A Bill for an Act to deal with consequential amendments and transitional matters arising from the enactment of the Financial Accountability Regime Act 2021 and to establish the financial services compensation scheme of last resort, and for related purposes
The Parliament of Australia enacts:
1 Short title
This Act is the Financial Sector Reform (Hayne Royal Commission Response No. 3) Act 2021.
2 Commencement
(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
| Commencement information |
| Column 1 | Column 2 | Column 3 |
| Provisions | Commencement | Date/Details |
| 1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table | The day after this Act receives the Royal Assent. | |
| 2. Schedule 1, Part 1 | At the same time as the Financial Accountability Regime Act 2021 commences. However, the provisions do not commence at all if that Act does not commence. | |
| 3. Schedule 1, Part 2 | The later of: (a) 1 July 2022; and (b) the day that is 6 months after the Financial Accountability Regime Act 2021 commences. However, the provisions do not commence at all if the event mentioned in paragraph (b) does not occur. | |
| 4. Schedule 2 | At the same time as the Financial Accountability Regime Act 2021 commences. However, the provisions do not commence at all if that Act does not commence. | |
| 5. Schedule 3 | At the same time as the Financial Services Compensation Scheme of Last Resort Levy Act 2021 commences. However, the provisions do not commence at all if that Act does not commence. | |
Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.
(2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.
3 Schedules
Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.
Schedule 1—Consequential amendments
Part 1—Amendments for the start of the financial accountability regime
Australian Prudential Regulation Authority Act 1998
1 Subsection 3(1) (after paragraph (b) of the definition of prudential regulation framework law)
Insert:
(ba) the Financial Accountability Regime Act 2021;
(bb) Schedules 1 and 2 to the Financial Sector Reform (Hayne Royal Commission Response No. 3) Act 2021;
2 Section 48
Omit “Under”, substitute “(1) Under”.
3 At the end of section 48
Add:
(2) Subsection (1) does not apply to an appointment made under, or for the purposes of, the Financial Accountability Regime Act 2021.
4 Paragraph 53(1)(d)
Repeal the paragraph, substitute:
(d) amounts of any fees, charges or penalties paid to APRA, on behalf of the Commonwealth, under section 51 or any other law of the Commonwealth except the following:
(i) Part 3A of the Financial Institutions Supervisory Levies Collection Act 1998;
(ii) the Financial Accountability Regime Act 2021;
5 Subsection 56(1) (after paragraph (cb) of the definition of protected document)
Insert:
; or (cc) a person in relation to whom information is, or was, required to be given under the Financial Accountability Regime Act 2021;
6 Subsection 56(1) (after paragraph (d) of the definition of protected document)
Insert:
(da) a document given or produced to ASIC under, or for the purposes of, a provision of the Financial Accountability Regime Act 2021, other than a document given or produced to ASIC by APRA; or
7 Subsection 56(1) (after paragraph (cb) of the definition of protected information)
Insert:
; or (cc) a person in relation to whom information is, or was, required to be given under the Financial Accountability Regime Act 2021;
8 Subsection 56(1) (after paragraph (d) of the definition of protected information)
Insert:
(da) information given or produced to ASIC under, or for the purposes of, a provision of the Financial Accountability Regime Act 2021, other than information given or produced to ASIC by APRA; or
9 Paragraph 56(2)(c)
Omit “or (7F)”, substitute “, (7F), (7G), (7H), (7J), (7K) or (7L)”.
10 After subsection 56(7F)
Insert:
(7G) It is not an offence if:
(a) the disclosure of protected information or the production of a protected document is to an accountable entity (within the meaning of the Financial Accountability Regime Act 2021); and
(b) the information, or the information contained in the document, as the case may be, is information contained in the register kept under section 40 of the Financial Accountability Regime Act 2021.
Note: A defendant bears an evidential burden in relation to the matters in subsection (7G) (see subsection 13.3(3) of the Criminal Code).
(7H) It is not an offence if:
(a) the disclosure of protected information or the production of a protected document is to an individual; and
(b) the information, or the information contained in the document, as the case may be, is only personal information about the individual; and
(c) the information, or the information contained in the document, as the case may be, is information contained in the register kept under section 40 of the Financial Accountability Regime Act 2021.
Note: A defendant bears an evidential burden in relation to the matters in subsection (7H) (see subsection 13.3(3) of the Criminal Code).
(7J) It is not an offence if:
(a) the disclosure of protected information or the production of a protected document is by APRA; and
(b) the information, or the information contained in the document, as the case may be, is information that discloses:
(i) whether a person is disqualified under section 42 of the Financial Accountability Regime Act 2021; or
(ii) a decision made under Division 2 of Part 3 of Chapter 3 of that Act (which is about disqualification of accountable persons), or the reasons for such a decision.
Note: A defendant bears an evidential burden in relation to the matters in subsection (7J) (see subsection 13.3(3) of the Criminal Code).
(7K) It is not an offence if the disclosure of protected information or the production of a protected document by a person is in accordance with section 39 of the Financial Accountability Regime Act 2021.
Note: A defendant bears an evidential burden in relation to the matters in subsection (7K) (see subsection 13.3(3) of the Criminal Code).
(7L) It is not an offence if:
(a) the disclosure of protected information or the production of a protected document is by ASIC, for the purposes of the performance of ASIC’s functions, or the exercise of ASIC’s powers; and
(b) the protected information was disclosed previously to ASIC, or the protected document was produced previously to ASIC, in accordance with section 39 of the Financial Accountability Regime Act 2021.
Note: A defendant bears an evidential burden in relation to the matters in subsection (7L) (see subsection 13.3(3) of the Criminal Code).
11 Paragraph 56(12)(a)
Omit “and (7F)”, substitute “, (7F), (7G), (7H), (7J), (7K) and (7L)”.
12 At the end of subsection 58(4)
Add:
; (d) section 101 or 102 of the Financial Accountability Regime Act 2021.
13 After paragraph 59(2)(ba)
Insert:
(bb) information about investigations (including joint investigations) conducted by APRA under Division 1 of Part 4 of Chapter 3 of the Financial Accountability Regime Act 2021 during the period;
14 After subsection 59(3)
Insert:
(4) Paragraph (2)(bb) does not authorise the inclusion in the annual report of information with respect to the affairs of a particular person.
Australian Securities and Investments Commission Act 2001
15 Subsection 12A(1)
Omit “Acts”.
16 At the end of subsection 12A(1)
Add:
(m) the Financial Accountability Regime Act 2021;
(n) Schedules 1 and 2 to the Financial Sector Reform (Hayne Royal Commission Response No. 3) Act 2021.
17 After subsection 127(6)
Insert:
(7) A person (the officer) commits an offence if:
(a) the officer is or has been:
(i) a member of ASIC; or
(ii) a staff member; or
(iii) a Commonwealth officer within the meaning of the Crimes Act 1914; and
(b) the officer intentionally or recklessly, and directly or indirectly:
(i) discloses information to any person or to a court; or
(ii) produces a document to any person or to a court; and
(c) if subparagraph (b)(i) applies—the information is protected information disclosed to, or obtained by, ASIC for the purposes of a function (a FAR‑related function) conferred on ASIC by:
(i) the Financial Accountability Regime Act 2021; or
(ii) Schedule 1 or 2 to the Financial Sector Reform (Hayne Royal Commission Response No. 3) Act 2021; and
(d) if subparagraph (b)(ii) applies—the document:
(i) is protected information and was given or produced to ASIC for the purposes of a FAR‑related function; or
(ii) contains protected information disclosed to, or obtained by, ASIC for the purposes of a FAR‑related function; and
(e) the officer acquired the information, or has or had access to the document, as the case may be, in the course of the officer’s duties as a member of ASIC, a staff member or a Commonwealth officer within the meaning of the Crimes Act 1914.
Penalty: Imprisonment for 2 years.
(7A) Subsection (7) does not apply if the disclosure or production constitutes authorised disclosure of the protected information for the purposes of subsection (1).
Note: A defendant bears an evidential burden in relation to the matter in this subsection (see subsection 13.3(3) of the Criminal Code).
(8) A document is an exempt document for the purposes of section 38 of the Freedom of Information Act 1982 if the document:
(a) is protected information and was given or produced to ASIC; or
(b) contains protected information disclosed to, or obtained by, ASIC;
for the purposes of a function conferred on ASIC by:
(c) the Financial Accountability Regime Act 2021; or
(d) Schedule 1 or 2 to the Financial Sector Reform (Hayne Royal Commission Response No. 3) Act 2021.
18 After paragraph 136(1)(d)
Insert:
(da) information about investigations (including joint investigations) conducted by ASIC under Division 1 of Part 4 of Chapter 3 of the Financial Accountability Regime Act 2021 during the period;
19 After subsection 136(2A)
Insert:
(3) Paragraph (1)(da) does not authorise the inclusion in the annual report of information with respect to the affairs of a particular person.
20 In the appropriate position
Insert:
Part 37—Transitional provisions relating to the Financial Sector Reform (Hayne Royal Commission Response No. 3) Act 2021
337 Application—confidentiality
The amendment of section 12A made by Part 1 of Schedule 1 to the Financial Sector Reform (Hayne Royal Commission Response No. 3) Act 2021, so far as it relates to the definition of protected information in subsection 127(9) of this Act, applies in relation to any use or disclosure of information after the commencement of that Part, whether ASIC obtained the information before or after that commencement.
338 Information to be included in ASIC’s annual report
The amendment of section 136 made by Part 1 of Schedule 1 to the Financial Sector Reform (Hayne Royal Commission Response No. 3) Act 2021 applies to reports on ASIC’s investigations during the financial year ending on 30 June 2023, and later financial years.
Banking Act 1959
21 After subparagraph 9A(2)(b)(ii)
Insert:
(iia) a requirement of the Financial Accountability Regime Act 2021;
22 After subparagraph 11AB(2)(a)(ii)
Insert:
(iia) a requirement of the Financial Accountability Regime Act 2021;
23 Paragraph 15D(1)(a)
After “the Financial Sector (Collection of Data) Act 2001”, insert “or the Financial Accountability Regime Act 2021”.
24 Paragraph 15D(1)(b)
Omit “that Act”, substitute “those Acts”.
25 Subsection 16B(1)
After “functions under this Act”, insert “or the Financial Accountability Regime Act 2021”.
26 Subparagraph 16BA(6)(a)(i)
Omit “the regulations or the Financial Sector (Collection of Data) Act 2001”, substitute “the regulations, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
27 Section 16C
Omit “this Act or the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
28 Paragraph 17(2)(a)
Omit “this Act or the prudential standards”, substitute “this Act, the prudential standards or the Financial Accountability Regime Act 2021”.
29 After subparagraph 20(1)(a)(ii)
Insert:
(iia) the Financial Accountability Regime Act 2021; or
30 Section 69BA
Omit “this Act or the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
Corporations Act 2001
31 After subparagraph 1317AA(5)(c)(iii)
Insert:
(iiia) the Financial Accountability Regime Act 2021;
Financial Regulator Assessment Authority Act 2021
32 Subparagraph 40(3)(a)(iv)
Omit “or”.
33 At the end of paragraph 40(3)(a)
Add:
(v) subsection 72(1) or section 73 of the Financial Accountability Regime Act 2021; or
Financial Sector (Transfer and Restructure) Act 1999
34 At the end of paragraph 36B(1A)(a)
Add:
(iv) section 64 of the Financial Accountability Regime Act 2021;
Insurance Act 1973
35 After subparagraph 15(1)(a)(ii)
Insert:
(iiaa) a requirement of the Financial Accountability Regime Act 2021; or
36 After subparagraph 21(1)(a)(ii)
Insert:
(iiaa) a requirement of the Financial Accountability Regime Act 2021; or
37 After subparagraph 25(1)(a)(ii)
Insert:
(iia) the Financial Accountability Regime Act 2021; or
38 After paragraph 43(2)(a)
Insert:
(aa) has failed to comply with a requirement of the Financial Accountability Regime Act 2021; or
39 After subparagraph 44(1)(a)(i)
Insert:
(ia) the person has failed to comply with a requirement of the Financial Accountability Regime Act 2021;
40 Paragraph 44(4)(a)
Omit “this Act and the prudential standards”, substitute “this Act, the prudential standards and the Financial Accountability Regime Act 2021”.
41 After subparagraphs 48(1)(a)(i) and (2)(a)(i)
Insert:
(ia) the Financial Accountability Regime Act 2021; or
42 Subsection 49(1)
After “functions under this Act”, insert “or the Financial Accountability Regime Act 2021”.
43 Subparagraph 49A(6)(a)(iv)
Omit “this Act or a requirement under the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, a requirement under the Financial Sector (Collection of Data) Act 2001 or a requirement of the Financial Accountability Regime Act 2021”.
44 Section 49B
Omit “this Act or the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
45 After subparagraph 62M(1)(a)(iv)
Insert:
(ivaa) the general insurer has failed to comply with a requirement of the Financial Accountability Regime Act 2021; or
46 Subsection 62W(1)
Repeal the subsection, substitute:
(1) None of the matters mentioned in subsection (2) affect:
(a) the continued operation of other Parts of this Act in relation to a general insurer; or
(b) the operation of the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021 in relation to a general insurer; or
(c) the obligation of a general insurer to comply with those other Parts and those Acts.
47 Subsection 62ZOY(1)
Repeal the subsection, substitute:
(1) None of the matters mentioned in subsection (2) affect:
(a) the continued operation of other provisions of this Act in relation to a body corporate; or
(b) the operation of the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021 in relation to a body corporate; or
(c) the obligation of a body corporate to comply with those other provisions and those Acts.
48 Section 129AA
Omit “this Act or the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
Life Insurance Act 1995
49 Paragraph 21(3)(e)
Omit “this Act or the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
50 After subparagraph 26(1)(a)(ii)
Insert:
(iia) a requirement of the Financial Accountability Regime Act 2021; or
51 After subparagraph 28C(1)(a)(ii)
Insert:
(iiaa) a requirement of the Financial Accountability Regime Act 2021; or
52 After paragraph 85(1)(b)
Insert:
(ba) the person has failed to comply with a requirement of the Financial Accountability Regime Act 2021; or
53 Paragraph 88(1)(a)
Omit “this Act or the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
54 Subparagraph 88(3)(a)(i)
Omit “this Act or the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
55 Section 88A
Omit “this Act or under the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
56 Subsection 88B(1)
Omit “this Act or the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
57 Paragraph 89(2)(a)
Omit “this Act or the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
58 After paragraph 94(1)(b)
Insert:
(ba) the person has failed to comply with a requirement of the Financial Accountability Regime Act 2021; or
59 Paragraph 98(1)(a)
Omit “this Act or the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
60 Subparagraph 98(3)(a)(i)
Omit “this Act or the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
61 Section 98A
Omit “this Act or under the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
62 Subsection 98B(1)
Omit “this Act or the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
63 Paragraph 99(2)(a)
After “this Act”, insert “or the Financial Accountability Regime Act 2021”.
64 Paragraph 125A(2)(c)
Omit “the regulations or the Financial Sector (Collection of Data) Act 2001”, substitute “the regulations, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
65 Subsection 166(1)
Repeal the subsection, substitute:
(1) None of the matters mentioned in subsection (2) affect:
(a) the continued operation of other Parts of this Act in relation to a life company; or
(b) the operation of the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021 in relation to a life company; or
(c) the obligation of a life company to comply with those other Parts and those Acts.
66 Subsection 179AY(1)
Repeal the subsection, substitute:
(1) None of the matters mentioned in subsection (2) affect:
(a) the continued operation of other provisions of this Act in relation to a body corporate; or
(b) the operation of the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021 in relation to a body corporate; or
(c) the obligation of a body corporate to comply with those other provisions and those Acts.
67 Paragraph 245(1)(a)
Omit “this Act or the Life Insurance Act 1945”, substitute “this Act, the repealed Life Insurance Act 1945 or the Financial Accountability Regime Act 2021”.
68 Subsection 248(2)
Omit “this Act or the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
National Consumer Credit Protection Act 2009
69 Subsection 5(1) (definition of large ADI)
Omit “has the same meaning as in the Banking Act 1959”, substitute “means an ADI of a kind determined under subsection (1A)”.
70 After subsection 5(1)
Insert:
(1A) The Minister may, by legislative instrument, determine the kinds of ADIs that are large ADIs.
Payment Systems and Netting Act 1998
71 Section 5 (after paragraph (b) of the definition of direction stay provision)
Insert:
(baa) subsection 77(2) of the Financial Accountability Regime Act 2021;
72 Section 5 (before paragraph (fc) of the definition of specified provisions)
Insert:
(fca) subsections 77(3) and (4) of the Financial Accountability Regime Act 2021;
73 Section 5 (after paragraph (e) of the definition of specified stay provision)
Insert:
(eaa) subsection 77(2) of the Financial Accountability Regime Act 2021;
Private Health Insurance (Prudential Supervision) Act 2015
74 After subsection 21(1)
Insert:
(1A) APRA may, in writing, cancel the registration of a private health insurer if APRA is satisfied that the private health insurer has failed to comply with a requirement of the Financial Accountability Regime Act 2021.
75 Subsections 84(1) and (2)
Omit “or of the Private Health Insurance Act 2007”, substitute “the Private Health Insurance Act 2007 or the Financial Accountability Regime Act 2021”.
76 After paragraph 107(2)(c)
Insert:
; and (d) the Financial Accountability Regime Act 2021.
77 Subsection 107(2) (note 2)
Omit “paragraphs (b) and (c)”, substitute “paragraphs (b), (c) and (d)”.
78 Paragraph 110(1)(a)
Omit “the Private Health Insurance Act 2007 or the Financial Sector (Collection of Data) Act 2001”, substitute “the Private Health Insurance Act 2007, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
79 Subparagraph 110(5)(a)(i)
Omit “the Private Health Insurance Act 2007 or the Financial Sector (Collection of Data) Act 2001”, substitute “the Private Health Insurance Act 2007, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
80 Subsections 111(1) and 112(1)
Omit “the Private Health Insurance Act 2007 or the Financial Sector (Collection of Data) Act 2001”, substitute “the Private Health Insurance Act 2007, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
81 Paragraph 113(2)(a)
Omit “the Private Health Insurance Act 2007 or the Financial Sector (Collection of Data) Act 2001”, substitute “the Private Health Insurance Act 2007, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
82 After subparagraphs 119(1)(a)(iii) and 120(4)(b)(iii)
Insert:
(iiia) the Financial Accountability Regime Act 2021; or
83 Subsection 168(1) (after table item 3)
Insert:
| 3A | to cancel the registration of a private health insurer | subsection 21(1A) |
Superannuation Industry (Supervision) Act 1993
84 Subsection 10(1) (after paragraph (c) of the definition of RSE licensee law)
Insert:
(ca) the Financial Accountability Regime Act 2021; and
85 Section 38A (before paragraph (ab) of the definition of regulatory provision)
Insert:
(aba) a provision of the Financial Accountability Regime Act 2021; or
86 Paragraph 126H(3)(a)
Omit “this Act or the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
87 Subparagraph 129(1)(a)(ii)
After “Financial Sector (Collection of Data) Act 2001”, insert “or the Financial Accountability Regime Act 2021”.
88 Section 130A
Omit “the prudential standards or the Financial Sector (Collection of Data) Act 2001”, substitute “the prudential standards, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021”.
89 At the end of paragraph 130D(4)(a)
Add:
(iv) any duties required to be performed under the Financial Accountability Regime Act 2021; or
90 Paragraph 131AA(2)(c)
Omit “the prudential standards or the Financial Sector (Collection of Data) Act 2001”, substitute “the prudential standards, the Financial Sector (Collection of Data) Act 2001or the Financial Accountability Regime Act 2021”.
91 At the end of paragraph 131A(1)(a)
Add:
(iv) any duties required to be performed under the Financial Accountability Regime Act 2021; or
92 Subparagraph 313(1)(a)(ii)
Omit “this Act or under the Financial Sector (Collection of Data) Act 2001”, substitute “this Act, or under the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2021,”.
Part 2—Amendments for the end of the banking executive accountability regime
Australian Prudential Regulation Authority Act 1998
93 Subsection 56(1) (paragraph (cb) of the definition of protected document)
Repeal the paragraph.
94 Subsection 56(1) (paragraph (cb) of the definition of protected information)
Repeal the paragraph.
95 Paragraph 56(2)(c)
Omit “(7D), (7E), (7F),”.
96 Subsections 56(7D), (7E) and (7F)
Repeal the subsections.
97 Paragraph 56(12)(a)
Omit “(7D), (7E), (7F),”.
Banking Act 1959
98 Paragraph 2A(2)(e)
Repeal the paragraph.
99 Subsection 5(1) (definition of accountable person)
Repeal the definition.
100 Subsection 5(1) (paragraph (g) of the definition of direction under this Act)
Omit “31F;”, substitute “31F.”.
101 Subsection 5(1) (paragraph (h) of the definition of direction under this Act)
Repeal the paragraph.
102 Subsection 5(1)
Repeal the following definitions:
(a) definition of large ADI;
(b) definition of medium ADI;
(c) definition of non‑ADI holding company;
(d) definition of remuneration;
(e) definition of small ADI;
(f) definition of variable remuneration.
103 Subsection 11AF(1AC)
Repeal the subsection.
104 Paragraphs 11CG(1)(b) and (2)(a)
Omit “, 29 or 37DB”, substitute “or 29”.
105 Subsection 11CG(2A)
Omit “, 29 or 37DB”, substitute “or 29”.
106 Part IIAA
Repeal the Part.
Schedule 2—Application, saving and transitional provisions
Part 1—Preliminary
1 Definitions
(1) In this Schedule:
banking start time means the time when Part 2 of Schedule 1 commences.
BEAR means:
(a) Part IIAA of the old Banking Act; and
(b) any instruments made under that Part as in force immediately before the banking start time; and
(c) any sections of the old Banking Act that apply in relation to a provision of that Part.
FAR Act means the Financial Accountability Regime Act 2021.
FAR start time for a body corporate that is an accountable entity under subsection 9(3) of the FAR Act means the time when the body corporate starts to be an accountable entity, as determined under subsection 9(4) of the FAR Act.
old Banking Act means the Banking Act 1959, and any instruments made under that Act, as in force immediately before the banking start time.
(2) Expressions used in this Schedule that are defined for the purposes of the FAR Act, and used in relation to that Act, have the same meaning as in that Act.
(3) Expressions used in this Schedule that were defined for the purposes of the old Banking Act, and are used in relation to that Act, have the same meaning as in that Act.
2 Section 7 of the Acts Interpretation Act 1901
This Schedule does not limit the effect of section 7 of the Acts Interpretation Act 1901 as it applies in relation to the repeals made by this Act.
3 Compensation for acquisition of property
(1) If the operation of the old Banking Act, or of this Act or the FAR Act as it applies under this Act, would result in an acquisition of property (within the meaning of paragraph 51(xxxi) of the Constitution) from a person otherwise than on just terms (within the meaning of that paragraph), the Commonwealth is liable to pay a reasonable amount of compensation to the person.
(2) Subitem (1) applies whether the acquisition of property occurred before or occurs after the commencement of this Part.
(3) If the Commonwealth and the person do not agree on the amount of the compensation, the person may institute proceedings in:
(a) the Federal Court of Australia; or
(b) the Supreme Court of a State or Territory;
for the recovery from the Commonwealth of such reasonable amount of compensation as the court determines.
Part 2—Banking sector
Division 1—Key personnel obligations
4 Persons registered under BEAR
When this item applies
(1) This item applies in relation to a person and an ADI if, immediately before the banking start time:
(a) the person is an accountable person of the ADI, or of a subsidiary of the ADI, under the old Banking Act; and
(b) the person is registered under section 37HA of the old Banking Act.
Accountable persons taken to be registered under FAR
(2) If, at the banking start time, the person is an accountable person of the ADI or the subsidiary under section 10 of the FAR Act, then the person is taken from the banking start time to be registered under the FAR Act as an accountable person in respect of the ADI or the subsidiary.
Note 1: If the person was an accountable person of a subsidiary of the ADI, and the subsidiary is not a significant related entity of the ADI under the FAR Act, then the person may not be an accountable person of the ADI or the subsidiary under the FAR Act.
Note 2: See also item 13 (old accountability statement taken to be new accountability statement).
Persons ceasing to be accountable persons
(3) If, at the banking start time, the person is not an accountable person of the ADI or the subsidiary under section 10 of the FAR Act, then:
(a) the person is taken to have ceased to be an accountable person of the ADI or the subsidiary for the purposes of the paragraph 32(a) of the FAR Act; and
(b) for the purposes of subparagraph 31(1)(a)(i) of the FAR Act, that ceasing event is taken to have occurred at the banking start time.
Note: Events mentioned in section 32 of the FAR Act must be notified to the Regulator in accordance with section 31 of the FAR Act (notification obligations of an accountable entity). Failure to comply with a notification obligation is a contravention of a civil penalty provision (see section 80 of the FAR Act).
5 Persons disqualified under BEAR
When this item applies
(1) This item applies in relation to a person if:
(a) before the banking start time, the person is disqualified from being, or acting as, an accountable person under section 37J of the old Banking Act; and
(b) the disqualification is in effect immediately before the banking start time.
Persons are taken to be disqualified under FAR
(2) The person is taken, from the banking start time, to be disqualified from being or acting as an accountable person under section 42 of the FAR Act.
(3) For the purposes of subsection 42(2) of the FAR Act, the disqualification applies in accordance with the following table.
| Disqualified accountable persons |
| Item | Column 1 If, before the banking start time, the person is disqualified under the old Banking Act in relation to … | Column 2 then, from the banking start time, the person is taken to be disqualified under the FAR Act in relation to … |
| 1 | a particular ADI | the accountable entity that is that ADI. |
| 2 | a particular subsidiary of an ADI | if the subsidiary is a significant related entity of the accountable entity that is the ADI—that significant related entity. |
| 3 | a class of ADIs | a class of accountable entities that includes those ADIs. |
| 4 | a class of subsidiaries of ADIs | a class of significant related entities of accountable entities that includes those subsidiaries of ADIs. |
| 5 | any ADI | any accountable entity. |
| 6 | any subsidiary of an ADI | any significant related entity of an accountable entity. |
(4) The period of disqualification ends when the period of the disqualification under the old Banking Act would have ended.
(5) Paragraphs 42(1)(a) and (b) and subsections 42(3) to (7) of the FAR Act do not apply in relation to the disqualification.
Applications to vary or revoke disqualification
(6) If:
(a) before the banking start time, the person applies to APRA under section 37JA of the old Banking Act to vary or revoke the disqualification; and
(b) as at the banking start time, the application has not been withdrawn by the applicant, or dealt with by APRA;
the application is taken, after the banking start time, to have been made under section 43 of the FAR Act.
6 Pending applications to register a person under BEAR
When this item applies
(1) This item applies if:
(a) before the banking start time, an application is made to APRA under section 37HA of the old Banking Act to register a person as an accountable person; and
(b) as at the banking start time, the application has not been withdrawn by the applicant, or dealt with by APRA.
Application taken to be made under FAR
(2) The application is taken to be an application made under section 41 of the FAR Act.
Note: The Regulator may request further information under subsection 41(3) of the FAR Act.
(3) For the purposes of paragraph 41(5)(a) of the FAR Act, the application is taken to have been made at the banking start time.
7 Persons filling a temporary or unforeseen vacancy when FAR starts
To avoid doubt, the period of 90 days referred to in paragraph 24(2)(a) of the FAR Act begins no earlier than the banking start time, regardless of when the person started to fill the temporary or unforeseen vacancy.
8 Applications to register under FAR
When this item applies
(1) This item applies to a body corporate that is:
(a) an ADI; or
(b) an authorised NOHC of an ADI.
Early application for registration of accountable persons
(2) From 30 days before the banking start time, the body corporate may apply to the Regulator under section 41 of the FAR Act to register a person as an accountable person in respect of the body or a significant related entity of the body.
(3) If the body corporate makes the application before the banking start time, section 41 of the FAR Act (and any other provision of the FAR Act that applies in relation to that section) applies in relation to the body corporate as if the body corporate were an accountable entity.
Note: Under paragraph 41(2)(d) of the FAR Act, if an accountable entity meets the enhanced notification threshold under subsection 31(3) of the FAR Act, the application must include an accountability statement for the person complying with section 33 of the FAR Act.
When registration comes into force
(4) The registration of the person as an accountable person comes into force at the later of the following times:
(a) the banking start time;
(b) when the Regulator registers the person.
9 Disqualification under FAR for non‑compliance with BEAR
APRA may, after the banking start time, disqualify a person under section 42 of the FAR Act from being, or acting as, an accountable person if APRA is satisfied that:
(a) the person has failed to comply with one or more of their obligations under section 37CA of the old Banking Act; and
(b) the disqualification is justified, having regard to the seriousness of the failure to comply.
Note: A decision to disqualify a person is a reviewable decision under Part 5 of Chapter 3 of the FAR Act.
Division 2—Deferred remuneration obligations
10 Deferral of variable remuneration continues under BEAR after FAR starts
When this item applies
(1) This item applies in relation to a person if:
(a) immediately before the banking start time, the person is an accountable person of an ADI, or of a subsidiary of an ADI, under the old Banking Act; and
(b) at the banking start time, the person is an accountable person of the ADI or subsidiary under section 10 of the FAR Act.
Old Banking Act continues to apply until FAR applies
(2) Despite the repeal of Part IIAA of the Banking Act 1959 by Part 2 of Schedule 1, the old Banking Act applies, after the banking start time, in relation to the variable remuneration of the accountable person unless Part 5 of Chapter 2 of the FAR Act applies to the variable remuneration (see item 11 of this Schedule).
Note: APRA may exercise powers etc. under repealed provisions for the purposes of this item: see item 29.
11 Deferral of variable remuneration under FAR
When this item applies
(1) This item applies in relation to a person who is an accountable person under section 10 of the FAR Act of an entity (the deferring entity) that is, at the banking start time:
(a) an accountable entity under subsection 9(1) of the FAR Act; or
(b) a significant related entity of such an accountable entity.
FAR applies to financial years starting at least 6 months after banking start time
(2) Part 5 of Chapter 2 of the FAR Act applies in relation to the variable remuneration of the accountable person only if the minimum deferral period for the variable remuneration (see section 28 of the FAR Act) starts in:
(a) the first financial year of the deferring entity that begins after the end of the period of 6 months after the banking start time; or
(b) a later financial year.
12 Deferral of variable remuneration under BEAR—savings provision
When this item applies
(1) This item applies in relation to a person if:
(a) immediately before the banking start time:
(i) the person is an accountable person of an ADI, or of a subsidiary of an ADI, under the old Banking Act; and
(ii) Division 4 of Part IIAA of the old Banking Act applies in relation to the variable remuneration of the person; and
(b) at the banking start time, the person is not an accountable person of the ADI or the subsidiary under section 10 of the FAR Act.
Note: If the person was an accountable person of a subsidiary of the ADI, and the subsidiary is not a significant related entity of the ADI under the FAR Act, then the person may not be an accountable person of the ADI or the subsidiary under the FAR Act.
Old Banking Act continues to apply
(2) Despite the repeal of Part IIAA of the Banking Act 1959 by Part 2 of Schedule 1, the old Banking Act continues to apply, after the banking start time, in relation to the variable remuneration, as if that repeal had not happened.
Division 3—Notification obligations
13 Accountability statements under BEAR
When this item applies
(1) This item applies if:
(a) before the banking start time, an ADI or a subsidiary of an ADI gave APRA a document (the old accountability statement) complying with section 37FA of the old Banking Act for a person who was registered under section 37HA of that Act; and
(b) at the banking start time, the person is an accountable person of the ADI or of the subsidiary under section 10 of the FAR Act.
Note: For transfer of registration of the person, see item 4.
(2) The old accountability statement (including any changes notified to APRA before the banking start time) is taken, from the banking start time, to have been given to the Regulator in accordance with section 33 of the FAR Act for the person.
Note: Any material change to the information contained in the accountability statement must be notified to the Regulator: see subsection 31(2) of the FAR Act.
14 Notification obligations under BEAR—savings provision
(1) Despite the repeal of Part IIAA of the Banking Act 1959 by Part 2 of Schedule 1, the old Banking Act continues to apply, after the banking start time, in relation to an obligation covered by subitem (2) and arising before that time, as if that repeal had not happened.
(2) For the purposes of subitem (1), the obligations are any of the following:
(a) an obligation under paragraph 37F(1)(a) of the old Banking Act to notify APRA of a change to an accountability statement;
(b) an obligation under paragraph 37F(1)(b) of the old Banking Act to notify APRA of a change to an accountability map;
(c) an obligation under paragraph 37F(1)(c) of the old Banking Act to notify APRA of an event.
Division 4—Regulatory powers and enforcement
15 Directions about reallocating responsibilities given under BEAR
When this item applies
(1) This item applies if:
(a) before the banking start time, APRA gives a body corporate a direction under section 37DB of the old Banking Act in relation to a responsibility; and
(b) as at the banking start time, APRA has not revoked the direction.
Direction under FAR Act taken to be given
(2) After the banking start time, the direction continues in force (and may be dealt with) as if it had been given by the Regulator under section 65 of the FAR Act.
(3) For the purposes of section 65 of the FAR Act:
(a) the requirements in paragraphs 65(3)(a) and (c) are taken to be met; and
(b) if the direction under section 37DB of the old Banking Act did not specify a period within which the direction is to be complied with—paragraph 65(3)(b) does not apply to the direction.
Secrecy obligations
(4) If, immediately before the banking start time, the direction was covered by a determination under subsection 11CH(2) of the old Banking Act, then it is taken after the banking start time to be covered by a determination under subsection 67(2) of the FAR Act.
(5) If, immediately before the banking start time, the direction was covered by a determination under subsection 11CK(2) or (5) of the old Banking Act, then it is taken after the banking start time to be covered by:
(a) for a direction covered by a determination under subsection 11CK(2) of the old Banking Act—a determination under subsection 70(2) of the FAR Act;
(b) for a direction covered by a determination under subsection 11CK(5) of the old Banking Act—a determination under subsection 70(4) of the FAR Act.
16 Directions under FAR for non‑compliance with BEAR
When this item applies
(1) This item applies if:
(a) APRA has reason to believe that a body corporate has contravened a provision of Part IIAA of the old Banking Act before the banking start time; and
(b) as at the banking start time, APRA has not given a direction under section 11CA of the old Banking Act in relation to the contravention; and
(c) immediately after the banking start time, the body corporate is an accountable entity.
APRA may give direction under FAR Act
(2) Both of the following apply:
(a) APRA may give the body corporate a direction under section 64 of the FAR Act;
(b) for the purposes of paragraph 64(3)(b) of the FAR Act, the ground for giving the direction is the contravention of the old Banking Act provision.
17 Revocation of authority for non‑compliance with FAR
The amendment of section 9A of the Banking Act 1959 made by Part 1 of Schedule 1 applies in relation to a body corporate’s authority under section 9 of that Act whether the authority was granted before or after the banking start time.
18 Contraventions under BEAR—savings provision
(1) Despite the repeal of Part IIAA of the Banking Act 1959 by Part 2 of Schedule 1, the old Banking Act continues to apply, after the banking start time, in relation to a contravention (or an alleged contravention) of a provision of the BEAR that occurs before that time, as if that repeal had not been made.
(2) This item does not limit any other item of this Schedule.
Note: As a result, APRA may have a choice as to whether to deal with BEAR non‑compliance under the old Banking Act or whether to take action under the FAR Act in reliance on item 9 or 16 of this Schedule.
19 Directions under BEAR for non‑compliance with BEAR—savings provision
When this item applies
(1) This item applies if:
(a) before the banking start time, APRA gives a body corporate a direction under section 11CA of the old Banking Act in relation to a contravention of the BEAR; and
(b) as at the banking start time, APRA has not revoked the direction.
Old Banking Act continues to apply
(2) Despite the repeals and amendments of the Banking Act 1959 made by Part 2 of Schedule 1, the old Banking Act continues to apply, after the banking start time, in relation to the direction, as if those repeals and amendments had not been made.
20 Review of decisions under BEAR—savings provision
Despite the repeal of Part IIAA of the Banking Act 1959 by Part 2 of Schedule 1, Part VI (review of decisions) of the old Banking Act continues to apply, after the banking start time, in relation to a decision made under Part IIAA of the Banking Act 1959:
(a) before the banking start time; or
(b) after the banking start time as a result of the operation of a provision of this Schedule;
as if that repeal had not been made.
21 Enforceable undertakings and injunctions under BEAR—savings provision
To avoid doubt, the repeal of Part IIAA of the Banking Act 1959 by Part 2 of Schedule 1 does not affect:
(a) an enforceable undertaking given under section 18A of the old Banking Act before the banking start time; or
(b) an injunction granted under section 65A of the old Banking Act before the banking start time.
Part 3—Other sectors
Division 1—Key personnel obligations
22 Applications to register under FAR
When this item applies
(1) This item applies to a body corporate that is any of the following:
(a) a general insurer;
(b) an authorised NOHC of a general insurer;
(c) a life company;
(d) a registered NOHC of a life company;
(e) a private health insurer;
(f) an RSE licensee.
Early application for registration of accountable persons
(2) From 30 days before the FAR start time for the body corporate, the body may apply to the Regulator under section 41 of the FAR Act to register a person as an accountable person in respect of the body or a significant related entity of the body.
(3) If the body corporate makes the application before the FAR start time, section 41 of the FAR Act (and any other provision of the FAR Act that applies in relation to that section) applies in relation to the body corporate as if the body corporate were an accountable entity.
Note: Under paragraph 41(2)(d) of the FAR Act, if the accountable entity meets the enhanced notification threshold under subsection 31(3) of the FAR Act, the application must include an accountability statement for the person complying with section 33 of the FAR Act.
When registration comes into force
(4) The registration of the person as an accountable person comes into force at the later of the following times:
(a) the FAR start time for the body corporate;
(b) when the Regulator registers the person.
Division 2—Deferred remuneration obligations
23 Deferral of remuneration under FAR
When this item applies
(1) This item applies in relation to a person who is an accountable person under section 10 of the FAR Act of:
(a) an accountable entity under subsection 9(3) of the FAR Act; or
(b) a significant related entity of such an accountable entity.
Deferred remuneration obligations apply when entity becomes an accountable entity
(2) Part 5 of Chapter 2 of the FAR Act applies in relation to the variable remuneration of the accountable person only if the day referred to in paragraph 28(2)(a) of the FAR Act in relation to the remuneration occurs after the FAR start time for the accountable entity referred to in paragraph (1)(a) or (b) of this item.
Division 3—Insurance
24 Revocation of authorisation for non‑compliance with FAR
The amendment of section 15 of the Insurance Act 1973 made by Part 1 of Schedule 1 applies in relation to a body corporate’s authorisation under section 12 of that Act whether the authorisation was granted before or after the FAR start time for the body corporate.
Division 4—Life insurance
25 Application for registration as a life company
The amendment of section 21 of the Life Insurance Act 1995 made by Part 1 of Schedule 1 applies in relation to an application under section 20 of the Life Insurance Act 1995 for registration as a life company if:
(a) the application was made before the commencement of this Part and, as at that commencement, APRA has not decided the application; or
(b) the application is made after that commencement.
26 Revocation of registration for non‑compliance with FAR
The amendment of section 26 of the Life Insurance Act 1995 made by Part 1 of Schedule 1 applies in relation to a body corporate’s registration under section 21 of that Act whether the registration was made before or after the FAR start time for the body corporate.
Division 5—Private health insurance
27 Cancellation of registration for non‑compliance with FAR
The amendment of section 21 of the Private Health Insurance (Prudential Supervision) Act 2015 made by Part 1 of Schedule 1 applies in relation to a body corporate’s registration under section 15 of that Act whether the registration was made before or after the FAR start time for the body corporate.
Division 6—Superannuation
28 Cancellation of RSE licence for non‑compliance with FAR
The amendment of the definition of RSE licensee law in subsection 10(1) of the Superannuation Industry (Supervision) Act 1993 made by Part 1 of Schedule 1 applies in relation to a body corporate’s RSE licence under section 29D of that Act whether the RSE licence was granted before or after the FAR start time for the body corporate.
Part 4—APRA and ASIC
Division 1—Transition from the BEAR
29 Doing things under repealed provisions
(1) The amendments of the Australian Prudential Regulation Authority Act 1998 and the Banking Act 1959 made by Part 2 of Schedule 1 do not apply for the purpose of APRA exercising any right or power, performing any obligation or duty or doing any other thing (including under a provision that is itself repealed or amended):
(a) in relation to variable remuneration to which the old Banking Act applies under item 10 of this Schedule; or
(b) in relation to any other matter in relation to which an item of this Schedule requires or permits APRA to do something under the old Banking Act.
Secrecy
(2) In addition to subitem (1), despite the amendments of section 56 of the Australian Prudential Regulation Authority Act 1998 made by Part 2 of Schedule 1, that Act as in force immediately before the banking start time, continues to apply in relation to:
(a) information disclosed or obtained before or after the commencement of that Part and relating to the affairs of a person in relation to whom information is, or was, required to be given under Part IIAA of the Banking Act 1959 (including that Part as it continues to apply under an item of this Schedule); and
(b) a document given or produced before or after the commencement of that Part and containing information relating to the affairs of a person in relation to whom information is, or was, required to be given under Part IIAA of the Banking Act 1959 (including that Part as it continues to apply under an item of this Schedule).
30 Agreement about exercise of powers
Section 38 of the FAR Act does not apply in relation to APRA performing a function, or exercising a power, that an item of this Schedule requires or permits APRA to perform or exercise.
Division 2—Application of the FAR
31 Secrecy
The amendments of sections 3 and 56 of the Australian Prudential Regulation Authority Act 1998 made by Part 1 of Schedule 1 apply in relation to:
(a) any disclosure of information after the commencement of that Part, whether the information was disclosed or obtained under, or for the purposes of, a prudential regulation framework law before or after that commencement; and
(b) any production of a document after the commencement of that Part, whether the document was given or produced under, or for the purposes of, a prudential regulation framework law before or after that commencement.
32 Information to be included in APRA’s annual report
The amendment of section 59 of the Australian Prudential Regulation Authority Act 1998 made by Part 1 of Schedule 1 applies to reports on APRA’s investigations during the financial year ending on 30 June 2023, and later financial years.
33 Sharing information and documents between APRA and ASIC
(1) Section 39 of the FAR Act is taken to apply in relation to information disclosed to or obtained by APRA or ASIC, or a document that is given or produced to APRA or ASIC, under or for the purposes of:
(a) the BEAR; or
(b) this Schedule.
(2) Section 39 of the FAR Act (including as it applies because of subitem (1) of this item) applies in relation to information disclosed or obtained, or a document that is given or produced, whether before or after the FAR Act commences.
Part 5—Transitional rules
34 Transitional rules
(1) ASIC and APRA may jointly, by legislative instrument, make rules prescribing matters of a transitional nature (including prescribing any saving or application provisions) relating to:
(a) the amendments or repeals made by this Act; or
(b) the enactment of this Act or the FAR Act.
(2) To avoid doubt, the rules may not do the following:
(a) create an offence or civil penalty;
(b) provide powers of:
(i) arrest or detention; or
(ii) entry, search or seizure;
(c) impose a tax;
(d) set an amount to be appropriated from the Consolidated Revenue Fund under an appropriation in this Act;
(e) directly amend the text of this Act or the FAR Act.
(3) This Act (other than subitem (2) of this item) does not limit the rules that may be made.
Schedule 3—Financial services compensation scheme of last resort
Part 1—Main amendments
Corporations Act 2001
1 Section 761A
Insert:
accumulation recovery day means the day the Bill for the Financial Sector Reform (Hayne Royal Commission Response No. 3) Act 2021 was introduced into the House of Representatives.
AFCA’s accumulated unpaid fees has the meaning given by subsection 1058B(4).
AFCA’s unpaid fees, for a month, has the meaning given by subsection 1058B(2).
capital reserve establishment contribution has the same meaning as in the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2021.
CSLR operator (short for financial services compensation scheme of last resort operator) means the person for whom an authorisation under section 1060 is in force.
CSLR staff member means:
(a) a director, officer or employee of the CSLR operator; or
(b) a person engaged as a consultant to, or to perform services for, the CSLR operator for the purposes of the financial services compensation scheme of last resort.
financial services compensation scheme of last resort means the financial services compensation scheme of last resort established under Part 7.10B.
financial services compensation scheme of last resort operator: see CSLR operator.
levy period has the same meaning as in the Financial Services Compensation Scheme of Last Resort Levy Act 2021.
pre‑CSLR complaint has the same meaning as in the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2021.
relevant AFCA determination has the meaning given by section 1065.
revised claims, fees and costs estimate has the same meaning as in the Financial Services Compensation Scheme of Last Resort Levy Act 2021.
sub‑sector has the same meaning as in the Financial Services Compensation Scheme of Last Resort Levy Act 2021.
sub‑sector levy cap has the same meaning as in the Financial Services Compensation Scheme of Last Resort Levy Act 2021.
2 At the end of Part 7.10A
Add:
Division 4—Information sharing and reporting
1058A Authorised use or disclosure of information
(1) An AFCA staff member may use or disclose information or documents obtained by the AFCA staff member under or for the purposes of this Part if:
(a) the use or disclosure is for the purposes of:
(i) this Part; or
(ii) Part 7.10B; or
(iii) the Financial Services Compensation Scheme of Last Resort Levy Act 2021; or
(iv) the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2021; or
(b) the use or disclosure is to the CSLR operator for the purposes of assisting the CSLR operator to perform its functions or exercise its powers.
(2) In this section:
use or disclosure, for information or documents, includes making a record of the information, disclosing the information, producing the document or permitting access to the document.
1058B AFCA reporting to CSLR operator
Notification of unpaid fees to CSLR operator
(1) AFCA must notify the CSLR operator, in writing, of AFCA’s unpaid fees, for a month ending on or after the accumulation recovery day, as soon as practicable after the end of the month.
Note: The notification could include information about AFCA’s unpaid fees, including whether those fees relate to pre‑CSLR complaints.
(2) AFCA’s unpaid fees, for a month, is the sum of each fee that:
(a) relates to a complaint:
(i) made against a person (the AFCA member) who, at the time the complaint was made, was a member of the AFCA scheme; and
(ii) about a product, or service, of a kind mentioned in subsection 1065(2); and
(iii) that has been finalised by AFCA (including by making a determination); and
(b) AFCA has charged to the AFCA member; and
(c) the AFCA member has not paid to AFCA; and
(d) AFCA finished taking steps to recover on or after the accumulation recovery day and during the month, which may have included taking one or more of the following steps if AFCA considered them appropriate:
(i) seeking an explanation from the AFCA member for the AFCA member not paying the fee;
(ii) explaining to the AFCA member the consequences of not paying the fee;
(iii) discussing with the AFCA member a reasonable payment plan or other alternatives to paying the fee;
(iv) if the AFCA member is (or has become) a Chapter 5 body corporate—engaging with an officer of the Chapter 5 body corporate to assess whether the body can pay the fee to AFCA.
Note: In addition to the steps in subparagraphs (d)(i) to (iv), AFCA may take any other steps it considers appropriate and cost effective.
AFCA’s accumulated unpaid fees
(3) AFCA must notify the CSLR operator, in writing, of AFCA’s accumulated unpaid fees as soon as practicable after the accumulation recovery day.
(4) AFCA’s accumulated unpaid fees is the sum of each fee that:
(a) relates to a complaint:
(i) made against a person (the AFCA member) who, at the time the complaint was made, was a member of the AFCA scheme; and
(ii) about a product, or service, of a kind mentioned in subsection 1065(2); and
(iii) that has been finalised by AFCA (including by making a determination); and
(b) AFCA has charged to the AFCA member; and
(c) the AFCA member has not paid to AFCA; and
(d) AFCA finished taking steps to recover during the period:
(i) starting on 1 November 2018; and
(ii) ending on the day before the accumulation recovery day;
which may have included taking one or more of the steps mentioned in subparagraphs (2)(d)(i) to (iv) of this section if AFCA considered them appropriate.
3 After Part 7.10A
Insert:
Part 7.10B—Financial services compensation scheme of last resort
Division 1—Establishment of the scheme
1059 Establishment of the scheme
The financial services compensation scheme of last resort is established by this Part.
1060 Minister may authorise an operator of the scheme
(1) The Minister may, by notifiable instrument, authorise a person to operate the financial services compensation scheme of last resort if the Minister is satisfied the person will meet the mandatory requirements under section 1062.
Note: The person who is authorised by the Minister to operate the scheme is the CSLR operator (short for financial services compensation scheme of last resort operator).
(2) An authorisation of a person to operate the financial services compensation scheme of last resort must not come into force while an authorisation of another person to operate that scheme is in force.
(3) The Minister may, by notifiable instrument, vary or revoke an authorisation.
(4) In an instrument made under subsection (1) or (3), the Minister:
(a) must specify the day the authorisation, variation or revocation comes into force; and
(b) may impose, vary or revoke conditions relating to the authorisation.
1061 Minister may appoint independent member
The Minister may, by written instrument, appoint an independent person to be a member of the board of the CSLR operator.
Note: The independent person appointed by the Minister is the Chair of the board (see the mandatory requirement in paragraph 1062(3)(d)).
1062 Mandatory requirements
(1) The mandatory requirements for a person (the operator) to operate the financial services compensation scheme of last resort are:
(a) the organisational requirement under subsection (2); and
(b) the operator requirements under subsection (3); and
(c) the operational requirements under subsection (4); and
(d) the compliance requirements under subsection (5).
Organisational requirement
(2) The organisational requirement is that the operator does not require a person applying for compensation to pay any fee or charge to the operator, or to any other entity, in relation to the application.
Operator requirements
(3) The operator requirements are that:
(a) the operator is a company limited by guarantee; and
(b) the operator’s constitution provides that the operator must not be operated for profit; and
(c) the operator’s constitution provides that amounts paid to the operator by the Commonwealth must be maintained for the purposes of the financial services compensation scheme of last resort; and
(d) the operator’s constitution provides that the Chair of the board of the operator must be an independent person appointed by the Minister as a member of the board; and
(e) the operator’s constitution provides that, within 6 months after the operator is authorised under section 1060, the following must be appointed as members of the board:
(i) the person who is the Chair of the board of AFCA;
(ii) a person who is a Fellow of the Institute of Actuaries of Australia and has at least 5 years’ experience in actuarial analysis.
Operational requirements
(4) The operational requirements are that:
(a) the operator operates in accordance with the operator’s constitution; and
(b) the operator administers the financial services compensation scheme of last resort in accordance with this Part and regulations made for the purposes of this Part; and
(c) the operator manages money of the operator in a manner that is efficient, effective and economical; and
(d) the operator has appropriate expertise available to deal with applications for compensation; and
(e) the operator has appropriate expertise available to undertake actuarial analysis and modelling to estimate the value of claims to be made against the financial services compensation scheme of last resort.
Compliance requirements
(5) The compliance requirements are that:
(a) the operator is to ensure that any conditions of the authorisation of the operator (see paragraph 1060(4)(b)) are complied with; and
(b) the operator is to ensure that regulatory requirements issued under section 1069K are complied with.
Division 2—Compensation payments under the scheme
1063 Compensation payments
(1) The CSLR operator must pay to a person an amount of compensation for a relevant AFCA determination made in respect of the person if:
(a) the person is eligible under section 1064 for compensation for the determination; and
(b) the amount of compensation for the determination is the amount referred to in section 1067; and
(c) the CSLR operator has offered under section 1068 that amount of compensation; and
(d) the person has accepted under section 1069 that offer of that amount of compensation.
(2) The CSLR operator must pay the amount of compensation to the person:
(a) in a single lump sum; or
(b) if a determination under subsection 1069H(2) specifies, under subsection 1069H(3), a class of persons that includes the person—in the instalments specified in the determination for that class of persons over the period specified in the determination.
(3) The CSLR operator must not pay an amount under this section before:
(a) the start of the first levy period; or
(b) any later day prescribed by regulations made for the purposes of this paragraph.
1064 Eligibility for compensation payments
Eligibility for compensation
(1) A person is eligible for compensation for a relevant AFCA determination made in respect of the person if:
(a) the determination requires an amount to be paid to the person by another person (the AFCA member); and
(b) the person has notified AFCA within:
(i) 12 months after the day the determination was made; or
(ii) such longer period as AFCA agrees with the person;
that the person has not been paid the amount; and
(c) AFCA has finished taking steps to require the amount to be paid to the person by the AFCA member, which may have included taking one or more of the steps mentioned in subsection (2) if AFCA considered them appropriate; and
(d) AFCA has notified the person, in writing, that AFCA has finished taking such steps; and
(e) the amount has not been fully paid to the person; and
(f) the person is not eligible to receive, under any other statutory compensation scheme, compensation:
(i) for the matters covered by the determination; and
(ii) for an amount equal to or greater than the amount required to be paid under the determination; and
(g) the person applies in accordance with section 1066 to the CSLR operator for compensation for the determination; and
(h) the person has not withdrawn that application for compensation; and
(i) the CSLR operator reasonably believes that the AFCA member is, having regard to the AFCA member’s financial position, unlikely to fully pay the amount.
Note: A person’s application for compensation may be withdrawn at any time before an offer of compensation is accepted by the person (see subsection 1066(4)).
Appropriate steps by AFCA
(2) For the purposes of paragraph (1)(c), the steps are the following:
(a) seeking an explanation from the AFCA member for the AFCA member not paying the amount to the person in accordance with the relevant AFCA determination;
(b) explaining to the AFCA member the consequences of not paying the amount to the person;
(c) discussing with the AFCA member a reasonable payment plan or other alternatives to paying the amount to the person;
(d) if the AFCA member is (or has become) a Chapter 5 body corporate—engaging with an officer of the Chapter 5 body corporate to assess whether the body will pay the amount to the person.
Note: In addition to these steps, AFCA may take any other steps it considers appropriate and cost effective.
1065 Meaning of relevant AFCA determination
(1) A determination made by AFCA in respect of a person is a relevant AFCA determination if:
(a) the determination relates to a complaint:
(i) made by the person against another person (the AFCA member) who, at the time the complaint was made, was a member of the AFCA scheme; and
(ii) about a product, or service, of a kind mentioned in subsection (2); and
(b) the determination:
(i) requires the AFCA member to pay an amount to the person; and
(ii) is accepted by the person.
(2) For the purposes of subparagraph (1)(a)(ii), the kinds of products and services are as follows:
(a) engaging in a credit activity (within the meaning of the National Consumer Credit Protection Act 2009):
(i) as a credit provider; or
(ii) other than as a credit provider;
(b) providing financial product advice that is personal advice provided to a person as a retail client about one or more products that include at least one relevant financial product (within the meaning of Part 7.6 of this Act);
(c) dealing in securities for a person as a retail client, other than issuing securities.
(3) In this section:
credit provider has the same meaning as in any Part of the National Consumer Credit Protection Act 2009 other than Part 3‑2CA.
1066 Applications for compensation payments
(1) A person may apply, in the approved form, to the CSLR operator for compensation for a relevant AFCA determination made in respect of the person.
(2) An application is in the approved form if and only if:
(a) it is in the form approved by the CSLR operator; and
(b) it includes any information (including any declarations) required by the form; and
(c) it is given in the manner required by the CSLR operator.
(3) The CSLR operator may approve a form for the purposes of paragraph (2)(a).
(4) If a person makes an application for compensation for a relevant AFCA determination made in respect of the person, the person may:
(a) amend the application at any time before the CSLR operator offers under section 1068 to the person an amount of compensation for the determination; or
(b) withdraw the application any time before the person accepts under 1069 such an offer.
1067 Amount of compensation payments
The amount of compensation for a person for a relevant AFCA determination made in respect of the person must be an amount equal to the lower of the following amounts:
(a) $150,000;
(b) the amount payable to the person in accordance with the relevant AFCA determination, less:
(i) any amount paid to the person in accordance with the relevant AFCA determination, including any partial payments or any payments made to the person as an unsecured creditor of a Chapter 5 body corporate for the matters covered by the determination; and
(ii) any compensation to which the person is eligible under any other statutory compensation scheme for the matters covered by the determination; and
(iii) any other payments made to the person of a kind prescribed by regulations made for the purposes of this subparagraph.
1068 Offer of compensation payments
Offer of compensation
(1) If a person is eligible under section 1064 for compensation for a relevant AFCA determination made in respect of the person, the CSLR operator must offer to the person, in writing, the amount of compensation referred to in section 1067 for the determination.
(2) The offer must explain the effect of section 1069A (subrogation of rights).
(3) Before the offer is accepted by the person, the CSLR operator may vary or revoke the offer if the CSLR operator reasonably believes:
(a) there is an error relating to the offer; or
(b) there is fraud relating to the offer; or
(c) there is a change in circumstances affecting:
(i) the person’s eligibility under section 1064 for the amount of compensation in the offer; or
(ii) the amount of compensation in the offer; or
(d) other exceptional circumstances exist that justify the variation or revocation.
Notification that person is not eligible for compensation
(4) If a person:
(a) is not eligible under section 1064 for compensation for a relevant AFCA determination made in respect of the person; and
(b) has made an application under section 1066 for compensation for the relevant AFCA determination;
the CSLR operator must, as soon as reasonably practicable, notify the person, in writing, that the person is not eligible for compensation.
(5) A notice to a person under subsection (4) must include reasons why the person is not eligible for compensation.
1069 Acceptance of offer of compensation payments
(1) A person accepts an offer made under section 1068 of an amount of compensation if the person notifies the CSLR operator, in writing, that the person accepts the offer.
(2) If the person does not accept the offer within 90 days after the day the offer is made, the person is taken to have withdrawn their application for compensation for the relevant AFCA determination to which the offer relates.
1069A CSLR operator’s right of subrogation if compensation is paid
If:
(a) the CSLR operator pays an amount of compensation:
(i) to a person under section 1063; and
(ii) for a relevant AFCA determination that required payment of an amount by another person (the AFCA member) who is, or was, a member of the AFCA scheme; and
(b) the AFCA member is (or has become) a Chapter 5 body corporate;
the CSLR operator is subrogated, to the extent of that amount of compensation, to any rights and remedies that the person may have, in relation to the relevant AFCA determination, that are recognised by an officer of the Chapter 5 body corporate.
Division 3—Reimbursement of unpaid AFCA fees
1069B Payment of AFCA’s unpaid fees
(1) The CSLR operator must pay to AFCA an amount equal to AFCA’s unpaid fees for a month starting on or after the accumulation recovery day if AFCA has notified the CSLR operator of those fees in accordance with subsection 1058B(1).
(2) The CSLR operator must pay the amount to AFCA as soon as reasonably practicable after AFCA’s notification to the CSLR operator of those fees.
(3) However, the CSLR operator must not pay an amount under this section before:
(a) the start of the first levy period; or
(b) any later day prescribed by regulations made for the purposes of this paragraph.
1069C Payment of AFCA’s accumulated unpaid fees
(1) The CSLR operator must pay to AFCA an amount equal to AFCA’s accumulated unpaid fees if AFCA has notified the CSLR operator of those fees in accordance with subsection 1058B(3).
(2) The CSLR operator must pay the amount to AFCA as soon as reasonably practicable after AFCA’s notification to the CSLR operator of those fees.
(3) However, the CSLR operator must not pay an amount under this section before:
(a) the start of the first levy period; or
(b) any later day prescribed by regulations made for the purposes of this paragraph.
Division 4—Powers, reporting and information sharing
Subdivision A—Powers of CSLR operator
1069D Power to obtain information and documents
(1) If the CSLR operator has reason to believe that a person is capable of giving information or producing documents relevant to an application for compensation under this Part, the CSLR operator may, by written notice to the person, require the person:
(a) to give to the CSLR operator, by writing, any such information; or
(b) to produce to the CSLR operator such documents or copies of such documents as are stated in the notice;
in the manner and within the period specified in the notice.
(2) The period specified in a notice given under subsection (1) must be at least 14 days after the day the notice is given.
(3) If documents (whether originals or copies) are so produced, the CSLR operator:
(a) may take possession of, and may make copies of, or take extracts from, the documents; and
(b) may keep the documents for as long as is necessary for the purpose of dealing with the application; and
(c) must, while keeping the documents, permit a person who would be entitled to inspect any one or more of them (if the documents were not in the possession of the CSLR operator) to inspect at all reasonable times such of the documents as that person would be so entitled to inspect.
(4) A person must not fail to comply with a requirement made by the CSLR operator under subsection (1).
Penalty: 30 penalty units.
(5) Subsection (4) is an offence of strict liability.
(6) Subsection (4) does not apply to the extent that the person has a reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in this subsection (see subsection 13.3(3) of the Criminal Code).
(7) If a person who is, or was, a member of the AFCA scheme fails, without a reasonable excuse, to comply with a requirement made by the CSLR operator under subsection (1), the CSLR operator must notify AFCA and ASIC of the person’s failure to comply with the notice.
(8) The CSLR operator must not require ASIC to give information or produce documents under this section.
Note: For information sharing between ASIC and the CSLR operator, see subparagraph 127(4)(aa)(ia) of the Australian Securities and Investments Commission Act 2001.
Subdivision B—Information sharing and reporting
1069E Authorised use or disclosure of information
A CSLR staff member may use or disclose information or documents obtained by the CSLR staff member under or for the purposes of this Part if:
(a) the use or disclosure is for the purposes of:
(i) this Part; or
(ii) Part 7.10A; or
(iii) the Financial Services Compensation Scheme of Last Resort Levy Act 2021; or
(iv) the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2021; or
(b) the use or disclosure is to:
(i) ASIC; or
(ii) AFCA; or
(iii) the Information Commissioner; or
(iv) the Commissioner of Taxation;
for the purposes of assisting the entity or person to perform its functions or exercise its powers.
1069F Reporting by CSLR operator
Reporting compensation payments
(1) If the CSLR operator pays an amount of compensation:
(a) to a person under section 1063; and
(b) for a relevant AFCA determination that required payment of an amount by another person (the AFCA member) who is, or was, a member of the AFCA scheme;
the CSLR operator must, as soon as reasonably practicable, notify ASIC, in writing, of details about the AFCA member and the AFCA member’s failure to pay the amount required by the relevant AFCA determination.
(2) If the CSLR operator:
(a) pays an amount of compensation:
(i) to a person under section 1063; and
(ii) for a relevant AFCA determination that required payment of an amount by another person (the AFCA member) who is, or was, a member of the AFCA scheme; and
(b) becomes aware that the AFCA member is a Chapter 5 body corporate while the determination is in force;
the CSLR operator must, as soon as reasonably practicable, notify an officer of the Chapter 5 body corporate, in writing, of the amount of compensation paid.
Reporting revised claims, fees and costs estimates that exceed cap
(3) If a revised claims, fees and costs estimate for a levy period and a sub‑sector comes into force that could cause the sub‑sector levy cap for the levy period and sub‑sector to be exceeded (or further exceeded), the CSLR operator must notify the Minister of this as soon as practicable.
(4) A notice to the Minister under subsection (3) must include the information (if any) prescribed by regulations made for the purposes of this subsection.
1069G Publishing reports
(1) The CSLR operator must, as soon as reasonably practicable after the end of a levy period, prepare a report for the levy period that contains information about the matters prescribed by regulations made for the purposes of this subsection.
(2) The CSLR operator must publish the report on its website.
Subdivision C—Powers of the Minister
1069H Ministerial determination
Ministerial determination
(1) Subsection (2) applies if the Minister is notified under subsection 1069F(3) that a revised claims, fees and cost estimate for:
(a) a levy period; and
(b) a sub‑sector (the primary sub‑sector);
could cause the sub‑sector levy cap for the levy period and the primary sub‑sector to be exceeded (or further exceeded).
(2) The Minister may, by legislative instrument, make a determination for the levy period and the primary sub‑sector dealing with one or more of the matters mentioned in subsections (3) to (5).
Manner of payment
(3) A determination made under subsection (2) may provide that an amount of compensation payable by the CSLR operator to a person in a specified class of persons must be paid in specified instalments over a specified period of time.
Special levy for just the primary sub‑sector
(4) For the purposes of paragraph 8(3)(b) of the Financial Services Compensation Scheme of Last Resort Levy Act 2021, a determination made under subsection (2) of this section may:
(a) specify that levy needs to be imposed by subsection 8(3) of that Act for the levy period and the primary sub‑sector; and
(b) specify the total amount of levy that needs to be imposed by subsection 8(3) of that Act across all persons for the levy period and the primary sub‑sector, which must not exceed the difference between:
(i) the revised claims, fees and costs estimate (referred to in subsection (1) of this section) for the levy period and the primary sub‑sector; and
(ii) the total amount of levy already paid as worked out under subsection (6) of this section.
Special levy for several sub‑sectors not just the primary sub‑sector
(5) For the purposes of paragraph 9(b) of the Financial Services Compensation Scheme of Last Resort Levy Act 2021, a determination made under subsection (2) of this section may:
(a) specify that levy needs to be imposed by section 9 of that Act (special levy) for the levy period if the Minister is satisfied that imposing special levy:
(i) is necessary due to the number of persons accepting amounts of compensation under section 1069 of this Act for the levy period and the primary sub‑sector, and due to the size of the sum of those amounts; and
(ii) is the most effective way of enabling payment of those amounts to those persons in a timely manner; and
(b) for each of one or more specified sub‑sectors—specify a total amount of special levy that needs to be imposed for the levy period across all members of the specified sub‑sector if the Minister has had regard to:
(i) the impact that imposing that total amount of special levy may have on the financial sustainability and viability of the specified sub‑sector; and
(ii) the impact that imposing that total amount of special levy across all members of the specified sub‑sector may have on the financial system more broadly; and
(c) specify the sum of the total amounts of special levy specified under paragraph (b) of this subsection, which must not exceed the difference between:
(i) the revised claims, fees and costs estimate (referred to in subsection (1) of this section) for the levy period and the primary sub‑sector; and
(ii) the total amount of levy already paid as worked out under subsection (6) of this section.
Working out the total amount of levy already paid
(6) For the purposes of subparagraph (4)(b)(ii) or (5)(c)(ii), work out the sum of:
(a) the total amount of levy paid that was earlier imposed by section 8 of the Financial Services Compensation Scheme of Last Resort Levy Act 2021 across all persons for the levy period and the primary sub‑sector; and
(b) the total amount of levy paid that was earlier imposed by section 9 of that Act across all persons for all sub‑sectors in relation to any earlier revised claims, fees and costs estimate for the levy period and the primary sub‑sector.
Division 5—Regulating the CSLR operator
1069J Obligation to comply with mandatory requirements
The CSLR operator must ensure that the mandatory requirements for the CSLR operator under section 1062 are complied with.
1069K ASIC may issue regulatory requirements
ASIC may, by legislative instrument, issue to the CSLR operator regulatory requirements relating to compliance with the mandatory requirements for the CSLR operator under section 1062.
1069L General directions to CSLR operator
Notice of intention to issue a direction
(1) If ASIC considers that the CSLR operator has not done all things reasonably practicable to ensure compliance with:
(a) the mandatory requirements for the CSLR operator under section 1062; or
(b) a condition of the authorisation of the CSLR operator imposed by the Minister (see paragraph 1060(4)(b)); or
(c) regulatory requirements issued under section 1069K;
ASIC may give the CSLR operator written notice that it intends to give the CSLR operator a specified direction under this section.
(2) The notice must set out:
(a) the specific measures that the direction will require the CSLR operator to take to comply with the requirements or condition; and
(b) the reasons for ASIC’s intention to give the direction.
Issuing a direction
(3) If, after receiving the notice:
(a) the CSLR operator does not take those specific measures; and
(b) ASIC still considers that it is appropriate to give the direction to the CSLR operator;
ASIC may give the CSLR operator the direction, in writing, with a statement setting out the reasons for giving the direction.
(4) The direction must deal with the time by which, or the period during which, it is to be complied with. The time or period must be reasonable.
(5) A direction made under this section is not a legislative instrument.
Compliance
(6) The CSLR operator must comply with a direction made under this section.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).
(7) If the CSLR operator fails to comply with the direction, ASIC may apply to the Court for, and the Court may make, an order that the CSLR operator comply with the direction.
Varying or revoking a direction
(8) ASIC may vary a direction made under this section by giving written notice to the CSLR operator.
(9) The direction has effect until ASIC revokes it by giving written notice to the CSLR operator.
(10) ASIC may revoke the direction, by giving written notice to the CSLR operator, if, at the time of revocation, ASIC considers that the direction is no longer necessary or appropriate.
Division 6—Financial matters
1069M Costs for first levy period
Estimate of costs for first levy period
(1) The CSLR operator may, by notifiable instrument made at any time before the start of the first levy period, determine for the first levy period and a sub‑sector an estimate that is the sum of:
(a) the specified amount equal to what the CSLR operator reasonably believes (having regard to actuarial principles) will be the total amount of compensation payable under section 1063:
(i) during the first levy period; and
(ii) for the sub‑sector;
other than any such compensation relating to pre‑CSLR complaints; and
(b) the specified amount equal to what the CSLR operator reasonably believes (having regard to actuarial principles) will be the portion of the sum of the following that is attributable to the sub‑sector:
(i) the sum of AFCA’s unpaid fees expected for each of the months in the first levy period, other than any such fees relating to pre‑CSLR complaints;
(ii) the sum of AFCA’s unpaid fees expected for each of the months ending on or after the accumulation recovery day but before the first levy period, other than any such fees relating to pre‑CSLR complaints;
(iii) the capital reserve establishment contribution;
(iv) the CSLR operator’s expected administrative costs for the first levy period.
Note: A single instrument may determine estimates for several sub‑sectors.
(2) The notifiable instrument must include each of the amounts referred to in subparagraphs (1)(b)(i) to (iv).
Reconciliation of costs for first levy period
(3) The CSLR operator may, by notifiable instrument and as soon as reasonably practicable after the first levy period, determine the revised costs for the first levy period and a sub‑sector by calculating the sum of the following amounts:
(a) the total amount of compensation paid under section 1063 during the first levy period for the sub‑sector, other than any such compensation relating to pre‑CSLR complaints;
(b) the amount equal to the portion of the sum of the following amounts that the CSLR operator reasonably believes (having regard to actuarial principles) are attributable to the sub‑sector:
(i) the sum of AFCA’s unpaid fees for each of the months in the first levy period, other than any such fees relating to pre‑CSLR complaints;
(ii) the sum of AFCA’s unpaid fees for each of the months ending on or after the accumulation recovery day but before the first levy period, other than any such fees relating to pre‑CSLR complaints;
(iii) the capital reserve establishment contribution;
(iv) the CSLR operator’s administrative costs for the first levy period.
Note: A single instrument may determine revised costs for several sub‑sectors.
1069N Payment to the CSLR operator of amount for the first levy period for the scheme
(1) The Commonwealth must pay to the CSLR operator the amount mentioned in subsection (2) for the first levy period for the following purposes:
(a) the CSLR operator paying compensation under section 1063 during the first levy period, other than any such compensation relating to pre‑CSLR complaints;
(b) the CSLR operator paying AFCA’s unpaid fees for each month in the first levy period, other than any such fees relating to pre‑CSLR complaints;
(c) the CSLR operator paying AFCA’s unpaid fees for each month ending on or after the accumulation recovery day but before the first levy period, other than any such fees relating to pre‑CSLR complaints;
(d) the CSLR operator establishing approximately one third of the capital reserve (within the meaning of the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2021);
(e) the CSLR operator paying the CSLR operator’s administrative costs for the first levy period.
(2) For the purposes of subsection (1), the amount is equal to the sum of each estimate determined under subsection 1069M(1) for the first levy period and a sub‑sector.
1069P Payment to the CSLR operator of amounts equal to levy
(1) The Commonwealth must pay to the CSLR operator an amount equal to each amount received by ASIC, on behalf of the Commonwealth, by way of:
(a) levy (within the meaning of the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2021); or
(b) late payment penalty (within the meaning of that Act); or
(c) shortfall penalty (within the meaning of that Act).
(2) The Consolidated Revenue Fund is appropriated for the purposes of subsection (1).
1069Q Application of money by CSLR operator
(1) The money of the CSLR operator is to be applied only:
(a) to pay compensation under section 1063; and
(b) to pay AFCA’s unpaid fees under section 1069B; and
(c) to pay AFCA’s accumulated unpaid fees under section 1069C; and
(d) to pay the CSLR operator’s administrative costs; and
(e) to reimburse to ASIC the costs that ASIC has notified to the CSLR operator under subsection 9(4) of the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2021; and
(f) to establish and restore the capital reserve (within the meaning of the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2021).
(2) Subsection (1) does not prevent investment of money.
1069R Investment by CSLR operator
The CSLR operator must not invest money of the CSLR operator unless:
(a) the money is not immediately required for the purposes mentioned in paragraphs 1069Q(1)(a) to (e); and
(b) the money is invested:
(i) on deposit with an ADI (within the meaning of the Banking Act 1959), including a deposit evidenced by a certificate of deposit; or
(ii) in securities of, or securities guaranteed by, the Commonwealth, a State or a Territory.
1069S Recovery of overpayments
(1) If:
(a) the CSLR operator pays an amount of compensation to a person under, or purportedly under, this Part; and
(b) the amount paid exceeds the amount (if any) properly payable to the person under this Part;
the amount of the excess is recoverable by the CSLR operator as a debt due to the CSLR operator by action against the person in the Federal Court or the Federal Circuit and Family Court of Australia (Division 2).
(2) An amount equal to the excess may alternatively be deducted from any other amount of compensation payable under this Part to, or for the benefit of, the person.
Part 2—Other amendments
Australian Securities and Investments Commission Act 2001
4 After paragraph 12A(1)(b)
Insert:
(ba) the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2021;
5 After subparagraph 127(4)(aa)(i)
Insert:
(ia) the CSLR operator (within the meaning of Chapter 7 of the Corporations Act 2001);
Corporations Act 2001
6 After subsection 601AB(1B)
Insert:
(1C) ASIC may also decide to deregister a company if the company is liable to pay levy (within the meaning of the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2021) and the company has not paid in full at least 12 months after the due date for payment:
(a) the amount of the levy; and
(b) the amount of any late payment penalty payable in relation to the levy; and
(c) the amount of any shortfall penalty payable in relation to the levy.
7 After subsection 601AH(1A)
Insert:
(1B) ASIC may reinstate the registration of a company deregistered under subsection 601AB(1C) if:
(a) ASIC receives an application in relation to the reinstatement of the company’s registration; and
(b) the levy (within the meaning of the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2021) imposed on the company is paid in full; and
(c) the amount of any late payment penalty payable in relation to the levy is paid in full; and
(d) the amount of any shortfall penalty payable in relation to the levy is paid in full.
8 After paragraph 915B(1)(f)
Insert:
; or (g) is liable to pay levy (within the meaning of the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2021) and has not paid in full at least 12 months after the due date for payment:
(i) the amount of levy; and
(ii) the amount of any late payment penalty in relation to the levy; and
(iii) the amount of any shortfall penalty payable in relation to the levy.
9 After subsection 915B(1A)
Insert:
(1B) ASIC must cancel an Australian financial services licence held by an individual, by giving written notice to the individual, if:
(a) the individual is required to pay an amount to another person in accordance with a relevant AFCA determination; and
(b) the CSLR operator has paid, under section 1063, an amount of compensation to the other person for the relevant AFCA determination.
10 After paragraph 915B(2)(e)
Insert:
; or (f) in the case of a partnership that is liable to pay levy (within the meaning of the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2021)—the following have not been paid in full at least 12 months after the due date for payment:
(i) the amount of levy;
(ii) the amount of any late payment penalty in relation to the levy;
(iii) the amount of any shortfall penalty payable in relation to the levy.
11 After subsection 915B(2A)
Insert:
(2B) ASIC must cancel an Australian financial services licence held by a partnership, by giving written notice to the partnership, if:
(a) one or more of the partners is required to pay an amount to a person in accordance with a relevant AFCA determination; and
(b) the CSLR operator has paid, under section 1063, an amount of compensation to the person for the relevant AFCA determination.
12 After paragraph 915B(3)(e)
Insert:
; or (f) the body is liable to pay levy (within the meaning of the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2021) and has not paid in full at least 12 months after the due date for payment:
(i) the amount of levy; and
(ii) the amount of any late payment penalty in relation to the levy; and
(iii) the amount of any shortfall penalty payable in relation to the levy.
13 After subsection 915B(3A)
Insert:
(3B) ASIC must cancel an Australian financial services licence held by a body corporate, by giving written notice to the body, if:
(a) the body is required to pay an amount to a person in accordance with a relevant AFCA determination; and
(b) the CSLR operator has paid, under section 1063, an amount of compensation to the person for the relevant AFCA determination.
14 After paragraph 915B(4)(e)
Insert:
; or (f) in the case of a licensee that is a single legal entity under section 761FA of this Act and also liable to pay levy (within the meaning of the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2021)—the following have not been paid in full at least 12 months after the due date for payment:
(i) the amount of levy;
(ii) the amount of any late payment penalty in relation to the levy;
(iii) the amount of any shortfall penalty payable in relation to the levy.
15 At the end of section 915B
Add:
(4B) ASIC must cancel an Australian financial services licence held by the trustees of a trust, by giving written notice to the trustees, if:
(a) the trustees of the trust are required to pay an amount to a person in accordance with a relevant AFCA determination; and
(b) the CSLR operator has paid, under section 1063, an amount of compensation to the person for the relevant AFCA determination.
16 After paragraph 920A(1)(j)
Insert:
(ja) all of the following apply:
(i) an individual who holds an Australian financial services licence, a partner in a partnership, a body corporate or a trustee of a trust is required to pay an amount in accordance with a relevant AFCA determination;
(ii) the CSLR operator has paid, under section 1063, an amount of compensation for the relevant AFCA determination;
(iii) at the time the payment is made by the CSLR operator, the person is the individual licensee, a partner in the partnership, an officer of the body corporate or the trustee of the trust; or
17 After paragraph 1317C(gdc)
Insert:
(gdca) a decision by ASIC under subsection 915B(1B), (2B), (3B) or (4B) (immediate cancellation of an Australian financial services licence); or
18 In the appropriate position in Schedule 3
Insert:
| Subsection 1069L(6) | (a) for an individual—100 penalty units for each day, or part of a day, in respect of which the offence is committed; and (b) for a body corporate—1,000 penalty units for each day, or part of a day, in respect of which the offence is committed |
National Consumer Credit Protection Act 2009
19 At the end of subsection 54(1)
Add:
; or (e) in the case of a licensee that is liable to pay levy (within the meaning of the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2021)—the following have not been paid in full at least 12 months after the due date for payment:
(i) the amount of levy;
(ii) the amount of any late payment penalty in relation to the levy;
(iii) the amount of any shortfall penalty payable in relation to the levy.
20 After subsection 54(1A)
Insert:
(1B) ASIC must cancel a licensee’s licence if:
(a) the licensee is required to pay an amount to a person in accordance with a relevant AFCA determination (within the meaning of Chapter 7 of the Corporations Act 2001); and
(b) the CSLR operator (within the meaning of that Chapter) has paid, under section 1063 of that Act, an amount of compensation to the person for the relevant AFCA determination.
21 After paragraph 80(1)(fb)
Insert:
(fba) if all of the following apply:
(i) an individual who holds a licence, a partner in a partnership, a body corporate or a trustee of a trust is required to pay an amount in accordance with a relevant AFCA determination (within the meaning of Chapter 7 of the Corporations Act 2001);
(ii) the CSLR operator (within the meaning of that Chapter) has paid, under section 1063 of that Act, an amount of compensation for the relevant AFCA determination;
(iii) at the time the payment is made by the CSLR operator, the person is the individual licensee, a partner in the partnership, an officer (within the meaning of that Act) of the body corporate or the trustee of the trust; or
22 Before paragraph 327(1)(a)
Insert:
(aa) a decision of ASIC under subsection 54(1B) (which deals with immediate cancellation of a licence); or