COPORA~2.DOC - Corporations Act 2001 No 50 2001 Compilation...

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Unformatted text preview: Corporations Act 2001 No. 50, 2001 Compilation No. 80 Compilation date: 42996.58 Includes amendments up to: Act No. 112, 2017 Registered: 42999.5842999.58 This compilation is in 6 volumes Volume 1: Volume 2: Volume 3: Volume 4: Volume 5: Volume 6: sections 1–260E sections 283AA–601DJ sections 601EA–742 sections 760A–993D sections 1010A–1369A sections 1370–1637 Schedules Endnotes Each volume has its own contents Prepared by the Office of Parliamentary Counsel, Canberra 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 42996.58 (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 ( ). 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 Self-repealing provisions If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes. Contents Chapter 7—Financial services and markets 1 Part 7.1—Preliminary 1 Division 1—Object of Chapter and outline of Chapter 760A 760B 1 Object of Chapter..............................................................................1 Outline of Chapter.............................................................................1 Division 2—Definitions 3 Definitions........................................................................................3 Meaning of arrangement—2 or more arrangements that together form a derivative or other financial product......................17 761C Meaning of carry on a financial services business..........................17 761CA Meaning of class and kind of financial products and financial services...........................................................................................17 761D Meaning of derivative.....................................................................17 761E Meaning of issued, issuer, acquire and provide in relation to financial products............................................................................19 761EA Meaning of margin lending facility, margin call and associated expressions.....................................................................22 761F Meaning of person—generally includes a partnership.....................25 761FA Meaning of person—generally includes multiple trustees...............26 761G Meaning of retail client and wholesale client..................................28 761GA Meaning of retail client—sophisticated investors............................33 761H References to this Chapter include references to regulations or other instruments made for the purposes of this Chapter.............34 761A 761B Division 3—What is a financial product? 36 Subdivision A—Preliminary 762A 762B 762C 36 Overview of approach to defining what a financial product is ........................................................................................................36 What if a financial product is part of a broader facility?..................36 Meaning of facility..........................................................................37 Subdivision B—The general definition 763A 763B 763C 763D 763E 37 General definition of financial product...........................................37 When a person makes a financial investment..................................38 When a person manages financial risk............................................39 When a person makes non-cash payments......................................39 What if a financial product is only incidental?................................40 Subdivision C—Specific inclusions 764A 41 Specific things that are financial products (subject to Subdivision D)................................................................................41 Subdivision D—Specific exclusions 765A 44 Specific things that are not financial products.................................44 Corporations Act 2001 Compilation No. Compilation date: Registered: Division 4—When does a person provide a financial service? 766A 766B 766C 766D 766E 48 When does a person provide a financial service?............................48 Meaning of financial product advice...............................................49 Meaning of dealing.........................................................................52 Meaning of makes a market for a financial product.........................54 Meaning of provide a custodial or depository service.....................54 Division 5—What is a financial market? 767A 56 What is a financial market?.............................................................56 Division 6—What is a clearing and settlement facility? 768A 57 What is a clearing and settlement facility?......................................57 Division 7—General provisions relating to civil and criminal liability 769A 769B 769C 59 Part 2.5 of Criminal Code does not apply........................................59 People are generally responsible for the conduct of their agents, employees etc......................................................................59 Representations about future matters taken to be misleading if made without reasonable grounds................................................62 Part 7.2—Licensing of financial markets 64 Division 1—Preliminary 790A 64 Definition........................................................................................64 Division 2—Requirement to be licensed 791A 791B 791C 791D 65 Need for a licence............................................................................65 Other prohibitions on holding out...................................................65 Exemptions by Minister..................................................................65 When a market is taken to be operated in this jurisdiction...............67 Division 3—Regulation of market licensees 68 Subdivision A—Licensee’s obligations 792A 792B 792C 792D 792E 792F 792G 792H 68 General obligations.........................................................................68 Obligation to notify ASIC of certain matters...................................69 Giving ASIC information about a listed disclosing entity................71 Obligation to assist ASIC................................................................71 Obligation to give ASIC access to market facilities.........................72 Annual report..................................................................................72 Obligations to notify people about clearing and settlement arrangements in certain circumstances............................................73 Change of country by foreign licensee............................................74 Corporations Act 2001 Compilation No. Compilation date: Registered: 792I Making information about compensation arrangements publicly available............................................................................75 Subdivision B—The market’s operating rules and procedures 793A 793B 793C 793D 793E 75 Content of the operating rules and procedures.................................75 Legal effect of operating rules.........................................................75 Enforcement of operating rules.......................................................76 Changing the operating rules...........................................................77 Disallowance of changes to operating rules.....................................78 Subdivision C—Powers of the Minister and ASIC 794A 794B 794C 794D 794E 79 Minister’s power to give directions.................................................79 Minister’s power to require special report.......................................79 ASIC assessment of licensee’s compliance.....................................80 ASIC’s power to give directions......................................................81 Additional directions to clearing and settlement facilities...............82 Division 4—The Australian market licence 84 Subdivision A—How to get a licence 795A 795B 795C 795D 795E 84 How to apply for a licence..............................................................84 When a licence may be granted.......................................................84 Publication of notice of licence grant..............................................86 More than one licence in the same document..................................87 More than one market covered by the same licence........................87 Subdivision B—The conditions on the licence 796A 87 The conditions on the licence..........................................................87 Subdivision C—When a licence can be varied, suspended or cancelled 797A 797B 797C 797D 797E 797F 797G 89 Varying licences..............................................................................89 Immediate suspension or cancellation.............................................89 Suspension or cancellation following hearing and report................90 Effect of suspension........................................................................91 Variation or revocation of suspension..............................................91 Publication of notice of licence suspension or cancellation.............91 Suspension and cancellation only in accordance with this Subdivision.....................................................................................92 Division 5—Other matters 798A 798B 798C 93 Matters to be taken into account by the Minister.............................93 ASIC may give advice to Minister..................................................94 Market licensee or related body corporate etc. listing on market.............................................................................................94 Corporations Act 2001 Compilation No. Compilation date: Registered: 798D Exemptions and modifications for self-listing licensees or related bodies corporate etc.............................................................96 798DA Market licensee, related body corporate etc. or competitor participating in market....................................................................97 798E Other potential conflict situations....................................................99 Part 7.2A—Supervision of financial markets 798F 798G 798H 798J 798K 798L 798M 100 ASIC to supervise financial markets.............................................100 Market integrity rules....................................................................100 Complying with market integrity rules..........................................101 Directions by ASIC.......................................................................101 Alternatives to civil proceedings...................................................103 Exemptions and modifications by regulations...............................103 Exemptions by Minister................................................................104 Part 7.3—Licensing of clearing and settlement facilities 106 Division 1—Requirement to be licensed 820A 820B 820C 820D 106 Need for a licence..........................................................................106 Other prohibitions on holding out..................................................106 Exemptions by Minister................................................................107 When a clearing and settlement facility is taken to be operated in this jurisdiction...........................................................108 Division 2—Regulation of CS facility licensees 109 Subdivision A—Licensee’s obligations 821A 821B 821BA 821C 821D 821E 821F 109 General obligations.......................................................................109 Obligation to notify ASIC of certain matters.................................110 Obligation to notify Reserve Bank of certain matters....................112 Obligation to assist........................................................................112 Obligation to give ASIC access to the facility...............................113 Annual report................................................................................113 Change of country by foreign licensee..........................................114 Subdivision B—The facility’s operating rules and procedures 822A 822B 822C 822D 822E 115 Content of the operating rules and procedures...............................115 Legal effect of operating rules.......................................................115 Enforcement of operating rules.....................................................116 Changing the operating rules.........................................................117 Disallowance of changes to operating rules...................................117 Subdivision C—Powers of the Minister, ASIC and the Reserve Bank in relation to licensees 118 Corporations Act 2001 Compilation No. Compilation date: Registered: 823A 823B 823C 823CA 823D 823E Minister’s power to give directions...............................................118 Minister’s power to require special report.....................................119 ASIC assessment of licensee’s compliance....................................119 Reserve Bank assessment of licensee’s compliance......................120 Directions power—protecting dealings in financial products and ensuring fair and effective provision of services by CS facilities.........................................................................................121 Directions power—reduction of systemic risk...............................123 Division 3—The Australian CS facility licence 125 Subdivision A—How to get a licence 824A 824B 824C 824D 824E 125 How to apply for a licence.............................................................125 When a licence may be granted.....................................................125 Publication of notice of licence grant............................................127 More than one licence in the same document................................128 More than one CS facility covered by the same licence................128 Subdivision B—The conditions on the licence 825A 128 The conditions on the licence........................................................128 Subdivision C—When a licence can be varied, suspended or cancelled 826A 826B 826C 826D 826E 826F 826G 130 Varying licences............................................................................130 Immediate suspension or cancellation...........................................130 Suspension or cancellation following hearing and report..............131 Effect of suspension......................................................................132 Variation or revocation of suspension............................................132 Publication of notice of licence suspension or cancellation ......................................................................................................132 Suspension and cancellation only in accordance with this Subdivision...................................................................................132 Division 4—Other matters 827A 827B 827C 827D 134 Matters to be taken into account by the Minister...........................134 ASIC may give advice to Minister................................................135 Reserve Bank may give advice to Minister...................................135 Reserve Bank may determine financial stability standards............136 Part 7.4—Limits on involvement with licensees Division 1—Limit on control of certain licensees 138 138 Subdivision A—15% voting power limit 850A 138 Scope of Division..........................................................................138 Corporations Act 2001 Compilation No. Compilation date: Registered: 850B 850C 850D 850E Meaning of unacceptable control situation....................................138 Acquisitions of shares...................................................................139 Remedial orders............................................................................139 Injunctions.....................................................................................140 Subdivision B—Approval to exceed 15% voting power limit 851A 851B 851C 851D 851E 851F 851G 851H 851I 141 Application for approval to exceed 15% voting power limit ......................................................................................................141 Approval of application.................................................................141 Duration of approval.....................................................................142 Conditions of approval..................................................................143 Varying percentage approved........................................................144 Revoking an approval....................................................................145 Further information about applications..........................................146 Time limit for Minister’s decision.................................................146 Preservation of voting power in relation to bodies specified in regulations made for section 850A............................................147 Subdivision C—Other matters 852A 852B 148 Acquisition of property.................................................................148 Anti-avoidance..............................................................................148 Division 2—Individuals who are not fit and proper are disqualified 853A 853B 853C 853D 853E 853F 853G 150 Who is disqualified.......................................................................150 When an individual is involved in an operator...............................150 Declaration by ASIC.....................................................................150 Procedure for declaration..............................................................151 Revoking a declaration..................................................................152 Obligations on disqualified individuals.........................................152 Notification by ASIC.....................................................................153 Division 3—Miscellaneous 854A 854B 154 Record-keeping and giving of information....................................154 Exemptions and modifications by regulations...............................155 Part 7.5—Compensation regimes for financial markets 156 Division 1—Preliminary 880A 880B 156 Part does not apply to markets licensed under special provisions about overseas markets................................................156 Definitions.....................................................................................156 Corporations Act 2001 Compilation No. Compilation date: Registered: Division 2—When there must be a compensation regime 881A 881B 881C 881D 158 Licensed markets th...
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