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CORPORATIONS AMENDMENT REGULATIONS 2003 (NO. 9) 2003 NO. 367
Statutory Rules 2003 No. 367
Corporations Amendment Regulations 2003 (No. 9)
Subsection 1364(1) of the Corporations Act 2001 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed by regulations or necessary or convenient to be prescribed by such regulations for carrying out or giving effect to the Act.
Paragraphs 792B(2)(b) and (c) of the Act require holders of a licence to operate a financial market in Australia to notify the Australian Securities and Investments Commission (ASIC) of breaches or disciplinary action involving market participants and other persons. An inappropriate and unintended consequence of these provisions is that it imposes a burden on foreign-based market licensees in the case where such information does not affect Australian persons. In addition, certain foreign-based market licensees could not comply with these requirements without breaching their home jurisdiction's regulatory regime.
The purpose of the Regulations is to partially exempt foreign-based market licensees from the requirement to inform the ASIC of breaches or disciplinary action involving non-Australian market participants and other persons. A partial exemption would also be provided where an overseas regulatory regime precludes a foreign-based market licensee from providing information directly to ASIC.
The Ministerial Council for Corporations has been consulted about the Regulations as required by the Corporations Agreement 2002. The approval of the Ministerial Council is not required for amendments to regulations relating to the securities industry.
Details of the Regulations are in the Attachment.
The Regulations commence on gazettal.
Authority: Section 1364 of the Corporations Act 2001
Details of the Corporations Amendment Regulations 2003 (No. 9)
Regulation 1: Name of Regulations
Regulation 1 provides that the proposed Regulations are to be known as the Corporations Amendment Regulations 2003 (No. 9).
Proposed Regulation 2: Commencement
Regulation 2 provides that the proposed regulations commence on gazettal.
Proposed Regulation 3: Amendment of Corporations Regulations 2001
Regulation 3 provides that Schedule 1 amends the Corporations Regulations 2001.
Schedule 1: Amendment
Paragraphs 792B(2)(b) and (c) of the Corporations Act 2001 require market licensees to notify ASIC of breaches or disciplinary action involving market participants and other persons.
Item 1 inserts new regulation 9.12.03 that prescribes that, for foreign-based licensees, the requirement to notify ASIC would be confined to disciplinary action against an Australian participant, contraventions by an Australian participant, or actions or contraventions which may have an impact on an Australian participant or Australian client.
If an overseas licensee's relevant (overseas) regulatory regime does not permit giving notice to ASIC directly, a foreign-based market licensee will be deemed to have complied with paragraph 792B(2)(c) if they give the relevant information to the relevant (overseas) regulator, tell ASIC that they have given the relevant information to that regulator, and arrangements exist for the information to be then passed to ASIC by that regulator.