EXPLANATORY STATEMENT

 

Select Legislative Instrument 2010 No. 278

 

Subject Australian Securities and Investments Commission Act 2001

 

Australian Securities and Investments Commission Amendment Regulations 2010 (No. 4)

 

 

The Australian Securities and Investments Commission Act 2001 (the Act) and the Australian Securities and Investments Commission Regulations 2001 (the Principal Regulations) provide for the establishment of the Australian Securities and Investments Commission as a statutory body to regulate companies and the financial services markets and contains provisions relating to unconscionable conduct and consumer protection.

 

Subsection 251(1) of the Act provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

 

The Act and the Principal Regulations are amended to reflect changes to the Trade Practices Act 1974 and the implementation of the Australian Consumer Law (ACL), which will apply to all non-financial services transactions from 1 January 2011.

 

Section 12BEA of the Act provides for a presumption that a person asserts a right to payment, amongst other things, if they send an invoice or other document that seeks payment without complying with requirements prescribed in the regulations.

 

Paragraphs 12DM(1AA)(b) and 12DMB(2)(b) of the Act prohibit a person from sending an invoice or other document to others seeking payment for unsolicited financial services without complying with requirements prescribed in the regulations.

 

The Regulations prescribe informational requirements for invoices that, if complied with, would allow a person to avoid the presumption that they have asserted a right to payment. The amendments also provide recipients of requests for payment for unsolicited financial services with information that limits the scope for confusion about obligations to pay other people money in response to documents that assert a right to payment.

 

For the purpose of section 12BEA and paragraphs 12DM(1AA)(b) and 12DMB(2)(b) of the Act, the Regulations require a statement to include the text ‘This is not a bill. You are not required to pay any money.’. This text must also be the most prominent text in the document.

 

Under the Corporations Agreement 2002 (the Corporations Agreement), the state and territory (state) governments referred their constitutional powers with respect to corporate regulation to the Commonwealth. Under subclauses 506(1) and 507(1) of the Corporations Agreement, the Commonwealth is required to consult with state ministers of the Ministerial Council for Corporations (the Council) before making a regulation under the national law. The Council has been consulted about the regulations as required by the Corporations Agreement.¹ Paragraph 507(1)(f) and subclause 511(2) of the Corporations Agreement provide that approval of the Council and the usual public exposure period are not required for amendments to regulations relating to financial products and services.

 

The Act does not specify any conditions that need to be satisfied before the power to make the Regulations may be exercised.

 

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

The Regulations commence on 1 January 2011.

 

 

Authority: Subsection 251(1) of the Australian Securities and Investments Commission Act 2001