfied that: ASIC may order:
1 (a) an offer document
lodged under
paragraph 1200D(1
)(a); or
(b) a warning statement
lodged under
paragraph 1200D(1
)(b); or
(c) a document or
information lodged
under
paragraph 1200D(1
)(i)
there is a misleading or
deceptive statement in,
or a material omission
from, the document,
statement or
information
(a) that no offers,
issues, sales or
transfers of the
securities to which
the document,
statement or
information relates
be made while the
order is in force;
(b) that specified
conduct in respect
of those securities,
or in respect of the
document,
statement or
information, must
not be engaged in
while the order is in
force.
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ASIC’s powers in relation to recognised offers Division 5
Section 1200N
Corporations Act 2001 299
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Stop orders
Item If, in relation to: ASIC is satisfied that: ASIC may order:
2 a document, statement
or notice lodged under
subsection 1200G(9)
the change results in
there being a
misleading or
deceptive statement in,
or a material omission
from, the document,
statement or notice
(a) that no offers,
issues, sales or
transfers of the
securities to which
the document,
statement or notice
relates be made
while the order is in
force;
(b) that specified
conduct in respect
of those securities,
or in respect of the
document,
statement or notice,
must not be
engaged in while
the order is in force.
3 (a) an advertisement of
securities the
subject of a
recognised offer; or
(b) a published
statement that is
reasonably likely to
induce people to
acquire securities
the subject of a
recognised offer
there is a misleading or
deceptive statement in,
or a material omission
from, the advertisement
or statement
(a) that no offers,
issues, sales or
transfers of the
securities to which
the advertisement
or statement relates
be made while the
order is in force;
(b) that specified
conduct in respect
of those securities,
or in respect of the
advertisement or
statement, must not
be engaged in while
the order is in force.
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Chapter 8 Mutual recognition of securities offers
Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 5 ASIC’s powers in relation to recognised offers
Section 1200N
300 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Stop orders
Item If, in relation to: ASIC is satisfied that: ASIC may order:
4 an offer document
lodged under
paragraph 1200D(1)(a)
a new circumstance has
arisen since lodgment
and that circumstance
would have been
required by the law of
the recognised
jurisdiction to be
included in the offer
document, if the
circumstance had
arisen before the
document was lodged
with the home
regulator (as defined in
subsection 1200G(13))
(a) that no offers,
issues, sales or
transfers of the
securities to which
the document
relates be made
while the order is in
force;
(b) that specified
conduct in respect
of those securities,
or in respect of the
document, must not
be engaged in while
the order is in force.
5 a notice of intention to
make a recognised
offer lodged under
paragraph 1200C(5)(a)
one or more of the
requirements in
section 1200C is not
met in relation to the
proposed offer
(a) that no offers,
issues, sales or
transfers of the
securities that are
proposed to be
offered be made
while the order is in
force;
(b) that specified
conduct in respect
of those securities
must not be
engaged in while
the order is in force.
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ASIC’s powers in relation to recognised offers Division 5
Section 1200N
Corporations Act 2001 301
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Stop orders
Item If, in relation to: ASIC is satisfied that: ASIC may order:
6 a recognised offer an offering condition in
section 1200G, the
address for service
condition in
section 1200H or the
dispute resolution
condition in
section 1200J is not
being met
(a) that no offers,
issues, sales or
transfers of the
securities be made
while the order is in
force;
(b) that specified
conduct in respect
of those securities
must not be
engaged in while
the order is in force.
(2) The order may include a statement that specified conduct engaged
in contrary to the order will be regarded as not meeting a specified
ongoing condition in Division 3.
(3) Before making an order under subsection (1), ASIC must:
(a) hold a hearing; and
(b) give a reasonable opportunity to any interested people to
make oral or written submissions to ASIC on whether an
order should be made.
(4) If ASIC considers that any delay in making an order under
subsection (1) pending the holding of a hearing would be
prejudicial to the public interest, ASIC may make an interim order.
The interim order may be made without holding a hearing and lasts
for 21 days after the day on which it is made unless revoked before
then.
(5) At any time during the hearing, ASIC may make an interim order.
The interim order lasts until:
(a) ASIC makes an order under subsection (1) after the
conclusion of the hearing; or
(b) the interim order is revoked;
whichever happens first.
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Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 5 ASIC’s powers in relation to recognised offers
Section 1200P
302 Corporations Act 2001
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(6) An order under subsection (1), (4) or (5) must be in writing and
must be served on the person who is ordered not to offer, issue, sell
or transfer securities or not to engage in specified conduct.
(7) The person on whom the order is served must take reasonable steps
to ensure that other people who engage in conduct to which the
order applies are aware of the order.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(8) The person on whom the order is served, or a person who is aware
of the order, must not engage in conduct contrary to the order.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(9) A statement under subsection (2) has effect accordingly in relation
to a person on whom the order is served, or who is aware of it, who
engages in conduct contrary to the order. This applies in addition to
any other consequence that is provided for in this Act.
1200P Ban on making subsequent recognised offers
(1) ASIC may declare in writing that a person is, for the time specified
in the declaration (which must be no longer than 5 years from the
day the declaration takes effect), banned from making a recognised
offer if:
(a) the person, or an associate of the person, has been convicted
(whether or not in this jurisdiction) of an offence constituted
by conduct engaged in in relation to a recognised offer; or
(b) a court in this jurisdiction has made a civil penalty order
against the person, or an associate of the person, for a
contravention in relation to a recognised offer; or
(c) a court in a recognised jurisdiction has made an order against
the person, or an associate of the person, for a contravention
of the law of the recognised jurisdiction (other than an
offence) in relation to an offer that is a recognised offer in
this jurisdiction.
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Section 1200P
Corporations Act 2001 303
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(2) Before making the declaration, ASIC must give the person an
opportunity:
(a) to appear, or be represented, at a hearing before ASIC that
takes place in private; or
(b) to make submissions to ASIC on the matter.
This subsection does not apply if the person does not have an
address for service in this jurisdiction.
(3) ASIC may, in writing, vary or cancel the declaration, on ASIC’s
own initiative or on application lodged by the person in the
prescribed form (if any) together with any prescribed documents, if
ASIC is satisfied that a circumstance on which ASIC based the
declaration has changed.
(4) If ASIC proposes to reject an application by the person to vary or
cancel the declaration, ASIC must give the person an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that
takes place in private; or
(b) to make submissions to ASIC on the matter.
(5) The declaration, and any variation or cancellation of the
declaration, takes effect:
(a) if the person to whom the declaration applies has an address
for service in this jurisdiction—when it is served on the
person at that address; or
(b) if the person to whom the declaration applies does not have
an address for service in this jurisdiction—when it is
published in the Gazette under subsection (7).
(6) A declaration that is served on a person under paragraph (5)(a)
must be accompanied by a statement of ASIC’s reasons for the
declaration.
(7) ASIC must publish a notice in the Gazette as soon as practicable
after making, varying or cancelling the declaration. The notice:
(a) must state when the action takes or took effect; and
(b) in the case of the making of a declaration—set out a copy of
the declaration; and
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Part 8.2 Foreign offers that are recognised in this jurisdiction
Division 5 ASIC’s powers in relation to recognised offers
Section 1200Q
304 Corporations Act 2001
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(c) in the case of the varying of a declaration—set out a copy of
the declaration as varied.
(8) A declaration under this section is not a legislative instrument.
1200Q Offence of breaching an ongoing condition
(1) A person commits an offence if, at any particular time:
(a) the person is the offeror of a recognised offer; and
(b) an offering condition in section 1200G applies in relation to
the offer; and
(c) the condition is not met in relation to the offer.
(2) A person commits an offence if:
(a) the person is or has been the offeror of a recognised offer;
and
(b) at any particular time:
(i) the address for service condition in section 1200H; or
(ii) the dispute resolution condition in section 1200J;
applies in relation to the offer; and
(c) the condition is not met in relation to the offer.
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Miscellaneous Division 6
Section 1200R
Corporations Act 2001 305
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Division 6—Miscellaneous
1200R Service of documents
(1) For the purposes of any law, a document may be served on a
person who is, or who has been, the offeror of a recognised offer
by leaving it at, or posting it to, the person’s address for service in
this jurisdiction.
(2) The person’s address for service in this jurisdiction is:
(a) the address lodged under paragraph 1200D(1)(g); or
(b) if a change to that address has been lodged with ASIC under
section 1200H—the changed address, on and from the later
of:
(i) the day that is 7 days after the day on which the change
(or, if more than one change has been lodged, the latest
change) was lodged; or
(ii) the day specified in the notice of change as the day from
which the change is to take effect.
(3) This section does not affect:
(a) any other provision of this Act, or any provision of another
law, that permits a document to be served in a different way;
or
(b) the power of a court to authorise a document to be served in a
different way.
(4) This section does not apply in relation to a person who is, or who
has been, the offeror of a recognised offer if the address for service
condition in section 1200H does not apply to the person.
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Part 8.3 Offers made under foreign recognition schemes
Section 1200S
306 Corporations Act 2001
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Part 8.3—Offers made under foreign recognition
schemes
1200S Notice to ASIC
If:
(a) a body proposes to make an offer of securities in a
recognised jurisdiction under a foreign recognition scheme;
and
(b) under the foreign recognition scheme, the offer is to be
regulated by the law of this jurisdiction;
the body must lodge with ASIC written notice, in the prescribed
form (if any), of its intention to make the offer under the foreign
recognition scheme, no later than the time it notifies the recognised
jurisdiction of that intention.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
1200T Extension of this Act to recognised jurisdictions
(1) If:
(a) a body proposes to make, or is making, an offer of securities
in a recognised jurisdiction under a foreign recognition
scheme; and
(b) under the foreign recognition scheme, the offer is to be
regulated by the law of this jurisdiction;
this Act applies in the recognised jurisdiction in relation to the
offer as if it were an offer being made in this jurisdiction.
(2) Despite subsection (1), the regulations may:
(a) exempt a person or class of persons from all or specified
provisions of this Act as it applies by force of subsection (1);
or
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Section 1200U
Corporations Act 2001 307
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(b) exempt a security or a class of securities from all or specified
provisions of this Act as it applies by force of subsection (1);
or
(c) provide that a provision of this Act as it applies by force of
subsection (1) applies with the modifications specified in the
regulations.
1200U ASIC stop order for advertising in a recognised jurisdiction
(1) If ASIC is satisfied that:
(a) an offer of securities is being made or has been made in a
recognised jurisdiction under a foreign recognition scheme;
and
(b) there is a contravention of section 734 or 1018A (as they
apply by force of section 1200T) constituted by conduct in
the recognised jurisdiction in relation to the offer;
ASIC may order that no offers, issues, sales or transfers of the
securities the subject of the offer be made in the recognised
jurisdiction while the order is in force.
(2) Before making an order under subsection (1), ASIC must:
(a) hold a hearing; and
(b) give a reasonable opportunity to any interested people to
make oral or written submissions to ASIC on whether an
order should be made.
(3) If ASIC considers that any delay in making an order under
subsection (1) pending the holding of a hearing would be
prejudicial to the public interest, ASIC may make an interim order
that no offers, issues, sales or transfers of the securities be made
while the interim order is in force. The interim order may be made
without holding a hearing and lasts for 21 days after the day on
which it is made unless revoked before then.
(4) At any time during the hearing, ASIC may make an interim order
that no offers, issues, sales or transfers of the securities be made
while the interim order is in force. The interim order lasts until:
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Section 1200U
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(a) ASIC makes an order under subsection (1) after the
conclusion of the hearing; or
(b) the interim order is revoked;
whichever happens first.
(5) An order under subsection (1), (3) or (4) must be in writing and
must be served on the person who is ordered not to offer, issue, sell
or transfer securities.
(6) The person on whom the order is served must take reasonable steps
to ensure that other people who engage in conduct to which the
order applies are aware of the order.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
(7) The person on whom the order is served, or a person who is aware
of the order, must not engage in conduct contrary to the order.
Note: Failure to comply with this subsection is an offence (see
subsection 1311(1)).
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Section 1274
Corporations Act 2001 309
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Chapter 9—Miscellaneous
Part 9.1—Registers and registration of documents
1274 Registers
(1) ASIC must, subject to this Act, keep such registers as it considers
necessary in such form as it thinks fit.
(2) A person may:
(a) inspect any document lodged with ASIC, not being:
(iaa) a notice lodged under subsection 205D(3); or
(i) an application under section 1279 (application for
registration as an auditor), or section 20-5 of Schedule 2
(application for registration as a liquidator); or
(ia) a document lodged under a provision of Chapter 7
(other than subsection 792C(1), section 1015B or
section 1015D); or
(ii) a document lodged under section 1287 (notification of
matters by registered auditors), 1287A (annual
statements by registered auditors), 30-1 of Schedule 2
(annual liquidator returns) or 35-1 of Schedule 2 (notice
of significant events); or
(iii) a document lodged under paragraph 1296(2)(b); or
(iv) a report made or lodged under section 422, 438D or
533; or
(iva) a disclosure document lodged under section 718, or a
supplementary or replacement document lodged under
section 719, in relation to an offer of an ESS interest, in
a company (within the meaning of the Income Tax
Assessment Act 1997), if the conditions set out in
subsection (2AA) are satisfied; or
(v) a document that has been destroyed or otherwise
disposed of; or
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(b) require a certificate of the registration of a company or any
other certificate authorised by this Act to be given by ASIC;
or
(c) require a copy of or extract from any document that the
person is entitled to inspect pursuant to paragraph (a) or any
certificate referred to in paragraph (b) to be given, or given
and certified, by ASIC.
(2AA) For the purposes of subparagraph (2)(a)(iva), the conditions are the
following:
(a) the offer is under an employee share scheme (within the
meaning of the Income Tax Assessment Act 1997);
(b) the disclosure document or replacement document being
lodged, or the disclosure document as supplemented by the
supplementary document being lodged, states that the ESS
interest, in the company (within the meaning of that Act) (the
issuing company), will:
(i) be made available only to employees of the issuing
company or a subsidiary (within the meaning of that
Act) of the issuing company; and
(ii) relate only to ordinary shares;
(c) no equity interests in any of the following companies are
listed for quotation in the official list of any approved stock
exchange at the end of the issuing company’s most recent
income year (the pre-lodgement year) before the income year
in which the disclosure document or replacement document,
or the disclosure document being supplemented by the
supplementary document, is lodged:
(i) the issuing company;
(ii) any subsidiary (within the meaning of that Act) of the
issuing company at the end of the pre-lodgement year;
(iii) any holding company of the issuing company at the end
of the pre-lodgement year;
(iv) any subsidiary (within the meaning of that Act) of a
holding company of the issuing company at the end of
the pre-lodgement year;
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(d) the issuing company and each of the other companies
mentioned in paragraph (c) were incorporated by or under an
Australian law or foreign law less than 10 years before the
end of the pre-lodgement year;
(e) the issuing company had an aggregated turnover not
exceeding $50 million for the pre-lodgement year.
(2AB) Subsection 83A-33(7) of the Income Tax Assessment Act 1997 also
applies for the purposes of subsection (2AA) of this section.
(2A) For the purposes of subsections (2) and (5), a document given to
ASIC by a market operator (whether or not pursuant to a provision
of this Act) that contains information that the market operator has
made available to participants in the market is taken to be a
document lodged with ASIC.
Note: For example, a document given to ASIC for the purposes of
subsection 792C(1) will be covered by this subsection.
(2B) For the purposes of subsections (2) and (5), information or a copy
of a document that is not required to be lodged with ASIC because
of section 601CDA or 601CTA is taken to be a document lodged
with ASIC if an authority mentioned in the section has given the
information or document to ASIC.
(2C) For the purposes of subsections (2) and (5), information or a copy
of a document that is taken to be lodged with ASIC because of
paragraph 1200D(2)(b) or 1200G(10)(b) is taken to be a document
lodged with ASIC if an authority mentioned in section 601CDA or
601CTA has given the information or document to ASIC.
(2D) For the purposes of subsections (2) and (5), each of the following
is taken to be a document lodged with ASIC if a copy has been
given to ASIC by APRA:
(a) benefit fund rules that have been approved by APRA under
section 16L of the Life Insurance Act 1995;
(b) an amendment of benefit fund rules that has been approved
by APRA under section 16Q of the Life Insurance Act 1995;
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(c) consequential amendments of a company’s constitution that
have been approved by APRA under section 16U or 16V of
the Life Insurance Act 1995.
(3) If a reproduction or transparency of a document or certificate is
produced for inspection, a person is not entitled pursuant to
paragraph (2)(a) to require the production of the original of that
document or certificate.
(4) The reference in paragraph (2)(c) to a document or certificate
includes, where a reproduction or transparency of that document or
certificate has been incorporated with a register kept by ASIC, a
reference to that reproduction or transparency and, where such a
reproduction or transparency has been so incorporated, a person is
not entitled pursuant to that paragraph to a copy of or extract from
the original of that document or certificate.
(4A) A person is not entitled under paragraph (2)(a) to require the
production of the original of a document or certificate if ASIC
keeps by means of a mechanical, electronic or other device a
record of information set out in the document or certificate and:
(a) ASIC produces to the person for inspection a writing that sets
out what purports to be the contents of the document or
certificate; or
(b) ASIC causes to be displayed for the person what purports to
be the contents of the document or certificate and, as at the
time of the displaying, the person has not asked for the
production of a writing of the kind referred to in
paragraph (a).
(4B) Where:
(a) a person makes under paragraph (2)(c) a requirement that
relates to a document or certificate; and
(b) ASIC keeps by means of a mechanical, electronic or other
device a record of information set out in the document or
certificate; and
(c) pursuant to that requirement, ASIC gives a writing or
document that sets out what purports to be the contents of:
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(i) the whole of the document or certificate; or
(ii) a part of the document or certificate;
then, for the purposes of that paragraph, ASIC is taken to have
given, pursuant to that requirement:
(d) if subparagraph (c)(i) applies—a copy of the document or
certificate; or
(e) if subparagraph (c)(ii) applies—an extract from the document
or certificate setting out that part of it.
(4C) Where:
(a) the requirement referred to in paragraph (4B)(a) includes a
requirement that the copy or extract be certified; and
(b) pursuant to that requirement, ASIC gives a writing or
document as mentioned in paragraph (4B)(c);
then:
(c) ASIC may certify that the writing or document sets out the
contents of the whole or part of the document or certificate,
as the case requires; and
(d) the writing or document is, in a proceeding in a court,
admissible as prima facie evidence of the information
contained in it.
(4D) ASIC may edit from a statement of affairs any information that
ASIC is satisfied is commercial-in-confidence, before allowing a
person to inspect the statement, or giving a copy or extract of the
statement to a person, under subsection (2).
(4E) A statement of affairs is a statement or report required to be
prepared under one of the following provisions:
(a) subsection 421A(1);
(b) paragraph 429(2)(b);
(c) subsection 438B(2);
(d) subsection 475(1) or (2);
(e) subsection 494(2);
(f) subsection 497(4).
(4F) Information is commercial-in confidence if:
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(a) the disclosure of the information could unreasonably affect a
person, or a business or action related to a person, in an
adverse manner; and
(b) the information is not in the public domain; and
(c) the information is not required to be disclosed under another
law of the Commonwealth, a State or a Territory; and
(d) the information is not readily discoverable.
(4G) Despite subsection (2), a person is not entitled to inspect, or to
require a copy or an extract of, any information in a statement of
affairs that has been edited from the statement under
subsection (4D).
(5) A copy of or extract from any document lodged with ASIC, and
certified by ASIC, is, in any proceeding, admissible in evidence as
of equal validity with the original document.
Note: See also subsection (2A) for when certain documents are taken to
have been lodged with ASIC.
(6) The reference in subsection (5) to a document includes, where a
reproduction or transparency of that document has been
incorporated with a register kept by ASIC, a reference to that
reproduction or transparency.
(7) In any proceeding:
(a) a certificate by ASIC that, at a date or during a period
specified in the certificate, no company was registered under
this Act by a name specified in the certificate is to be
received as prima facie evidence that at that date or during
that period, as the case may be, no company was registered
by that name under this Act; and
(b) a certificate by ASIC that a requirement of this Act specified
in the certificate:
(i) had or had not been complied with at a date or within a
period specified in the certificate; or
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(ii) had been complied with at a date specified in the
certificate but not before that date;
is to be received as prima facie evidence of matters specified
in the certificate; and
(c) a certificate by ASIC that, during a period specified in the
certificate, a particular company was registered, or taken to
be registered, under this Act is to be received as prima facie
evidence that, during that period, that company was
registered under this Act.
(7A) A certificate issued by ASIC stating that a company has been
registered under this Act is conclusive evidence that:
(a) all requirements of this Act for its registration have been
complied with; and
(b) the company was duly registered as a company under this
Act on the date specified in the certificate.
(8) If ASIC is of opinion that a document submitted for lodgment:
(a) contains matter contrary to law; or
(b) contains matter that, in a material particular, is false or
misleading in the form or context in which it is included; or
(c) because of an omission or misdescription has not been duly
completed; or
(d) contravenes this Act; or
(e) contains an error, alteration or erasure;
ASIC may refuse to register or receive the document and may
request:
(f) that the document be appropriately amended or completed
and resubmitted; or
(g) that a fresh document be submitted in its place; or
(h) where the document has not been duly completed, that a
supplementary document in the prescribed form be lodged.
(9) ASIC may require a person who submits a document for lodgment
to produce to ASIC such other document, or to give to ASIC such
information, as ASIC thinks necessary in order to form an opinion
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whether it may refuse to receive or register the first-mentioned
document.
(10) ASIC may, if in the opinion of ASIC it is no longer necessary or
desirable to retain them, destroy or dispose of:
(a) in relation to a body corporate:
(i) any return of allotment of shares for cash that has been
lodged for not less than 2 years; or
(ii) any balance-sheet that has been lodged for not less than
7 years or any document creating or evidencing a
charge, or the complete or partial satisfaction of a
charge, where a memorandum of satisfaction of the
charge has been registered for not less than 7 years; or
(iii) any other document (other than the constitution or any
other document affecting it) that has been lodged or
registered for not less than 15 years; or
(c) any document a transparency of which has been incorporated
with a register kept by ASIC.
(11) If a body corporate or other person, having made default in
complying with:
(a) any provision of this Act or of any other law that requires the
lodging in any manner of any return, account or other
document or the giving of notice to ASIC of any matter; or
(b) any request of ASIC to amend or complete and resubmit any
document or to submit a fresh document;
fails to make good the default within 14 days after the service on
the body or person of a notice requiring it to be done, a court may,
on an application by any member or creditor of the body or by
ASIC, make an order directing the body or any officer of the body
or the person to make good the default within such time as is
specified in the order.
(12) Any such order may provide that all costs of and incidental to the
application are to be borne by the body or by any officers of the
body responsible for the default or by the person.
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(13) A person must not contravene an order made under
subsection (11).
(14) Nothing in this section prejudices the operation of any law
imposing penalties on a body corporate or its officers or on another
person in respect of a default mentioned in subsection (11).
(15) Where information about a person is included on a register kept by
ASIC, ASIC may at any time, in writing, require that person to
give ASIC specified information about the person, being
information of the kind included on that register.
(16) The person must provide the information within such reasonable
period, and in such form, as are specified by ASIC.
(17) An offence based on subsection (9), (13) or (16) is an offence of
strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
1274AA Register of disqualified company directors and other
officers
(1) ASIC must keep a register of persons who have been disqualified
from managing corporations under:
(a) section 206C, 206D, 206E, 206EAA, 206EA, 206EB or 206F
of this Act; or
(b) a provision of a law of a State or Territory that:
(i) was in force at any time before the commencement of
this Act; and
(ii) corresponds, in whole or in part, to one of the provisions
referred to in paragraph (a).
(2) The register must contain a copy of:
(a) every order made by the Court under section 206C, 206D or
206E; and
(aa) every court order referred to in section 206EA; and
(ab) every court order referred to in section 206EAA; and
(ac) every court order referred to in section 206EB; and
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318 Corporations Act 2001
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(b) every notice that was served under subsection 206F(3); and
(c) each permission given under subsection 206F(5); and
(d) every order lodged under subsection 206G(4); and
(e) every order, notice or permission that was made, served,
given or lodged under a provision of a law of a State or
Territory that:
(i) was in force at any time before the commencement of
this Act; and
(ii) corresponds, in whole or in part, to one of the provisions
referred to in paragraph (a), (b), (c) or (d).
(3) Subsections 1274(2) and (5) apply to a copy of an order, notice or
permission referred to in subsection (2) as if that copy were a
document lodged with ASIC.
(4) A reference in this section to a provision of a law of a State or
Territory includes a provision as applied as a law of that State or
Territory.
1274A Obtaining information from certain registers
(1) In this section:
data processor means a mechanical, electronic or other device for
the processing of data.
register means a register kept by ASIC under this Act.
search includes inspect.
(2) ASIC may permit a person to search, otherwise than by using a
data processor, a prescribed register other than the Register of
Relevant Providers.
(3) ASIC may permit a person to search a prescribed register by using
a data processor in order to obtain prescribed information from the
register.
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Corporations Act 2001 319
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(4) ASIC may make available to a person prescribed information (in
the form of a document or otherwise) that ASIC has obtained from
a prescribed register by using a data processor.
(5) Nothing in this section limits:
(a) a power or function that ASIC has apart from this section; or
(b) a right that a person has apart from this section.
1274B Use, in court proceedings, of information from ASIC’s
national database
(1) In this section:
data processor means a mechanical, electronic or other device for
processing data.
(2) In a proceeding in a court, a writing that purports to have been
prepared by ASIC is admissible as prima facie evidence of the
matters stated in so much of the writing as sets out what purports to
be information obtained by ASIC, by using a data processor, from
the national database. In other words, the writing is proof of such a
matter in the absence of evidence to the contrary.
(3) A writing need not bear a certificate or signature in order to be
taken to purport to have been prepared by ASIC.
(4) Nothing in this section limits, or is limited by, section 1274 or
1274A.
1274C ASIC certificate
ASIC may certify that a person was a director or secretary of a
company at a particular time or during a particular period. In the
absence of evidence to the contrary, a certificate is proof of the
matters stated in it.
Note: See section 1274B for the evidentiary status of documents prepared by
ASIC from the national database.
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320 Corporations Act 2001
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1275 Relodging of lost registered documents
(1) Where a document forming part of the constitution of, or any other
document relating to, a body corporate has, since being lodged,
been lost or destroyed, a person may apply to ASIC for leave to
lodge a copy of the document as originally lodged.
(2) Where such an application is made, ASIC may direct that notice of
the application be given to such persons and in such manner as it
thinks fit.
(3) Whether or not an application has been made to ASIC under
subsection (1), ASIC, upon being satisfied:
(a) that an original document has been lost or destroyed; and
(b) of the date of the lodging of that document; and
(c) that a copy of that document produced to ASIC is a correct
copy;
may certify upon the copy that it is so satisfied and grant leave for
the copy to be lodged in the manner required by law in respect of
the original.
(4) Upon the lodgment the copy has, and is taken to have had from
such date as is mentioned in the certificate as the date of the
lodging of the original, the same force and effect for all purposes
as the original.
(5) A decision of the Tribunal varying or setting aside a decision of
ASIC to certify and grant leave under subsection (3) may be
lodged with ASIC and is to be registered by it, but no payments,
contracts, dealings, acts or things made, had or done in good faith
before the registration of the Tribunal’s decision and upon the faith
of and in reliance upon the certificate are to be invalidated or
affected by the Tribunal’s decision.
(6) Where a transparency of a document referred to in subsection (1)
has been incorporated with a register kept by ASIC and is lost or
destroyed as referred to in that subsection, this section applies as if
the document of which it is a transparency had been so lost or
destroyed.
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Section 1276
Corporations Act 2001 321
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Part 9.2—Registration of auditors
Division 1—Interpretation
1276 Definitions
In this Part, unless the contrary intention appears:
body corporate includes a Part 5.7 body.
decision, in relation to the Board, means, in Division 3, a decision
of the Board under that Division and includes a refusal to exercise
a power under section 1292.
registered means registered under Division 2.
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Section 1279
322 Corporations Act 2001
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Division 2—Registration
1279 Application for registration as auditor
(1) A natural person may make an application to ASIC for registration
as an auditor.
(2) An application under this section:
(a) must be lodged with ASIC; and
(b) must contain such information as is prescribed in the
regulations; and
(c) must be in the prescribed form.
1280 Registration of auditors
(2) Subject to this section, where an application for registration as an
auditor is made under section 1279, ASIC must grant the
application and register the applicant as an auditor if:
(a) the applicant satisfies subsection (2A) or (2B); and
(b) ASIC is satisfied that the applicant has either:
(i) satisfied all the components of an auditing competency
standard approved by ASIC under section 1280A; or
(ii) had such practical experience in auditing as is
prescribed; and
(c) ASIC is satisfied that the applicant is capable of performing
the duties of an auditor and is otherwise a fit and proper
person to be registered as an auditor;
but otherwise ASIC must refuse the application.
(2A) The applicant satisfies this subsection if the applicant:
(a) holds a degree, diploma or certificate from a prescribed
university or another prescribed institution in Australia; and
(b) has, in the course of obtaining that degree, diploma or
certificate, passed examinations in such subjects, under
whatever name, as the appropriate authority of the university
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Section 1280
Corporations Act 2001 323
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or other institution certifies to ASIC to represent a course of
study:
(i) in accountancy (including auditing) of not less than 3
years duration; and
(ii) in commercial law (including company law) of not less
than 2 years duration; and
(c) has satisfactorily completed a course in auditing prescribed
by the regulations for the purposes of this paragraph.
(2B) The applicant satisfies this subsection if the applicant has other
qualifications and experience that, in ASIC’s opinion, are
equivalent to the requirements mentioned in subsection (2A).
(3) ASIC must not register as an auditor a person who is disqualified
from managing corporations under Part 2D.6.
(4) Subject to subsection (8), ASIC may refuse to register as an auditor
a person who is not resident in Australia.
(5) Where ASIC grants an application by a person for registration as
an auditor, ASIC must cause to be issued to the person a certificate
by ASIC stating that the person has been registered as an auditor
and specifying the day on which the application was granted.
(7) A registration under this section is taken to have taken effect at the
beginning of the day specified in the certificate as the day on which
the application for registration was granted and remains in force
until:
(a) the registration is cancelled by ASIC or the Board; or
(b) the person who is registered dies.
(8) ASIC must not refuse to register a person as an auditor unless
ASIC has given the person an opportunity to appear at a hearing
before ASIC and to make submissions and give evidence to ASIC
in relation to the matter.
(9) Where ASIC refuses an application by a person for registration as
an auditor, ASIC must, not later than 14 days after the decision,
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Section 1280A
324 Corporations Act 2001
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give to the person a notice in writing setting out the decision and
the reasons for it.
1280A Approval of auditing competency standard
(1) ASIC may, on application by any person, approve an auditing
competency standard for the purposes of paragraph 1280(2)(b).
The approval must be in writing.
(2) If, on application by a person, ASIC approves an auditing
competency standard under subsection (1), ASIC may, on
application by that person, approve a variation of the standard. The
approval must be in writing.
(3) ASIC must not approve an auditing competency standard, or a
variation of an auditing competency standard, unless it is satisfied
that:
(a) the standard, or the standard as proposed to be varied,
provides that a person’s performance against each component
of the standard is to be appropriately verified by a person
who:
(i) is a registered company auditor; and
(ii) has sufficient personal knowledge of the person’s work
to be able to give that verification; and
(b) the standard, or the standard as proposed to be varied, is not
inconsistent with this Act or any other law of the
Commonwealth under which ASIC has regulatory
responsibilities; and
(c) the standard adequately addresses the level of practical
experience needed for registration as a company auditor; and
(d) the standard is harmonised to the greatest extent possible
with other approved auditing competency standards.
(4) ASIC may revoke an approval of an auditing competency standard:
(a) on application by the person who applied for the approval; or
(b) if ASIC is no longer satisfied as mentioned in subsection (3).
The revocation must be in writing.
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Section 1281
Corporations Act 2001 325
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(5) An approval, an approval of a variation, and a revocation of an
approval, of an auditing competency standard are legislative
instruments.
1281 Auditor-General taken to be registered as auditor
(1) A person who holds office as, or is for the time being exercising
the powers and performing the duties of:
(a) the Auditor-General; or
(b) the Auditor-General of a State or Territory in this
jurisdiction;
is taken, despite any other provision of this Part, to be registered as
an auditor.
(2) A person to whom the Auditor-General of the Commonwealth, or
of a State or Territory, delegates:
(a) the function of conducting an audit; or
(b) the power to conduct an audit;
is taken to be registered as an auditor under this Part for the
purposes of applying Chapter 2M to the audit.
1285 Register of Auditors
(1) ASIC must cause a Register of Auditors to be kept for the purposes
of this Act and must cause to be entered in the Register in relation
to a person who is registered as an auditor:
(a) the name of the person; and
(b) the day on which the application by that person for
registration as an auditor was granted; and
(c) the address of the principal place where the person practises
as an auditor and the address of the other places (if any) at
which he or she so practises; and
(d) if the person practises as an auditor as a member of a firm or
under a name or style other than his or her own name—the
name of that firm or the name or style under which he or she
so practises; and
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Section 1287
326 Corporations Act 2001
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(e) particulars of any suspension of the person’s registration,
under Division 2, as an auditor and of any action taken in
respect of the person under paragraph 1292(9)(a), (b) or (c);
and may cause to be entered in the Register in relation to a person
who is registered as an auditor such other particulars as ASIC
considers appropriate.
(2) Where a person ceases to be registered as an auditor, ASIC must
cause to be removed from the Register of Auditors the name of the
person and any other particulars entered in the Register in relation
to that person.
(3) A person may inspect and make copies of, or take extracts from,
the Register of Auditors.
1287 Notification of certain matters
(1) Where:
(a) a person who is a registered company auditor ceases to
practise as an auditor; or
(b) a change occurs in any matter particulars of which are
required by paragraph 1285(1)(a), (c) or (d) to be entered in
the Register of Auditors in relation to a person who is a
registered company auditor;
the person must, not later than 21 days after the occurrence of the
event concerned, lodge, in the prescribed form, particulars in
writing of that event.
(4) If a person who is registered as an auditor is disqualified from
managing corporations under Part 2D.6, then, within a period of 3
days after they become disqualified, they must lodge written
particulars in the prescribed form of the circumstances because of
which they become disqualified.
1287A Annual statements by registered company auditors
(1) A person who is a registered company auditor must, within one
month after the end of:
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(a) the period of 12 months beginning on the day on which the
person’s registration begins; and
(b) each subsequent period of 12 months;
lodge with ASIC a statement in respect of that period.
(1A) A statement under subsection (1):
(a) must contain such information as is prescribed in the
regulations; and
(b) must be in the prescribed form.
(2) ASIC may, on the application of the person made before the end of
the period for lodging a statement under subsection (1), extend, or
further extend, that period.
1289 Auditors and other persons to enjoy qualified privilege in
certain circumstances
Qualified privilege for auditor
(1) An auditor has qualified privilege in respect of:
(a) a statement that the auditor makes (orally or in writing) in the
course of the auditor’s duties as auditor; or
(b) a statement that the auditor makes (orally or in writing) on:
(i) a directors’ report under section 298 or 306; or
(ii) a statement, report or other document that is taken, for
any purpose, to be part of that report; or
(c) notifying ASIC of a matter under section 311; or
(d) a disclosure made by the auditor in response to a notice given
to the auditor under subsection 30A(1) or 225A(5) of the
ASIC Act.
Note: If the auditor is an audit company, the company has qualified privilege
under this subsection in respect of statements made, and notices given,
by individuals on behalf of the company if those statements and
notices can be properly attributed to the company.
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Section 1289
328 Corporations Act 2001
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Qualified privilege for registered company auditor acting on
behalf of audit company
(2) If the auditor is an audit company, a registered company auditor
acting on behalf of the company has qualified privilege in respect
of:
(a) a statement that the registered company auditor makes (orally
or in writing) in the course of the performance, on the behalf
of the company, of the company’s duties as auditor; or
(b) a statement that the registered company auditor makes (orally
or in writing), on behalf of the company, on:
(i) a directors’ report under section 298 or 306; or
(ii) any statement, report or other document that is taken,
for any purpose, to be part of that report; or
(c) a notification of a matter that the registered company auditor
gives ASIC, on behalf of the company, under section 311; or
(d) a disclosure made by the registered company auditor in
response to a notice given to the audit company under
subsection 225A(5) of the ASIC Act.
Extent of auditor’s duties—answering questions put to auditor by
members
(3) For the purposes of this section, an auditor’s duties as auditor
include:
(a) answering questions put to the auditor (or the auditor’s
representative) at an AGM; and
(b) providing answers to questions that are submitted to the
auditor under section 250PA.
Qualified privilege for person representing auditor at AGM
(4) A person who represents an auditor at an AGM has qualified
privilege in respect of any statement that the person makes in the
course of representing the auditor at that AGM.
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Corporations Act 2001 329
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Qualified privilege for subsequent publication
(5) A person has qualified privilege in respect of the publishing of a
document that:
(a) is prepared by an auditor in the course of the auditor’s duties;
or
(b) required by or under this Act to be lodged (whether or not the
document has been lodged).
(6) A person has qualified privilege in respect of the publishing of any
statement:
(a) made by an auditor as mentioned in subsection (1); or
(b) made by a registered company auditor as mentioned in
subsection (2); or
(c) made by a person as mentioned in subsection (4).
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Division 2A Conditions on registration of auditors
Section 1289A
330 Corporations Act 2001
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Division 2A—Conditions on registration of auditors
1289A ASIC may impose conditions on registration
(1) Under this section, ASIC may impose only conditions of a kind
specified in the regulations.
(2) Subject to this section, ASIC may, at any time, by giving written
notice to a person registered as an auditor:
(a) impose conditions, or additional conditions, on their
registration; and
(b) vary or revoke conditions imposed on their registration.
(3) ASIC may do so:
(a) on its own initiative; or
(b) if the registered company auditor lodges with ASIC an
application for ASIC to do so, which is accompanied by the
documents, if any, required by regulations made for the
purposes of this paragraph.
Note: For fees in respect of lodging applications, see Part 9.10.
(4) Except where conditions are varied on the application of the
registered company auditor, ASIC may only impose conditions or
additional conditions, or vary the conditions, on registration after
giving the auditor an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that
takes place in private; and
(b) to make submissions to ASIC in relation to the matter.
This subsection does not apply to ASIC imposing conditions at the
time when the applicant is registered.
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Section 1290
Corporations Act 2001 331
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Division 3—Cancellation or suspension of registration
1290 Cancellation at request of registered person
(1) Where a person who is registered as an auditor requests ASIC to
cancel his or her registration, ASIC may cancel the registration of
that person as an auditor.
(2) A decision of ASIC under subsection (1) to cancel the registration
of a person as an auditor comes into effect as soon as practicable
upon the making of the decision.
1291 Immediate suspension or cancellation
ASIC may cancel or suspend a person’s registration as an auditor
if:
(a) the person is liable to pay levy imposed by the ASIC
Supervisory Cost Recovery Levy Act 2017; and
(b) the following have not been paid in full at least 12 months
after the due date for payment:
(i) an amount of levy (if any) payable in respect of the
person;
(ii) an amount of late payment penalty payable (if any) in
relation to the levy;
(iii) an amount of shortfall penalty payable (if any) in
relation to the levy.
Note: See section 1298 for the effect of suspension.
1291A Notice of suspension or cancellation
Application of this section
(1) This section applies if ASIC decides under section 1291 to suspend
or cancel the registration of a person as an auditor.
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Section 1291B
332 Corporations Act 2001
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ASIC must give notice of decision
(2) ASIC must, within 10 business days after making the decision,
give a written notice setting out the decision, and the reasons for
the decision.
When decision comes into effect
(3) The decision comes into effect on the day after the notice is given
to the person.
Failure to give notice does not affect validity of decision
(4) A failure by ASIC to give the notice under subsection (2) within 10
business days does not affect the validity of the decision.
1291B ASIC may vary or revoke suspension
(1) This section applies if ASIC has suspended the registration of a
person as an auditor under section 1291.
(2) ASIC may at any time vary or revoke the suspension by giving
written notice to the person.
1292 Powers of Board in relation to auditors
(1) The Board may, if it is satisfied on an application by ASIC or
APRA for a person who is registered as an auditor to be dealt with
under this section that, before, at or after the commencement of
this section:
(a) the person has:
(ia) contravened section 324DB; or
(i) contravened section 1287A; or
(ia) failed to comply with a condition of the person’s
registration as an auditor; or
(ii) ceased to be resident in Australia; or
(b) the person either:
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(i) has not performed any audit work during a continuous
period of not less than 5 years; or
(ii) has not performed any significant audit work during a
continuous period of not less than 5 years;
and, as a result, has ceased to have the practical experience
necessary for carrying out audits for the purposes of this Act;
or
(d) the person has failed, whether in or outside this jurisdiction,
to carry out or perform adequately and properly:
(i) the duties of an auditor; or
(ii) any duties or functions required by an Australian law to
be carried out or performed by a registered company
auditor;
or is otherwise not a fit and proper person to remain
registered as an auditor;
by order, cancel, or suspend for a specified period, the registration
of the person as an auditor.
(1A) In determining for the purposes of subparagraph (1)(b)(ii) whether
audit work performed by a person is significant, have regard to:
(a) the nature of the audit; and
(b) the extent to which the person was involved in the audit; and
(c) the level of responsibility the person assumed in relation to
the audit.
(7) The Board must, if it is satisfied on an application by ASIC or
APRA for a person who is registered as an auditor to be dealt with
under this section:
(a) that the person is disqualified from managing corporations
under Part 2D.6; or
(b) that the person is incapable, because of mental infirmity, of
managing his or her affairs;
by order, cancel the registration of the person as an auditor.
(9) Where, on an application by ASIC or APRA for a person who is
registered as an auditor to be dealt with under this section, the
Board is satisfied that the person has failed to carry out or perform
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Section 1294
334 Corporations Act 2001
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adequately and properly any of the duties or functions mentioned
in paragraph (1)(d), or is otherwise not a fit and proper person to
remain registered as an auditor the Board may deal with the person
in one or more of the following ways:
(a) by admonishing or reprimanding the person;
(b) by requiring the person to give an undertaking to engage in,
or to refrain from engaging in, specified conduct;
(c) by requiring the person to give an undertaking to refrain from
engaging in specified conduct except on specified conditions;
and, if a person fails to give an undertaking when required to do so
under paragraph (b) or (c), or contravenes an undertaking given
pursuant to a requirement under that paragraph, the Board may, by
order, cancel, or suspend for a specified period, the registration of
the person as an auditor.
(10) The Board’s powers under subsection (9) may be exercised in
addition to, or in substitution for, the exercise of the Board’s
powers to cancel or suspend a registration under subsection (1).
(11) The Board may exercise any of its powers under this Division in
relation to a person as a result of conduct engaged in by the person
whether or not that conduct constituted or might have constituted
an offence, and whether or not any proceedings have been brought
or are to be brought in relation to that conduct.
(12) This section has effect subject to section 1294.
1294 Board to give opportunity for hearing etc.
(1) The Board must not:
(a) cancel or suspend the registration of a person as an auditor;
or
(b) deal with a person in any of the ways mentioned in
subsection 1292(9);
unless the Board has given the person an opportunity to appear at a
hearing held by the Board and to make submissions to, and adduce
evidence before, the Board in relation to the matter.
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Section 1294A
Corporations Act 2001 335
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(2) Where subsection (1) requires the Board to give a person an
opportunity to appear at a hearing and to make submissions to, and
bring evidence before, the Board in relation to a matter, the Board
must give ASIC and APRA an opportunity to appear at the hearing
and to make submissions to, and bring evidence before, the Board
in relation to the matter.
1294A Pre-hearing conference
(1) If subsection 1294(1) requires the Board to give a person an
opportunity to appear at a hearing and to make submissions to, and
bring evidence before, the Board in relation to a matter, the
Chairperson of the Board may, if he or she considers that it would
assist in the conduct of the hearing to do so, convene one or more
conferences with the person.
(2) The Chairperson of the Board may allow any of the following
persons to attend a conference:
(a) a representative of ASIC;
(b) a representative of APRA;
(c) any other person.
(3) The Chairperson of the Board must give written notice of a
conference to ASIC and APRA at least 14 days before the
conference.
(4) At a conference, the Chairperson of the Board may, on behalf of
the Board:
(a) fix a date or dates for the hearing; and
(b) give directions about the time within which submissions are
to be made to the Board in relation to the matter; and
(c) give directions about the time within which evidence is to be
brought before the Board in relation to the matter; and
(d) give directions as to the procedure to be followed at or in
connection with the hearing.
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Chapter 9 Miscellaneous
Part 9.2 Registration of auditors
Division 3 Cancellation or suspension of registration
Section 1295
336 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1295 Board may remove suspension
(1) Where a registration of a person as an auditor is suspended by the
Board, the Board may, on an application by the person or of its
own motion, by order, terminate the suspension.
(2) An order under subsection (1) has effect accordingly.
1296 Notice of Board’s decision
(1) Where the Board decides to exercise any of its powers under
section 1292 in relation to a person, or decides that it is required to
make an order under subsection 1292(7) in relation to a person, the
Board must, within 14 days after the decision:
(a) give to the person a notice in writing setting out the decision
and the reasons for it; and
(b) lodge a copy of the notice referred to in paragraph (a); and
(c) cause to be published in the Gazette a notice in writing
setting out the decision.
(1A) If:
(a) the Board decides to exercise the power, or makes the order,
on the basis of particular conduct engaged in by the person;
and
(b) the person engaged in that conduct in the course of
participating in the conduct of an audit on behalf of an audit
firm or audit company;
the notice under paragraph (1)(c) may identify the audit firm or
audit company.
(1B) If the Board:
(a) decides to exercise any of its powers under section 1292 in
relation to a person; or
(b) decides that it is required to make an order under
subsection 1292(7) in relation to a person;
then, in addition to meeting the requirements of subsection (1), the
Board may take such steps as it considers reasonable and
appropriate to publicise:
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Cancellation or suspension of registration Division 3
Section 1297
Corporations Act 2001 337
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) the decision; and
(d) the reasons for the decision.
Without limiting this, the Board may make the decision and
reasons available on the internet.
(1C) If:
(a) the Board decides to exercise the power under section 1292,
or makes the order under subsection 1292(7), on the basis of
particular conduct engaged in by the person; and
(b) the person engaged in that conduct in the course of
participating in the conduct of an audit on behalf of an audit
firm or audit company;
a publication under subsection (1B) may identify the audit firm or
audit company.
(2) Where the Board decides to refuse to exercise its powers under
section 1292 in relation to a person, or decides that it is not
required to make an order under subsection 1292(7) in relation to a
person, the Board must, within 14 days after the decision:
(a) give to the person a notice in writing setting out the decision
and the reasons for it; and
(b) lodge a copy of the notice referred to in paragraph (a).
(3) The validity of a decision of the Board is not affected by failure of
the Board to comply with subsection (1) or (2), as the case
requires, in relation to the decision.
1297 Time when Board’s decision comes into effect
(1) Subject to subsection (2) and to sections 41 and 44A of the
Administrative Appeals Tribunal Act 1975, an order made by the
Board cancelling or suspending the registration of a person as an
auditor comes into effect:
(a) at the end of the day on which there is given to the person a
paragraph 1296(1)(a) notice of the decision pursuant to
which the order is made; or
(b) at the end of such longer period (not exceeding 90 days) as
the Board determines.
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Chapter 9 Miscellaneous
Part 9.2 Registration of auditors
Division 3 Cancellation or suspension of registration
Section 1298
338 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) Where the Board makes an order of a kind referred to in
subsection (1), it may, in order to enable an application to be made
to the Tribunal for review of the decision to make the order,
determine that the order is not to come into effect until a specified
time or until the happening of a specified event.
(3) The Board may at any time vary or revoke a determination made
under subsection (2), including such a determination that has been
varied at least once before.
(4) A determination in force under subsection (2) has effect
accordingly.
1298 Effect of suspension
A person whose registration as an auditor is suspended is, except
for the purposes of subsection 1285(2), section 1287 (other than
paragraph 1287(1)(a)), section 1287A and this Division, taken not
to be registered as an auditor so long as the registration is
suspended.
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Miscellaneous Chapter 9
Registration of auditors Part 9.2
Validation of approval of auditing competency standard Division 4
Section 1298P
Corporations Act 2001 339
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 4—Validation of approval of auditing competency
standard
1298P Validation of approval of auditing competency standard
(1) This section applies, for the purposes of the laws of the
Commonwealth (including this Act), in relation to the approval
dated 24 November 2004 under section 1280A of an auditing
competency standard (whether or not the approval is in force when
this section commences).
(2) The Legislation Act 2003 has effect, and is taken always to have
had effect, as if:
(a) the approval had been lodged for registration immediately
after the approval was given; and
(b) the approval had been registered immediately after it was
lodged for registration; and
(c) any other requirement imposed by that Act in relation to the
approval had been met.
(3) However, this section does not affect rights or liabilities arising
between parties to proceedings heard and finally determined by a
court on or before the commencement of this section, to the extent
that those rights or liabilities arose from, or were affected by, the
approval.
Definitions
(4) In this section:
lodge has the same meaning as in the Legislation Act 2003.
register has the same meaning as in the Legislation Act 2003.
1298Q Compensation for acquisition of property
(1) If the operation of section 1298P would result in an acquisition of
property from a person otherwise than on just terms, the
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Part 9.2 Registration of auditors
Division 4 Validation of approval of auditing competency standard
Section 1298Q
340 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Commonwealth is liable to pay a reasonable amount of
compensation to the person.
(2) If the Commonwealth and the person do not agree on the amount
of the compensation, the person may institute proceedings in the
Federal Court for the recovery from the Commonwealth of such
reasonable amount of compensation as the court determines.
(3) To avoid doubt, this section applies in relation to the operation of
section 1298P instead of section 1350.
(4) In this section:
acquisition of property has the same meaning as in
paragraph 51(xxxi) of the Constitution.
just terms has the same meaning as in paragraph 51(xxxi) of the
Constitution.
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Miscellaneous Chapter 9
Authorised audit companies Part 9.2A
Registration Division 1
Section 1299A
Corporations Act 2001 341
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 9.2A—Authorised audit companies
Division 1—Registration
1299A Application for registration as authorised audit company
(1) A company may apply to ASIC for registration as an authorised
audit company.
(2) An application under this section:
(a) must contain such information as is prescribed in the
regulations; and
(b) must be in the prescribed form.
1299B Eligibility for registration as an authorised audit company
A company is eligible to be registered as an authorised audit
company if and only if:
(a) each of the directors of the company:
(i) is a registered company auditor; and
(ii) is not disqualified from managing a corporation under
Part 2D.6; and
(b) each share in the company is held and beneficially owned by
a person who is:
(i) an individual; or
(ii) the legal personal representatives of an individual; and
(c) a majority of the votes that may be cast at a general meeting
of the company attach to shares in the company that are held
and beneficially owned by individuals who are registered
company auditors; and
(d) ASIC is satisfied that the company has adequate and
appropriate professional indemnity insurance for claims that
may be made against the company in relation to the audit of
companies and registered schemes for the purposes of this
Act; and
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Part 9.2A Authorised audit companies
Division 1 Registration
Section 1299C
342 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(e) the company is not a Chapter 5 body corporate.
1299C Registration as authorised audit company
(1) ASIC must grant the application and register the company as an
authorised audit company if the company is eligible to be
registered as an authorised audit company. Otherwise ASIC must
refuse the application.
(2) If ASIC grants the company’s application, ASIC must issue to the
company a certificate by ASIC stating that the company has been
registered as an authorised audit company and specifying the day
on which the application was granted.
(3) The company’s registration under this section takes effect at the
beginning of the day specified in the certificate as the day on which
the application for registration was granted and remains in force
until:
(a) the registration is cancelled by ASIC; or
(b) the company is wound up.
(4) ASIC must not refuse to register the company as an authorised
audit company unless ASIC has given the company an opportunity
to be represented at a hearing before ASIC and to make
submissions and give evidence to ASIC in relation to the matter.
(5) If ASIC refuses the company’s application, ASIC must, not later
than 14 days after the decision, give to the company a notice in
writing setting out the decision and the reasons for it.
1299D Registration may be subject to conditions
(1) The company’s registration as an authorised audit company is
subject to:
(a) the provisions of this Part; and
(b) the conditions or restrictions specified in the regulations; and
(c) any other conditions or restrictions determined by ASIC.
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Registration Division 1
Section 1299E
Corporations Act 2001 343
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(2) ASIC may determine conditions or restrictions for the purposes of
paragraph (1)(c) either at the time when the company is registered
as an authorised audit company or subsequently.
(3) ASIC determines a condition or restriction by written notice to the
company.
1299E Register of authorised audit companies
(1) ASIC must keep a Register of Authorised Audit Companies for the
purposes of this Act.
(2) In relation to each authorised audit company, ASIC must enter in
the Register:
(a) the name of the company; and
(b) the company’s ACN or ABN; and
(c) the day on which the company’s registration under
section 1299C took effect; and
(d) the address of the company’s registered office; and
(e) the address of the principal place where the company
practises as an auditor and the address of the other places (if
any) at which the company so practises; and
(f) the name and address of:
(i) each director of the company; and
(ii) each person who performs a chief executive officer
function (within the meaning of section 295A) in
relation to the company; and
(g) the details of any conditions or restrictions determined under
paragraph 1299D(1)(c) in relation to the registration; and
(h) details of any suspension of the registration.
(3) ASIC may enter in the Register in relation to the company any
other details that ASIC considers appropriate.
(4) If a company ceases to be registered as an authorised audit
company, ASIC must remove the entry in relation to the company
from the Register.
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Part 9.2A Authorised audit companies
Division 1 Registration
Section 1299F
344 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(5) A person may inspect and make copies of, or take extracts from,
the Register.
1299F Notification of certain matters
(1) An authorised audit company must notify ASIC if a condition or
restriction to which the company’s registration is subject is
contravened.
(2) The notice under subsection (1) must:
(a) set out details of the contravention; and
(b) be given within 14 days after the company becomes aware of
the contravention; and
(c) be lodged with ASIC in the prescribed form.
(3) An authorised audit company must notify ASIC if:
(a) details of a matter are required by subsection 1299E(2) to be
entered in the Register of Authorised Audit Companies in
relation to the company; and
(b) a change occurs in that matter while the company is
registered as an authorised audit company.
(4) The notice under subsection (3) must:
(a) set out details of the change; and
(b) be given within 28 days after the change occurs; and
(c) be lodged with ASIC in the prescribed form.
(5) A company that applies for registration as an authorised audit
company must notify ASIC if:
(a) details of a matter would be required by subsection 1299E(2)
to be entered in the Register of Authorised Audit Companies
in relation to the company if it were to be registered; and
(b) a change occurs in that matter before the application is
granted or rejected.
(6) The notice under subsection (5) must:
(a) set out details of the change; and
(b) be given within 28 days after the change occurs; and
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Registration Division 1
Section 1299G
Corporations Act 2001 345
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(c) be lodged with ASIC in the prescribed form.
1299G Annual statements by authorised audit company
(1) A company that is an authorised audit company must, within one
month after the end of:
(a) the period of 12 months beginning on the day on which the
company became registered as an authorised audit company;
and
(b) each subsequent period of 12 months;
lodge with ASIC a statement in respect of that period.
(1A) A statement under subsection (1):
(a) must contain such information as is prescribed in the
regulations; and
(b) must be in the prescribed form.
(2) ASIC may, on the application of an authorised audit company
made before the end of the period for lodging a statement under
subsection (1), extend, or further extend, that period.
(3) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) A director of a company must take all reasonable steps to comply
with, or to secure compliance with, subsection (1).
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Chapter 9 Miscellaneous
Part 9.2A Authorised audit companies
Division 2 Cancellation or suspension of registration
Section 1299H
346 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Division 2—Cancellation or suspension of registration
1299H Cancellation at request of registered person
(1) ASIC may cancel a company’s registration as an authorised audit
company if the company requests ASIC to cancel the registration.
(2) ASIC must take the steps necessary to cancel the registration as
soon as practicable after the request is made.
1299I Cancellation or suspension in other cases
ASIC may cancel or suspend a company’s registration as an
authorised audit company if:
(a) the company ceases to be eligible to be registered as an
authorised audit company; or
(b) the company fails to meet conditions or observe restrictions
imposed on the company’s registration as an authorised audit
company; or
(c) in the case of a company that is a leviable entity (within the
meaning of the ASIC Supervisory Cost Recovery Levy Act
2017)—the following have not been paid in full at least 12
months after the due date for payment:
(i) an amount of levy (if any) payable in respect of the
company;
(ii) an amount of late payment penalty payable (if any) in
relation to the levy;
(iii) an amount of shortfall penalty payable (if any) in
relation to the levy.
Note: See section 1299K for when the cancellation takes effect.
1299J Notice of cancellation or suspension
(1) If ASIC decides to cancel or suspend a company’s registration as
an authorised audit company under section 1299I, ASIC must,
within 14 days after the decision:
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Cancellation or suspension of registration Division 2
Section 1299K
Corporations Act 2001 347
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(a) give to the company written notice setting out the decision
and the reasons for it; and
(b) publish written notice of the decision in the Gazette.
(2) The validity of a decision by ASIC is not affected by a failure by
ASIC to comply with subsection (1) in relation to the decision.
1299K Time when ASIC’s decision comes into effect
(1) A decision by ASIC to cancel or suspend a company’s registration
as an authorised audit company comes into effect at the end of the
day on which the company is given notice of the decision under
paragraph 1299J(1)(a). This subsection has effect subject to
subsection (2) and to sections 41 and 44A of the Administrative
Appeals Tribunal Act 1975.
(2) ASIC may, in order to enable an application to be made to the
Tribunal for review of the decision to cancel or suspend the
registration, determine that the decision to cancel or suspend the
company’s registration as an authorised audit company is not to
come into effect until:
(a) a specified time; or
(b) the happening of a specified event.
(3) ASIC may at any time vary or revoke a determination made under
subsection (2), including such a determination that has been varied
at least once before.
(4) A determination in force under subsection (2) has effect
accordingly.
1299L Effect of suspension
A company whose registration as an authorised audit company is
suspended is, except for the purposes of subsection 1299E(4),
sections 1299F and 1299G and this Division, taken not to be
registered as an authorised audit company so long as the
registration is suspended.
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Part 9.2A Authorised audit companies
Division 2 Cancellation or suspension of registration
Section 1299M
348 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1299M Effect of cancellation
If a company’s registration as an authorised audit company is
cancelled (whether under section 1299H or 1299I), each
appointment of the company as auditor for a company or registered
scheme for the purposes of this Act that is in force on the day on
which the cancellation decision takes effect is terminated at the end
of that day.
Note: This means that the authorised audit company ceases to be auditor
without resigning and that the position of auditor for the company or
scheme will immediately become vacant unless there is another
auditor who has been appointed, and who can continue to act, as
auditor for the company or registered scheme.
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Miscellaneous Chapter 9
Books Part 9.3
Section 1300
Corporations Act 2001 349
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 9.3—Books
1300 Inspection of books
(1) A book that is by this Act required to be available for inspection
must, subject to and in accordance with this Act, be available for
inspection at the place where, in accordance with this Act, it is kept
and at all times when the registered office in this jurisdiction of the
body corporate concerned is required to be open to the public.
(2) If any register kept by a company or a foreign company for the
purposes of this Act is kept at a place other than the registered
office of the company or foreign company, that place must be open
to permit the register to be inspected during the same hours as
those during which the registered office of the company or foreign
company is required to be open to the public.
(2A) If a person asks a proprietary company in writing to inspect a
particular book of the company that the person has a right to
inspect, the company must make it available within 7 days, for
inspection by the person at the place where it is required to be kept.
(2B) An offence based on subsection (2A) is an offence of strict
liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) A person permitted by this Act (other than section 70-30 of
Schedule 2) to inspect a book may make copies of, or take extracts
from, the book and any person who refuses or fails to allow a
person so permitted to make a copy of, or take an extract from, the
book is guilty of an offence.
Note: Section 70-30 of Schedule 2 is about books relating to an external
administration.
(4) An offence based on subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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Section 1301
350 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1301 Location of books on computers
(1) This section applies if:
(a) a corporation records, otherwise than in writing, matters (the
stored matters) this Act requires to be contained in a book;
and
(b) the record of the stored matters is kept at a place (the place of
storage) other than the place (the place of inspection) where
the book is, apart from this section, required to be kept; and
(c) at the place of inspection means are provided by which the
stored matters are made available for inspection in written
form; and
(d) the corporation has lodged a notice:
(i) stating that this section is to apply in respect of:
(A) except where sub-subparagraph (B) applies—
the book; or
(B) if the stored matters are only some of the
information that is required to be contained in
the book—the book and matters that are of the
same kind as the stored matters; and
(ii) specifying the situation of the place of storage and the
place of inspection.
(2) Subject to subsection (4), the corporation is taken to have complied
with the requirements of this Act as to the location of the book, but
only in so far as the book is required to contain the stored matters.
(3) Subject to subsection (4), for the purposes of the application of
subsection 1085(3) and section 1300 in relation to the corporation
and the book, the book is taken to be kept at the place of
inspection, even though the record of the stored matters is kept at
the place of storage.
(4) If:
(a) the situation of the place of storage or the place of inspection
changes; and
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Section 1303
Corporations Act 2001 351
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the corporation does not lodge notice of the change within 14
days after the change;
this section, as it applies to the corporation because of the lodging
of the notice referred to in paragraph (1)(d), ceases to so apply at
the end of that period of 14 days.
1303 Court may compel compliance
If any person in contravention of this Act refuses to permit the
inspection of any book or to supply a copy of any book, the Court
may by order compel an immediate inspection of the book or order
the copy to be supplied.
1304 Translations of instruments
(1) Where under this Act a person is required to lodge an instrument or
a certified copy of an instrument and the instrument is not written
in English, the person must lodge at the same time a certified
translation of the instrument into English.
(2) Where under this Act a body corporate is required to make an
instrument available for inspection and the instrument is not
written in English, the body corporate must keep at its registered
office or, if it does not have a registered office, at its principal
office in this jurisdiction, a certified translation of the instrument
into English.
(3) In this section, instrument includes any certificate, contract or
other document.
1305 Admissibility of books in evidence
(1) A book kept by a body corporate under a requirement of this Act is
admissible in evidence in any proceeding and is prima facie
evidence of any matter stated or recorded in the book.
(2) A document purporting to be a book kept by a body corporate is,
unless the contrary is proved, taken to be a book kept as mentioned
in subsection (1).
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Section 1306
352 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1306 Form and evidentiary value of books
(1) A book that is required by this Act to be kept or prepared may be
kept or prepared:
(a) by making entries in a bound or looseleaf book; or
(b) by recording or storing the matters concerned by means of a
mechanical, electronic or other device; or
(c) in any other manner approved by ASIC.
(2) Subsection (1) does not authorise a book to be kept or prepared by
a mechanical, electronic or other device unless:
(a) the matters recorded or stored will be capable, at any time, of
being reproduced in a written form; or
(b) a reproduction of those matters is kept in a written form
approved by ASIC.
(3) A corporation must take all reasonable precautions, including such
precautions (if any) as are prescribed, for guarding against damage
to, destruction of or falsification of or in, and for discovery of
falsification of or in, any book or part of a book required by this
Act to be kept or prepared by the corporation.
(4) Where a corporation records or stores any matters by means of a
mechanical, electronic or other device, any duty imposed by this
Act to make a book containing those matters available for
inspection or to provide copies of the whole or a part of a book
containing those matters is to be construed as a duty to make the
matters available for inspection in written form or to provide a
document containing a clear reproduction in writing of the whole
or part of them, as the case may be.
(4A) The regulations may provide for how up to date the information
contained in an instrument prepared for the purposes of
subsection (4) must be.
(5) If:
(a) because of this Act, a book that this Act requires to be kept or
prepared is prima facie evidence of a matter; and
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Books Part 9.3
Section 1307
Corporations Act 2001 353
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(b) the book, or a part of the book, is kept or prepared by
recording or storing matters (including that matter) by means
of a mechanical, electronic or other device;
a written reproduction of that matter as so recorded or stored is
prima facie evidence of that matter.
(6) A writing that purports to reproduce a matter recorded or stored by
means of a mechanical, electronic or other device is, unless the
contrary is established, taken to be a reproduction of that matter.
1307 Falsification of books
(1) An officer, former officer, employee, former employee, member or
former member of a company who engages in conduct that results
in the concealment, destruction, mutilation or falsification of any
securities of or belonging to the company or any books affecting or
relating to affairs of the company is guilty of an offence.
(2) Where matter that is used or intended to be used in connection with
the keeping of any books affecting or relating to affairs of a
company is recorded or stored in an illegible form by means of a
mechanical device, an electronic device or any other device, a
person who:
(a) records or stores by means of that device matter that the
person knows to be false or misleading in a material
particular; or
(b) engages in conduct that results in the destruction, removal or
falsification of matter that is recorded or stored by means of
that device, or has been prepared for the purpose of being
recorded or stored, or for use in compiling or recovering
other matter to be recorded or stored by means of that device;
or
(c) having a duty to record or store matter by means of that
device, fails to record or store the matter by means of that
device:
(i) with intent to falsify any entry made or intended to be
compiled, wholly or in part, from matter so recorded or
stored; or
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Section 1307
354 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) knowing that the failure so to record or store the matter
will render false or misleading in a material particular
other matter so recorded or stored;
contravenes this subsection.
(3) It is a defence to a charge arising under subsection (1) or (2) if the
defendant proves that he, she or it acted honestly and that in all the
circumstances the act or omission constituting the offence should
be excused.
Note: A defendant bears a legal burden in relation to the matter mentioned in
subsection (3), see section 13.4 of the Criminal Code.
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1308A Application of Criminal Code
Subject to this Act, Chapter 2 of the Criminal Code applies to all
offences against this Act.
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1308 False or misleading statements
(1) A corporation must not advertise or publish:
(a) a statement of the amount of its capital that is misleading; or
(b) a statement in which the total of all amounts paid and unpaid
on shares in the company is stated but the amount of paid up
capital or the amount of any charge on uncalled capital is not
stated.
(1A) An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) A person who, in a document required by or for the purposes of
this Act or lodged with or submitted to ASIC, makes or authorises
the making of a statement that to the person’s knowledge is false or
misleading in a material particular, or omits or authorises the
omission of any matter or thing without which the document is to
the person’s knowledge misleading in a material respect, is guilty
of an offence.
(3) A person who makes or authorises the making of a statement that is
based on information that to the person’s knowledge:
(a) is false or misleading in a material particular; or
(b) has omitted from it a matter or thing the omission of which
renders the information misleading in a material respect;
is, for the purposes of subsection (2), taken to have made or
authorised the making of a statement that to the person’s
knowledge was false or misleading in a material particular.
(3A) A person is not liable to be proceeded against for an offence in
consequence of a regulation made under section 1364 as well as for
an offence against subsection (2) of this section.
(4) A person who, in a document required by or for the purposes of
this Act or lodged:
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(a) makes or authorises the making of a statement that is false or
misleading in a material particular; or
(b) omits or authorises the omission of any matter or thing
without which the document is misleading in a material
respect;
without having taken reasonable steps to ensure that the statement
was not false or misleading in a material particular or to ensure that
the document did not omit any matter or thing without which the
document would be misleading in a material respect, as the case
may be, is guilty of an offence.
(5) A person who makes or authorises the making of a statement
without having taken reasonable steps to ensure that the
information on which the statement was based:
(a) was not false or misleading in a material particular; and
(b) did not have omitted from it a matter or thing the omission of
which would render the information misleading in a material
respect;
is, for the purposes of subsection (4), taken to have made or
authorised the making of a statement without having taken
reasonable steps to ensure that the statement was not false or
misleading.
(6) For the purposes of subsections (2) and (4), where:
(a) at a meeting, a person votes in favour of a resolution
approving, or otherwise approves, a document required by or
for the purposes of this Act or required to be lodged; and
(b) the document contains a statement that, to the person’s
knowledge, is false or misleading in a material particular, or
omits any matter or thing without which the document is, to
the person’s knowledge, misleading in a material respect;
the person is taken to have authorised the making of the statement
or the omission of the matter or thing.
(7) For the purposes of this section, a statement, report or other
document that:
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(a) relates to affairs of a company or of a subsidiary of a
company; and
(b) is not itself required by this Act to be laid before the
company in general meeting; and
(c) is attached to or included with a report of the directors
provided under section 314 to members of the company or
laid before the company at an annual general meeting of the
company;
is taken to be part of the report referred to in paragraph (c).
(8) A person must not, in connection with an application for an
Australian CS facility licence, Australian financial services licence
or Australian market licence:
(a) make a statement that is false or misleading in a material
particular knowing it to be false or misleading; or
(b) omit to state any matter or thing knowing that because of that
omission the application is misleading in a material respect.
(9) For the purposes of this section:
(a) a notice under subsection 708AA(2), 708A(5), 1012DAA(2)
or 1012DA(5) is taken to be a notice required for the
purposes of this Act; and
(b) a notice under subsection 708AA(2), 708A(5), 1012DAA(2)
or 1012DA(5) is taken to be misleading in a material respect
if it fails to comply with paragraph 708AA(7)(d), 708A(6)(e),
1012DAA(7)(e) or 1012DA(6)(f).
(10) For the purposes of subsection (4), a person is taken to have taken
reasonable steps to ensure that a statement was not false or
misleading in a material particular if the person proves that:
(a) the person made all inquiries (if any) that were reasonable in
the circumstances; and
(b) after doing so, the person believed on reasonable grounds
that the statement was not misleading in a material particular.
(11) For the purposes of subsection (4), a person is taken to have taken
reasonable steps to ensure that a document did not omit any matter
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or thing without which the document would be misleading in a
material respect if the person proves that:
(a) the person made all inquiries (if any) that were reasonable in
the circumstances; and
(b) after doing so, the person believed on reasonable grounds
that there was no such omission.
(12) For the purposes of subsection (4), a person is taken to have taken
reasonable steps to ensure that a statement was not false or
misleading in a material particular if the person proves that:
(a) the person relied on information given to the person by:
(i) if the person is a body—someone other than a director,
employee or agent of the body; or
(ii) if the person is an individual—someone other than an
employee or agent of the individual; and
(b) the reliance placed on that information by the person was
reasonable in all the circumstances.
(13) For the purposes of subsection (4), a person is taken to have taken
reasonable steps to ensure that a document did not omit any matter
or thing without which the document would be misleading in a
material respect if the person proves that:
(a) the person relied on information given to the person by:
(i) if the person is a body—someone other than a director,
employee or agent of the body; or
(ii) if the person is an individual—someone other than an
employee or agent of the individual; and
(b) the reliance placed on that information by the person was
reasonable in all the circumstances.
1309 False information etc.
(1) An officer or employee of a corporation who makes available or
gives information, or authorises or permits the making available or
giving of information, to:
(a) a director, auditor, member, debenture holder or trustee for
debenture holders of the corporation; or
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(b) if the corporation is taken for the purposes of Chapter 2M to
be controlled by another corporation—an auditor of the other
corporation; or
(c) an operator of a financial market (whether the market is
operated in Australia or elsewhere) or an officer of such a
market;
being information, whether in documentary or any other form, that
relates to the affairs of the corporation and that, to the knowledge
of the officer or employee:
(d) is false or misleading in a material particular; or
(e) has omitted from it a matter or thing the omission of which
renders the information misleading in a material respect;
is guilty of an offence.
(2) An officer or employee of a corporation who makes available or
gives information, or authorises or permits the making available or
giving of information, to:
(a) a director, auditor, member, debenture holder or trustee for
debenture holders of the corporation; or
(b) if the corporation is taken for the purposes of Chapter 2M to
be controlled by another corporation—an auditor of the other
corporation; or
(c) an operator of a financial market (whether the market is
operated in Australia or elsewhere) or an officer of such a
market;
being information, whether in documentary or any other form,
relating to the affairs of the corporation that:
(d) is false or misleading in a material particular; or
(e) has omitted from it a matter or thing the omission of which
renders the information misleading in a material respect;
without having taken reasonable steps to ensure that the
information:
(f) was not false or misleading in a material particular; and
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(g) did not have omitted from it a matter or thing the omission of
which rendered the information misleading in a material
respect;
is guilty of an offence.
(3) The references in subsections (1) and (2) to a person making
available or giving, or authorising or permitting the making
available or giving of, information relating to the affairs of a
corporation include references to a person making available or
giving, or authorising or permitting the making available or giving
of, information as to the state of knowledge of that person with
respect to the affairs of the corporation.
(4) Where information is made available or given to a person referred
to in paragraph (1)(a), (b) or (c) or (2)(a), (b) or (c) in response to a
question asked by that person, the question and the information are
to be considered together in determining whether the information
was false or misleading.
(5) For the purposes of this section:
(a) a notice under subsection 708AA(2), 708A(5), 1012DAA(2)
or 1012DA(5) is taken to be a notice required for the
purposes of this Act; and
(b) a notice under subsection 708AA(2), 708A(5), 1012DAA(2)
or 1012DA(5) is taken to be misleading in a material respect
if it omits information that is excluded information for the
purposes of section 708AA, 708A, 1012DAA or 1012DA.
(6) Paragraphs (1)(a) and (b) do not apply in relation to a corporation
that is an Aboriginal and Torres Strait Islander corporation.
Note: Similar offences are created in relation to Aboriginal and Torres Strait
Islander corporations under section 561-5 of the Corporations
(Aboriginal and Torres Strait Islander) Act 2006.
(7) For the purposes of subsection (2), a person is taken to have taken
reasonable steps to ensure that information was not false or
misleading in a material particular if the person proves that:
(a) the person made all inquiries (if any) that were reasonable in
the circumstances; and
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(b) after doing so, the person believed on reasonable grounds
that the information was not misleading or deceptive in a
material particular.
(8) For the purposes of subsection (2), a person is taken to have taken
reasonable steps to ensure that information did not have omitted
from it any matter or thing the omission of which rendered the
information misleading in a material respect if the person proves
that:
(a) the person made all inquiries (if any) that were reasonable in
the circumstances; and
(b) after doing so, the person believed on reasonable grounds
that there was no such omission.
(9) For the purposes of subsection (2), a person is taken to have taken
reasonable steps to ensure that information was not false or
misleading in a material particular if the person proves that:
(a) the person relied on information given to the person by:
(i) if the person is a body—someone other than a director,
employee or agent of the body; or
(ii) if the person is an individual—someone other than an
employee or agent of the individual; and
(b) the reliance placed on that information by the person was
reasonable in all the circumstances.
(10) For the purposes of subsection (2), a person is taken to have taken
reasonable steps to ensure that information did not have omitted
from it any matter or thing the omission of which rendered the
information misleading in a material respect if the person proves
that:
(a) the person relied on information given to the person by:
(i) if the person is a body—someone other than a director,
employee or agent of the body; or
(ii) if the person is an individual—someone other than an
employee or agent of the individual; and
(b) the reliance placed on that information by the person was
reasonable in all the circumstances.
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1310 Obstructing or hindering ASIC etc.
A person must not, without lawful excuse, obstruct or hinder
ASIC, or any other person, in the performance or exercise of a
function or power under this Act.
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1311 General penalty provisions
(1) A person who:
(a) does an act or thing that the person is forbidden to do by or
under a provision of this Act; or
(b) does not do an act or thing that the person is required or
directed to do by or under a provision of this Act; or
(c) otherwise contravenes a provision of this Act;
is guilty of an offence by virtue of this subsection, unless that or
another provision of this Act provides that the person:
(d) is guilty of an offence; or
(e) is not guilty of an offence.
Note: Chapter 2 of the Criminal Code sets out the general principles of
criminal responsibility.
(1A) Paragraphs (1)(a), (b) and (c) only apply to a provision in the
following list if a penalty, pecuniary or otherwise, is set out in
Schedule 3 for that provision, or for a provision or provisions in
which that provision is included:
(a) Chapters 2A, 2B and 2C;
(b) Parts 2F.2 and 2F.3;
(c) Chapters 2G, 2H, 2J, 2M (other than Part 2M.4), 2N, 2P and
5A;
(d) Parts 5B.1 and 5B.3;
(daa) Chapter 5D;
(da) Chapter 6CA;
(db) Chapter 7;
(dc) Chapter 8;
(e) Chapter 10.
(2) Subject to section 1312, a person who is guilty of an offence
against this Act, whether by virtue of subsection (1) or otherwise,
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is punishable, on conviction, by a penalty not exceeding the
penalty applicable to the offence.
(3) Where:
(a) subsection (1) operates in relation to a provision of this Act
so as to make a person guilty of an offence; or
(b) a provision of this Act (other than this section) provides that
a person is, in circumstances referred to in the provision,
guilty of an offence;
and a penalty, pecuniary or otherwise, is set out in Schedule 3 for
that provision, or for a provision or provisions in which that
provision is included, the penalty applicable to the offence is the
penalty so set out.
(4) Where a provision of this Act (other than this section) provides that
the penalty applicable to a contravention of a particular provision
of this Act is a specified penalty, pecuniary or otherwise, the
penalty applicable to an offence constituted by a contravention of
the particular provision is the specified penalty.
(5) Except as provided in subsection (3) or (4) or in a provision of this
Act (other than this section), the penalty applicable to the offence
is a fine of 5 penalty units.
(6) An offence based on subsection (1) for which the penalty is set out
in subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
1312 Penalties for bodies corporate
(1) Where a body corporate is convicted of an offence against this Act,
the penalty that the court may impose is a fine not exceeding 5
times the maximum amount that, but for this section, the court
could impose as a pecuniary penalty for that offence.
(2) Subsection (1) does not apply in relation to the following
provisions of this Act:
(a) section 1041A;
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(b) subsection 1041B(1);
(c) subsection 1041C(1);
(d) section 1041D;
(e) subsection 1041E(1);
(f) subsection 1041F(1);
(g) subsection 1041G(1);
(h) subsection 1043A(1);
(i) subsection 1043A(2).
Note: The penalties applicable to these provisions in relation to bodies
corporate are set out in the relevant item of the table in Schedule 3.
1313 Penalty notices
(1) Where ASIC has reason to believe that a person has committed a
prescribed offence, ASIC may, subject to subsection (2), give the
person a notice in the prescribed form:
(a) alleging that the person has committed the prescribed offence
and giving the prescribed particulars in relation to the
prescribed offence; and
(b) setting out the prescribed penalty in respect of the prescribed
offence; and
(c) stating:
(i) in the case of a prescribed offence constituted by a
failure to do a particular act or thing:
(A) that the obligation to do the act or thing
continues despite the service of the notice or the
payment of the prescribed penalty; and
(B) that if, within the period specified in the notice
(being a period of at least 21 days), the person
pays the prescribed penalty to the authority
specified in the notice and does the act or thing,
no further action will be taken against the
person in relation to the prescribed offence; and
(C) that if, at the end of the period specified in the
notice, the person has not paid the prescribed
penalty to the authority specified in the notice
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or has not done the act or thing, proceedings
may be instituted against the person; or
(ii) in the case of a prescribed offence, not being an offence
constituted by a failure to do a particular act or thing:
(A) that if, within the period specified in the notice
(being a period of at least 21 days), the person
pays the prescribed penalty to the authority
specified in the notice, no further action will be
taken against the person in relation to the
prescribed offence; and
(B) that if, at the end of the period specified in the
notice, the person has not paid the prescribed
penalty to the authority specified in the notice,
proceedings may be instituted against the
person.
(2) Subsection (1) does not empower ASIC:
(a) to give a person more than one notice under that subsection
in relation to an alleged commission by that person of a
particular prescribed offence; or
(b) to give a person a notice under that subsection in relation to a
prescribed offence unless proceedings could be instituted
against that person for that offence in accordance with
section 1316.
(3) A notice under subsection (1) may be given to a natural person
either personally or by post.
(4) Where a notice under subsection (1) is given to a person in relation
to a prescribed offence constituted by a failure to do a particular act
or thing:
(a) if, within the period specified in the notice, the person pays
the prescribed penalty to the authority specified in the notice,
and does the act or thing—no proceedings may be instituted
against the person in respect of the prescribed offence; or
(b) if, at the end of the period specified in the notice, the person
has paid the prescribed penalty to the authority specified in
the notice but has not done the act or thing—no proceedings
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may be instituted against the person in respect of the
prescribed offence, but the obligation to do that act or thing
continues, and section 1314 applies in relation to the
continued failure to do that act or thing as if, on the day on
which the person so paid the prescribed penalty, the person
had been convicted of an offence constituted by a failure to
do that act or thing; or
(c) if, at the end of the period specified in the notice, the person
has not paid the prescribed penalty to the authority specified
in the notice but had done the act or thing—proceedings may
be instituted against the person in respect of the prescribed
offence; or
(d) if, at the end of the period specified in the notice, the person
has not paid the prescribed penalty to the authority specified
in the notice and has not done the act or thing—the
obligation to do that act or thing continues, and proceedings
may be instituted against the person in respect of the
prescribed offence.
(5) Where a notice under subsection (1) is given to a person in relation
to a prescribed offence, not being an offence constituted by a
failure to do a particular act or thing:
(a) if, within the period specified in the notice, the person pays
the prescribed penalty to the authority specified in the
notice—no proceedings may be instituted against the person
in respect of the prescribed offence; or
(b) if, at the end of the period specified in the notice, the person
has not paid the prescribed penalty to the authority specified
in the notice—proceedings may be instituted against the
person in respect of the prescribed offence.
(6) The payment of an amount by a person pursuant to a notice served
on the person under this section in relation to a prescribed offence
is not taken for any purpose to be an admission by that person of
any liability in connection with the alleged commission of the
prescribed offence.
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(7) Except as provided by paragraphs (4)(a) and (b) and (5)(a), this
section does not affect the operation of any provision of this Act,
of the regulations, of the rules or of any other Act in relation to the
institution of proceedings in respect of offences that are prescribed
offences for the purposes of this section.
(8) In this section:
authority includes a person.
prescribed offence means:
(a) a subsection 1311(5) offence; or
(b) an offence against this Act that the regulations prescribe for
the purposes of this section.
prescribed penalty, in relation to a prescribed offence in relation to
which ASIC may give, or has given, to a person a notice under
subsection (1), means:
(a) if the offence is a subsection 1311(5) offence:
(i) if the regulations prescribe in relation to the offence for
the purposes of this paragraph an amount not exceeding
one half the amount of the penalty applicable to the
offence:
(A) if the person is a body corporate—a penalty of
five times the amount so prescribed; or
(B) otherwise—a penalty of the amount so
prescribed; or
(ii) otherwise:
(A) if the person is a body corporate—a penalty of
1.25 times the amount of the penalty applicable
to the offence; or
(B) otherwise—a penalty of 0.25 times the amount
of the penalty applicable to the offence; or
Note: Section 1311 provides for the penalty applicable to an offence.
(b) otherwise—a penalty of the amount that the regulations
prescribe in relation to the offence.
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subsection 1311(5) offence means an offence the penalty
applicable to which is provided for by subsection 1311(5).
1313A Offences committed partly in and partly out of the
jurisdiction
Where:
(a) a person does or omits to do an act outside this jurisdiction;
and
(b) if that person had done or omitted to do that act in this
jurisdiction, the person would, by reason of also having done
or omitted to do an act in this jurisdiction, have been guilty
of an offence against this Act;
the person is guilty of that offence.
1314 Continuing offences
(1) Where:
(a) by or under a provision, an act is or was required to be done
within a particular period or before a particular time; and
(b) failure to do the act within that period or before that time
constitutes an offence; and
(c) the act is not done within that period or before that time;
then:
(d) the obligation to do the act continues, after that period has
ended or that time has passed, and whether or not a person is
or has been convicted of a primary substantive offence in
relation to failure to do the act, until the act is done; and
(e) subsections (3) and (4) apply.
(2) Where:
(a) by or under a provision, an act is or was required to be done
but neither a period nor a time for the doing of the Act is or
was specified; and
(b) failure to do the act constitutes an offence; and
(c) a person is or has been convicted of a primary substantive
offence in relation to failure to do the act;
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then:
(d) the obligation to do the act continues, despite the conviction,
until the act is done; and
(e) subsections (3) and (4) apply.
(3) Where:
(a) at a particular time, a person is or was first convicted of a
substantive offence, or is or was convicted of a second or
subsequent substantive offence, in relation to failure to do the
act; and
(b) the failure to do the act continued after that time;
then:
(c) the person is, in relation to failure to do the act, guilty of a
further offence in respect of so much of the period
throughout which the failure to do the act continued or
elapsed after that time and before the relevant day in relation
to the further offence; and
(d) for the purposes of this Act and of the Crimes Act 1914, the
further offence is taken to be constituted by failure to do the
act during so much of that period as so elapsed.
(4) Where:
(a) the provision referred to in paragraph (1)(a) or (2)(a), as the
case may be, provides or provided that:
(i) an officer or employee of a body corporate; or
(ii) a person;
who is or was in default, or is or was involved in a
contravention constituted by the failure to do the act, is or
was guilty of an offence or contravenes or contravened a
provision of this Act; and
(b) throughout a particular period (in this subsection called the
relevant period):
(i) the failure to do the act continued; and
(ii) a person (in this subsection called the derivative
offender) is or was in any way, by act or omission,
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directly or indirectly, knowingly concerned in or party
to the failure to do the act; and
(iii) in a case where subparagraph (a)(i) applies—the
derivative offender is or was an officer or employee of
the body;
then:
(c) in a case where either or both of the following events occurs
or occur:
(i) a person is or was convicted, before or during the
relevant period, of a primary substantive offence in
relation to failure to do the act;
(ii) the derivative offender is or was convicted, before or
during the relevant period, of a primary derivative
offence in relation to failure to do the act;
the derivative offender is, in relation to failure to do the act,
guilty of an offence (in this paragraph called the relevant
offence) in respect of so much (if any) of the relevant period
as elapsed:
(iii) after the conviction referred to in subparagraph (i) or(ii),
or after the earlier of the convictions referred to in
subparagraphs (i) and (ii), as the case may be; and
(iv) before the relevant day in relation to the relevant
offence; and
(d) in a case where, at a particular time during the relevant
period, the derivative offender is or was first convicted of a
secondary derivative offence, or is or was convicted of a
second or subsequent secondary derivative offence, in
relation to failure to do the act—the derivative offender is, in
relation to failure to do the act, guilty of a further offence in
respect of so much of the relevant period as elapsed after that
time and before the relevant day in relation to the further
offence.
(5) Where a person is guilty, by virtue of subsection (3) or (4), of an
offence in respect of the whole or a part of a particular period, the
penalty applicable to the offence is a fine of the amount obtained
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by multiplying half a penalty unit by the number of days in that
period, or in that part of that period, as the case may be.
(6) In this section:
act includes thing.
primary derivative offence, in relation to failure to do an act,
means an offence (other than an offence of which a person is guilty
by virtue of this section) of which a person is or was guilty by
virtue of being an officer of a corporation, or a person, who is or
was in any way, by act or omission, directly or indirectly,
knowingly concerned in or party to failure to do the act.
primary substantive offence, in relation to a failure to do an act,
means an offence (other than an offence of which a person is or
was guilty by virtue of this section) constituted by failure to do the
act, or by failure to do the act within a particular period or before a
particular time.
provision means a section, or a subsection of a section, of this Act.
relevant day, in relation to an offence of which a person is guilty
by virtue of this section, means:
(a) in a case where the information relating to the offence
specifies a day in relation to the offence for the purposes of
this section, being a day not later than the day on which the
information is laid—the day the information so specifies; or
(b) in any other case—the day on which the information relating
to the offence is laid.
required includes directed.
secondary derivative offence, in relation to failure to do an act,
means an offence or further offence of which a person is, in
relation to failure to do the act, guilty by virtue of paragraph (4)(c)
or (d).
substantive offence, in relation to failure to do an act, means:
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(a) a primary substantive offence in relation to failure to do the
act; or
(b) a further offence of which a person is, in relation to failure to
do the act, guilty by virtue of subsection (3).
(7) For the purposes of subsection (4), a provision of this Act is,
whether or not it expressly provides as mentioned in
paragraph (4)(a), taken to provide that a person who is or was
involved in a contravention constituted by a failure to do an act
required by the provision contravenes or contravened that
provision.
1315 Proceedings: how taken
(1) Subject to this Act, in any proceedings for an offence against this
Act, any information, charge, complaint or application may be laid
or made by:
(a) ASIC; or
(b) a Commission delegate; or
(c) another person authorised in writing by the Minister to
institute the proceedings.
(2) A delegation for the purposes of paragraph (1)(b), or an
authorisation for the purposes of paragraph (1)(c), may relate to all
offences, or to specified offences, against this Act.
(3) Nothing in this section affects the operation of the Director of
Public Prosecutions Act 1983.
1316 Time for instituting criminal proceedings
Despite anything in any other law, proceedings for an offence
against this Act may be instituted within the period of 5 years after
the act or omission alleged to constitute the offence or, with the
Minister’s consent, at any later time.
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1316A Privilege against self-incrimination not available to bodies
corporate in Corporations Act criminal proceedings
(1) In a Corporations Act criminal proceeding, a body corporate is not
entitled to refuse or fail to comply with a requirement:
(a) to answer a question or give information; or
(b) to produce a book or any other thing; or
(c) to do any other act whatever;
on the ground that the answer or information, production of the
book or other thing, or doing that other act, as the case may be,
might tend:
(d) to incriminate the body (whether in respect of an offence to
which the proceeding relates or otherwise); or
(e) to make the body liable to a penalty (whether in respect of
anything to which the proceeding relates or otherwise).
(2) Subsection (1) applies whether or not the body concerned is a
defendant in the proceeding or in any other proceeding.
(3) In this section:
Corporations Act criminal proceeding means a proceeding in a
court when exercising jurisdiction in respect of a criminal matter
arising under this Act.
1317 Certain persons to assist in prosecutions
(1) Where a prosecution in respect of an offence against this Act has
been instituted, or ASIC is of the opinion that a prosecution in
respect of an offence against this Act ought to be instituted, against
a person (in this section referred to as the defendant), ASIC may:
(a) if the defendant is a natural person—require any person who
is or was a partner, employee or agent of the defendant; or
(b) if the defendant is a body corporate—require any person who
is or was an officer, employee or agent of the defendant;
to assist in the prosecution, and the person who is so required must
give all assistance in connection with the prosecution that that
person is reasonably able to give.
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(2) ASIC must not make such a requirement as is mentioned in
subsection (1) of a person who, in the opinion of ASIC, is or is
likely to be a defendant in the proceedings or is or has been such a
person’s lawyer.
(3) If a person to whom paragraph (1)(a) or (b) relates fails to give
assistance as required by subsection (1), the person contravenes
this section and, without affecting any penalty to which the person
may be liable for the contravention, the Court may, on the
application of ASIC, order the person to comply with the
requirement within such time, and in such manner, as the Court
orders.
(4) In this section, agent, in relation to the defendant, includes a
banker of the defendant and a person engaged as an auditor by the
defendant, whether that person is an employee or an officer of the
defendant or not.
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Section 1317AA
Corporations Act 2001 377
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Part 9.4AAA—Protection for whistleblowers
1317AA Disclosures qualifying for protection under this Part
(1) A disclosure of information by a person (the discloser) qualifies for
protection under this Part if:
(a) the discloser is:
(i) an officer of a company; or
(ii) an employee of a company; or
(iii) a person who has a contract for the supply of services or
goods to a company; or
(iv) an employee of a person who has a contract for the
supply of services or goods to a company; and
(b) the disclosure is made to:
(i) ASIC; or
(ii) the company’s auditor or a member of an audit team
conducting an audit of the company; or
(iii) a director, secretary or senior manager of the company;
or
(iv) a person authorised by the company to receive
disclosures of that kind; and
(c) the discloser informs the person to whom the disclosure is
made of the discloser’s name before making the disclosure;
and
(d) the discloser has reasonable grounds to suspect that the
information indicates that:
(i) the company has, or may have, contravened a provision
of the Corporations legislation; or
(ii) an officer or employee of the company has, or may
have, contravened a provision of the Corporations
legislation; and
(e) the discloser makes the disclosure in good faith.
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Section 1317AB
378 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Note: Under section 1405, the reference to a provision of the Corporations
legislation includes a reference to a corresponding provision of the old
corporations legislation of the States and Territories.
(2) A reference in subsection (1) to a person contravening a provision
of the Corporations legislation includes a reference to a person
committing an offence against, or based on, a provision of this Act.
Note: This subsection causes section 11.6 of the Criminal Code to operate in
relation to such references.
1317AB Disclosure that qualifies for protection not actionable etc.
(1) If a person makes a disclosure that qualifies for protection under
this Part:
(a) the person is not subject to any civil or criminal liability for
making the disclosure; and
(b) no contractual or other remedy may be enforced, and no
contractual or other right may be exercised, against the
person on the basis of the disclosure.
Note: This subsection does not provide that the person is not subject to any
civil or criminal liability for conduct of the person that is revealed by
the disclosure.
(2) Without limiting subsection (1):
(a) the person has qualified privilege in respect of the disclosure;
and
(b) a contract to which the person is a party may not be
terminated on the basis that the disclosure constitutes a
breach of the contract.
(3) Without limiting paragraphs (1)(b) and (2)(b), if a court is satisfied
that:
(a) a person (the employee) is employed in a particular position
under a contract of employment with another person (the
employer); and
(b) the employee makes a disclosure that qualifies for protection
under this Part; and
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(c) the employer purports to terminate the contract of
employment on the basis of the disclosure;
the court may order that the employee be reinstated in that position
or a position at a comparable level.
1317AC Victimisation prohibited
Actually causing detriment to another person
(1) A person (the first person) contravenes this subsection if:
(a) the first person engages in conduct; and
(b) the first person’s conduct causes any detriment to another
person (the second person); and
(c) the first person intends that his or her conduct cause
detriment to the second person; and
(d) the first person engages in his or her conduct because the
second person or a third person made a disclosure that
qualifies for protection under this Part.
Threatening to cause detriment to another person
(2) A person (the first person) contravenes this subsection if:
(a) the first person makes to another person (the second person)
a threat to cause any detriment to the second person or to a
third person; and
(b) the first person:
(i) intends the second person to fear that the threat will be
carried out; or
(ii) is reckless as to causing the second person to fear that
the threat will be carried out; and
(c) the first person makes the threat because a person:
(i) makes a disclosure that qualifies for protection under
this Part; or
(ii) may make a disclosure that would qualify for protection
under this Part.
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Section 1317AD
380 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Officers and employees involved in contravention
(3) If a company contravenes subsection (1) or (2), any officer or
employee of the company who is involved in that contravention
contravenes this subsection.
Threats
(4) For the purposes of subsection (2), a threat may be:
(a) express or implied; or
(b) conditional or unconditional.
(5) In a prosecution for an offence against subsection (2), it is not
necessary to prove that the person threatened actually feared that
the threat would be carried out.
1317AD Right to compensation
If:
(a) a person (the person in contravention) contravenes
subsection 1317AC(1), (2) or (3); and
(b) a person (the victim) suffers damage because of the
contravention;
the person in contravention is liable to compensate the victim for
the damage.
1317AE Confidentiality requirements for company, company
officers and employees and auditors
(1) A person (the offender) is guilty of an offence against this
subsection if:
(a) a person (the discloser) makes a disclosure of information
(the qualifying disclosure) that qualifies for protection under
this Part; and
(b) the qualifying disclosure relates to a contravention or
possible contravention of a provision of the Corporations
legislation by:
(i) a company; or
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(ii) an officer or employee of the company; and
(c) the qualifying disclosure is made to:
(i) the company’s auditor or a member of an audit team
conducting an audit of the company; or
(ii) a director, secretary or senior manager of the company;
or
(iii) a person authorised by the company to receive
disclosures of that kind; and
(d) the offender is:
(i) the company’s auditor or a member of an audit team
conducting an audit of the company; or
(ii) a director, secretary or senior manager of the company;
or
(iii) a person authorised by the company to receive
disclosures of that kind; or
(iv) the company; or
(v) any officer or employee of the company; and
(e) the offender discloses one of the following (the confidential
information):
(i) the information disclosed in the qualifying disclosure;
(ii) the identity of the discloser;
(iii) information that is likely to lead to the identification of
the discloser; and
(f) the confidential information is information that the offender
obtained directly or indirectly because of the qualifying
disclosure; and
(g) either:
(i) the offender is the person to whom the qualifying
disclosure is made; or
(ii) the offender is a person to whom the confidential
information is disclosed in contravention of this section
and the offender knows that the disclosure of the
confidential information to the offender was unlawful or
made in breach of confidence; and
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(h) the disclosure referred to in paragraph (e) is not authorised
under subsection (2).
(2) The disclosure referred to in paragraph (1)(e) is authorised under
this subsection if it:
(a) is made to ASIC; or
(b) is made to APRA; or
(c) is made to a member of the Australian Federal Police (within
the meaning of the Australian Federal Police Act 1979); or
(d) is made to someone else with the consent of the discloser.
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Review by Administrative Appeals Tribunal of certain decisions Part 9.4A
Section 1317A
Corporations Act 2001 383
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Part 9.4A—Review by Administrative Appeals
Tribunal of certain decisions
1317A Definitions
In this Part:
decision has the same meaning as in the Administrative Appeals
Tribunal Act 1975.
1317B Applications for review
(1) Subject to this Part, applications may be made to the Tribunal for
review of a decision made under this Act by:
(a) the Minister; or
(b) ASIC; or
(c) the Companies Auditors Disciplinary Board; or
(d) a committee convened under Part 2 of Schedule 2.
(2) For the purposes of this Act and the Administrative Appeals
Tribunal Act 1975, ASIC and APRA are taken to be persons whose
interests are affected by a decision made under this Act by the
Companies Auditors Disciplinary Board.
1317C Excluded decisions
Section 1317B does not apply in relation to:
(a) a decision in respect of which any provision in the nature of
an appeal or review is expressly provided by this Act; or
(b) a decision that is declared by this Act to be conclusive or
final or is embodied in a document declared by this Act to be
conclusive evidence of an act, matter or thing; or
(ca) a decision of ASIC to order the winding up of a company
under section 489EA; or
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(d) a decision made by ASIC in the performance of a function, or
in the exercise of a power, under section 601CC or 601CL or
Chapter 5A; or
(e) a decision by ASIC to refuse to exercise a power under
section 601CC or 601CL or Chapter 5A; or
(f) a decision to apply under section 596A or 596B for the Court
to summon a person for examination about a corporation’s
examinable affairs; or
(g) a decision to apply under section 597A for the Court to
require a person to file an affidavit about a corporation’s
examinable affairs; or
(ga) a decision of ASIC under section 655A; or
(gb) a decision of ASIC under section 673 in relation to securities
of the target of a takeover bid during the bid period; or
(gc) a decision by ASIC whether to make an application under
section 657C, 657G, 659B, 1325A, 1325B or 1325C; or
(gca) a decision by ASIC to make market integrity rules under
section 798G; or
(gcb) a decision by the Minister to:
(i) consent to the making of a market integrity rule; or
(ii) direct ASIC to revoke or amend a market integrity rule;
or
(gcc) a decision by ASIC to do or not do anything under
regulations made for the purposes of section 798K
(alternatives to civil proceedings); or
(gd) a decision of the Minister under Division 1 of Part 7.4; or
(gda) a decision by the Minister:
(i) to make a determination under section 901B, or to
amend or revoke such a determination; or
(ii) to consent, under section 901K or 903H, to the making
of a derivative transaction rule or a derivative trade
repository rule, or to consent to the variation or
revocation of such a rule; or
(iii) to direct ASIC, under section 901L or 903J, to amend or
revoke a derivative transaction rule or a derivative trade
repository rule; or
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(gdb) a decision by ASIC to make derivative transaction rules or
derivative trade repository rules under section 901A or 903A,
or to vary or revoke such rules; or
(gdc) a decision by ASIC to do or not do anything under
regulations made for the purpose of section 901F or 903E; or
(ge) a decision of ASIC under section 1101A; or
(h) a decision to make a determination under
subsection 1317D(3); or
(i) a decision of ASIC to issue an infringement notice under
section 1317DAC; or
(j) a decision of ASIC to withdraw, or not to withdraw, an
infringement notice under section 1317DAI; or
(k) a decision of ASIC under section 40-5 of Schedule 2 (which
deals with directing liquidators to comply with requirements
to lodge documents etc.); or
(l) a decision of ASIC under section 40-10 of Schedule 2 (which
deals with directing liquidators to correct inaccuracies etc.);
or
(m) a decision of ASIC under section 40-100 of Schedule 2 to
take no action in relation to matters raised by an industry
notice lodged under that section (notice by industry bodies of
possible grounds for disciplinary action); or
(n) a decision of ASIC to give a direction under section 70-70 of
Schedule 2 (which deals with directing external
administrators to comply with requests for information etc.);
or
(o) a decision of ASIC under section 70-85 of Schedule 2 (a
decision to impose a condition on the use or disclosure of
relevant material).
1317D Notice of reviewable decision and review rights
(1) This section applies if the Minister, ASIC, the Companies Auditors
Disciplinary Board or a committee convened under Part 2 of
Schedule 2 (the decision maker) makes a decision to which
section 1317B applies.
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(2) Subject to subsection (3), the decision maker must take such steps
as are reasonable in the circumstances to give to each person
whose interests are affected by the decision notice, in writing or
otherwise:
(a) of the making of the decision; and
(b) of the person’s right to have the decision reviewed by the
Tribunal.
(3) Subsection (2) does not require the decision maker to give notice to
a person affected by the decision or to the persons in a class of
persons affected by the decision, if the decision maker determines
that giving notice to the person or persons is not warranted, having
regard to:
(a) the cost of giving notice to the person or persons; and
(b) the way in which the interests of the person or persons are
affected by the decision.
(4) A failure to comply with this section does not affect the validity of
the decision.
(5) The fact that a person has not been given notice of the decision
because of a determination under subsection (3) constitutes special
circumstances for the purposes of subsection 29(6) of the
Administrative Appeals Tribunal Act 1975.
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Part 9.4AA
Section 1317DAA
Corporations Act 2001 387
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Part 9.4AA—Infringement notices for alleged
contraventions of continuous disclosure
provisions
1317DAA Definitions
(1) In this Part:
compensation proceedings means:
(a) proceedings under section 1317HA; and
(b) proceedings under section 12GF of the ASIC Act in relation
to a contravention of section 12DA of that Act; and
(c) any other proceedings by a person for compensation for loss
or damage suffered by the person.
compliance period for an infringement notice has the meaning
affected by section 1317DAH.
contravention proceedings means proceedings under
section 1101B by a person referred to in paragraph 1101B(1)(b) or
(d).
enforcement proceedings means proceedings under section 793C
by a person referred to in paragraph 793C(1)(b), (c) or (d).
infringement notice means an infringement notice issued under
section 1317DAC.
penalty and disclosure proceedings means the proceedings
referred to in column 3 of the table in subsection 1317DAG(2).
public interest proceedings means proceedings under section 50 of
the ASIC Act.
(2) For the purposes of applying this Part to a disclosing entity that is
an undertaking to which interests in a registered scheme relate:
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(a) references to the disclosing entity are taken to be references
to the responsible entity for the registered scheme; and
(b) references to a financial report for a financial year being
lodged by a disclosing entity are taken to be references to
such a report being lodged by the responsible entity in
relation to the scheme; and
(c) references to securities of a disclosing entity are taken to be
references to interests in the registered scheme; and
(d) references to a disclosing entity being convicted of an
offence based on subsection 674(2) or 675(2) are taken to be
references to the responsible entity being convicted of such
an offence in relation to the registered scheme; and
(e) references to a civil penalty order under Part 9.4B being
made against a disclosing entity in relation to a contravention
of subsection 674(2) or 675(2) are taken to be references to
such an order being made against the responsible entity in
relation to the registered scheme; and
(f) references to a disclosing entity having breached an
enforceable undertaking given to ASIC under section 93AA
of the ASIC Act in relation to the requirements of
subsection 674(2) or 675(2) are taken to be references to the
responsible entity having breached such an undertaking given
in relation to the registered scheme.
1317DAB Purpose and effect of this Part
(1) The purpose of this Part is to provide for the issue of an
infringement notice to a disclosing entity for an alleged
contravention of subsection 674(2) or 675(2) as an alternative to
proceedings for civil penalties under Part 9.4B.
(2) This Part does not:
(a) require an infringement notice to be issued to the disclosing
entity for the alleged contravention of subsection 674(2) or
675(2); or
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Section 1317DAC
Corporations Act 2001 389
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(b) affect the liability of the disclosing entity to civil or criminal
proceedings in relation to the alleged contravention of
subsection 674(2) or 675(2) if:
(i) an infringement notice is not issued to the disclosing
entity for the alleged contravention; or
(ii) an infringement notice issued to the disclosing entity for
the alleged contravention is withdrawn under
section 1317DAI; or
(c) prevent a Court from imposing a higher penalty than the
penalty specified in the infringement notice if the disclosing
entity does not comply with the infringement notice.
1317DAC Issue of infringement notice
Issue of infringement notice
(1) Subject to section 1317DAD, if ASIC has reasonable grounds to
believe that a disclosing entity has contravened subsection 674(2)
or 675(2), ASIC may issue an infringement notice to the disclosing
entity.
(2) ASIC issues the infringement notice to the disclosing entity by
serving it on the disclosing entity.
(3) ASIC must not issue more than one infringement notice to the
disclosing entity for the same alleged contravention of
subsection 674(2) or 675(2).
ASIC must have regard to certain matters
(4) In determining whether to issue an infringement notice to a listed
disclosing entity for an alleged contravention of subsection 674(2),
ASIC must have regard to:
(a) any guidelines issued by the relevant market operator for the
listed disclosing entity that relate to the provisions of the
listing rules referred to in subsection 674(1); and
(b) any other relevant matter.
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390 Corporations Act 2001
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Infringement notice does not have effect
(5) The infringement notice does not have any effect if the
infringement notice:
(a) is issued more than 12 months after the day on which the
contravention of subsection 674(2) or 675(2) is alleged to
have occurred; or
(b) relates to more than one alleged contravention of
subsection 674(2) or 675(2) by the disclosing entity.
1317DAD Statement of reasons must be given
Statement of reasons
(1) Before issuing the infringement notice, ASIC must:
(a) give the disclosing entity a written statement that sets out
ASIC’s reasons for believing that the disclosing entity has
contravened subsection 674(2) or 675(2); and
(b) give a representative of the disclosing entity an opportunity
to:
(i) appear at a private hearing before ASIC; and
(ii) give evidence to ASIC; and
(iii) make submissions to ASIC;
in relation to the alleged contravention of subsection 674(2)
or 675(2).
(2) If the disclosing entity is a listed disclosing entity, ASIC must
consult with the relevant market operator for the disclosing entity
before giving the disclosing entity the statement under this
subsection.
(3) ASIC does not need to consult the relevant market operator under
subsection (2) if:
(a) the disclosing entity is the relevant market operator; or
(b) the disclosing entity conducts a business in competition with
a business conducted by the relevant market operator.
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Limit on the use of evidence or information given to ASIC
(4) Evidence or information that a representative of the disclosing
entity gives ASIC under paragraph (1)(b) in relation to the alleged
contravention of subsection 674(2) or 675(2) is:
(a) not admissible in evidence against the disclosing entity in
any proceedings; and
(b) not admissible in evidence against a representative of the
disclosing entity in any proceedings (other than proceedings
for an offence based on the evidence or information given
being false or misleading).
1317DAE Matters to be included in infringement notice
(1) The infringement notice:
(a) must state the day on which it is issued; and
(b) must state the name and address of the disclosing entity to
whom it is issued; and
(c) must state that it is being issued by ASIC; and
(d) must state that ASIC may publish details of the disclosing
entity’s compliance with the infringement notice under
section 1317DAJ if the disclosing entity complies with the
notice; and
(e) must give details of the alleged contravention by the
disclosing entity, including:
(i) the date of the alleged contravention; and
(ii) the particular provision that was contravened; and
(f) must state the maximum pecuniary penalty that a Court could
impose under Part 9.4B in relation to the alleged
contravention; and
(g) must specify the penalty that is payable in relation to the
alleged contravention; and
(h) must state that the penalty is payable to ASIC on behalf of
the Commonwealth; and
(i) if it is alleged that the disclosing entity contravened
subsection 674(2)—may specify information that the
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disclosing entity must notify to the relevant market operator
in accordance with the provisions of the listing rules referred
to in subsection 674(1); and
(j) if it is alleged that the disclosing entity contravened
subsection 675(2)—may require the disclosing entity to
lodge a document with ASIC that contains specified
information; and
(k) must explain the effect of sections 1317DAF, 1317DAG and
1317DAH; and
(l) must state that the disclosing entity may make written
representations to ASIC seeking the withdrawal of the
infringement notice; and
(m) must contain any other matters that are prescribed in the
regulations.
(2) Subject to subsection (3), the penalty specified in the infringement
notice under paragraph (1)(g) for an alleged contravention of
subsection 674(2) is:
(a) $100,000 if the disclosing entity is a Tier 1 entity; or
(b) $66,000 if the disclosing entity is a Tier 2 entity; or
(c) $33,000 if the disclosing entity is a Tier 3 entity.
(3) The penalty specified in the infringement notice under
paragraph (1)(g) for an alleged contravention of subsection 674(2)
is:
(a) $100,000 if the disclosing entity is a Tier 2 entity; or
(b) $66,000 if the disclosing entity is a Tier 3 entity;
if:
(c) the disclosing entity has at any time been convicted of an
offence based on subsection 674(2) or 675(2); or
(d) a civil penalty order under Part 9.4B has at any time been
made against the disclosing entity in relation to a
contravention of subsection 674(2) or 675(2); or
(e) the disclosing entity has at any time breached an enforceable
undertaking given to ASIC under section 93AA of the ASIC
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Act in relation to the requirements of subsection 674(2) or
675(2).
(4) Subject to subsection (5), the penalty specified in the infringement
notice under paragraph (1)(g) for an alleged contravention of
subsection 675(2) is $33,000.
(5) The penalty specified in the infringement notice under
paragraph (1)(g) for an alleged contravention of subsection 675(2)
is $66,000 if:
(a) the disclosing entity has at any time been convicted of an
offence based on subsection 674(2) or 675(2); or
(b) a civil penalty order under Part 9.4B has at any time been
made against the disclosing entity in relation to a
contravention of subsection 674(2) or 675(2); or
(c) the disclosing entity has at any time breached an enforceable
undertaking given to ASIC under section 93AA of the ASIC
Act in relation to the requirements of subsection 674(2) or
675(2).
(6) For the purposes of this section:
(a) a disclosing entity is:
(i) a Tier 1 entity if its market capitalisation on the relevant
day exceeds $1,000 million; and
(ii) a Tier 2 entity if its market capitalisation on the relevant
day exceeds $100 million but does not exceed $1,000
million; and
(iii) a Tier 3 entity if its market capitalisation on the relevant
day does not exceed $100 million or it is not possible to
work out its market capitalisation on the relevant day
because it has not lodged a financial report with ASIC
before the relevant day; and
(b) the relevant day for an infringement notice is the last day of
the financial year in relation to which the latest financial
report by the disclosing entity has been lodged with ASIC
before the infringement notice is issued.
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(7) This is how to work out a disclosing entity’s market capitalisation
on the relevant day:
(a) for each class of security of the disclosing entity that is a
quoted security:
(i) work out the closing price, on the relevant day, for
securities in that class on the prescribed financial market
on which the securities are quoted; and
(ii) multiply that price by the number of securities in that
class on issue on the relevant day (as shown in the
financial report lodged with ASIC for the period that
ends on the relevant day); and
(b) add up the amounts obtained under paragraph (a): the result
is the disclosing entity’s market capitalisation on the relevant
day.
Disregard quoted securities of the disclosing entity that are options.
1317DAF Effect of issue and compliance with infringement notice
Circumstances in which this section applies
(1) This section applies if subsection (2) or (3) is satisfied.
(2) This subsection is satisfied if:
(a) the compliance period for the infringement notice has not
ended; and
(b) the infringement notice is not withdrawn under
section 1317DAI; and
(c) subsection (3) has not been satisfied.
(3) This subsection is satisfied if, within the compliance period for the
infringement notice, the disclosing entity:
(a) pays the penalty specified in the infringement notice; and
(b) either:
(i) if it is alleged in the infringement notice that the
disclosing entity contravened subsection 674(2)—
notifies the relevant market operator, in accordance with
the provisions of the listing rules referred to in
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subsection 674(1), of any information specified in the
infringement notice; or
(ii) if it is alleged in the infringement notice that the
disclosing entity contravened subsection 675(2)—
lodges any required document with ASIC that contains
the information specified in the infringement notice.
Note: If this subsection is satisfied, ASIC must not withdraw the
infringement notice, see section 1317DAI.
No contravention etc. by the disclosing entity
(4) The disclosing entity is not, by reason only of subsection (3) being
satisfied, regarded as:
(a) having contravened the provision specified in the
infringement notice; or
(b) having been convicted of an offence constituted by the same
conduct that constituted the alleged contravention of the
provision specified in the infringement notice.
No proceedings may be started etc.
(5) Subject to subsection (6), no proceedings (whether criminal or
civil) may be started or continued against the disclosing entity in
relation to:
(a) the alleged contravention of the provision specified in the
infringement notice; or
(b) an offence constituted by the same conduct that constituted
the alleged contravention.
(6) Subsection (5) does not apply to the following proceedings:
(a) compensation proceedings, contravention proceedings,
enforcement proceedings and public interest proceedings that
relate to the alleged contravention of the provision specified
in the infringement notice;
(b) proceedings to enforce the following orders of a Court:
(i) an order made in relation to proceedings referred to in
paragraph (a);
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(ii) an order made under subsection 1335(2) in relation to
proceedings referred to in paragraph (a) other than
public interest proceedings;
(c) any other proceedings in respect of a breach of an order
referred to in paragraph (b);
(d) an appeal to a Court against the following decisions or orders
of a Court:
(i) a decision or order made in relation to proceedings
referred to in paragraph (a);
(ii) a decision or order made under subsection 1335(2) in
relation to the proceedings referred to in paragraph (a)
other than public interest proceedings.
(7) To avoid doubt, subsection (5) does not prevent ASIC from:
(a) making an order under section 91 of the ASIC Act; or
(b) bringing proceedings to enforce the order.
1317DAG Effect of failure to comply with infringement notice
Circumstances in which this section applies
(1) This section applies if an infringement notice issued to a disclosing
entity is not withdrawn under section 1317DAI.
Effect of failure to comply with infringement notice
(2) If the disclosing entity fails to do a thing specified in column 2 of
the following table within the compliance period for the
infringement notice, the disclosing entity is liable to the
proceedings specified in column 3 of the following table:
Effect of failure to comply with infringement notice
Column 1 Column 2 Column 3
Item If the disclosing entity fails to: the disclosing entity is liable to:
1 pay the penalty specified in the
infringement notice
proceedings under Part 9.4B for:
(a) a declaration of contravention;
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Effect of failure to comply with infringement notice
Column 1 Column 2 Column 3
Item If the disclosing entity fails to: the disclosing entity is liable to:
and
(b) a pecuniary penalty order;
in relation to the alleged
contravention of the provision
specified in the infringement notice.
2 notify the relevant market
operator, in accordance with the
provisions of the listing rules
referred to in subsection 674(1),
of any information specified in
the infringement notice if it is
alleged in the infringement
notice that the disclosing entity
contravened subsection 674(2)
proceedings for an order under
section 1324B in relation to the
alleged contravention of the
provision specified in the
infringement notice.
3 lodge any required document
with ASIC that contains the
information specified in the
infringement notice if it is
alleged in the infringement
notice that the disclosing entity
contravened subsection 675(2)
proceedings for an order under
section 1324B in relation to the
alleged contravention of the
provision specified in the
infringement notice.
No other proceedings may be started etc.
(3) Subject to subsection (4), no other proceedings (whether criminal
or civil) may be started or continued against the disclosing entity in
relation to:
(a) the alleged contravention of the provision specified in the
infringement notice; or
(b) an offence constituted by the same conduct that constituted
the alleged contravention.
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(4) Subsection (3) does not apply to the following proceedings:
(a) compensation proceedings, contravention proceedings,
enforcement proceedings and public interest proceedings that
relate to the alleged contravention of the provision specified
in the infringement notice;
(b) proceedings to enforce the following orders of a Court:
(i) an order made in relation to penalty and disclosure
proceedings;
(ii) an order made in relation to proceedings referred to in
paragraph (a);
(iii) an order made under subsection 1335(2) in relation to
penalty and disclosure proceedings;
(iv) an order made under subsection 1335(2) in relation to
proceedings referred to in paragraph (a) other than
public interest proceedings;
(c) any other proceedings in respect of a breach of an order
referred to in paragraph (b);
(d) an appeal to a Court against the following decisions or orders
of a Court:
(i) a decision or order made in relation to penalty and
disclosure proceedings;
(ii) a decision or order made in relation to proceedings
referred to in paragraph (a);
(iii) a decision or order made under subsection 1335(2) in
relation to penalty and disclosure proceedings;
(iv) a decision or order made under subsection 1335(2) in
relation to proceedings referred to in paragraph (a) other
than public interest proceedings.
(5) To avoid doubt, subsection (3) does not prevent ASIC from:
(a) making a determination under subsection 708AA(3),
708A(2), 713(6), 713A(23), 1012DAA(3), 1012DA(2) or
1013FA(3) of this Act; or
(b) making an order under section 91 of the ASIC Act; or
(c) accepting an undertaking under section 93AA of the ASIC
Act; or
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(d) bringing proceedings to enforce the determination, order or
undertaking.
1317DAH Compliance period for infringement notice
(1) Subject to this section, the compliance period for an infringement
notice is a period of 28 days beginning on the day after the day on
which the infringement notice is issued.
(2) ASIC may extend, by notice in writing, the compliance period for
the infringement notice if ASIC is satisfied that it is appropriate to
do so.
(3) Only one extension may be given and the extension must not be for
longer than 28 days.
(4) Notice of the extension must be given to the disclosing entity that
was issued with the infringement notice.
(5) A failure to comply with subsection (4) does not affect the validity
of the extension.
(6) If ASIC extends the compliance period for an infringement notice,
a reference in this Act to the compliance period for an infringement
notice is taken to be a reference to the compliance period as so
extended.
1317DAI Withdrawal of infringement notice
Disclosing entity may seek withdrawal
(1) If an infringement notice is issued to a disclosing entity, the
disclosing entity may make written representations to ASIC
seeking the withdrawal of the infringement notice.
(2) Evidence or information that a representative of the disclosing
entity gives ASIC in the course of making representations under
subsection (1) is:
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(a) not admissible in evidence against the disclosing entity in
any proceedings; and
(b) not admissible in evidence against a representative of the
disclosing entity in any proceedings (other than proceedings
for an offence based on the evidence or information given
being false or misleading).
Withdrawal
(3) Subject to subsection (4), ASIC may withdraw the infringement
notice (whether or not the disclosing entity has made
representations seeking the withdrawal) if ASIC is satisfied that it
is appropriate to do so.
(4) ASIC must not withdraw the infringement notice if
subsection 1317DAF(3) is satisfied.
Withdrawal notice
(5) The withdrawal must be made by notice in writing and must be
given to the disclosing entity.
(6) The withdrawal notice must state:
(a) the name and address of the disclosing entity; and
(b) the day on which the infringement notice was issued to the
disclosing entity; and
(c) that the infringement notice is withdrawn; and
(d) that civil proceedings under Part 9.4B may be brought
against the disclosing entity for a contravention of the
provision specified in the infringement notice; and
(e) that a prosecution for an offence based on the provision
specified in the infringement notice may be brought against
the disclosing entity.
Refund of penalty
(7) If:
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(a) the disclosing entity pays the penalty specified in the
infringement notice; and
(b) the infringement notice is withdrawn after the disclosing
entity pays the penalty;
ASIC must refund to the disclosing entity an amount equal to the
amount paid.
1317DAJ Publication in relation to infringement notices
(1) If:
(a) ASIC issues an infringement notice to a disclosing entity;
and
(b) subsection 1317DAF(3) (compliance with the infringement
notice) is satisfied;
ASIC may publish details of the disclosing entity’s compliance
with the infringement notice under subsection (2) or (3) or under
both of those subsections.
(2) ASIC publishes details of the disclosing entity’s compliance with
the infringement notice under this subsection if it publishes a copy
of the infringement notice in the Gazette together with the
following statements:
(a) a statement that the disclosing entity has complied with the
infringement notice;
(b) a statement that compliance with the notice is not an
admission of guilt or liability;
(c) a statement that the disclosing entity is not regarded as
having contravened the provision specified in the notice.
(3) ASIC publishes details of the disclosing entity’s compliance with
the infringement notice under this subsection if:
(a) ASIC issues a statement (whether written or oral) about the
disclosing entity’s compliance with the infringement notice;
and
(b) the statement is limited to an accurate summary of the
infringement notice including:
(i) the name of the disclosing entity; and
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(ii) the amount of the penalty payable under the notice in
relation to the alleged contravention; and
(iii) the conduct specified in the notice as the conduct in
relation to which the infringement notice was issued;
together with the following statements:
(iv) a statement that the disclosing entity has complied with
the infringement notice;
(v) a statement that compliance with the notice is not an
admission of guilt or liability;
(vi) a statement that the relevant disclosing entity is not
regarded as having contravened the provision specified
in the notice.
(4) ASIC must not otherwise publish details of:
(a) an infringement notice; or
(b) a disclosing entity’s compliance with an infringement notice.
Failure to comply with this subsection is not an offence.
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Part 9.4B—Civil consequences of contravening civil
penalty provisions
1317DA Definitions
In this Act:
corporation/scheme civil penalty provision means a provision
specified in column 1 of any of the following items of the table in
subsection 1317E(1):
(a) items 1 to 13;
(b) item 46.
financial services civil penalty provision means a provision
specified in column 1 of any of the following items of the table in
subsection 1317E(1):
(a) item 14;
(b) items 23 to 45.
1317E Declarations of contravention
(1) If a Court is satisfied that a person has contravened a civil penalty
provision, it must make a declaration of contravention. The
provisions specified in column 1 of the following table are civil
penalty provisions.
Civil penalty provisions
Item Column 1
provisions that are civil penalty
provisions
Column 2
brief description of what the
provisions are about
1 subsections 180(1), 181(1) and
(2), 182(1) and (2) and 183(1) and
(2)
officers’ duties
2 subsections 188(1) and (2) responsibilities of secretaries etc. for
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Civil penalty provisions
Item Column 1
provisions that are civil penalty
provisions
Column 2
brief description of what the
provisions are about
corporate contraventions
3 subsection 209(2) related parties rules
4 subsections 254L(2), 256D(3),
259F(2) and 260D(2)
share capital transactions
5 subsection 344(1) requirements for financial reports
6 subsection 588G(2) insolvent trading
7 subsection 601FC(5) duties of responsible entity
8 subsection 601FD(3) duties of officers of responsible entity
9 subsection 601FE(3) duties of employees of responsible
entity
10 subsection 601FG(2) acquisition of interest in scheme by
responsible entity
11 subsection 601JD(3) duties of members
12 subsection 601UAA(2) duties of officers of licensed trustee
company
13 subsection 601UAB(2) duties of employees of licensed trustee
company
14 subsections 674(2), 674(2A),
675(2) and 675(2A)
continuous disclosure
15 subsection 798H(1) complying with market integrity rules
16 section 901E complying with derivative transaction
rules
17 section 903D complying with derivative trade
repository rules
18 subsections 961K(1) and (2) financial services licensee responsible
for breach of certain best interests
duties
19 section 961L financial services licensee to ensure
compliance with certain best interests
duties
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Civil penalty provisions
Item Column 1
provisions that are civil penalty
provisions
Column 2
brief description of what the
provisions are about
20 subsection 961Q(1) authorised representative responsible
for breach of certain best interests
duties
21 section 962P charging ongoing fee after termination
of ongoing fee arrangement
22 subsection 962S(1) fee recipient must give fee disclosure
statement
23 subsections 963E(1) and (2) financial services licensee responsible
for breach of ban on conflicted
remuneration
24 section 963F financial services licensee must ensure
representatives do not accept conflicted
remuneration
25 subsection 963G(1) authorised representative must not
accept conflicted remuneration
26 section 963J employer must not pay employees
conflicted remuneration
27 section 963K financial product issuer or seller must
not give conflicted remuneration to
financial services licensee or
representative
28 subsection 964A(1) platform operator must not accept
volume-based shelf-space fees
29 subsections 964D(1) and (2) financial services licensee responsible
for breach of asset-based fees on
borrowed amounts
30 subsection 964E(1) authorised representative must not
charge asset-based fees on borrowed
amounts
31 section 965 anti-avoidance of Part 7.7A provisions
32 subsection 985E(1) issuing or increasing limit of margin
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Civil penalty provisions
Item Column 1
provisions that are civil penalty
provisions
Column 2
brief description of what the
provisions are about
lending facility without having made
assessment etc.
33 subsection 985H(1) failure to assess a margin lending
facility as unsuitable
34 subsection 985J(1) failure to give assessment to retail
client if requested before issue of
facility or increase in limit
35 subsection 985J(2) failure to give assessment to retail
client if requested after issue of facility
or increase in limit
36 subsection 985J(4) demanding payment to give assessment
to retail client
37 subsection 985K(1) issuing or increasing limit of margin
lending facility if unsuitable
38 section 985L making issue of margin lending facility
conditional on retail client agreeing to
receive communications through agent
39 subsection 985M(1) failure to notify of margin call where
there is no agent
40 subsection 985M(2) failure to notify of margin call where
there is an agent
41 section 1041A market manipulation
42 subsection 1041B(1) false trading and market rigging—
creating a false or misleading
appearance of active trading etc.
43 subsection 1041C(1) false trading and market rigging—
artificially maintaining etc. market
price
44 section 1041D dissemination of information about
illegal transactions
45 subsections 1043A(1) and (2) insider trading
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Civil penalty provisions
Item Column 1
provisions that are civil penalty
provisions
Column 2
brief description of what the
provisions are about
46 subclause 29(6) of Schedule 4 disclosure for proposed
demutualisation
Note 1: Once a declaration has been made ASIC can then seek a pecuniary
penalty order (section 1317G) or (in the case of a corporation/scheme
civil penalty provision) a disqualification order (section 206C).
Note 2: The descriptions of matters in column 2 are indicative only.
(2) A declaration of contravention must specify the following:
(a) the Court that made the declaration;
(b) the civil penalty provision that was contravened;
(c) the person who contravened the provision;
(d) the conduct that constituted the contravention;
(e) if the contravention is of a corporation/scheme civil penalty
provision—the corporation or registered scheme to which the
conduct related.
1317F Declaration of contravention is conclusive evidence
A declaration of contravention is conclusive evidence of the
matters referred to in subsection 1317E(2).
1317G Pecuniary penalty orders
Corporation/scheme civil penalty provisions
(1) A Court may order a person to pay the Commonwealth a pecuniary
penalty of up to $200,000 if:
(a) a declaration of contravention by the person has been made
under section 1317E; and
(aa) the contravention is of a corporation/scheme civil penalty
provision; and
(b) the contravention:
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(i) materially prejudices the interests of the corporation or
scheme, or its members; or
(ii) materially prejudices the corporation’s ability to pay its
creditors; or
(iii) is serious.
Financial services civil penalty provisions
(1A) A Court may order a person to pay the Commonwealth a pecuniary
penalty of the relevant maximum amount if:
(a) a declaration of contravention by the person has been made
under section 1317E; and
(b) the contravention is of a financial services civil penalty
provision not dealt with in subsections (1E) to (1G); and
(c) the contravention:
(i) materially prejudices the interests of acquirers or
disposers of the relevant financial products; or
(ii) materially prejudices the issuer of the relevant financial
products or, if the issuer is a corporation or scheme, the
members of that corporation or scheme; or
(iii) is serious.
(1B) The relevant maximum amount is:
(a) $200,000 for an individual; or
(b) $1 million for a body corporate.
Responsibilities of secretaries etc. for certain corporate
contraventions
(1BA) Without limiting subsection (1), if a declaration of contravention
by a person of subsection 188(1) or (2) has been made under
section 1317E, a Court may order the person to pay the
Commonwealth a pecuniary penalty of up to $3,000.
Market integrity rules
(1C) A Court may order a person to pay the Commonwealth a pecuniary
penalty if:
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(a) a declaration of contravention by the person has been made
under section 1317E; and
(b) the contravention is of subsection 798H(1) (complying with
market integrity rules).
(1D) The maximum amount that the court may order the person to pay
for contravening a market integrity rule is the penalty amount set
out in the market integrity rules for the rule.
Derivative transaction rules and derivative trade repository rules
(1DA) A Court may order a person to pay the Commonwealth a pecuniary
penalty if:
(a) a declaration of contravention by the person has been made
under section 1317E; and
(b) the contravention is of:
(i) section 901E (complying with derivative transaction
rules); or
(ii) section 903D (complying with derivative trade
repository rules).
(1DB) The maximum amount that the court may order the person to pay
for contravening a derivative transaction rule, or a derivative trade
repository rule, is the penalty amount specified in those rules for
the rule that has been contravened.
Best interests obligations and remuneration
(1E) A Court may order a person to pay the Commonwealth a pecuniary
penalty if:
(a) a declaration of contravention by the person has been made
under section 1317E; and
(b) the contravention is of one of the following provisions:
(i) subsections 961K(1) and (2) (financial services licensee
responsible for breach of certain best interests duties);
(ii) section 961L (financial services licensee to ensure
compliance with certain best interests duties);
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(iii) subsection 961Q(1) (authorised representative
responsible for breach of certain best interests duties);
(iv) section 962P (charging ongoing fee after termination of
ongoing fee arrangement);
(v) subsection 962S(1) (fee recipient must give fee
disclosure statement);
(vi) subsections 963E(1) and (2) (financial services licensee
must not accept conflicted remuneration);
(vii) section 963F (financial services licensee must ensure
representatives do not accept conflicted remuneration);
(viii) subsection 963G(1) (authorised representative must not
accept conflicted remuneration);
(ix) section 963J (employer must not pay employees
conflicted remuneration);
(x) section 963K (financial product issuer or seller must not
give conflicted remuneration to financial services
licensee or representative);
(xi) subsection 964A(1) (platform operator) must not accept
volume-based shelf-space fees);
(xii) subsections 964D(1) and (2) (financial services licensee
must not charge asset-based fees on borrowed amounts);
(xiii) subsection 964E(1) (authorised representative must not
charge asset-based fees on borrowed amounts);
(xiv) section 965 (anti-avoidance of Part 7.7A provisions).
(1F) The maximum amount that the court may order the person to pay
for contravening a provision mentioned in paragraph (1E)(b)
(except a provision mentioned in subparagraph (1E)(b)(iv) or (v))
is:
(a) $200,000 for an individual; or
(b) $1 million for a body corporate.
(1G) The maximum amount that the court may order the person to pay
for contravening a provision mentioned in
subparagraph (1E)(b)(iv) or (v) is:
(a) $50,000 for an individual; or
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(b) $250,000 for a body corporate.
Penalty a civil debt etc.
(2) The penalty is a civil debt payable to ASIC on the
Commonwealth’s behalf. ASIC or the Commonwealth may enforce
the order as if it were an order made in civil proceedings against
the person to recover a debt due by the person. The debt arising
from the order is taken to be a judgment debt.
1317GA Refund orders—contravention of section 962P
(1) A Court may order that a person (the fee recipient) refund a fee
paid to the fee recipient by another person (the client) if the Court
is satisfied that:
(a) the fee recipient knowingly or recklessly contravened
section 962P in charging the client the fee (charging ongoing
fee after termination of ongoing fee arrangement); and
(b) it is reasonable in all the circumstances to make the order.
Note: An order may be made under this subsection whether or not a
declaration of contravention has been made under section 1317E.
Applications for order
(2) The Court may make the order under this section:
(a) on its own initiative, during proceedings before the Court; or
(b) on application by ASIC; or
(c) on the application of the client.
When order may be made
(3) The Court must not make an order under this section in relation to
fees paid more than 6 years before the proceedings for the order are
commenced.
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Recovery of amount as a debt
(4) If the Court makes an order that the fee recipient refund an amount
specified in the order to the client, the client may recover the
amount as a debt due to the client.
1317H Compensation orders—corporation/scheme civil penalty
provisions
Compensation for damage suffered
(1) A Court may order a person to compensate a corporation or
registered scheme for damage suffered by the corporation or
scheme if:
(a) the person has contravened a corporation/scheme civil
penalty provision in relation to the corporation or scheme;
and
(b) the damage resulted from the contravention.
The order must specify the amount of the compensation.
Note: An order may be made under this subsection whether or not a
declaration of contravention has been made under section 1317E.
Damage includes profits
(2) In determining the damage suffered by the corporation or scheme
for the purposes of making a compensation order, include profits
made by any person resulting from the contravention or the
offence.
Damage includes diminution of value of scheme property
(3) In determining the damage suffered by the scheme for the purposes
of making a compensation order, include any diminution in the
value of the property of the scheme.
(4) If the responsible entity for a registered scheme is ordered to
compensate the scheme, the responsible entity must transfer the
amount of the compensation to scheme property. If anyone else is
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ordered to compensate the scheme, the responsible entity may
recover the compensation on behalf of the scheme.
Recovery of damage
(5) A compensation order may be enforced as if it were a judgment of
the Court.
1317HA Compensation orders—financial services civil penalty
provisions
Compensation for damage suffered
(1) A Court may order a person (the liable person) to compensate
another person (including a corporation), or a registered scheme,
for damage suffered by the person or scheme if:
(a) the liable person has contravened a financial services civil
penalty provision; and
(b) the damage resulted from the contravention.
The order must specify the amount of compensation.
Note: An order may be made under this subsection whether or not a
declaration of contravention has been made under section 1317E.
Damage includes profits
(2) In determining the damage suffered by a person or scheme for the
purposes of making a compensation order, include profits made by
any person resulting from the contravention.
Damage to scheme includes diminution of value of scheme
property
(3) In determining the damage suffered by a registered scheme for the
purposes of making a compensation order, include any diminution
in the value of the property of the scheme.
(4) If the responsible entity for a registered scheme is ordered to
compensate the scheme, the responsible entity must transfer the
amount of the compensation to the scheme property. If anyone else
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is ordered to compensate the scheme, the responsible entity may
recover the compensation on behalf of the scheme.
Recovery of damage
(5) A compensation order may be enforced as if it were a judgment of
the Court.
1317HB Compensation orders—market integrity rules
Compensation for damage suffered
(1) A Court may order a person (the liable person) to compensate
another person (including a corporation), or a registered scheme,
for damage suffered by the person or scheme if:
(a) the liable person has contravened subsection 798H(1)
(complying with market integrity rules); and
(b) the damage resulted from the contravention.
The order must specify the amount of compensation.
Note: An order may be made under this subsection whether or not a
declaration of contravention has been made under section 1317E.
(2) Subsection (1) does not apply in relation to a contravention by the
operator of a licensed market acting in that capacity.
Damage includes profits
(3) In determining the damage suffered by a person or scheme for the
purposes of making a compensation order, include profits made by
any person resulting from the contravention.
Damage to scheme includes diminution of value of scheme
property
(4) In determining the damage suffered by a registered scheme for the
purposes of making a compensation order, include any diminution
in the value of the property of the scheme.
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Recovery of damage
(5) A compensation order may be enforced as if it were a judgment of
the Court.
1317J Who may apply for a declaration or order
Application by ASIC
(1) ASIC may apply for a declaration of contravention, a pecuniary
penalty order or a compensation order.
Application by corporation
(2) The corporation, or the responsible entity for the registered
scheme, may apply for a compensation order.
Note: An application for a compensation order may be made whether or not
a declaration of contravention has been made under section 1317E.
(3) The corporation, or the responsible entity for the registered
scheme, may intervene in an application for a declaration of
contravention or a pecuniary penalty order in relation to the
corporation or scheme. The corporation or responsible entity is
entitled to be heard on all matters other than whether the
declaration or order should be made.
Compensation order relating to financial services civil penalty
provision—any other person who suffers damage may apply
(3A) Any other person who suffers damage in relation to a
contravention, or alleged contravention, of a financial services civil
penalty provision may apply for a compensation order under
section 1317HA.
Note: An application for a compensation order may be made whether or not
a declaration of contravention has been made under section 1317E.
(3B) Subsections (2) and (3) do not apply in relation to a contravention
of:
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(a) section 901E (complying with derivative transaction rules);
or
(b) section 903D (complying with derivative trade repository
rules).
No one else may apply
(4) No person may apply for a declaration of contravention, a
pecuniary penalty order or a compensation order unless permitted
by this section.
(5) Subsection (4) does not exclude the operation of the Director of
Public Prosecutions Act 1983.
1317K Time limit for application for a declaration or order
Proceedings for a declaration of contravention, a pecuniary penalty
order, or a compensation order, may be started no later than 6 years
after the contravention.
1317L Civil evidence and procedure rules for declarations of
contravention and civil penalty orders
The Court must apply the rules of evidence and procedure for civil
matters when hearing proceedings for:
(a) a declaration of contravention; or
(b) a pecuniary penalty order.
1317M Civil proceedings after criminal proceedings
A court must not make a declaration of contravention or a
pecuniary penalty order against a person for a contravention if the
person has been convicted of an offence constituted by conduct
that is substantially the same as the conduct constituting the
contravention.
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1317N Criminal proceedings during civil proceedings
(1) Proceedings for a declaration of contravention or pecuniary penalty
order against a person are stayed if:
(a) criminal proceedings are started or have already been started
against the person for an offence; and
(b) the offence is constituted by conduct that is substantially the
same as the conduct alleged to constitute the contravention.
(2) The proceedings for the declaration or order may be resumed if the
person is not convicted of the offence. Otherwise, the proceedings
for the declaration or order are dismissed.
1317P Criminal proceedings after civil proceedings
(1) Subject to subsection (2), criminal proceedings may be started
against a person for conduct that is substantially the same as
conduct constituting a contravention of a civil penalty provision
regardless of whether:
(a) a declaration of contravention has been made against the
person; or
(b) a pecuniary penalty order has been made against the person;
or
(ba) a refund order has been made against the person; or
(c) a compensation order has been made against the person; or
(d) the person has been disqualified from managing a
corporation under Part 2D.6; or
(e) an order has been made against the person by ASIC under
section 920A (banning orders) or by the Court under
section 921A (disqualification by Court).
(2) Subsection (1) does not apply if:
(a) an infringement notice is issued to the person for an alleged
contravention of subsection 674(2) or 675(2); and
(b) the infringement notice is not withdrawn under
section 1317DAI.
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1317Q Evidence given in proceedings for penalty not admissible in
criminal proceedings
Evidence of information given or evidence of production of
documents by an individual is not admissible in criminal
proceedings against the individual if:
(a) the individual previously gave the evidence or produced the
documents in proceedings for a pecuniary penalty order
against the individual for a contravention of a civil penalty
provision (whether or not the order was made); and
(b) the conduct alleged to constitute the offence is substantially
the same as the conduct that was claimed to constitute the
contravention.
However, this does not apply to a criminal proceeding in respect of
the falsity of the evidence given by the individual in the
proceedings for the pecuniary penalty order.
1317R ASIC requiring person to assist
(1) ASIC may require a person to give all reasonable assistance in
connection with:
(a) an application for a declaration of contravention or a
pecuniary penalty order; or
(b) criminal proceedings for an offence against this Act.
(2) ASIC can require the person to assist in connection with an
application for a declaration or order if, and only if:
(a) it appears to ASIC that someone other than the person
required to assist may have contravened a civil penalty
provision; and
(b) ASIC suspects or believes that the person required to assist
can give information relevant to the application.
(3) ASIC can require the person to assist in connection with criminal
proceedings if, and only if:
(a) it appears to ASIC that the person required to assist is
unlikely to be a defendant in the proceedings; and
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(b) the person required to assist is, in relation to a person who is
or should be a defendant in the proceedings:
(i) an employee or agent (including a banker or auditor) of
the other person; or
(ii) if the other person is a corporation—an officer or
employee of the other person; or
(iii) if the other person is an individual—a partner of the
other person.
(4) ASIC can require the person to assist regardless of whether:
(a) an application for the declaration or penalty order has
actually been made; or
(b) criminal proceedings for the offence have actually begun.
(5) The person cannot be required to assist if they are or have been a
lawyer for:
(a) in an application for a declaration or penalty order—the
person suspected of the contravention; or
(b) in criminal proceedings—a defendant or likely defendant in
the proceedings.
(6) The requirement to assist must be given in writing.
(7) The Court may order the person to comply with the requirement in
a specified way. Only ASIC may apply to the Court for an order
under this subsection.
Note: The person must comply with the requirement and may commit an
offence if they do not, even if there is no order under this
subsection (see section 104 and subsection 1311(1)).
(8) This section does not limit and is not limited by section 49 of the
ASIC Act.
1317S Relief from liability for contravention of civil penalty
provision
(1) In this section:
eligible proceedings:
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(a) means proceedings for a contravention of a civil penalty
provision (including proceedings under section 588M, 588W,
961M, 1317GA, 1317H, 1317HA or 1317HB); and
(b) does not include proceedings for an offence (except so far as
the proceedings relate to the question whether the court
should make an order under section 588K, 1317H, 1317HA
or 1317HB).
(2) If:
(a) eligible proceedings are brought against a person; and
(b) in the proceedings it appears to the court that the person has,
or may have, contravened a civil penalty provision but that:
(i) the person has acted honestly; and
(ii) having regard to all the circumstances of the case
(including, where applicable, those connected with the
person’s appointment as an officer, or employment as
an employee, of a corporation or of a Part 5.7 body), the
person ought fairly to be excused for the contravention;
the court may relieve the person either wholly or partly from a
liability to which the person would otherwise be subject, or that
might otherwise be imposed on the person, because of the
contravention.
(3) In determining under subsection (2) whether a person ought fairly
to be excused for a contravention of section 588G, the matters to
which regard is to be had include, but are not limited to:
(a) any action the person took with a view to appointing an
administrator of the company or Part 5.7 body; and
(b) when that action was taken; and
(c) the results of that action.
(4) If a person thinks that eligible proceedings will or may be begun
against them, they may apply to the Court for relief.
(5) On an application under subsection (4), the Court may grant relief
under subsection (2) as if the eligible proceedings had been begun
in the Court.
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(6) For the purposes of subsection (2) as applying for the purposes of a
case tried by a judge with a jury:
(a) a reference in that subsection to the court is a reference to the
judge; and
(b) the relief that may be granted includes withdrawing the case
in whole or in part from the jury and directing judgment to be
entered for the defendant on such terms as to costs as the
judge thinks appropriate.
(7) Nothing in this section limits, or is limited by, section 1318.
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Part 9.5—Powers of Courts
1318 Power to grant relief
(1) If, in any civil proceeding against a person to whom this section
applies for negligence, default, breach of trust or breach of duty in
a capacity as such a person, it appears to the court before which the
proceedings are taken that the person is or may be liable in respect
of the negligence, default or breach but that the person has acted
honestly and that, having regard to all the circumstances of the
case, including those connected with the person’s appointment, the
person ought fairly to be excused for the negligence, default or
breach, the court may relieve the person either wholly or partly
from liability on such terms as the court thinks fit.
(2) Where a person to whom this section applies has reason to
apprehend that any claim will or might be made against the person
in respect of any negligence, default, breach of trust or breach of
duty in a capacity as such a person, the person may apply to the
Court for relief, and the Court has the same power to relieve the
person as it would have had under subsection (1) if it had been a
court before which proceedings against the person for negligence,
default, breach of trust or breach of duty had been brought.
(3) Where a case to which subsection (1) applies is being tried by a
judge with a jury, the judge after hearing the evidence may, if he or
she is satisfied that the defendant ought pursuant to that subsection
to be relieved either wholly or partly from the liability sought to be
enforced against the person, withdraw the case in whole or in part
from the jury and forthwith direct judgment to be entered for the
defendant on such terms as to costs or otherwise as the judge thinks
proper.
(4) This section applies to a person who is:
(a) an officer or employee of a corporation; or
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(b) an auditor of a corporation, whether or not the person is an
officer or employee of the corporation; or
(c) an expert in relation to a matter:
(i) relating to a corporation; and
(ii) in relation to which the civil proceeding has been taken
or the claim will or might arise; or
(d) a receiver, receiver and manager, liquidator or other person
appointed or directed by the Court to carry out any duty
under this Act in relation to a corporation.
(5) This section does not apply to a corporation that is an Aboriginal
and Torres Strait Islander corporation.
Note: Similar provision is made in relation to Aboriginal and Torres Strait
Islander corporations under section 576-1 of the Corporations
(Aboriginal and Torres Strait Islander) Act 2006.
1319 Power of Court to give directions with respect to meetings
ordered by the Court
Where, under this Act, the Court orders a meeting to be convened,
the Court may, subject to this Act, give such directions with
respect to the convening, holding or conduct of the meeting, and
such ancillary or consequential directions in relation to the
meeting, as it thinks fit.
1322 Irregularities
(1) In this section, unless the contrary intention appears:
(a) a reference to a proceeding under this Act is a reference to
any proceeding whether a legal proceeding or not; and
(b) a reference to a procedural irregularity includes a reference
to:
(i) the absence of a quorum at a meeting of a corporation,
at a meeting of directors or creditors of a corporation, at
a joint meeting of creditors and members of a
corporation or at a meeting of members of a registered
scheme; and
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(ii) a defect, irregularity or deficiency of notice or time.
(2) A proceeding under this Act is not invalidated because of any
procedural irregularity unless the Court is of the opinion that the
irregularity has caused or may cause substantial injustice that
cannot be remedied by any order of the Court and by order declares
the proceeding to be invalid.
(3) A meeting held for the purposes of this Act, or a meeting notice of
which is required to be given in accordance with the provisions of
this Act, or any proceeding at such a meeting, is not invalidated
only because of the accidental omission to give notice of the
meeting or the non-receipt by any person of notice of the meeting,
unless the Court, on the application of the person concerned, a
person entitled to attend the meeting or ASIC, declares proceedings
at the meeting to be void.
(3AA) A meeting held for the purposes of this Act, or a meeting notice of
which is required to be given in accordance with the provisions of
this Act, or any proceeding at such a meeting, is not invalidated
only because of the inability of a person to access the notice of
meeting, unless the Court, on the application of the person
concerned, a person entitled to attend the meeting or ASIC,
declares proceedings at the meeting to be void.
Note: Under paragraph 249J(3)(cb), a company may, in certain
circumstances, give a member notice of a meeting by notifying the
member that the notice of meeting is available and how the member
may access the notice of meeting.
(3A) If a member does not have a reasonable opportunity to participate
in a meeting of members, or part of a meeting of members, held at
2 or more venues, the meeting will only be invalid on that ground
if:
(a) the Court is of the opinion that:
(i) a substantial injustice has been caused or may be
caused; and
(ii) the injustice cannot be remedied by any order of the
Court; and
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(b) the Court declares the meeting or proceeding (or that part of
it) invalid.
(3B) If voting rights are exercised in contravention of
subsection 259D(3) (company controlling entity that holds shares
in it), the meeting or the resolution on which the voting rights were
exercised will only be invalid on that ground if:
(a) the court is of the opinion that:
(i) a substantial injustice has been caused or may be
caused; and
(ii) the injustice cannot be remedied by any order of the
court; and
(b) the court declares the meeting or resolution invalid.
(4) Subject to the following provisions of this section but without
limiting the generality of any other provision of this Act, the Court
may, on application by any interested person, make all or any of
the following orders, either unconditionally or subject to such
conditions as the Court imposes:
(a) an order declaring that any act, matter or thing purporting to
have been done, or any proceeding purporting to have been
instituted or taken, under this Act or in relation to a
corporation is not invalid by reason of any contravention of a
provision of this Act or a provision of the constitution of a
corporation;
(b) an order directing the rectification of any register kept by
ASIC under this Act;
(c) an order relieving a person in whole or in part from any civil
liability in respect of a contravention or failure of a kind
referred to in paragraph (a);
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(d) an order extending the period for doing any act, matter or
thing or instituting or taking any proceeding under this Act or
in relation to a corporation (including an order extending a
period where the period concerned ended before the
application for the order was made) or abridging the period
for doing such an act, matter or thing or instituting or taking
such a proceeding;
and may make such consequential or ancillary orders as the Court
thinks fit.
(5) An order may be made under paragraph (4)(a) or (c)
notwithstanding that the contravention or failure referred to in the
paragraph concerned resulted in the commission of an offence.
(6) The Court must not make an order under this section unless it is
satisfied:
(a) in the case of an order referred to in paragraph (4)(a):
(i) that the act, matter or thing, or the proceeding, referred
to in that paragraph is essentially of a procedural nature;
(ii) that the person or persons concerned in or party to the
contravention or failure acted honestly; or
(iii) that it is just and equitable that the order be made; and
(b) in the case of an order referred to in paragraph (4)(c)—that
the person subject to the civil liability concerned acted
honestly; and
(c) in every case—that no substantial injustice has been or is
likely to be caused to any person.
1323 Power of Court to prohibit payment or transfer of money,
financial products or other property
(1) Where:
(a) an investigation is being carried out under the ASIC Act or
this Act in relation to an act or omission by a person, being
an act or omission that constitutes or may constitute a
contravention of this Act; or
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(b) a prosecution has been begun against a person for a
contravention of this Act; or
(c) a civil proceeding has been begun against a person under this
Act;
and the Court considers it necessary or desirable to do so for the
purpose of protecting the interests of a person (in this section
called an aggrieved person) to whom the person referred to in
paragraph (a), (b) or (c), as the case may be, (in this section called
the relevant person), is liable, or may be or become liable, to pay
money, whether in respect of a debt, by way of damages or
compensation or otherwise, or to account for financial products or
other property, the Court may, on application by ASIC or by an
aggrieved person, make one or more of the following orders:
(d) an order prohibiting a person who is indebted to the relevant
person or to an associate of the relevant person from making
a payment in total or partial discharge of the debt to, or to
another person at the direction or request of, the person to
whom the debt is owed;
(e) an order prohibiting a person holding money, financial
products or other property, on behalf of the relevant person,
or on behalf of an associate of the relevant person, from
paying all or any of the money, or transferring, or otherwise
parting with possession of, the financial products or other
property, to, or to another person at the direction or request
of, the person on whose behalf the money, financial products
or other property, is or are held;
(f) an order prohibiting the taking or sending out of this
jurisdiction, or out of Australia, by a person of money of the
relevant person or of an associate of the relevant person;
(g) an order prohibiting the taking, sending or transfer by a
person of financial products or other property of the relevant
person, or of an associate of the relevant person:
(i) from a place in this jurisdiction to a place outside this
jurisdiction (including the transfer of financial products
from a register in this jurisdiction to a register outside
this jurisdiction); or
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(ii) from a place in Australia to a place outside Australia
(including the transfer of financial products from a
register in Australia to a register outside Australia);
(h) an order appointing:
(i) if the relevant person is a natural person—a receiver or
trustee, having such powers as the Court orders, of the
property or of part of the property of that person; or
(ii) if the relevant person is a body corporate—a receiver or
receiver and manager, having such powers as the Court
orders, of the property or of part of the property of that
person;
(j) if the relevant person is a natural person—an order requiring
that person to deliver up to the Court his or her passport and
such other documents as the Court thinks fit;
(k) if the relevant person is a natural person—an order
prohibiting that person from leaving this jurisdiction, or
Australia, without the consent of the Court.
(2A) A reference in paragraph (1)(g) or (h) to property of a person
includes a reference to property that the person holds otherwise
than as sole beneficial owner, for example:
(a) as trustee for, as nominee for, or otherwise on behalf of or on
account of, another person; or
(b) in a fiduciary capacity.
(2B) Subsection (2A) is to avoid doubt, is not to limit the generality of
anything in subsection (1) and is not to affect by implication the
interpretation of any other provision of this Act.
(2) An order under subsection (1) prohibiting conduct may prohibit the
conduct either absolutely or subject to conditions.
(3) Where an application is made to the Court for an order under
subsection (1), the Court may, if in the opinion of the Court it is
desirable to do so, before considering the application, grant an
interim order, being an order of the kind applied for that is
expressed to have effect pending the determination of the
application.
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(4) On an application under subsection (1), the Court must not require
the applicant or any other person, as a condition of granting an
interim order under subsection (3), to give an undertaking as to
damages.
(5) Where the Court has made an order under this section on a
person’s application, the Court may, on application by that person
or by any person affected by the order, make a further order
discharging or varying the first-mentioned order.
(6) An order made under subsection (1) or (2) may be expressed to
operate for a specified period or until the order is discharged by a
further order under this section.
(7) Nothing in this section affects the powers that the Court has apart
from this section.
(8) This section has effect subject to the Bankruptcy Act 1966.
(9) A person must not contravene an order by the Court under this
section that is applicable to the person.
(10) An offence based on subsection (9) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
1324 Injunctions
(1) Where a person has engaged, is engaging or is proposing to engage
in conduct that constituted, constitutes or would constitute:
(a) a contravention of this Act; or
(b) attempting to contravene this Act; or
(c) aiding, abetting, counselling or procuring a person to
contravene this Act; or
(d) inducing or attempting to induce, whether by threats,
promises or otherwise, a person to contravene this Act; or
(e) being in any way, directly or indirectly, knowingly concerned
in, or party to, the contravention by a person of this Act; or
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(f) conspiring with others to contravene this Act;
the Court may, on the application of ASIC, or of a person whose
interests have been, are or would be affected by the conduct, grant
an injunction, on such terms as the Court thinks appropriate,
restraining the first-mentioned person from engaging in the
conduct and, if in the opinion of the Court it is desirable to do so,
requiring that person to do any act or thing.
(1A) For the purposes of subsection (1):
(a) a contravention of this Act affects the interests of a creditor
or member of a company if the insolvency of the company is
an element of the contravention; and
(b) a company’s contravention of:
(i) paragraph 257A(1)(a) (share buy-back not to prejudice
ability to pay creditors); or
(ia) paragraph 256B(1)(b) (share capital reduction not to
prejudice ability to pay creditors); or
(ii) paragraph 260A(1)(a) (financial assistance for share
acquisition not to prejudice company or shareholders or
ability to pay creditors);
affects the interests of a creditor or member of the company;
and
(c) a company’s contravention of paragraph 256B(1)(a) (fair and
reasonable test for share capital reduction) affects the
interests of a member of the company.
This subsection does not limit subsection (1) in any way.
(1B) If the ground relied on in an application for an injunction is
conduct or proposed conduct of a company or other person that it is
alleged constitutes, or would constitute:
(a) a contravention of paragraph 256B(1)(a) or (b), section 257A
or paragraph 260A(1)(a); or
(b) a contravention of a provision of this Act involving the
insolvency of the company because of:
(i) the company making a reduction of its share capital to
which Division 1 of Part 2J.1 applies; or
(ii) the company buying back its shares; or
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(iii) the company giving financial assistance to which
Part 2J.3 applies;
the Court must assume that the conduct constitutes, or would
constitute, a contravention of that paragraph, section or provision
unless the company or person proves otherwise.
(2) Where a person has refused or failed, is refusing or failing, or is
proposing to refuse or fail, to do an act or thing that the person is
required by this Act to do, the Court may, on the application of:
(a) ASIC; or
(b) any person whose interests have been, are or would be
affected by the refusal or failure to do that act or thing;
grant an injunction, on such terms as the Court thinks appropriate,
requiring the first-mentioned person to do that act or thing.
(3) Where an application for an injunction under subsection (1) or (2)
has been made, the Court may, if the Court determines it to be
appropriate, grant an injunction by consent of all the parties to the
proceedings, whether or not the Court is satisfied that that
subsection applies.
(4) Where in the opinion of the Court it is desirable to do so, the Court
may grant an interim injunction pending determination of an
application under subsection (1).
(5) The Court may discharge or vary an injunction granted under
subsection (1), (2) or (4).
(6) The power of the Court to grant an injunction restraining a person
from engaging in conduct may be exercised:
(a) whether or not it appears to the Court that the person intends
to engage again, or to continue to engage, in conduct of that
kind; and
(b) whether or not the person has previously engaged in conduct
of that kind; and
(c) whether or not there is an imminent danger of substantial
damage to any person if the first-mentioned person engages
in conduct of that kind.
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(7) The power of the Court to grant an injunction requiring a person to
do an act or thing may be exercised:
(a) whether or not it appears to the Court that the person intends
to refuse or fail again, or to continue to refuse or fail, to do
that act or thing; and
(b) whether or not the person has previously refused or failed to
do that act or thing; and
(c) whether or not there is an imminent danger of substantial
damage to any person if the first-mentioned person refuses or
fails to do that act or thing.
(8) Where ASIC applies to the Court for the grant of an injunction
under this section, the Court must not require the applicant or any
other person, as a condition of granting an interim injunction, to
give an undertaking as to damages.
(9) In proceedings under this section against a person the Court may
make an order under section 1323 in respect of the person.
(10) Where the Court has power under this section to grant an
injunction restraining a person from engaging in particular
conduct, or requiring a person to do a particular act or thing, the
Court may, either in addition to or in substitution for the grant of
the injunction, order that person to pay damages to any other
person.
1324A Provisions relating to prosecutions
In the prosecution of a person for an offence in respect of a
contravention of a provision of Chapter 5C, 6CA or 6D or
Part 7.10, the Court may do either or both of the following:
(a) grant an injunction under section 1324 against the person in
relation to:
(i) the conduct that constitutes, or is alleged to constitute,
the offence; or
(ii) other conduct of that kind
(b) make an order under section 1324B in respect of the person.
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1324B Order to disclose information or publish advertisements
Without limiting section 1324, if, on the application of ASIC, the
Court is satisfied that a person has engaged in conduct constituting
a contravention of a provision of Chapter 5C, 6CA or 6D,
subsection 798H(1), section 901E or 903D or Part 7.10, the Court
may make either or both of the following orders against that person
or a person involved in the contravention:
(a) an order requiring the person to whom it is directed to
disclose, in the manner specified in the order, to:
(i) the public; or
(ii) a particular person; or
(iii) a particular class of persons;
the information, or information of a kind, that is specified in
the order and is in the person’s possession or to which the
person has access;
(b) an order requiring the person to whom it is directed to
publish, at the person’s own expense, in the manner and at
times specified in the order, advertisements whose terms are
specified in, or are to be determined in accordance with, the
order.
1325 Other orders
(1) Where, in a proceeding instituted under, or for a contravention of,
subsection 201P(1), Chapter 5C, 6CA or 6D, subsection 798H(1)
or Part 7.10, the Court finds that a person who is a party to the
proceeding has suffered, or is likely to suffer, loss or damage
because of conduct of another person that was engaged in in
contravention of subsection 201P(1), Chapter 5C, 6CA or 6D,
subsection 798H(1) or Part 7.10, the Court may, whether or not it
grants an injunction, or makes an order, under any other provision
of this Act, make such order or orders as it thinks appropriate
against the person who engaged in the conduct or a person who
was involved in the contravention (including all or any of the
orders mentioned in subsection (5)) if the Court considers that the
order or orders concerned will compensate the first-mentioned
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person in whole or in part for the loss or damage or will prevent or
reduce the loss or damage.
(2) The Court may, on the application of a person who has suffered, or
is likely to suffer, loss or damage because of conduct of another
person that was engaged in in contravention of subsection 201P(1),
Chapter 5C, 6CA or 6D, subsection 798H(1) or Part 7.10, or on the
application of ASIC in accordance with subsection (3) on behalf of
such a person or 2 or more such persons, make such order or orders
as the Court thinks appropriate against the person who engaged in
the conduct or a person who was involved in the contravention
(including all or any of the orders mentioned in subsection (5)) if
the Court considers that the order or orders concerned will
compensate the person who made the application, or the person or
any of the persons on whose behalf the application was made, in
whole or in part for the loss or damage, or will prevent or reduce
the loss or damage suffered, or likely to be suffered, by such a
person.
(3) Where, in a proceeding instituted for a contravention of
subsection 201P(1), Chapter 5C, 6CA or 6D, subsection 798H(1)
or Part 7.10 or instituted by ASIC under section 1324, a person is
found to have engaged in conduct in contravention of
subsection 201P(1), Chapter 5C, 6CA or 6D, subsection 798H(1)
or Part 7.10, ASIC may make an application under subsection (2)
on behalf of one or more persons identified in the application who
have suffered, or are likely to suffer, loss or damage by the
conduct, but ASIC must not make such an application except with
the consent in writing given before the application is made by the
person, or by each of the persons, on whose behalf the application
is made.
(4) An application under subsection (2) may be made within 6 years
after the day on which the cause of action arose.
(5) The orders referred to in subsections (1) and (2) are:
(a) an order declaring the whole or any part of a contract made
between the person who suffered, or is likely to suffer, the
loss or damage and the person who engaged in the conduct or
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a person who was involved in the contravention constituted
by the conduct, or of a collateral arrangement relating to such
a contract, to be void and, if the Court thinks fit, to have been
void ab initio or at all times on and after a specified day
before the order is made; and
(b) an order varying such a contract or arrangement in such
manner as is specified in the order and, if the Court thinks fit,
declaring the contract or arrangement to have had effect as so
varied on and after a specified day before the order is made;
and
(c) an order refusing to enforce any or all of the provisions of
such a contract; and
(d) an order directing the person who engaged in the conduct or
a person who was involved in the contravention constituted
by the conduct to refund money or return property to the
person who suffered the loss or damage; and
(e) an order directing the person who engaged in the conduct or
a person who was involved in the contravention constituted
by the conduct to pay to the person who suffered the loss or
damage the amount of the loss or damage; and
(f) an order directing the person who engaged in the conduct or
a person who was involved in the contravention constituted
by the conduct, at the person’s own expense, to supply
specified services to the person who suffered, or is likely to
suffer, the loss or damage.
(5A) Subsections (1) and (2) have effect subject to section 1044B.
Note: Section 1044B may limit the liability, under an order under
subsection (1) or (2) of this section, of a person for his or her
contravention of section 1041H (Misleading or deceptive conduct) or
involvement in such a contravention.
(6) Where an application is made for an order under this section
against a person, the Court may make an order under section 1323
in respect of the person.
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1325A Orders if contravention of Chapter 6, 6A, 6B or 6C
(1) The Court may make any order or orders (including a remedial
order) that it considers appropriate if a person:
(a) contravenes a provision of Chapter 6, 6A, 6B or 6C; or
(b) contravenes a condition on a consent given by ASIC under
section 652B; or
(c) states in a notice under section 672B about securities that
they do not know particular information about:
(i) the securities; or
(ii) someone who has a relevant interest in, or has given
instructions in relation to, the securities.
Note 1: Section 9 defines remedial order.
Note 2: Sections 659B and 659C deal with court proceedings during and after
a takeover bid.
(2) The Court may make any order or orders (including a remedial
order) that it considers appropriate if:
(a) the consideration offered under a takeover bid is or includes
securities; and
(b) the offers under the bid or the bidder’s statement states or
implies that the securities will be able to be traded on a
financial market (whether in Australia or elsewhere) and:
(i) an application for admission to quotation is not made
within 7 days after the start of the bid period; or
(ii) permission for admission to quotation is not granted
within 7 days after the end of the bid period.
Note: Section 9 defines remedial order.
(3) An order under this section may be made on application by the
following:
(a) ASIC;
(b) the company, or the responsible entity of the registered
scheme, whose securities are involved in the contravention;
(c) a member or former member of that company or scheme;
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(d) a person from whom the relevant interest in the securities
were acquired;
(e) a person whose interests are affected by the contravention.
1325B Court may order bidder to make offers
(1) If a bidder making a takeover bid for a class of securities
contravenes section 631 by failing to make offers under the bid
within time and ASIC applies for an order under this section, the
Court may:
(a) order the bidder to send, to each holder of securities in that
class, an offer to which the bidder’s statement relates within
a specified time; and
(b) make any ancillary orders it thinks appropriate including
orders that the bidder:
(i) send notices setting out specified information with the
offer; and
(ii) send copies of the notice within a specified period to the
target and, if the target is listed, to the relevant market
operator; and
(iii) lodge a copy of the notice with ASIC within a specified
period.
(2) Offers sent in accordance with an order under this section are taken
to be made under a takeover bid.
1325C Unfair or unconscionable agreements, payments or benefits
(1) The Court may make orders under subsection (2) if:
(a) a body corporate gives, or enters into an agreement to give, a
director or secretary of the body corporate or a related body
corporate a benefit (including a payment or an agreement to
employ them, or engage their services, for a fixed period);
and
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(b) the agreement is entered into or the benefit is given:
(i) within 12 months after the start of the bid period for a
takeover bid for the securities of the body corporate or a
related body corporate; or
(ii) at a time when the directors of the body corporate have
reason to believe that a takeover bid is to be made in
respect of securities of the body corporate or a related
body corporate; and
(c) the Court is satisfied that the agreement or benefit was unfair
or unconscionable having regard to the interests of the body
corporate.
(2) The Court may:
(a) declare the agreement, or any part of it, to be void or to have
always been void; or
(b) direct a person to whom a benefit is given, or another
specified person, to:
(i) make a payment or transfer property to the body
corporate; or
(ii) do any other act for the benefit of the body corporate; or
(c) make any other order it considers appropriate.
(3) This section does not apply to an agreement or benefit that has
been approved by an ordinary resolution of the body corporate
(whether before or after the agreement was entered into or the
benefit given) with no vote being cast by the person who is to
receive the benefit or their associates.
(4) An order under this section may be made on application by:
(a) the body corporate; or
(b) ASIC; or
(c) members who together hold shares carrying at least 10% of
the votes attached to voting shares in the body corporate or a
related body corporate;
within 12 months, or any longer period that the Court thinks
appropriate in the circumstances, after the agreement is entered
into or the benefit given.
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1325D Contravention due to inadvertence etc.
(1) The Court may declare that any act, document or matter:
(a) is not invalid merely because a person has contravened a
provision of Chapter 6, 6A, 6B or 6C; and
(b) has had effect at all times as if there had been no
contravention;
if the Court is satisfied that the contravention ought to be excused
in all the circumstances.
(2) An application for an order under subsection (1) may be made by
any interested person.
(3) If the Court is satisfied that in all the circumstances a contravention
of a provision of Chapter 6, 6A, 6B or 6C ought to be excused, the
Court must not make an order under section 1325A, 1325B or
1325C other than:
(a) an order restraining the exercise of voting or other rights
attached to securities; or
(b) an order that an exercise of voting or other rights attached to
securities be disregarded.
(4) In determining whether or not a contravention of a provision by a
person ought to be excused, have regard to the contravention being
caused by any of the following:
(a) the person’s inadvertence or mistake;
(b) the person not having been aware of a relevant fact or
occurrence;
(c) circumstances beyond the control of the person.
(5) This section applies notwithstanding anything contained in any
other provision of this Chapter.
1325E Orders to secure compliance
In order to secure compliance with an order under section 1325A,
1325B or 1325C, the Court may direct a person to:
(a) do a specified act; or
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(b) refrain from doing a specified act.
1326 Effect of sections 1323, 1324 and 1325
Nothing in any of sections 1323, 1324, 1324A, 1324B, and 1325
limits the generality of anything else in any of those sections.
1327 Power of Court to punish for contempt of Court
Nothing in a provision of this Act that provides:
(a) that a person must not contravene an order of the Court; or
(b) that a person who contravenes an order of the Court
contravenes a provision of this Act or is guilty of an offence;
affects the powers of the Court in relation to the punishment of
contempts of the Court.
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1330 ASIC’s power to intervene in proceedings
(1) ASIC may intervene in any proceeding relating to a matter arising
under this Act.
(2) Where ASIC intervenes in a proceeding referred to in
subsection (1), ASIC is taken to be a party to the proceeding and,
subject to this Act, has all the rights, duties and liabilities of such a
party.
(3) Without limiting the generality of subsection (2), ASIC may appear
and be represented in any proceeding in which it wishes to
intervene pursuant to subsection (1):
(a) by a staff member of ASIC; or
(b) by a natural person to whom, or by an officer or employee of
a person or body to whom or to which, ASIC has delegated
its functions and powers under this Act or such of those
functions and powers as relate to a matter to which the
proceeding relates; or
(c) by solicitor or counsel.
1331 Civil proceedings not to be stayed
No civil proceedings under this Act are to be stayed merely
because the proceeding discloses, or arises out of, the commission
of an offence.
1332 Standard of proof
Where, in proceedings other than proceedings for an offence, it is
necessary to establish, or for the Court to be satisfied, for any
purpose relating to a matter arising under this Act, that:
(a) a person has contravened a provision of this Act; or
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(b) default has been made in complying with a provision of this
Act; or
(c) an act or omission was unlawful by virtue of a provision of
this Act; or
(d) a person has been in any way, by act or omission, directly or
indirectly, knowingly concerned in or party to a
contravention, or a default in complying with, a provision of
this Act;
it is sufficient if the matter referred to in paragraph (a), (b), (c) or
(d) is established, or the Court is so satisfied, as the case may be,
on the balance of probabilities.
1333 Evidence of contravention
For the purposes of this Act, a certificate that:
(a) purports to be signed by the Registrar or other proper officer
of an Australian court; and
(b) states:
(i) that a person was convicted by that court on a specified
day of a specified offence; or
(ii) that a person charged before that court with a specified
offence was, on a specified day, found in that court to
have committed the offence but that the court did not
proceed to convict the person of the offence;
is, unless it is proved that the conviction was quashed or set aside,
or that the finding was set aside or reversed, as the case may be,
conclusive evidence:
(c) if subparagraph (b)(i) applies—that the person was convicted
of the offence on that day; and
(d) if the offence was constituted by a contravention of a
provision of a law—that the person contravened that
provision.
1335 Costs
(1) Where a corporation is plaintiff in any action or other legal
proceeding, the court having jurisdiction in the matter may, if it
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appears by credible testimony that there is reason to believe that
the corporation will be unable to pay the costs of the defendant if
successful in his, her or its defence, require sufficient security to be
given for those costs and stay all proceedings until the security is
given.
(1A) Subsection (1) does not apply to a corporation that is an Aboriginal
and Torres Strait Islander corporation.
Note: Similar provision is made in relation to Aboriginal and Torres Strait
Islander corporations under section 581-20 of the Corporations
(Aboriginal and Torres Strait Islander) Act 2006.
(2) The costs of any proceeding before a court under this Act are to be
borne by such party to the proceeding as the court, in its discretion,
directs.
1336 Vesting of property
(1) Where an order is made by a court under this Act vesting property
in a person:
(a) subject to subsection (2), the property forthwith vests in the
person named in the order without any conveyance, transfer
or assignment; and
(b) the person who applied for the order must, within 7 days after
the passing and entering of the order, lodge an office copy of
the order with such person (if any) as is specified for the
purpose in the order.
(2) Where:
(a) the property to which an order referred to in subsection (1)
relates is property the transfer or transmission of which may
be registered under a law of the Commonwealth, of a State or
of a Territory; and
(b) that law enables the registration of such an order;
the property, notwithstanding that it vests in equity in the person
named in the order, does not vest in that person at law until the
requirements of the law referred to in paragraph (a) have been
complied with.
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(3) Where:
(a) property vests in a person by force of this Act; and
(b) the property is property the transfer or transmission of which
may be registered under a law of the Commonwealth, of a
State or of a Territory; and
(c) that law enables the person to be registered as the owner of
that property;
that property, notwithstanding that it vests in equity in that person
by force of this Act, does not vest in that person at law until the
requirements of the law referred to in paragraph (b) have been
complied with.
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Part 9.6A—Jurisdiction and procedure of Courts
Division 1—Civil jurisdiction
Subdivision A—Preliminary
1337A Operation of Division
(1) This Division deals with:
(a) the jurisdiction of courts in respect of civil matters arising
under the Corporations legislation; and
(b) the jurisdiction of courts in respect of matters arising under
the Administrative Decisions (Judicial Review) Act 1977
involving or related to decisions made under the
Corporations legislation by Commonwealth authorities and
officers of the Commonwealth; and
(c) the jurisdiction of courts in civil matters in respect of
decisions made by officers of the Commonwealth to
prosecute persons for offences against the Corporations
legislation and related criminal justice process decisions.
(2) This Division operates to the exclusion of:
(a) the Jurisdiction of Courts (Cross-vesting) Act 1987; and
(b) section 39B of the Judiciary Act 1903.
(3) This Division does not limit the operation of the provisions of the
Judiciary Act 1903 other than section 39B.
(4) Without limiting subsection (3), this Division does not limit the
operation of subsection 39(2) of the Judiciary Act 1903 in relation
to civil matters arising under the Corporations legislation.
(5) Nothing in this Division affects any other jurisdiction of any court.
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Subdivision B—Conferral of jurisdiction
1337B Jurisdiction of Federal Court and State and Territory
Supreme Courts
(1) Jurisdiction is conferred on the Federal Court of Australia with
respect to civil matters arising under the Corporations legislation.
(2) Subject to section 9 of the Administrative Decisions (Judicial
Review) Act 1977, jurisdiction is conferred on the Supreme Court
of:
(a) each State; and
(b) the Capital Territory; and
(c) the Northern Territory;
with respect to civil matters arising under the Corporations
legislation.
(3) Despite section 9 of the Administrative Decisions (Judicial Review)
Act 1977, jurisdiction is conferred on the Supreme Court of:
(a) each State; and
(b) the Capital Territory; and
(c) the Northern Territory;
with respect to matters arising under that Act involving or related
to decisions made, or proposed or required to be made, under the
Corporations legislation by a Commonwealth authority or an
officer of the Commonwealth.
Note 1: The Federal Court also has jurisdiction with respect to these matters
under that Act.
Note 2: A Supreme Court may be required to transfer a proceeding with
respect to such a matter to the Federal Court: see
subsection 1337H(3).
(4) Subsection (3) applies to a decision made, or proposed or required
to be made:
(a) whether or not in the exercise of a discretion; and
(b) whether before or after that subsection commences.
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(5) The jurisdiction conferred on a Supreme Court by subsection (2) or
(3) is not limited by any limits to which any other jurisdiction of
that Supreme Court may be subject.
(6) This section has effect subject to section 1337D.
1337C Jurisdiction of Family Court and State Family Courts
(1) Jurisdiction is conferred on the Family Court with respect to civil
matters arising under the Corporations legislation.
(2) Subject to section 9 of the Administrative Decisions (Judicial
Review) Act 1977, jurisdiction is conferred on each State Family
Court with respect to civil matters arising under the Corporations
legislation.
(3) The jurisdiction conferred on a State Family Court by
subsection (2) is not limited by any limits to which any other
jurisdiction of the State Family Court may be subject.
(4) This section has effect subject to section 1337D.
1337D Jurisdiction of courts (decisions to prosecute and related
criminal justice process decisions made by
Commonwealth officers)
(1) If a decision to prosecute a person for an offence against the
Corporations legislation has been made by an officer or officers of
the Commonwealth and the prosecution is proposed to be
commenced in a State or Territory court:
(a) neither the Federal Court nor the Family Court has
jurisdiction with respect to any matter in which a person
seeks a writ of mandamus or prohibition or an injunction
against the officer or officers in relation to that decision; and
(b) jurisdiction with respect to any such matter is conferred on
the Supreme Court of the State or Territory in which the
prosecution is proposed to be commenced.
(2) Subject to subsection (3), at any time when:
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(a) a prosecution for an offence against the Corporations
legislation is before a State or Territory court; or
(b) an appeal arising out of such a prosecution is before a State
or Territory court;
the following apply:
(c) neither the Federal Court nor the Family Court has
jurisdiction with respect to any matter in which the person
who is or was the defendant in the prosecution seeks a writ of
mandamus or prohibition or an injunction against an officer
or officers of the Commonwealth in relation to a related
criminal justice process decision;
(d) jurisdiction with respect to any such matter is conferred on
the Supreme Court of the State or Territory in which the
prosecution or appeal is before a court.
(3) Subsection (2) does not apply where a person has applied for a writ
of mandamus or prohibition, or an injunction, against an officer or
officers of the Commonwealth in relation to a related criminal
justice process decision before the commencement of a prosecution
for an offence against a law of the Commonwealth, or of a State or
a Territory.
(4) Where subsection (3) applies, the prosecutor may apply to the
court for a permanent stay of the proceedings referred to in that
subsection and the court may grant such a stay if the court
determines that:
(a) the matters that are the subject of the proceedings are more
appropriately dealt with in the criminal justice process; and
(b) a stay of proceedings will not substantially prejudice the
person.
(5) Subsections (1), (2), (3) and (4) have effect despite anything in this
Act or in any other law. In particular:
(a) neither this Act, nor any other law, has the effect of giving
the Federal Court or the Family Court jurisdiction contrary to
subsection (1) or (2); and
(b) neither section 9 of the Administrative Decisions (Judicial
Review) Act 1977, nor any other law, has the effect of
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removing from the Supreme Court of a State, the Capital
Territory or the Northern Territory the jurisdiction given to
that Court by subsection (1) or (2).
(6) In this section:
appeal includes an application for a new trial and a proceeding to
review or call in question the proceedings, decision or jurisdiction
of a court or judge.
related criminal justice process decision, in relation to an offence,
means a decision (other than a decision to prosecute) made in the
criminal justice process in relation to the offence, including:
(a) a decision in connection with the investigation, committal for
trial or prosecution of the defendant; and
(b) a decision in connection with the appointment of
investigators or inspectors for the purposes of such an
investigation; and
(c) a decision in connection with the issue of a warrant,
including a search warrant or a seizure warrant; and
(d) a decision requiring the production of documents, the giving
of information or the summoning of persons as witnesses;
and
(e) a decision in connection with an appeal arising out of the
prosecution.
1337E Jurisdiction of lower courts
(1) Subject to section 9 of the Administrative Decisions (Judicial
Review) Act 1977, jurisdiction is conferred on the lower courts of:
(a) each State; and
(b) the Capital Territory; and
(c) the Northern Territory;
with respect to civil matters (other than superior court matters)
arising under the Corporations legislation.
(2) The jurisdiction conferred on a lower court by subsection (1):
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(a) is subject to the court’s general jurisdictional limits, so far as
they relate to:
(i) the amounts; or
(ii) the value of property;
with which the court may deal; but
(b) is not subject to the court’s other jurisdictional limits.
1337F Appeals
(1) An appeal may not be instituted from a decision of the Federal
Court to:
(a) a State or Territory court; or
(b) the Family Court.
(2) An appeal may not be instituted from a decision of a court of the
Capital Territory to:
(a) a court of a State or the Northern Territory; or
(b) the Family Court.
(3) An appeal may not be instituted from a decision of a court (not
being a State Family Court) of a State or the Northern Territory to:
(a) the Federal Court; or
(b) a court of another State or Territory; or
(c) the Family Court; or
(d) a State Family Court of that State.
(4) An appeal may not be instituted from a decision of the Family
Court to:
(a) the Federal Court; or
(b) a State or Territory court.
(5) An appeal may not be instituted from a decision of a State Family
Court of a State to:
(a) the Federal Court; or
(b) a court of another State or Territory; or
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(c) except in accordance with the law of the State under which
the State Family Court is constituted—the Supreme Court of
that State.
1337G Courts to act in aid of each other
All courts having jurisdiction in:
(a) civil matters arising under the Corporations legislation; or
(b) matters referred to in subsection 1337B(3);
and the officers of, or under the control of, those courts must
severally act in aid of, and be auxiliary to, each other in all those
matters.
Subdivision C—Transfer of proceedings
1337H Transfer of proceedings by the Federal Court and State and
Territory Supreme Courts
(1) This section applies to a proceeding (the relevant proceeding) in a
court (the transferor court) if:
(a) the relevant proceeding is:
(i) a proceeding with respect to a civil matter arising under
the Corporations legislation; or
(ii) a subsection 1337B(3) proceeding; and
(b) the transferor court is:
(i) the Federal court; or
(ii) a State or Territory Supreme Court.
(2) Subject to subsections (3), (4) and (5), if it appears to the transferor
court that, having regard to the interests of justice, it is more
appropriate for:
(a) the relevant proceeding; or
(b) an application in the relevant proceeding;
to be determined by another court that has jurisdiction in the
matters for determination in the relevant proceeding or application,
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the transferor court may transfer the relevant proceeding or
application to that other court.
(3) If:
(a) the relevant proceeding is a subsection 1337B(3) proceeding;
and
(b) the transferor court is a State or Territory Supreme Court;
the transferor court must transfer the relevant proceeding to the
Federal Court unless the matter for determination in it arises out of,
or relates to, another proceeding pending in any court of that State
or Territory that:
(c) arises, or a substantial part of which arises, under the
Corporations legislation; and
(d) is not a subsection 1337B(3) proceeding;
regardless of which proceeding was commenced first.
(4) Even if subsection (3) does not require a State or Territory
Supreme Court to transfer a subsection 1337B(3) proceeding to the
Federal Court, it may nevertheless do so if it considers that to be
appropriate, having regard to the interests of justice, including the
desirability of related proceedings being heard in the same State or
Territory.
(5) If:
(a) the relevant proceeding is a subsection 1337B(3) proceeding
in relation to a matter; and
(b) the transferor court is the Federal Court;
the transferor court may only transfer the relevant proceeding, or
an application in the relevant proceeding, to a State or Territory
Supreme Court if:
(c) the matter arises out of, or relates to, another proceeding
pending in any court of that State or Territory that:
(i) arises, or a substantial part of which arises, under the
Corporations legislation; and
(ii) is not a subsection 1337B(3) proceeding;
regardless of which proceeding was commenced first; and
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(d) the transferor court considers the transfer to be appropriate,
having regard to the interests of justice, including the
desirability of related proceedings being heard in the same
jurisdiction.
(6) Nothing in this section confers on a court jurisdiction that the court
would not otherwise have.
(7) The fact that some references in this section to the interests of
justice include the desirability of related proceedings being heard
in the same jurisdiction does not of itself mean that other
references to the interests of justice, in this section or elsewhere in
this Act, do not include that matter.
1337J Transfer of proceedings by Family Court and State Family
Courts
(1) This section applies to a proceeding (the relevant proceeding) in a
court (the transferor court) if:
(a) the relevant proceeding is with respect to a civil matter
arising under the Corporations legislation; and
(b) the transferor court is:
(i) the Family Court of Australia; or
(ii) a State Family Court.
(2) If it appears to the transferor court:
(a) that the relevant proceeding arises out of, or is related to,
another proceeding pending in:
(i) the Federal Court; or
(ii) another State or Territory court;
and that the court in which the other proceeding is pending is
the most appropriate court to determine the relevant
proceeding; or
(b) that having regard to:
(i) whether, in the transferor court’s opinion, apart from
this Division, the relevant proceeding, or a substantial
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part of it, would have been incapable of being instituted
in the transferor court; and
(ii) the extent to which, in the transferor court’s opinion, the
matters for determination in the relevant proceeding are
matters not within the transferor court’s jurisdiction
apart from this Division; and
(iii) the interests of justice;
the Federal Court, or another State or Territory court, is the
most appropriate court to determine the relevant proceeding;
or
(c) that it is otherwise in the interests of justice that the Federal
Court, or another State or Territory court, determine the
relevant proceeding;
the transferor court must transfer the relevant proceeding to the
Federal Court or to that other court.
(3) Subject to subsection (2), if it appears to the transferor court:
(a) that the relevant proceeding arises out of, or is related to,
another proceeding pending in another court that is:
(i) the Family Court of Australia; or
(ii) a State Family Court;
and that has jurisdiction under section 1337C in the matters
for determination in the relevant proceeding and that the
other court is the most appropriate court to determine the
relevant proceeding; or
(b) that it is otherwise in the interests of justice that the relevant
proceeding be determined by another court that is:
(i) the Family Court of Australia; or
(ii) a State Family Court;
and that has jurisdiction under section 1337C in the matters
for determination in the relevant proceeding;
the transferor court must transfer the relevant proceeding to the
other court.
(4) If:
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(a) the transferor court transfers the relevant proceeding to
another court; and
(b) it appears to the transferor court that:
(i) there is another proceeding pending in the transferor
court that arises out of, or is related to, the relevant
proceeding; and
(ii) it is in the interests of justice that the other court also
determine the other proceeding;
the transferor court must also transfer the other proceeding to the
other court.
(5) Nothing in this section confers on a court jurisdiction that the court
would not otherwise have.
1337K Transfer of proceedings in lower courts
(1) This section applies to a proceeding (the relevant proceeding) in a
court (the transferor court) if:
(a) the relevant proceeding is with respect to a civil matter
arising under the Corporations legislation; and
(b) the transferor court is a lower court of a State or Territory.
(2) If it appears to the transferor court that, having regard to the
interests of justice, it is more appropriate for:
(a) the relevant proceeding; or
(b) an application in the relevant proceeding;
to be determined by another court that has jurisdiction in the
matters for determination in the relevant proceeding or application,
the transferor court may take action under whichever of
subsections (3) and (4) applies.
(3) If the other court is also a lower court, the transferor court may
transfer the relevant proceeding or application to the other court.
(4) If the other court is a superior court, the transferor court may:
(a) transfer the relevant proceeding or application to the relevant
Supreme Court; and
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(b) recommend that the relevant proceeding or application be
transferred by the Supreme Court to the other court.
(5) The relevant Supreme Court is not bound to comply with a
recommendation under subsection (4) and it may instead decide:
(a) to deal with the relevant proceeding or application itself; or
(b) to transfer the relevant proceeding or application to some
other court (which could be the transferor court).
(6) Nothing in this section allows the relevant Supreme Court to
transfer the relevant proceeding or application to another court
otherwise than in accordance with section 1337H and the other
requirements of this Division.
(7) Nothing in this section confers on a court jurisdiction that the court
would not otherwise have.
(8) In this section:
relevant Supreme Court means the Supreme Court of the State or
Territory of which the transferor court is a court.
1337L Further matters for a court to consider when deciding
whether to transfer a proceeding
In deciding whether to transfer under section 1337H, 1337J or
1337K a proceeding or application, a court must have regard to:
(a) the principal place of business of any body corporate
concerned in the proceeding or application; and
(b) the place or places where the events that are the subject of the
proceeding or application took place; and
(c) the other courts that have jurisdiction to deal with the
proceeding or application.
1337M Transfer may be made at any stage
A court may transfer under section 1337H, 1337J or 1337K a
proceeding or application:
(a) on the application of a party made at any stage; or
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(b) of the court’s own motion.
1337N Transfer of documents
If, under section 1337H, 1337J or 1337K, a court (the transferor
court) transfers a proceeding, or an application in a proceeding, to
another court:
(a) the Registrar or other proper officer of the transferor court
must transmit to the Registrar or other proper officer of the
other court all documents filed in the transferor court in
respect of the proceeding or application, as the case may be;
and
(b) the other court must proceed as if:
(i) the proceeding had been originally instituted in the other
court; and
(ii) the same proceedings had been taken in the other court
as were taken in the transferor court; and
(iii) in a case where an application is transferred—the
application had been made in the other court.
1337P Conduct of proceedings
(1) Subject to sections 1337S, 1337T and 1337U, if it appears to a
court that, in determining a matter for determination in a
proceeding, the court will, or will be likely to, be exercising
relevant jurisdiction, the rules of evidence and procedure to be
applied in dealing with that matter are to be the rules that:
(a) are applied in a superior court in Australia or in an external
Territory; and
(b) the court considers appropriate to be applied in the
circumstances.
(2) If a proceeding is transferred or removed to a court (the transferee
court) from another court (the transferor court), the transferee
court must deal with the proceeding as if, subject to any order of
the transferee court, the steps that had been taken for the purposes
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of the proceeding in the transferor court (including the making of
an order), or similar steps, had been taken in the transferee court.
(3) In this section:
relevant jurisdiction means:
(a) jurisdiction conferred on the Federal Court of Australia or the
Family Court with respect to civil matters arising under the
Corporations Legislation; or
(b) jurisdiction conferred on a court of a State, the Capital
Territory or the Northern Territory with respect to matters
referred to in subsection 1337B(3).
1337Q Rights of appearance
(1) This section applies if a proceeding (the transferred proceeding) in
a court (the transferor court) is transferred to another court (the
transferee court) under this Division.
(2) A person who is entitled to practise as a barrister or a solicitor, or
as both a barrister and a solicitor, in the transferor court has the
same entitlements to practise in relation to:
(a) the transferred proceeding; and
(b) any other proceeding out of which the transferred proceeding
arises or to which the transferred proceeding is related, being
another proceeding that is to be determined together with the
transferred proceeding;
in the transferee court that the person would have if the transferee
court were a federal court exercising federal jurisdiction.
1337R Limitation on appeals
An appeal does not lie from a decision of a court:
(a) in relation to the transfer of a proceeding under this Division;
or
(b) as to which rules of evidence and procedure are to be applied
pursuant to subsection 1337P(1).
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Subdivision D—Rules of court
1337S Rules of the Federal Court
(1) The power to make rules of court conferred by section 59 of the
Federal Court of Australia Act 1976 extends to making rules of
court:
(a) with respect to proceedings, and the practice and procedure,
of the Federal Court of Australia under the Corporations
legislation; and
(b) with respect to any matter or thing that is:
(i) required or permitted by the Corporations legislation to
be prescribed by rules within the meaning of the
Corporations legislation; or
(ii) necessary or convenient to be prescribed by such rules
for carrying out or giving effect to the Corporations
legislation; and
(c) without limitation, with respect to costs, and with respect to
rules about meetings ordered by the Federal Court of
Australia.
(2) In this section:
Corporations legislation does not include rules of court.
1337T Rules of the Supreme Court
(1) The Judges of the Supreme Court of the Capital Territory, or a
majority of them, may make rules of court:
(a) with respect to proceedings, and the practice and procedure,
of that court under the Corporations legislation; and
(b) with respect to any matter or thing that is:
(i) required or permitted by the Corporations legislation to
be prescribed by rules within the meaning of the
Corporations legislation; or
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Division 1 Civil jurisdiction
Section 1337U
460 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(ii) necessary or convenient to be prescribed by such rules
for carrying out or giving effect to the Corporations
legislation; and
(c) without limitation, with respect to costs, and with respect to
rules as to meetings ordered by that Court.
(2) When a lower court of the Capital Territory is exercising
jurisdiction with respect to matters arising under the Corporations
legislation, the court must apply the rules of court made under
subsection (1), with such alterations as are necessary.
(3) In this section:
Corporations legislation does not include rules of court.
1337U Rules of the Family Court
(1) The power to make rules of court conferred by section 123 of the
Family Law Act 1975 extends to making rules of court:
(a) with respect to proceedings, and the practice and procedure,
of the Family Court under the Corporations legislation; and
(b) with respect to any matter or thing that is:
(i) required or permitted by the Corporations legislation to
be prescribed by rules within the meaning of the
Corporations legislation; or
(ii) necessary or convenient to be prescribed by such rules
for carrying out or giving effect to the Corporations
legislation; and
(c) without limitation, with respect to costs, and with respect to
rules about meetings ordered by the Family Court.
(2) In this section:
Corporations legislation does not include rules of court.
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Jurisdiction and procedure of Courts Part 9.6A
Criminal jurisdiction Division 2
Section 1338A
Corporations Act 2001 461
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Division 2—Criminal jurisdiction
1338A Operation of Division
(1) This Division provides in relation to the jurisdiction of courts in
respect of criminal matters arising under the Corporations
legislation and so provides to the exclusion of sections 68, 70 and
70A of the Judiciary Act 1903.
(2) This Division does not limit the operation of the provisions of the
Judiciary Act 1903 other than sections 68, 70 and 70A.
(3) Without limiting subsection (2), this Division does not limit the
operation of subsection 39(2) of the Judiciary Act 1903 in relation
to criminal matters arising under the Corporations legislation.
1338B Jurisdiction of courts
(1) Subject to this section, the several courts of each State, the Capital
Territory and the Northern Territory exercising jurisdiction:
(a) with respect to:
(i) the summary conviction; or
(ii) the examination and commitment for trial on
indictment; or
(iii) the trial and conviction on indictment;
of offenders or persons charged with offences against the
laws of the State, the Capital Territory or the Northern
Territory, and with respect to:
(iv) their sentencing, punishment and release; or
(v) their liability to make reparation in connection with
their offences; or
(vi) the forfeiture of property in connection with their
offences; or
(vii) the proceeds of their crimes; and
(b) with respect to the hearing and determination of:
(i) proceedings connected with; or
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Part 9.6A Jurisdiction and procedure of Courts
Division 2 Criminal jurisdiction
Section 1338B
462 Corporations Act 2001
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(ii) appeals arising out of; or
(iii) appeals arising out of proceedings connected with;
any such trial or conviction or any matter of a kind referred
to in subparagraph (a)(iv), (v), (vi) or (vii);
have the equivalent jurisdiction with respect to offenders or
persons charged with offences against the Corporations legislation.
(2) The jurisdiction conferred by subsection (1) is not to be exercised
with respect to the summary conviction, or examination and
commitment for trial, of any person except by a magistrate.
(3) The jurisdiction conferred by subsection (1) includes jurisdiction in
accordance with provisions of a relevant law of a State, the Capital
Territory or the Northern Territory, and:
(a) the reference in paragraph (1)(b) to “any such trial or
conviction” includes a reference to any conviction or
sentencing in accordance with the provisions of a relevant
law; and
(b) unless the contrary intention appears, a reference to
jurisdiction conferred by subsection (1) includes a reference
to such included jurisdiction.
(4) A person may be dealt with in accordance with a relevant law even
if, apart from this section, the offence concerned:
(a) would be required to be prosecuted on indictment; or
(b) would be required to be prosecuted either summarily or on
indictment.
(5) For the purposes of the application of a relevant law as provided by
subsection (3):
(a) a reference in that law to an indictable offence is taken to
include a reference to an offence that may be prosecuted on
indictment; and
(b) in order to determine the sentence that may be imposed on a
person by a court pursuant to the relevant law, the person is
taken to have been prosecuted and convicted on indictment in
that court.
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Criminal jurisdiction Division 2
Section 1338B
Corporations Act 2001 463
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(6) Subject to subsection (8), the jurisdiction conferred on a State or
Territory court by subsection (1) is conferred despite any limits as
to locality of the jurisdiction of that court under the law of that
State or Territory.
(7) If:
(a) jurisdiction is conferred on a State or Territory court in
relation to the summary conviction of persons charged with
offences against the Corporations legislation by
subsection (1); and
(b) the court is satisfied that it is appropriate to do so, having
regard to all the circumstances including the public interest;
the court may decline to exercise that jurisdiction in relation to an
offence committed in another State or Territory.
(8) The jurisdiction conferred on a court of a State, the Capital
Territory or the Northern Territory by subsection (1) in relation to:
(a) the examination and commitment for trial on indictment; and
(b) the trial and conviction on indictment;
of offenders or persons charged with offences against the
Corporations legislation is conferred only in relation to:
(c) offences committed outside Australia; and
(d) offences committed, begun or completed in the State or the
Territory concerned.
(9) In this section:
appeal includes an application for a new trial and a proceeding to
review or call in question the proceedings, decision or jurisdiction
of a court or judge.
Australia does not include the coastal sea.
relevant law means a law providing that where, in proceedings
before a court, a person pleads guilty to a charge for which he or
she could be prosecuted on indictment, the person may be
committed, to a court having jurisdiction to try offences on
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Part 9.6A Jurisdiction and procedure of Courts
Division 2 Criminal jurisdiction
Section 1338C
464 Corporations Act 2001
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indictment, to be sentenced or otherwise dealt with without being
tried in that last-mentioned court.
1338C Laws to be applied
(1) Subject to this Division, the laws of a State, the Capital Territory or
the Northern Territory respecting:
(a) the arrest and custody in the State or Territory of offenders or
persons charged with offences; and
(b) criminal procedure in the State or Territory in relation to such
persons; and
(c) the rules of evidence applied in criminal procedure in the
State or Territory in relation to such persons;
apply in the State or Territory, so far as they are applicable, to
persons who are charged with offences against the Corporations
legislation.
(2) In this section:
criminal procedure means the procedure for:
(a) the summary conviction; and
(b) the examination and commitment for trial on indictment; and
(c) the trial and conviction on indictment; and
(d) the hearing and determination of appeals arising out of any
such trial or conviction or out of any related proceedings;
of offenders or persons charged with offences, and includes the
procedure for holding accused persons to bail.
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Miscellaneous Chapter 9
Unclaimed property Part 9.7
Section 1339
Corporations Act 2001 465
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Part 9.7—Unclaimed property
1339 ASIC to deal with unclaimed property
(1) Unclaimed property held by ASIC is to be dealt with in accordance
with this Part.
Note: Unclaimed property is held by ASIC for and on behalf of the
Commonwealth (see subsections 8(3) and (4) of the ASIC Act).
(2) If property (other than money) becomes unclaimed property, ASIC
must, on behalf of the Commonwealth, sell or dispose of the
property as ASIC thinks fit.
1340 No liability to pay calls on shares etc.
Where unclaimed property is or includes shares in a body
corporate, neither the Commonwealth nor ASIC is subject to any
obligation:
(a) to pay any calls; or
(b) to make any contribution to the debts and liabilities of the
body corporate; or
(c) to discharge any other liability; or
(d) to do any other act or thing;
in respect of the shares, whether the obligation arises before or
after the shares become unclaimed property, but this section does
not affect the right of a body corporate to forfeit a share.
1341 Entitlement to unclaimed property
(1) If:
(a) unclaimed property is or was held by ASIC; and
(b) the unclaimed property is an amount of money; and
(c) a person claims to be entitled to that amount; and
(d) ASIC is satisfied that the person is entitled to that amount;
ASIC must:
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Part 9.7 Unclaimed property
Section 1341
466 Corporations Act 2001
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(e) pay the person an amount equal to that amount; and
(f) do so out of money appropriated by the Parliament for the
purposes of this section.
(2) If:
(a) ASIC has, under subsection 1339(2), sold or disposed of
unclaimed property; and
(b) the amount of the proceeds is or was held by ASIC; and
(c) a person claims to be entitled to that amount; and
(d) ASIC is satisfied that the person is entitled to that amount;
ASIC must:
(e) pay the person an amount equal to that amount; and
(f) do so out of money appropriated by the Parliament for the
purposes of this section.
(3) A person who is dissatisfied with the decision of ASIC in respect
of a claim made by the person in accordance with subsection (1) or
(2) may appeal to the Court and the Court may confirm, disallow
or vary the decision of ASIC.
(3A) If ASIC pays an amount to a person under subsection (1) or (2) on
or after 1 July 2013, ASIC must:
(a) also pay to the person the amount of interest (if any) worked
out in accordance with the regulations; and
(b) do so out of money appropriated by the Parliament for the
purposes of this section.
(3B) Regulations made for the purposes of paragraph (3A)(a) may
prescribe different rates for different periods over which the
interest accrues. For this purpose, rate includes a nil rate.
(3C) Interest under subsection (3A) does not accrue in relation to a
period before 1 July 2013.
(4) Where a person claims to be entitled to money that has been paid
to another person in accordance with this section, neither the
Commonwealth nor ASIC is under any liability to that
first-mentioned person in respect of that money, but, if the
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Section 1342
Corporations Act 2001 467
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first-mentioned person is entitled to that money, that person may
recover that money from the other person.
1342 Commonwealth or ASIC not liable for loss or damage
Neither the Commonwealth nor ASIC is liable for any loss or
damage suffered by a person arising out of the exercise of, or the
failure to exercise, any of the powers which are conferred on ASIC
under this Part or which ASIC has in relation to unclaimed
property.
1343 Disposal of securities if whereabouts of holder unknown
Where a person has been shown in an appropriate register of a
company as the holder of securities of the company for a period of
at least 6 years and the company has, for a period of at least 6
years:
(a) had reasonable grounds for believing that the person was not
residing at the address shown in the register as the person’s
address; and
(b) on each occasion during that last-mentioned period when,
whether or not in accordance with a provision of this Act, it
sought to communicate with the person, being unable after
the exercise of reasonable diligence to do so;
the company may, by executing a transfer for and on behalf of the
person, transfer to ASIC:
(c) the securities; and
(d) any rights in respect of the securities;
to be dealt with under this Part.
1343A Disposal of interests in registered scheme if whereabouts of
member unknown
If, during a period of at least 6 years while a person has been
shown in the register of members of a registered scheme as the
holder of interests in the scheme:
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Section 1343A
468 Corporations Act 2001
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(a) the responsible entity has had reasonable grounds for
believing that the person was not residing at the address
shown in the register as their address; and
(b) the responsible entity’s attempts to communicate with the
person have been made using reasonable diligence but have
all been unsuccessful;
the responsible entity may, by executing a transfer for and on
behalf of the person, transfer the interests and any rights in respect
of them to ASIC to be dealt with under this Part.
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Miscellaneous Part 9.9
Section 1344
Corporations Act 2001 469
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Part 9.9—Miscellaneous
1344 Use of ABN
Despite any provision in this Act or any other Act, in any case
where:
(a) the ACN of a company; or
(b) the ARBN of a registered body; or
(c) the ARSN of a registered scheme;
is required or permitted to be used under a law of the
Commonwealth administered by ASIC, the ABN of the company,
body or scheme may be used instead if the last 9 digits of the ABN
are the same, and in the same order, as the last 9 digits of the ACN,
ARBN or ARSN.
1345A Minister may delegate prescribed functions and powers
under this Act
(1) The Minister may, by signed instrument, delegate to an officer of
the Department such of the Minister’s functions and powers under
this Act as are prescribed.
(1A) The Minister may, by signed instrument, delegate the function or
power under subsection 147(2) or 601DC(2) to:
(a) a member of ASIC (within the meaning of paragraph (a) of
the definition of member in subsection 5(1) of the Australian
Securities and Investments Commission Act 2001); or
(b) a staff member of ASIC.
(2) A delegate is, in the performance or exercise of a delegated
function or power, subject to the Minister’s directions.
1346 Non-application of rule against perpetuities to certain schemes
(1) The rules of law relating to perpetuities do not apply, and are taken
never to have applied, to the trusts of any fund or scheme for the
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Part 9.9 Miscellaneous
Section 1348
470 Corporations Act 2001
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benefit of any employee of a corporation, whether the fund or
scheme was established before, or is established after, the
commencement of this section.
(2) In this section:
(a) a reference to a corporation includes a reference to a body
corporate or society incorporated or formed, or otherwise
duly constituted, whether before, at or after the
commencement of this section, by or under:
(i) a law of the Commonwealth, of a State or Territory, of
an external Territory or of a country outside Australia
and the external Territories; or
(ii) letters patent or a royal charter; and
(b) a reference to a fund or scheme includes a reference to a
provident, superannuation, sick, accident, assurance,
unemployment, pension or co-operative benefit fund,
scheme, arrangement or provision or other like fund, scheme,
arrangement or provision; and
(c) a reference to an employee of a corporation includes a
reference to:
(i) a director of the corporation; and
(ii) a spouse, child, grandchild, parent or any dependant of
an employee or of a director of the corporation.
1348 Operation of Life Insurance Act
Nothing in this Act is taken to affect any of the provisions of the
Life Insurance Act 1995.
1349 Privilege against exposure to penalty—disqualification etc.
Court or Tribunal proceeding
(1) In the case of:
(a) a civil or criminal proceeding under, or arising out of, this
Act or the ASIC Act; or
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(b) a proceeding before the Tribunal arising out of this Act or the
ASIC Act;
a person is not entitled to refuse or fail to comply with a
requirement:
(c) to answer a question or give information; or
(d) to produce a book or any other thing; or
(e) to do any other act whatever;
on the ground that the answer or information, production of the
book or other thing, or doing that other act, as the case may be,
might tend to make the person liable to a penalty by way of:
(f) a disqualification under Part 2D.6 of this Act; or
(g) a declaration under section 853C of this Act; or
(h) a suspension or cancellation under section 915B of this Act;
or
(i) a suspension or cancellation under section 915C of this Act;
or
(j) a banning order under section 920A of this Act; or
(k) an order under section 921A of this Act; or
(l) a cancellation or suspension under Division 3 of Part 9.2 of
this Act; or
(m) a requirement to give an undertaking under
paragraph 1292(9)(b) or (c) of this Act; or
(n) a cancellation or suspension under Division 2 of Part 9.2A of
this Act; or
(na) a direction under section 40-15 of Schedule 2; or
(nb) a decision of a kind mentioned in section 40-55 of
Schedule 2; or
(nc) a cancellation or suspension under Division 40 of
Schedule 2; or
(o) an order under section 12GLD of the ASIC Act.
(2) Subsection (1) applies whether or not the person is a defendant in,
or a party to, the proceeding or any other proceeding.
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Section 1349
472 Corporations Act 2001
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Statutory requirement
(3) A person is not entitled to refuse or fail to comply with a
requirement under this Act or the ASIC Act:
(a) to answer a question or give information; or
(b) to produce a book or any other thing; or
(c) to do any other act whatever;
on the ground that the answer or information, production of the
book or other thing, or doing that other act, as the case may be,
might tend to make the person liable to a penalty by way of:
(d) a disqualification under Part 2D.6 of this Act; or
(e) a declaration under section 853C of this Act; or
(f) a suspension or cancellation under section 915B of this Act;
or
(g) a suspension or cancellation under section 915C of this Act;
or
(h) a banning order under section 920A of this Act; or
(i) an order under section 921A of this Act; or
(j) a cancellation or suspension under Division 3 of Part 9.2 of
this Act; or
(k) a requirement to give an undertaking under
paragraph 1292(9)(b) or (c) of this Act; or
(l) a cancellation or suspension under Division 2 of Part 9.2A of
this Act; or
(la) a direction under section 40-15 of Schedule 2; or
(lb) a decision of a kind mentioned in section 40-55 of
Schedule 2; or
(lc) a cancellation or suspension under Division 40 of
Schedule 2; or
(m) an order under section 12GLD of the ASIC Act.
Admissibility
(4) Paragraph 597(12A)(d) of this Act, and paragraph 68(3)(b) of the
ASIC Act, do not apply to a proceeding for the imposition of a
penalty by way of:
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(a) a disqualification under Part 2D.6 of this Act; or
(b) a declaration under section 853C of this Act; or
(c) a suspension or cancellation under section 915B of this Act;
or
(d) a suspension or cancellation under section 915C of this Act;
or
(e) a banning order under section 920A of this Act; or
(f) an order under section 921A of this Act; or
(g) a cancellation or suspension under Division 3 of Part 9.2 of
this Act; or
(h) a requirement to give an undertaking under
paragraph 1292(9)(b) or (c) of this Act; or
(i) a cancellation or suspension under Division 2 of Part 9.2A of
this Act; or
(ia) a direction under section 40-15 of Schedule 2; or
(ib) a decision of a kind mentioned in section 40-55 of
Schedule 2; or
(ic) a cancellation or suspension under Division 40 of
Schedule 2; or
(j) an order under section 12GLD of the ASIC Act.
Other provisions
(5) Subsections (1) and (3) have effect despite anything in:
(a) section 1317L; or
(b) any other provision of this Act; or
(c) the ASIC Act; or
(d) the Administrative Appeals Tribunal Act 1975.
Definition
(6) In this section:
penalty includes forfeiture.
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Part 9.9 Miscellaneous
Section 1350
474 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
1350 Compensation for compulsory acquisition
(1) If:
(a) apart from this section, the operation of this Act would result
in the acquisition of property from a person otherwise than
on just terms; and
(b) the acquisition would be invalid because of
paragraph 51(xxxi) of the Constitution;
the person who acquires the property is liable to pay compensation
of a reasonable amount to the person from whom the property is
acquired in respect of the acquisition.
(2) If the 2 people do not agree on the amount of the compensation, the
person to whom compensation is payable may institute proceedings
in the Court for the recovery of such reasonable amount as the
court determines from the other person.
(3) Any damages or compensation recovered or other remedy given in
a proceeding that is commenced otherwise than under this section
is to be taken into account in assessing compensation payable in a
proceeding that is commenced under this section and that arises out
of the same event or transaction.
(4) In this section:
acquisition of property has the same meaning as in
paragraph 51(xxxi) of the Constitution.
just terms has the same meaning as in paragraph 51(xxxi) of the
Constitution.
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Fees imposed by the Corporations (Fees) Act 2001 and the Corporations (Review Fees)
Act 2003 Part 9.10
Section 1351
Corporations Act 2001 475
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Part 9.10—Fees imposed by the Corporations
(Fees) Act 2001 and the Corporations
(Review Fees) Act 2003
1351 Fees are payable to the Commonwealth
(1) The fees imposed under the Corporations (Fees) Act 2001 are
payable to the Commonwealth.
(2) The fees imposed under the Corporations (Review Fees) Act 2003
are payable to the Commonwealth.
(3) The date on which a fee imposed under the Corporations (Review
Fees) Act 2003 becomes due and payable is worked out under this
table.
Due date for review fees
Item For a review fee imposed on... The due date is...
1 a company 2 months after the review date to
which the fee relates
2 a registered scheme 2 months after the review date to
which the fee relates
3 a registered Australian body the date prescribed by the
regulations
4 a natural person registered as an
auditor under Part 9.2
the date prescribed by the
regulations
6 a person holding an Australian
financial services licence under
Part 7.6
the date prescribed by the
regulations
(4) However, a fee imposed under the Corporations (Review Fees) Act
2003 is not payable to the Commonwealth by a company in
relation to a review date in a year if:
(a) both of the following apply:
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(Review Fees) Act 2003
Section 1354
476 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
(i) ASIC has given notice of the proposed deregistration of
the company in accordance with
paragraph 601AA(4)(c), and published notice of the
proposed deregistration of the company in accordance
with paragraph 601AA(4)(d);
(ii) the review date for that year falls in the 2 month period
before or after the publication of the notice published in
accordance with paragraph 601AA(4)(d); or
(b) in the case of a company, a registered scheme or a registered
Australian body—the company, scheme or body has, in a
previous year, paid the fee in respect of the review date for
that year in accordance with regulations made under the
Corporations (Review Fees) Act 2003 for the purposes of this
section.
1354 Lodgment of document without payment of fee
(1) This section applies where:
(a) a fee is payable under section 1351 for the lodgment of a
document; and
(b) the document was submitted for lodgment without payment
of the fee.
(2) The document is not taken not to have been lodged merely because
of non-payment of the fee.
1355 Doing act without payment of fee
If a fee is payable under section 1351 for a matter involving the
doing of an act by the Minister or ASIC, the Minister or ASIC may
refuse to do that act until the fee is paid.
1356 Effect of sections 1354 and 1355
Sections 1354 and 1355 have effect despite anything in another
Part of this Act.
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Fees imposed by the Corporations (Fees) Act 2001 and the Corporations (Review Fees)
Act 2003 Part 9.10
Section 1359
Corporations Act 2001 477
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1359 Waiver and refund of fees
Nothing in this Part, the Corporations (Fees) Act 2001 or the
Corporations (Review Fees) Act 2003 prevents the Commonwealth
from:
(a) waiving or reducing, in a particular case or in particular
classes of cases, fees that would otherwise be payable under
this Act; or
(b) refunding, in whole or in part, in a particular case or in
particular classes of cases, fees paid under this Act.
1360 Debts due to the Commonwealth
ASIC may, on behalf of the Commonwealth, recover a debt due
under this Part.
1362 Payment of fee does not give right to inspect or search
To avoid doubt, nothing in this Part, and nothing done under this
Part:
(a) imposes on ASIC a duty to allow the inspection or search of
a register or document, or to make available information; or
(b) confers a right to inspect or search a register or document or
to have information made available;
except so far as such a duty or right would, but for the effect of
section 1355, exist under a provision of another Part of this Act or
under some other law.
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Part 9.12 Regulations
Section 1363
478 Corporations Act 2001
Compilation No. 79 Compilation date: 1/7/17 Registered: 6/7/17
Part 9.12—Regulations
1363 Definitions
In this Part, unless the contrary intention appears:
prescribed means prescribed by the regulations.
the regulations means the regulations made under section 1364.
1364 Power to make regulations
(1) The Governor-General may make regulations prescribing matters:
(a) required or permitted by this Act to be prescribed by
regulations; or
(b) necessary or convenient to be prescribed by such regulations
for carrying out or giving effect to this Act.
(2) Without limiting subsection (1), the regulations may make
provision:
(c) for or in relation to the keeping of registers by ASIC, the
lodging of documents with ASIC, the registration of
documents by ASIC, the time and manner of lodging or
registration, and the requirements with which documents
lodged or to be lodged are to comply; and
(d) prescribing forms for the purposes of this Act and the method
of verifying any information required by or in those forms;
and
(e) prescribing the manner in which, the persons by whom, and
the directions or requirements in accordance with which, the
forms prescribed for the purposes of this Act, or any of them,
are required or permitted to be signed, prepared, or
completed, and generally regulating the signing, preparation
and completion of those forms, or any of them; and
(f) for or in relation to the convening of, conduct of, and
procedure and voting at, meetings of creditors, meetings of
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eligible employee creditors, meetings of contributories and
meetings of holders of debentures, and joint meetings of
creditors and members of companies, the number of persons
required to constitute a quorum at any such meeting, the
sending of notices of meetings to persons entitled to attend at
meetings, the lodging of copies of notices of, and of
resolutions passed at, meetings, and generally regulating the
conduct of, and procedure at, any such meeting; and
(g) prescribing the persons by whom, and the circumstances and
manner in which, proxies may be appointed and generally
regulating the appointment and powers of proxies; and
(h) for or in relation to the proving of debts in the winding up of
a company, the manner of proving debts and the time within
which debts are required or permitted to be proved and
generally regulating the proving of debts; and
(j) prescribing the manner in which a liquidator appointed by the
Court may:
(i) exercise powers and perform functions under
subsection 478(1); and
(ii) exercise any powers conferred, and perform any duties
imposed, on the liquidator by regulations made for the
purposes of subsection 488(1); and
(k) prescribing the manner in which a liquidator in a voluntary
winding up may exercise powers and perform functions
under section 506; and
(m) prescribing times for the lodging of any documents; and
(n) prescribing penalties for late payment of a review fee
imposed by the Corporations (Review Fees) Act 2003; and
(o) prescribing that, in relation to the payment of a fee imposed
by the Corporations (Fees) Act 2001 or the Corporations
(Review Fees) Act 2003, in the event that the fee is paid by
electronic means, a refund of an amount or proportion of the
fee is payable; and
(s) for or in relation to the giving to ASIC of information in
addition to, or in variation of, the information contained in a
prescribed form lodged with it; and
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(t) for or in relation to the times within which information
required to be given to ASIC under this Act must be so
given; and
(u) for or in relation to the manner in which:
(i) orders made under this Act may be served on persons
affected by the orders; and
(ii) documents that are required or permitted by this Act to
be served on a person may be so served; and
(w) prescribing penalties not exceeding 50 penalty units for
contraventions of the regulations.
Note: Because of section 1312, if a body corporate is convicted of an
offence against the regulations a court may impose a penalty of up to
5 times the penalty specified for the offence.
1365 Scope of particular regulations
Except as otherwise expressly provided in this Act, the regulations
may be of general or specially limited application or may differ
according to differences in time, locality, place or circumstance.
1366 Verifying or certifying documents
The regulations may:
(a) where documents required by or under this Act to be lodged
in accordance with this Act are required to be verified or
certified and no manner of verification or certification is
prescribed by or under this Act—require that the documents
or any of them be verified or certified by statement in writing
made by such persons as are prescribed by the regulations;
and
(b) where no express provision is made in this Act for
verification or certification of documents—require that the
documents be verified or certified by statement in writing by
such persons as are prescribed.
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1367 Documents lodged by an agent
The regulations may provide, in such cases as are prescribed, that,
if a document that is required by or under this Act to be lodged is
signed or lodged on behalf of a person by an agent duly authorised
by writing, there must be:
(a) lodged with; or
(b) endorsed on; or
(c) annexed to;
that document, the original, or a verified copy, of the authority.
1367A Publication in the prescribed manner
(1) If a particular provision of this Act requires a person (other than
ASIC) to:
(a) publish a notice, or a copy of a notice, in the prescribed
manner; or
(b) cause a notice, or a copy of a notice, to be published in the
prescribed manner;
the regulations may provide that:
(c) the person is taken to have complied with that requirement if,
and only if, the person lodges the notice or copy under
subsection (2); and
(d) if the person lodges the notice or copy under subsection (2),
ASIC must publish the notice or copy in the manner specified
in the regulations.
(2) A person may lodge a notice, or a copy of a notice, under this
subsection if the notice or copy is covered by regulations made for
the purposes of subsection (1).
1368 Exemptions from Chapter 6D or 7
The regulations may provide that, subject to any prescribed terms
and conditions, Chapter 6D or 7, or specified provisions of
Chapter 6D or 7:
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(a) do not have effect in relation to a specified person or class of
persons; or
(b) have effect in relation to a specified person or class of
persons to such extent only as is prescribed; or
(c) do not have effect in relation to a specified transaction or
class of transactions; or
(d) do not have effect in relation to a specified transaction or
class of transactions entered into by a specified person or
class of persons;
and may provide that a contravention of a prescribed term or
condition is an offence against the regulations.
1369 Penalty notices
(1) The regulations:
(a) may prescribe offences against this Act (not being offences
the penalties applicable to which include a term of
imprisonment or a pecuniary penalty that exceeds $1,000), or
offences against the regulations, for the purposes of
section 1313; and
(b) must, in relation to each offence that is prescribed under this
subsection:
(i) prescribe the particulars of that offence that are to be
given in a notice served on a person under that section
in relation to the offence; and
(ii) prescribe the amount of the penalty (being not more
than half the amount of the penalty applicable to the
offence) that is payable in respect of the offence under a
notice served on a person under that section in relation
to the offence.
(2) In subsection (1), a reference to a penalty applicable to an offence
is a reference to the penalty that is applicable to that offence
because of any of the provisions of section 1311.
(3) The particulars of an offence required to be prescribed by
subparagraph (1)(b)(i) may be prescribed by being set out in the
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form prescribed for the purposes of section 1313 in relation to the
offence.
1369A State termination of reference
(1) The regulations may make provision in relation to circumstances
that arise because a State ceases to be a referring State.
Note: For example, the regulations may prevent companies that have their
registered office or financial records in the State from committing
offences and give them time to relocate their office or records.
(2) Without limiting subsection (1), regulations made under that
subsection may modify the operation of this Act in relation to the
circumstances dealt with in the regulations.
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