Contents
Part 1—Preliminary 1
Division 1—Objects 1
1............................ Objects................................................................................ 1
Division 2—Citation 3
1A......................... Short title............................................................................ 3
Division 3—Commencement and application 4
2............................ Commencement.................................................................. 4
4............................ Application of this Act........................................................ 4
4A......................... Application of the Criminal Code....................................... 5
Division 4—Interpretation 6
5............................ Interpretation....................................................................... 6
6............................ Giving information........................................................... 17
Part 2—Australian Securities and Investments Commission and consumer protection in relation to financial services 18
Division 1—Australian Securities and Investments Commission 18
8............................ ASIC is a body corporate................................................. 18
8A......................... ASIC’s liabilities are Commonwealth liabilities................ 19
9............................ Membership...................................................................... 19
9A......................... Application of the finance law.......................................... 20
10.......................... Chairperson and Deputy Chairpersons............................. 20
10A....................... Chairperson not subject to direction by ASIC on certain matters 21
11.......................... Corporations legislation functions and powers and other functions and powers 21
12.......................... Directions by Minister...................................................... 24
12A....................... Other functions and powers.............................................. 25
12AA.................... Cooperation with APRA.................................................. 27
Division 2—Unconscionable conduct and consumer protection in relation to financial services 28
Subdivision A—Application 28
12AC..................... Division extends to some conduct outside Australia......... 28
12AD.................... Application of Division to Commonwealth and Commonwealth authorities 29
12AE..................... Saving of other laws and remedies................................... 30
Subdivision B—Interpretation 30
12BA..................... Interpretation..................................................................... 30
12BAA.................. Definition of financial product......................................... 37
12BAB.................. Meaning of financial service............................................. 43
12BB..................... Misleading representations with respect to future matters. 49
12BC..................... Consumers........................................................................ 50
12BD..................... Acquisition, supply and re‑supply.................................... 53
12BE..................... Application of Division in relation to leases and licences of land and buildings 53
12BEA.................. Asserting a right to payment............................................. 53
Subdivision BA—Unfair contract terms 54
12BF..................... Unfair terms of consumer contracts and small business contracts 54
12BG..................... Meaning of unfair............................................................. 57
12BH..................... Examples of unfair terms.................................................. 58
12BI...................... Terms that define main subject matter of consumer contracts or small business contracts etc. are unaffected.......................................................................................... 59
12BK..................... Standard form contracts.................................................... 60
12BL..................... Contracts to which this Subdivision does not apply......... 61
12BLA.................. Replacement life insurance contracts to which this Subdivision does not apply 63
12BLB................... Renewed life insurance contracts to which this Subdivision does not apply 64
12BLC................... This Subdivision does not apply to certain contracts connected with financial markets 65
12BM.................... Contraventions of this Subdivision etc............................. 66
Subdivision C—Unconscionable conduct 66
12CA..................... Unconscionable conduct within the meaning of the unwritten law of the States and Territories 66
12CB..................... Unconscionable conduct in connection with financial services 66
12CC..................... Matters the court may have regard to for the purposes of section 12CB 67
Subdivision D—Consumer protection 71
12DA.................... Misleading or deceptive conduct....................................... 71
12DB..................... False or misleading representations.................................. 72
12DC..................... False or misleading representations in relation to financial products that involve interests in land 74
12DD.................... Cash price to be stated in certain circumstances................ 76
12DE..................... Offering rebates, gifts, prizes etc...................................... 76
12DF..................... Certain misleading conduct in relation to financial services 78
12DG.................... Bait advertising................................................................. 79
12DH.................... Referral selling.................................................................. 80
12DI...................... Accepting payment without intending or being able to supply as ordered 81
12DJ...................... Harassment and coercion.................................................. 81
12DK..................... Pyramid selling of financial products................................ 82
12DL..................... Unsolicited credit cards and debit cards............................ 85
12DM.................... Assertion of right to payment for unsolicited financial services etc. 87
12DMA................. Liability of recipient for unsolicited financial services etc. 88
12DMB................. Assertion of right to payment for unauthorised advertisements 88
12DMC................. Caps on commissions for add‑on risk products supplied in connection with motor vehicles 90
12DN.................... Application of provisions of this Division to information providers 93
Subdivision DA—Deferred sales for add‑on insurance products 95
12DO.................... Meaning of add‑on insurance product............................. 95
12DP..................... Meaning of add‑on insurance deferral period and add‑on insurance pre‑deferral period 96
12DQ.................... Prohibition on selling add‑on insurance products before end of add‑on insurance deferral period etc. 98
12DR..................... Prohibition on offering add‑on insurance product during add‑on insurance deferral period 100
12DS..................... Prohibition on offering add‑on insurance product—customer opt‑out 102
12DT..................... Right of return and refund for add‑on insurance product sold in contravention of section 12DQ 103
12DU.................... Exception for financial advisers...................................... 104
12DV.................... Exception for product covered by product intervention order 104
12DW.................... Exception for comprehensive motor vehicle insurance... 105
12DX.................... Exemption by regulations............................................... 106
12DY.................... Exemption by ASIC....................................................... 106
12DZ..................... Effect of exemption......................................................... 107
12DZA.................. Contravention of conditions on exemption..................... 108
Subdivision E—Conditions and warranties in consumer transactions 109
12EA..................... Conflict of laws.............................................................. 109
12EB..................... Application of provisions not to be excluded or modified 109
12EC..................... Limitation of liability for breach of certain conditions or warranties 110
12ED..................... Warranties in relation to the supply of financial services 111
Subdivision G—Enforcement and remedies 112
12GA.................... Interpretation................................................................... 112
12GB..................... Offences against Subdivision D or DA.......................... 112
12GBA.................. Declaration of contravention of civil penalty provision... 115
12GBB.................. Pecuniary penalty orders................................................. 116
12GBC.................. Maximum pecuniary penalty........................................... 117
12GBCA............... Pecuniary penalty applicable........................................... 117
12GBCB............... Civil enforcement of pecuniary penalty order................. 118
12GBCC............... Relinquishing the benefit derived from engaging in conduct resulting in a pecuniary penalty order 118
12GBCD............... Civil enforcement of relinquishment order...................... 119
12GBCE................ Meaning of benefit derived and detriment avoided because of a contravention of a civil penalty provision........................................................................................ 119
12GBCF................ Civil evidence and procedure rules for declarations of contravention, pecuniary penalty orders and relinquishment orders..................................................... 120
12GBCG............... Civil proceedings after criminal proceedings.................. 120
12GBCH............... Criminal proceedings during civil proceedings............... 120
12GBCJ................ Criminal proceedings after civil proceedings.................. 121
12GBCK............... Evidence given in civil proceedings not admissible in criminal proceedings 121
12GBCL................ Attempt and involvement in contravention treated in same way as actual contravention 121
12GBCM.............. Continuing contraventions of civil penalty provisions.... 122
12GBCN............... State of mind................................................................... 122
12GBCP................ Exceptions etc. to civil penalty provisions—burden of proof....... 123
12GBD.................. Indemnification of officers.............................................. 124
12GC..................... Enforcement and recovery of certain fines...................... 125
12GCA.................. Preference must be given to compensate persons who suffer damage as a result of contravention 127
12GD.................... Injunctions...................................................................... 128
12GF..................... Actions for damages....................................................... 129
12GFA.................. Recovering commissions that exceed a cap under section 12DMC 131
12GG.................... Finding in proceedings to be evidence............................ 132
12GH.................... Conduct by directors, employees or agents..................... 132
12GI...................... Defences......................................................................... 133
12GJ...................... Jurisdiction of courts...................................................... 135
12GK..................... Transfer of matters.......................................................... 136
12GL..................... Transfer of certain proceedings to Federal Circuit and Family Court of Australia (Division 1) 138
12GLA.................. Non‑punitive orders........................................................ 140
12GLB.................. Punitive orders requiring adverse publicity..................... 142
12GLC.................. ASIC may issue a public warning notice........................ 143
12GLD.................. Order disqualifying a person from managing corporations 144
12GM.................... Other orders.................................................................... 144
12GN.................... Power of Court to prohibit payment or transfer of money or other property 148
12GNA................. Limit on liability for misleading or deceptive conduct..... 150
12GNB.................. Orders to redress loss or damage suffered by non‑parties etc. 151
12GNC.................. Kinds of orders that may be made to redress loss or damage suffered by non‑parties etc. 154
12GND................. Declarations.................................................................... 155
12GNE.................. Orders made in favour of party to contract containing unfair term 156
12GNF.................. Orders made on application of ASIC to prevent and remedy unfair contract terms 158
12GNG................. Interaction with other provisions.................................... 159
12GO.................... Intervention by ASIC..................................................... 160
Subdivision GA—Proportionate liability for misleading and deceptive conduct 160
12GP..................... Application of Subdivision............................................. 160
12GQ.................... Certain concurrent wrongdoers not to have benefit of apportionment 161
12GR..................... Proportionate liability for apportionable claims............... 161
12GS..................... Defendant to notify plaintiff of concurrent wrongdoer of whom defendant is aware 162
12GT..................... Contribution not recoverable from defendant.................. 163
12GU.................... Subsequent actions......................................................... 163
12GV.................... Joining non‑party concurrent wrongdoer in the action.... 164
12GW.................... Application of Subdivision............................................. 164
Subdivision GB—Infringement notices 164
12GX.................... When an infringement notice may be given.................... 164
12GXA................. Provisions subject to an infringement notice................... 165
12GXB.................. Matters to be included in an infringement notice............. 165
12GXC.................. Payment period............................................................... 168
12GXD................. Extension of time to pay amount..................................... 170
12GXE.................. Payment by instalments.................................................. 171
12GXF.................. Withdrawal of an infringement notice............................. 172
12GXG................. Effect of payment of amount........................................... 174
12GXH................. Effect of this Subdivision............................................... 175
Subdivision GC—Substantiation notices 175
12GY.................... ASIC may require claims to be substantiated etc............ 175
12GYA................. Extending periods for complying with substantiation notices 177
12GYB.................. Compliance with substantiation notices.......................... 177
12GYC.................. False or misleading information etc................................ 178
Subdivision H—Miscellaneous 178
12HA.................... Relationship of this Subdivision to Part 3....................... 178
12HB..................... Disclosure of documents by ASIC................................. 178
12HC..................... Prosecutions................................................................... 179
12HD.................... Jurisdiction of Court to make declarations and orders.... 180
Part 3—Investigations and information‑gathering 182
Division 1—Investigations 182
13.......................... General powers of investigation..................................... 182
14.......................... Minister may direct investigations.................................. 183
15.......................... Investigation after report of receiver or liquidator........... 184
16.......................... Interim report on investigation........................................ 184
17.......................... Final report on investigation........................................... 185
18.......................... Distribution of report...................................................... 185
Division 2—Examination of persons 187
19.......................... Notice requiring appearance for examination.................. 187
20.......................... Proceedings at examination............................................. 187
21.......................... Requirements made of examinee..................................... 187
22.......................... Examination to take place in private................................ 188
22A....................... Proceedings at examination............................................. 188
23.......................... Examinee’s lawyer may attend........................................ 189
24.......................... Record of examination.................................................... 190
25.......................... Giving to other persons copies of record........................ 190
26.......................... Copies given subject to conditions.................................. 191
27.......................... Record to accompany report........................................... 191
Division 3—Inspection of books and audit information‑gathering powers 192
28.......................... When certain powers may be exercised.......................... 192
29.......................... ASIC may inspect books without charge........................ 192
30.......................... Notice to produce books about affairs of body corporate or registered scheme 193
30A....................... Notice to auditors concerning information and books..... 193
30B........................ Notice to registered liquidators concerning information and books 195
31.......................... Notice to produce books about financial products.......... 197
32A....................... Notice to produce books about financial services........... 199
33.......................... Notice to produce documents in person’s possession..... 199
34.......................... ASIC may authorise persons to require production of books, giving of information etc. 200
37.......................... Powers where books produced or seized........................ 201
38.......................... Powers where books not produced................................. 203
39.......................... Power to require person to identify property of body corporate 203
39A....................... ASIC may give copy of book relating to registered scheme to another person 203
39B........................ ASIC to notify foreign regulator’s access to information or books 204
39C........................ ASIC may give information and books in relation to Chapter 5 bodies corporate 204
Division 3A—Extra application of Crimes Act search warrant provisions 209
Subdivision A—Basic extra application 209
39D....................... Extra application of Crimes Act search warrant provisions 209
39E........................ Interpretation of modifications........................................ 210
Subdivision B—Modifications 210
39F........................ Major modifications—evidential material....................... 210
39G....................... Major modifications—who may apply for a warrant etc. 210
39H....................... Major modifications—purposes for which things may be used and shared 211
39I......................... Minor modifications....................................................... 215
Division 4—Requirements to disclose information 217
40.......................... When certain powers may be exercised.......................... 217
41.......................... Acquisitions and disposals of financial products............ 217
42.......................... Acquisitions and disposals of trust property by trustee companies 219
43.......................... Exercise of certain powers of ASIC in relation to financial products 220
44.......................... Exercise of certain powers of ASIC in relation to trust property acquired or disposed of by trustee company........................................................................................ 222
47.......................... Disclosures to take place in private................................. 223
48.......................... Lawyer of person making disclosure may attend............ 223
Division 5—Proceedings after an investigation 225
49.......................... ASIC may cause prosecution to be begun...................... 225
50.......................... ASIC may cause civil proceeding to be begun................ 226
Division 5A—Audit deficiency notifications and reports 227
50A....................... Application..................................................................... 227
50B........................ Notice of audit deficiency............................................... 228
50C........................ Audit deficiency report................................................... 228
50D....................... Publication of report....................................................... 229
50E........................ Consultation before publication...................................... 230
Division 6—Hearings 231
51.......................... Power to hold hearings................................................... 231
52.......................... General discretion to hold hearing in public or private.... 231
53.......................... Request by person appearing at hearing that it take place in public 231
54.......................... Certain hearings to take place in private.......................... 232
55.......................... ASIC may restrict publication of certain material............ 232
56.......................... Who may be present when hearing takes place in private 233
57.......................... Involvement of person entitled to appear at hearing........ 233
58.......................... Power to summon witnesses and take evidence.............. 234
59.......................... Proceedings at hearings.................................................. 235
59A....................... Proceedings at hearings.................................................. 236
60.......................... ASIC to take account of evidence and submissions........ 237
61.......................... Reference to Court of question of law arising at hearing 237
62.......................... Protection of members etc............................................... 238
Division 7—Offences 239
63.......................... Non‑compliance with requirements made under this Part 239
64.......................... False information............................................................ 240
65.......................... Obstructing person acting under this Part....................... 241
66.......................... Contempt of ASIC.......................................................... 241
67.......................... Concealing books relevant to investigation..................... 242
68.......................... Self‑incrimination........................................................... 242
69.......................... Legal professional privilege............................................ 243
70.......................... Powers of Court where non‑compliance with Part......... 244
Division 8—ASIC’s powers where non‑compliance with Part 245
71.......................... Orders by ASIC............................................................. 245
72.......................... Orders in relation to securities of a body corporate......... 245
73.......................... Orders in relation to financial products and trust property generally 246
75.......................... Orders under this Division............................................. 247
Division 9—Evidentiary use of certain material 249
76.......................... Statements made at an examination: proceedings against examinee 249
77.......................... Statements made at an examination: other proceedings... 249
78.......................... Weight of evidence admitted under section 77................ 250
79.......................... Objection to admission of statements made at examination 251
80.......................... Copies of, or extracts from, certain books...................... 252
81.......................... Report under Division 1................................................. 253
82.......................... Exceptions to admissibility of report............................... 253
83.......................... Material otherwise admissible......................................... 254
Division 10—Miscellaneous 255
84.......................... Requirement made of a body corporate........................... 255
85.......................... Evidence of authority...................................................... 255
86.......................... Giving documents to natural persons.............................. 255
87.......................... Place and time for production of books.......................... 256
88.......................... Application of Crimes Act and Evidence Act................. 256
89.......................... Allowances and expenses............................................... 256
90.......................... Expenses of investigation under Division 1.................... 257
91.......................... Recovery of expenses of investigation............................ 257
92.......................... Compliance with Part...................................................... 258
93.......................... Effect of Part................................................................... 258
93AA.................... Enforcement of undertakings given to ASIC.................. 258
Part 3A—Enforceable undertakings 260
93A....................... Undertakings—registered schemes................................. 260
93B........................ Undertakings—notified foreign passport funds.............. 261
93BA..................... Undertakings by corporate director of a CCIV............... 262
Part 3B—Criminal penalties 264
93C........................ Penalty for committing an offence.................................. 264
93D....................... Penalty applicable to an offence committed by an individual 264
93E........................ Penalty applicable to an offence committed by a body corporate 265
93F........................ Meaning of benefit derived and detriment avoided because of an offence 266
93G....................... Where is the penalty for an offence specified?................ 266
93H....................... If no penalty is specified................................................. 267
Part 4—ASIC’s business 268
Division 1—General 268
94.......................... Arrangement of ASIC’s business................................... 268
95.......................... ASIC to establish offices................................................ 268
96.......................... Regional Commissioners................................................ 268
Division 2—Divisions of ASIC 269
97.......................... ASIC may establish Division......................................... 269
98.......................... Effect of direction establishing Division......................... 269
99.......................... ASIC may reconstitute Division..................................... 269
100........................ Effect of reconstituting Division..................................... 270
101........................ Multiple Divisions.......................................................... 270
Division 3—Delegation by ASIC 271
102........................ Delegation....................................................................... 271
Division 4—Meetings of ASIC 273
103........................ Times and places of meetings......................................... 273
105........................ Quorum.......................................................................... 273
106........................ Who is to preside at meetings......................................... 273
107........................ Voting at meetings.......................................................... 274
107A..................... Conduct of meetings....................................................... 274
107B...................... ASIC resolutions without meetings................................ 274
Part 5—ASIC’s members 275
Division 1—Terms and conditions 275
108........................ Term of office as member............................................... 275
109........................ Term of office as Chairperson or Deputy Chairperson... 275
110........................ Resignation..................................................................... 275
111........................ Termination of appointment............................................ 275
112........................ Remuneration and allowances etc................................... 277
113........................ Leave of absence............................................................. 278
114........................ Superannuation arrangements......................................... 278
115........................ Other terms and conditions............................................. 279
Division 2—Acting appointments 280
116........................ Acting members.............................................................. 280
117........................ Acting Chairperson......................................................... 280
118........................ Acting Deputy Chairperson............................................ 281
119........................ Limitation on appointments to act during vacancy.......... 281
Division 3—Delegation by members 282
119A..................... Delegation by members.................................................. 282
Part 6—ASIC’s staff 283
120........................ Staff................................................................................ 283
121........................ Consultants etc................................................................ 283
122........................ Staff seconded to ASIC.................................................. 283
122A..................... Senior staff member determination................................. 283
Part 6A—Giving information etc. to APRA 285
122B...................... APRA may request information or documents............... 285
122C...................... ASIC must comply with request..................................... 285
122D..................... Information and documents covered by request.............. 286
122E...................... Notifying APRA of reasonable belief of material breach of APRA provisions 287
Part 7—Preventing conflicts of interest and misuse of information 288
Division 1—Disclosure of interests 288
123........................ Members to disclose certain interests to Minister........... 288
125........................ Notification of interests to ASIC.................................... 289
126........................ Defence........................................................................... 290
126A..................... Chairperson to ensure adequate disclosure of interest requirements for ASIC staff members 290
126B...................... ASIC Code of Conduct.................................................. 290
126C...................... ASIC Values.................................................................. 290
Division 2—Confidentiality 292
127........................ Confidentiality................................................................ 292
Part 8—Finance and reporting requirements 302
Division 2—Reporting requirements 302
136........................ Annual reports................................................................ 302
Division 3—Liability to taxation 305
137........................ Liability to taxation......................................................... 305
Division 4—Transparency 306
138........................ Annual “dashboard” report about ASIC’s regulatory costs 306
Part 9—Financial Services and Credit Panels 307
Division 1—ASIC to convene panels 307
139........................ ASIC to convene panels................................................. 307
Division 2—Panel members 308
140........................ Appointment of panel members...................................... 308
141........................ Minister may specify persons who are eligible to be appointed to panels 308
142........................ Disclosure of interests to ASIC...................................... 309
143........................ Remuneration.................................................................. 309
144........................ Resignation..................................................................... 309
145........................ Termination of appointment............................................ 310
146........................ Other terms and conditions............................................. 310
147........................ Application of finance law.............................................. 310
Division 3—Decisions of panels 311
Subdivision A—Decisions of panels at meetings 311
148........................ Convening meetings....................................................... 311
149........................ Presiding at meetings...................................................... 311
150........................ Disclosure of interests to panels..................................... 311
151........................ Quorum.......................................................................... 312
152........................ Voting at meetings.......................................................... 312
153........................ Participation in meetings etc............................................ 313
154........................ Conduct of meetings....................................................... 313
155........................ Minutes........................................................................... 313
Subdivision B—Decisions of panels without meetings 313
156........................ Decisions without meetings............................................ 313
Division 4—Panel hearings 315
Subdivision A—General 315
157........................ When hearings are to be held.......................................... 315
158........................ Panels to take account of evidence and submissions....... 315
Subdivision B—Hearing procedures 316
159........................ Proceedings at hearings.................................................. 316
159A..................... Proceedings at hearings.................................................. 316
160........................ Notice of hearings........................................................... 317
161........................ Who may be present at hearings etc................................ 318
162........................ Appearance of affected persons at hearings.................... 319
163........................ Affected persons may request hearings to be held in public 319
164........................ Representation at hearings.............................................. 320
165........................ Power to require persons to appear and give evidence etc. 320
166........................ Allowances and expenses............................................... 321
167........................ Panels may restrict publication of certain material........... 322
Subdivision C—Offences 322
168........................ Contempt of panels......................................................... 322
169........................ Giving false evidence...................................................... 323
170........................ Failing to comply with certain requirements................... 323
171........................ Being present at hearings................................................ 324
171A..................... Publication of restricted material..................................... 324
Subdivision D—Other matters 325
171B...................... Reference to Court of question of law arising at hearing 325
171C...................... Protection of panel members etc..................................... 325
Division 5—Information given to panel members 327
171D..................... Use and disclosure of information.................................. 327
Division 6—Enforceable undertakings 328
171E...................... Variation, withdrawal and enforcement of undertakings given to Financial Services and Credit Panels 328
Division 7—Electronic communication 330
171F...................... Electronic communication of documents......................... 330
Part 10—The Takeovers Panel 331
Division 1—General 331
172........................ Membership.................................................................... 331
173........................ President......................................................................... 332
174........................ Functions and powers of Takeovers Panel..................... 332
175........................ Term of office as member............................................... 333
176........................ Term of office as President............................................. 333
177........................ Resignation..................................................................... 333
178........................ Termination of appointment............................................ 333
179........................ Remuneration and allowances......................................... 334
180........................ Leave of absence............................................................. 334
181........................ Other terms and conditions............................................. 334
182........................ Acting President............................................................. 334
183........................ Annual report.................................................................. 335
Division 2—Conduct of Takeovers Panel’s business 336
184........................ Constitution of Takeovers Panel in relation to particular matters 336
185........................ Disclosure of interests by members................................ 337
186........................ Application of Division 2 of Part 7................................. 338
Division 3—Takeovers Panel proceedings 339
187........................ Interpretation................................................................... 339
188........................ Power to conduct proceedings........................................ 339
190........................ Takeovers Panel may restrict publication of certain material 339
192........................ Power to summon witnesses and take evidence.............. 340
193........................ Quorum.......................................................................... 342
194........................ Legal representation in proceedings before the Takeovers Panel 342
195........................ Procedure........................................................................ 342
197........................ Protection of members etc............................................... 342
198........................ Non‑compliance with requirements made under section 192 343
199........................ False evidence................................................................. 343
200........................ Contempt of Takeovers Panel......................................... 343
201........................ Powers of Court where non‑compliance with section 192 344
201A..................... Undertakings to the Takeovers Panel.............................. 345
Part 11—Companies Auditors Disciplinary Board 346
Division 1—Constitution of Disciplinary Board 346
203........................ Membership of Disciplinary Board................................ 346
204........................ Functions and powers of Disciplinary Board................. 347
205........................ Term of office................................................................. 347
206........................ Resignation from office.................................................. 347
207........................ Termination of appointment............................................ 347
208........................ Acting Chairperson......................................................... 348
208A..................... Acting Deputy Chairperson............................................ 349
210........................ Meetings of the Disciplinary Board................................ 349
210A..................... Panel to be constituted to deal with application............... 350
210B...................... Meetings of Panel of the Disciplinary Board.................. 352
211........................ Disclosure of interests.................................................... 353
212........................ Remuneration and allowances......................................... 353
213........................ Confidentiality................................................................ 354
214........................ Annual report.................................................................. 354
Division 2—Hearings by Disciplinary Board 356
215........................ Definition........................................................................ 356
216........................ Hearings......................................................................... 356
217........................ Power to summon witnesses and take evidence.............. 358
218........................ Proceedings at hearings.................................................. 359
218A..................... Proceedings at hearings.................................................. 360
219........................ Failure of witnesses to attend and answer questions....... 361
220........................ Contempt of Disciplinary Board..................................... 362
221........................ Protection of members etc............................................... 363
222........................ Hearings taken to be judicial proceedings....................... 364
223........................ Costs............................................................................... 364
Part 12—The Australian financial reporting system 367
224........................ Main objects of this Part................................................. 367
Division 1—The financial reporting system 368
Subdivision A—The Financial Reporting Council 368
225........................ Functions and powers of the Financial Reporting Council 368
225A..................... Financial Reporting Council’s information gathering powers 372
Subdivision B—The Australian Accounting Standards Board and the Office of the Australian Accounting Standards Board 373
226........................ The Office of the Australian Accounting Standards Board 373
226A..................... Office of the AASB’s functions and powers.................. 374
227........................ AASB’s functions and powers....................................... 375
Subdivision C—The Auditing and Assurance Standards Board and the Office of the Auditing and Assurance Standards Board 376
227AA.................. The Office of the Auditing and Assurance Standards Board 376
227AB................... Office of the AUASB’s functions and powers............... 376
227A..................... The Auditing and Assurance Standards Board............... 377
227B...................... AUASB’s functions and powers.................................... 377
Division 2—Accounting standards 379
228........................ Purposive interpretation of standards.............................. 379
229........................ Generic and specific standards........................................ 379
230........................ Comparative amounts..................................................... 380
231........................ Cost/benefit analysis....................................................... 380
232........................ FRC views...................................................................... 380
233........................ International accounting standards.................................. 381
234........................ Validity of accounting standards..................................... 381
Division 2A—Auditing standards 382
234A..................... Purposive interpretation of standards.............................. 382
234B...................... Generic and specific standards........................................ 382
234C...................... FRC views...................................................................... 382
234D..................... International auditing standards...................................... 383
234E...................... Validity of auditing standards......................................... 383
Division 3—Administrative provisions 384
Subdivision A—The Financial Reporting Council 384
235A..................... Membership of FRC....................................................... 384
235AA.................. Terms and conditions of appointment of FRC members. 384
235B...................... Annual report.................................................................. 385
235C...................... Procedure........................................................................ 385
Subdivision AA—The Office of the AASB 385
235D..................... Duties of the Chair of the AASB.................................... 385
235E...................... Staff of the Office of the AASB..................................... 386
235F...................... Consultants and persons seconded to the Office of the AASB 387
235G..................... Office of the AASB to have regard to FRC’s advice etc. 388
235H..................... Chair not subject to direction by the AASB on certain matters 388
Subdivision B—The Australian Accounting Standards Board 388
236A..................... Procedures...................................................................... 388
236AA.................. AASB to have regard to FRC’s advice etc..................... 388
236B...................... Appointment of members of the AASB......................... 389
236BA................... Terms and conditions of appointment of members of the AASB 389
236C...................... Resignation and termination of appointment................... 390
236D..................... Acting appointments....................................................... 391
236DA.................. Disclosure of interests.................................................... 392
Subdivision BAA—The Office of the AUASB 393
236DB................... Duties of the Chair of the AUASB................................. 393
236DC................... Staff of the Office of the AUASB.................................. 394
236DD.................. Consultants and persons seconded to the Office of the AUASB 395
236DE................... Office of the AUASB to have regard to FRC’s advice etc. 396
236DF................... Chair not subject to direction by the AUASB on certain matters 396
Subdivision BA—The Auditing and Assurance Standards Board 396
236E...................... Procedures...................................................................... 396
236EA................... AUASB to have regard to FRC’s advice etc.................. 397
236F...................... Appointment of members of the AUASB...................... 397
236FA................... Terms and conditions of appointment of members of the AUASB 398
236G..................... Resignation and termination of appointment................... 398
236H..................... Acting appointments....................................................... 400
236J....................... Disclosure of interests.................................................... 401
Subdivision C—Confidentiality 402
237........................ Confidentiality................................................................ 402
Part 14—The Parliamentary Joint Committee on Corporations and Financial Services 403
241........................ Membership.................................................................... 403
242........................ Powers and proceedings................................................. 404
243........................ Duties............................................................................. 404
Part 15—Miscellaneous 406
243B...................... Offences committed partly in and partly out of the jurisdiction 406
243C...................... ASIC may publish internal dispute resolution data......... 406
243D..................... Financial transaction reports........................................... 407
243E...................... Suspicious matters reports under the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006........................................................................................ 407
243F...................... Treat the corporate director of a CCIV as providing financial services etc. being provided by the CCIV 408
244........................ Review by Administrative Appeals Tribunal of certain decisions 409
244A..................... Notice of reviewable decision and review rights............. 410
246........................ Liability for damages...................................................... 411
247........................ Duplicate seals................................................................ 412
248........................ Judicial notice of ASIC’s seal and members’ signatures 413
249........................ Validation of agreements to employ staff or engage consultants 413
250........................ Compensation for compulsory acquisition...................... 414
251........................ The regulations............................................................... 415
Part 16—Transition from the old ASIC legislation 416
Division 1—Preliminary 416
253........................ Object of Part.................................................................. 416
254........................ Definitions...................................................................... 417
255........................ Relationship of Part with State validation Acts............... 421
256........................ References to things taken or deemed to be the case etc.. 422
257........................ Existence of several versions of the old ASIC legislation does not result in this Part operating to take the same thing to be done several times under the new ASIC legislation etc. 423
258........................ Penalty units in respect of pre‑commencement conduct remain at $100 424
259........................ Ceasing to be a referring State does not affect previous operation of this Part 424
Division 2—Carrying over bodies established etc. or persons appointed under the old ASIC Act 425
260........................ Division has effect subject to Division 7 regulations...... 425
261........................ Carrying over bodies established under the old ASIC Act 425
262........................ Carrying over the Chairman and Deputy Chairman of the Financial Reporting Council 425
Division 3—Carrying over the old ASIC Regulations 426
263........................ Division has effect subject to Division 7 regulations...... 426
264........................ Old ASIC Regulations continue to have effect............... 426
Division 4—Court proceedings and orders 427
265........................ Division has effect subject to Division 7 regulations...... 427
266........................ Definitions...................................................................... 427
267........................ Treatment of court proceedings under or related to the old ASIC legislation—proceedings other than federal ASIC proceedings.......................................................... 429
268........................ Treatment of court proceedings under or related to the old ASIC legislation—federal ASIC proceedings........................................................................................ 432
268A..................... Appeals etc. in relation to some former federal corporations proceedings 433
268B...................... Effect of decisions and orders made in federal corporations proceedings before commencement 434
269........................ References to proceedings and orders in the new ASIC legislation 434
Division 5—Functions and powers of ASIC 436
270........................ Division has effect subject to Division 7 regulations...... 436
271........................ Non‑federal proceedings etc........................................... 436
272........................ NCSC’s functions and powers....................................... 437
Division 6—General transitional provisions relating to other things done etc. under the old ASIC legislation 439
273........................ Provisions in this Division have effect subject to the other Divisions 439
274........................ Provisions of this Division may have an overlapping effect 440
275........................ Things done by etc. carried over provisions continue to have effect 440
276........................ Creation of equivalent rights and liabilities to those that existed before the commencement under carried over provisions of the old ASIC legislation............................ 442
277........................ Creation of equivalent rights and liabilities to those that existed before the commencement under repealed provisions of the old ASIC legislation............................ 444
278........................ Old ASIC legislation time limits continue to run............ 446
279........................ Preservation of significance etc. of events or circumstances 447
280........................ References in the new ASIC legislation generally include references to events, circumstances or things that happened or arose before the commencement................. 448
281........................ References in the new ASIC legislation to that legislation or the new corporations legislation generally include references to corresponding provisions of the old ASIC legislation or old corporations legislation 448
282........................ Carrying over references to corresponding previous laws or relevant previous laws 449
283........................ References to ASIC legislation in instruments................ 450
284........................ Old transitional provisions continue to have their effect. 451
Division 7—Regulations dealing with transitional matters 454
285........................ Regulations may deal with transitional matters............... 454
Part 17—Transitional provisions relating to the Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 456
285A..................... Definitions...................................................................... 456
286........................ Application of new subsection 225A(5)......................... 456
287........................ Application of Part 8 of Schedule 1 to the amending Act 456
288........................ Application of Schedule 3 to the amending Act.............. 458
Part 18—Transitional provisions relating to the Corporations Amendment (Corporate Reporting Reform) Act 2010 459
289........................ Definitions...................................................................... 459
290........................ Application of Companies Auditors and Liquidators Disciplinary Board amendments 459
291........................ Application of pre‑hearing conference amendments....... 460
Part 19—Transitional provisions relating to the Corporations Legislation Amendment (Audit Enhancement) Act 2012 461
292........................ Definitions...................................................................... 461
293........................ Amendments made by Part 1 of Schedule 2—final report on auditor independence functions 461
294........................ Application of amendments made by Parts 2 and 3 of Schedule 2 461
Part 20—Transitional provisions relating to the Clean Energy Legislation (Carbon Tax Repeal) Act 2014 462
295........................ Definition........................................................................ 462
296........................ Transitional—carbon units issued before the designated carbon unit day 462
Part 21—Transitional provisions relating to the Corporations Legislation Amendment (Deregulatory and Other Measures) Act 2015 463
297........................ Definitions...................................................................... 463
298........................ FRC members................................................................. 463
299........................ AASB members............................................................. 464
300........................ AUASB members.......................................................... 464
Part 22—Application provision relating to the Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Act 2015 465
301........................ Application..................................................................... 465
Part 23—Transitional provisions relating to the Insolvency Law Reform Act 2016 467
302........................ Definitions...................................................................... 467
303........................ General powers of investigation continue to apply to failure to comply with duties before the commencement day.................................................................................. 467
304........................ Notice to registered liquidators concerning information and books—requirements before the commencement day.................................................................................. 468
305........................ ASIC may give information and books relating to pre‑commencement activity 468
306........................ Information to be included in ASIC’s annual report....... 469
307........................ Appointments to the Companies Auditors Disciplinary Board 469
Part 24—Application provision relating to the Treasury Laws Amendment (2017 Measures No. 1) Act 2017 470
308........................ Application..................................................................... 470
Part 25—Transitional provisions relating to the Treasury Laws Amendment (Enhancing ASIC’s Capabilities) Act 2018 471
309........................ Definitions...................................................................... 471
310........................ Staff members engaged under former subsection 120(3) 471
311........................ APS employees in ASIC................................................ 471
312........................ ASIC Enterprise Agreement........................................... 472
313........................ Variation of terms and conditions of employment.......... 473
314........................ Transitional rules............................................................ 473
Part 26—Transitional provisions relating to the Treasury Laws Amendment (ASIC Governance) Act 2018 476
314A..................... Saving of appointments.................................................. 476
Part 26A—Application provisions relating to the Treasury Laws Amendment (Australian Consumer Law Review) Act 2018 477
315........................ Application—listed public companies............................. 477
316........................ Application—power to obtain information, documents and evidence in relation to unfair contract terms 477
317........................ Application—consumer protection................................. 477
318........................ Application—financial products..................................... 477
Part 27—Application and transitional provisions relating to the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 478
320........................ Definitions...................................................................... 478
321........................ Application—offences.................................................... 478
322........................ Application—civil penalty provisions............................. 478
323........................ Application—infringement notices................................. 478
Part 28—Transitional provisions relating to the Financial Sector Reform (Hayne Royal Commission Response—Stronger Regulators (2019 Measures)) Act 2020 480
324........................ Application of amendments—search warrant provisions 480
Part 29—Application provisions relating to Schedule 12 to the Financial Sector Reform (Hayne Royal Commission Response) Act 2020 481
325........................ Definitions...................................................................... 481
326........................ Application..................................................................... 481
Part 29A—Application provisions relating to the Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2019 Measures)) Act 2020 482
326A..................... Application—unfair contract terms................................. 482
Part 30—Application provisions relating to the Treasury Laws Amendment (2019 Measures No. 3) Act 2020 484
327........................ Application—amounts of pecuniary penalties................. 484
328........................ Application—authorised disclosure to monitoring body. 484
Part 31—Application and transitional provisions relating to Schedule 3 to the Financial Sector Reform (Hayne Royal Commission Response) Act 2020 485
329........................ Application—deferred sales model for add‑on insurance 485
Part 32—Application and transitional provisions relating to Schedule 4 to the Financial Sector Reform (Hayne Royal Commission Response) Act 2020 486
330........................ Application—caps on commissions................................ 486
Part 33—Transitional provision relating to the Treasury Laws Amendment (2020 Measures No. 6) Act 2020 487
331........................ Transitional—directions by Minister.............................. 487
Part 34—Application provision relating to Schedule 1 to the Financial Regulator Assessment Authority (Consequential Amendments and Transitional Provisions) Act 2021 488
333........................ Application—confidentiality........................................... 488
Part 36—Application provision relating to the Treasury Laws Amendment (2021 Measures No. 5) Act 2021 489
336........................ Application—reports of liquidators................................ 489
Part 37—Application and transitional provisions for the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 490
337........................ Definitions...................................................................... 490
338........................ Validation of acts or things done during interim period.. 491
339........................ Application of item 102 of Schedule 1 to the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020....................................................... 492
Part 38—Transitional provisions relating to the Financial Accountability Regime (Consequential Amendments) Act 2023 494
340........................ Application—confidentiality........................................... 494
341........................ Information to be included in ASIC’s annual report....... 494
Part 39—Application provisions relating to the Treasury Laws Amendment (More Competition, Better Prices) Act 2022 495
342........................ Amendments relating to unfair contract terms................. 495
343........................ Application of sections 12BLA and 12BLB................... 496
Part 40—Application and transitional provisions relating to the ALRC Financial Services Interim Reports 497
Division 1—Schedule 2 to the Treasury Laws Amendment (Modernising Business Communications and Other Measures) Act 2023 497
344........................ Definitions...................................................................... 497
344A..................... Translation of references in instruments......................... 497
Division 2—Schedules 1 and 2 to the Treasury Laws Amendment (2023 Law Improvement Package No. 1) Act 2023 499
344B...................... Definitions...................................................................... 499
344C...................... Translation of references in instruments......................... 499
344D..................... Calculation of time.......................................................... 500
Part 41—Application provision relating to Schedule 6 to the Treasury Laws Amendment (2023 Law Improvement Package No. 1) Act 2023 502
345........................ Application—hearings held by a Panel of the Disciplinary Board 502
346........................ Application—claims handling and settling services........ 502
Endnotes 503
Endnote 1—About the endnotes 503
Endnote 2—Abbreviation key 505
Endnote 3—Legislation history 506
Endnote 4—Amendment history 520
Endnote 5—Editorial changes 551
An Act to provide for the Australian Securities and Investments Commission and certain other bodies, and for other purposes
Part 1—Preliminary
Division 1—Objects
1 Objects
(1) The objects of this Act are:
(a) to provide for the Australian Securities and Investments Commission (ASIC) which will administer such laws of the Commonwealth, a State or a Territory as confer functions and powers under those laws on ASIC; and
(b) to provide for ASIC’s functions, powers and business; and
(d) to establish a Takeovers Panel, a Companies Auditors Disciplinary Board, a Financial Reporting Council, an Australian Accounting Standards Board, an Auditing and Assurance Standards Board and a Parliamentary Joint Committee on Corporations and Financial Services.
(2) In performing its functions and exercising its powers, ASIC must strive to:
(a) maintain, facilitate and improve the performance of the financial system and the entities within that system in the interests of commercial certainty, reducing business costs, and the efficiency and development of the economy; and
(b) promote the confident and informed participation of investors and consumers in the financial system; and
(d) administer the laws that confer functions and powers on it effectively and with a minimum of procedural requirements; and
(e) receive, process and store, efficiently and quickly, the information given to ASIC under the laws that confer functions and powers on it; and
(f) ensure that information is available as soon as practicable for access by the public; and
(g) take whatever action it can take, and is necessary, in order to enforce and give effect to the laws of the Commonwealth that confer functions and powers on it.
(2A) Without limiting subsection (2), ASIC must consider the effects that the performance of its functions and the exercise of its powers will have on competition in the financial system.
(3) This Act has effect, and is to be interpreted, accordingly.
Division 2—Citation
1A Short title
This Act may be cited as the Australian Securities and Investments Commission Act 2001.
Division 3—Commencement and application
2 Commencement
This Act commences at the same time as the Corporations Act 2001.
4 Application of this Act
(1) This Act applies:
(a) in this jurisdiction; and
(b) in a State that is not a referring State (but only to the extent to which the application would be within the legislative powers of the Parliament (including powers it has under paragraphs 51(xxxvii) and (xxxix) of the Constitution)); and
(c) in such external Territories (if any) as are prescribed.
(2) Without limiting paragraph (1)(c), if an external Territory is prescribed, regulations prescribing the external Territory may provide:
(a) that only some of the provisions of this Act apply in the external Territory; and
(b) that provisions that apply in the external Territory only apply in specified circumstances.
(3) If an external Territory is prescribed for the purposes of paragraph (1)(c), in a provision of this Act that applies (either generally or in particular circumstances) in the external Territory, a reference to a term covered by subsection (4) includes a reference to that external Territory (including its coastal sea).
(4) For the purposes of subsection (3), the following terms are covered:
(a) “Australia”;
(b) “Commonwealth”;
(c) “Territory”;
(d) “this jurisdiction”;
(e) a term the definition of which includes a term mentioned in paragraphs (a) to (d).
4A Application of the Criminal Code
Chapter 2 of the Criminal Code applies to all offences against this Act.
Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
Division 4—Interpretation
5 Interpretation
(1) In this Act, unless the contrary intention appears:
AASB means the Australian Accounting Standards Board.
absent from office, in relation to a holder of an office, means:
(a) absent from duty or from Australia; or
(b) unable, for any reason, to perform the functions of the office.
accounting member of the Disciplinary Board has the meaning given by subsection 203(1A).
affairs, in relation to a body corporate, has the same meaning as in section 232 of the Corporations Act.
arrangement has the meaning given by subsection 761B(1) of the Corporations Act.
ASIC means the Australian Securities and Investments Commission.
ASIC delegate means a person to whom, or a body to which, a function or power is delegated under section 102.
assist, in relation to an ASIC delegate, means:
(a) to perform functions:
(i) as a member, officer or employee of the ASIC delegate; and
(ii) in connection with the ASIC delegate’s performance or exercise of a function or power delegated under section 102; or
(b) to perform services for the ASIC delegate in connection with the ASIC delegate’s performance or exercise of a function or power delegated under section 102.
AUASB means the Auditing and Assurance Standards Board.
audit deficiency report has the meaning given by subsection 50C(1).
Australia means the Commonwealth of Australia and, when used in a geographical sense, includes each Territory.
Note 1: The Australian Capital Territory, the Jervis Bay Territory, the Northern Territory, Norfolk Island and the Territories of Christmas Island and of Cocos (Keeling) Islands are covered by the definition of Territory in this subsection.
Note 2: The meaning of Australia is affected by subsection 4(3) (when used in a provision applying in an external Territory).
Australian auditor means:
(a) an individual auditor; or
(b) an audit firm; or
(c) an audit company;
that is conducting, or that has conducted, audits undertaken for the purposes of the Australian Charities and Not‑for‑profits Commission Act 2012 or the Corporations Act and includes a registered company auditor who is participating in, or has participated in, audits of that kind.
benefit derived and detriment avoided:
(a) because of an offence—has the meaning given by section 93F; and
(b) because of the contravention of a civil penalty provision—has the meaning given by section 12GBCE.
books includes:
(a) a register; and
(b) financial reports or financial records, however compiled, recorded or stored; and
(c) a document; and
(d) banker’s books; and
(e) any other record of information.
business member of the Disciplinary Board has the meaning given by subsection 203(1A).
Chairperson means:
(a) except in Part 11 or in relation to the Disciplinary Board—the Chairperson of ASIC; and
(b) in Part 11 or in relation to the Disciplinary Board—the Chairperson of the Disciplinary Board.
Commonwealth means the Commonwealth of Australia and, when used in a geographical sense, includes each Territory.
Note: The Australian Capital Territory, the Jervis Bay Territory, the Northern Territory, Norfolk Island and the Territories of Christmas Island and of Cocos (Keeling) Islands are covered by the definition of Territory in this subsection.
contravention:
(a) in relation to an offence against a law—includes:
(i) an offence against section 6 of the Crimes Act 1914; and
(ii) an ancillary offence (within the meaning of the Criminal Code);
relating to the offence against the law; and
(b) in relation to a civil penalty provision—has a meaning affected by section 12GBCL.
Corporations Act means the Corporations Act 2001 and regulations and rules made under that Act.
corporations legislation means:
(a) this Act; and
(b) the Corporations Act.
court, except in section 248, includes a tribunal having power to require the production of documents or the answering of questions.
CSC (short for Commonwealth Superannuation Corporation) has the same meaning as in the Governance of Australian Government Superannuation Schemes Act 2011.
dealing in a financial product has the meaning given by section 766C of the Corporations Act and deal in a financial product has a corresponding meaning.
Deputy Chairperson means:
(a) in relation to the Disciplinary Board—the Deputy Chairperson of the Disciplinary Board; and
(b) in any other case—a Deputy Chairperson of ASIC.
Disciplinary Board means the Companies Auditors Disciplinary Board.
eligible employee has the same meaning as in the Superannuation Act 1976.
eligible person, in relation to a person, means a person who:
(a) if the first‑mentioned person is a body corporate (other than a CCIV)—is or has been an officer of the body within the meaning of the corporations legislation (other than the excluded provisions); or
(aa) if the first‑mentioned person is a CCIV—is or has been:
(i) an officer of the CCIV; or
(ii) an officer of an officer of the CCIV; or
(b) in any case:
(i) is or has been an employee, agent, banker, solicitor or auditor of; or
(ii) is acting, or has acted, in any other capacity on behalf of;
the first‑mentioned person.
Note: For paragraph (aa), officer is defined in this subsection.
engage in conduct:
(a) in Division 2 of Part 2—has the meaning given by subsection 12BA(2); and
(b) in the other provisions of this Act—means do an act or omit to do an act.
examination means an examination of a person pursuant to a requirement made under section 19.
excluded provisions means section 12A and Division 2 of Part 2.
expenses, in relation to an investigation under Division 1 of Part 3, includes costs and expenses incurred in relation to a proceeding begun under section 50 as a result of the investigation.
external Territory:
(a) means a Territory referred to in section 122 of the Constitution, where an Act makes provision for the government of the Territory as a Territory; but
(b) does not include a Territory covered by the definition of Territory in this subsection.
Note: The Australian Capital Territory, the Jervis Bay Territory, the Northern Territory, Norfolk Island and the Territories of Christmas Island and of Cocos (Keeling) Islands are covered by the definition of Territory in this subsection.
fail means refuse or fail.
financial product:
(a) in Division 2 of Part 2—has the meaning given by section 12BAA; and
(b) in the other provisions of this Act—has the meaning given by Division 3 of Part 7.1 of the Corporations Act.
financial service:
(a) in Division 2 of Part 2—has the meaning given by section 12BAB; and
(b) in the other provisions of this Act—has the same meaning as it has in the Corporations Act.
Note: Some provisions of of the Corporations Act have a modified meaning when applying to CCIVs (see Part 8B.7 of that Act).
Financial Services and Credit Panel means a panel convened under subsection 139(1).
foreign business law means:
(a) a law of a foreign country that regulates, or relates to the regulation of, business or persons engaged in business; or
(b) a law, or rules or regulations (however described), that an international business regulator administers or enforces.
foreign country includes:
(a) a part of a foreign country; and
(b) when used in a provision of this Act that does not apply (either generally or in particular circumstances) to a particular external Territory—that external Territory (but only to the extent that the provision does not apply in that external Territory).
FRC means the Financial Reporting Council.
give has:
(a) in relation to a document—a meaning affected by section 86; and
(b) in relation to information—a meaning affected by section 6.
hearing, in this section and Part 3, means a hearing before ASIC and, in sections 52, 54, 55 and 56, includes a part of such a hearing.
House means a House of the Parliament.
information has a meaning affected by section 6.
international accounting standards means accounting standards made by:
(a) the International Accounting Standards Board; or
(b) another body specified by the regulations.
international auditing standards means auditing standards made by:
(a) the International Auditing and Assurance Standards Board; or
(b) another body specified by the regulations.
international business regulator means a body that satisfies the following conditions:
(a) the body has functions relating to the regulation, in 2 or more countries, of business, or persons engaged in business;
(b) those functions are conferred on the body by:
(i) a law or laws in force in those countries; or
(ii) a treaty, or other international agreement, to which those countries are parties; or
(iii) without limiting subparagraphs (i) and (ii)—a parliament or other body established by or under a treaty, or other international agreement, to which those countries are parties.
investigate, in relation to ASIC, means investigate in the course of performing or exercising any of ASIC’s functions and powers.
meeting means:
(a) in Part 4—a meeting of ASIC;
(c) in Part 11—a meeting of the Disciplinary Board.
member means:
(a) except in Division 2 of Part 4, in Part 10, 11, 12 or 14, or in relation to a Division, the Takeovers Panel, a Financial Services and Credit Panel, the Disciplinary Board, the FRC, the AASB or the Parliamentary Committee—a member of ASIC; and
(aa) in relation to a Financial Services and Credit Panel—a member of the panel appointed under subsection 140(1); and
(c) in Part 10 or in relation to the Takeovers Panel—a member of the Takeovers Panel; and
(d) in Part 11 or in relation to the Disciplinary Board—the Chairperson or any other member of the Disciplinary Board; and
(e) in relation to the FRC—a member of the FRC; and
(ea) in relation to the AASB—a member of the AASB; and
(eb) in relation to the AUASB—a member of the AUASB; and
(f) in Part 14 or in relation to the Parliamentary Committee—a member of the Parliamentary Committee.
Office of the AASB means the Office of the Australian Accounting Standards Board.
Office of the AUASB means the Office of the Auditing and Assurance Standards Board.
officer means:
(a) an officer within the meaning of the Corporations Act; or
(b) a provisional liquidator.
old ASIC Act means the Australian Securities and Investments Commission Act 1989 as in force from time to time before the commencement of this Act.
Panel Chairperson has the meaning given by subsection 210A(3A) (about constituting a Panel of the Disciplinary Board).
Panel of the Disciplinary Board means a Panel constituted by the Chairperson of the Disciplinary Board under section 210A to hear a particular matter.
Parliamentary Committee means the Parliamentary Joint Committee on Corporations and Financial Services.
penalty applicable:
(a) to an offence committed by an individual:
(i) in Division 2 of Part 2—has the meaning given by section 12GBCA; and
(ii) in the other provisions of this Act——has the meaning given by section 93D; and
(b) to an offence committed by a body corporate:
(i) in Division 2 of Part 2—has the meaning given by section 12GBCA; and
(ii) in the other provisions of this Act——has the meaning given by section 93E.
person has the same meaning as in Chapter 7 of the of the Corporations Act.
Note: See sections 761F (which deals with partnerships) and 761FA (which deals with multiple trustees) of the Corporations Act.
power includes an authority.
prescribed means prescribed by this Act or the regulations.
President means the President of the Takeovers Panel.
proceeding means:
(a) a proceeding in a court; or
(b) a proceeding or hearing before, or an examination by or before, a tribunal;
whether the proceeding, hearing or examination is of a civil, administrative, criminal, disciplinary or other nature.
produce, except in Part 3, includes permit access to.
professional accounting body means a body prescribed by the regulations for the purposes of this definition.
property means any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description and includes a thing in action and money.
record, in relation to an examination, means the whole or a part of a record made under section 24 of statements made at the examination.
regulations means regulations made under this Act.
report includes an interim report.
Schedule 2 to the Corporations Act means Schedule 2 to the Corporations Act 2001 and rules made under that Schedule.
security has the meaning given by subsection 92(5) of the Corporations Act.
senior staff member means a staff member identified as a senior staff member in a determination made under section 122A.
staff member means:
(a) a person employed under section 120; or
(b) a person engaged under subsection 121(1); or
(c) any of the officers, employees and persons who under section 122 are to assist ASIC.
statement, in relation to an examination, includes a question asked, an answer given, and any other comment or remark made, at the examination.
superannuation benefits includes:
(a) benefits in the nature of superannuation benefits; and
(b) benefits similar to benefits provided under the Superannuation Act 1976; and
(c) benefits similar to the benefits provided under the Superannuation Act 1990.
Takeovers Panel means the Takeovers Panel continued in existence by section 261.
Takeovers Panel proceedings means proceedings before the Takeovers Panel on:
(a) an application made to the Takeovers Panel under the Corporations Act; or
(b) a reference of a decision to the Takeovers Panel for review under the Corporations Act.
Territory:
(a) means the following:
(i) the Australian Capital Territory;
(ii) the Jervis Bay Territory;
(iii) the Northern Territory;
(iv) Norfolk Island;
(v) the Territory of Christmas Island;
(vi) the Territory of Cocos (Keeling) Islands; and
(b) when used in a geographical sense—includes the Territory’s coastal sea (if any).
Note 1: The term external Territory is defined in this subsection to be any Territory, other than a Territory covered by this definition, that is referred to in section 122 of the Constitution, where an Act makes provision for the government of the Territory as a Territory.
Note 2: The meaning of Territory is affected by subsection 4(3) (when used in a provision applying in an external Territory).
this Act includes the regulations.
this jurisdiction means:
(a) each referring State (including, when used in a geographical sense, its coastal sea); and
(b) each Territory.
Note 1: Territory, when used in a geographical sense, includes the Territory’s coastal sea, but the term does not include an external Territory. See the definitions of Territory and external Territory in this subsection.
Note 2: The meaning of this jurisdiction is affected by subsection 4(3) (when used in a provision applying in an external Territory).
tribunal means:
(a) a tribunal in Australia; or
(b) any other body, authority or person in Australia having power, by law or by consent of parties, to hear, receive or examine evidence.
trust property, in relation to a trustee company, means property that is or was held by the trustee company as trustee.
virtual enquiry technology means any technology that allows a person to appear at all or part of a hearing, examination or other enquiry without being physically present at the hearing, examination or other enquiry.
witness:
(a) in relation to a hearing before ASIC, means a person appearing at the hearing to give evidence; or
(b) in relation to Takeovers Panel proceedings, means a person appearing in the proceedings to give evidence.
written record, in relation to an examination, means:
(a) a record of the examination:
(i) that is made in writing; or
(ii) as reduced to writing; or
(b) a part of such a record.
(2) Subject to this Act, Part 1.2 (Interpretation) of the Corporations Act applies for the purposes of this Act as if the provisions of this Act were provisions of that Act.
Note: Part 1.2 of the Corporations Act includes the Dictionary in section 9 of that Act, so the definitions in that section apply for the purposes of this Act unless this Act otherwise provides.
6 Giving information
A reference in this Act to giving information includes a reference to:
(a) explaining or stating a matter; or
(b) identifying a person, matter or thing; or
(c) disclosing information; or
(d) answering a question.
Part 2—Australian Securities and Investments Commission and consumer protection in relation to financial services
Division 1—Australian Securities and Investments Commission
8 ASIC is a body corporate
(1) ASIC:
(a) is a body corporate, with perpetual succession; and
(b) has a common seal; and
(c) may, subject to subsection (5), acquire, hold and dispose of real and personal property; and
(ca) may enter into contracts; and
(d) may sue and be sued in its corporate name.
Note: ASIC was established by section 7 of the Australian Securities and Investments Commission Act 1989 and is continued in existence by section 261 of this Act.
(1A) However, ASIC is taken, for the purposes of the finance law (within the meaning of the Public Governance, Performance and Accountability Act 2013):
(a) to be a non‑corporate Commonwealth entity, and not to be a corporate Commonwealth entity; and
(b) to be a part of the Commonwealth; and
(c) not to be a body corporate.
(2) ASIC may enter into contracts in its own right.
(3) Any real or personal property held by ASIC is held for and on behalf of the Commonwealth.
(4) Any money received by ASIC is received for and on behalf of the Commonwealth.
(5) ASIC cannot hold real or personal property or money on trust.
Note: Any real or personal property or money that ASIC would otherwise hold on trust is held by the Commonwealth on trust.
(6) Despite any rule of equity, ASIC may, for and on behalf of the Commonwealth, perform all the duties and exercise all the powers of the Commonwealth as trustee in relation to any real or personal property or money held on trust by the Commonwealth.
(7) To avoid doubt, a right to sue is taken not to be personal property for the purposes of subsection (3).
8A ASIC’s liabilities are Commonwealth liabilities
(1) Any financial liabilities of ASIC are taken to be liabilities of the Commonwealth.
(2) For the purposes of this section:
financial liability means a liability to pay a person an amount where the amount, or the method for working out the amount, has been determined.
9 Membership
(1) ASIC is to consist of not fewer than 3 nor more than 8 members.
(2) The Governor‑General appoints the members on the nomination of the Minister.
(3) At least 3 of the members must be appointed as full‑time members and each of the remaining members (if any) may be appointed as a full‑time member or as a part‑time member.
(4) The Minister is to nominate a person as a member only if the Minister is satisfied that the person is qualified for appointment by virtue of his or her knowledge of, or experience in, one or more of the following fields, namely:
(a) business;
(b) administration of companies;
(c) financial markets;
(d) financial products and financial services;
(e) law;
(f) economics;
(g) accounting.
(5) The performance of ASIC’s functions or the exercise of ASIC’s powers is not affected by reason only that the number of members, or the number of full‑time members, is less than 3 unless a continuous period of 3 months has elapsed since the number of members, or the number of full‑time members, as the case may be, fell below 3.
(6) For the purposes of subsection (5), an acting member is taken to be a member.
9A Application of the finance law
For the purposes of the finance law (within the meaning of the Public Governance, Performance and Accountability Act 2013):
(a) ASIC is a listed entity; and
(b) the Chairperson is the accountable authority of ASIC; and
(c) the following persons are officials of ASIC:
(i) the Chairperson;
(ii) the other members of ASIC;
(iii) staff members; and
(d) the purposes of ASIC include the functions of ASIC referred to in sections 11 and 12A.
10 Chairperson and Deputy Chairpersons
(1) The Governor‑General is to appoint as Chairperson of ASIC a person who is, or is to be, a full‑time member.
(2) The Governor‑General may appoint as a Deputy Chairperson of ASIC a person who is, or is to be, a full‑time member.
Note: For the manner in which the Chairperson and a Deputy Chairperson may be referred to, see section 18B of the Acts Interpretation Act 1901.
(3) Not more than 2 persons may hold office as Deputy Chairperson at any one time.
10A Chairperson not subject to direction by ASIC on certain matters
The Chairperson of ASIC is not subject to direction by ASIC in relation to the Chairperson’s performance of functions, or exercise of powers, under:
(a) the Public Governance, Performance and Accountability Act 2013; or
(b) Part 6 or 7 of this Act.
11 Corporations legislation functions and powers and other functions and powers
(1) ASIC has such functions and powers as are conferred on it by or under the corporations legislation (other than the excluded provisions).
(2) ASIC also has the following functions:
(a) to provide such staff and support facilities to the Takeovers Panel, the Disciplinary Board and the Review Board as are necessary or desirable for the performance and exercise by the Takeovers Panel, the Disciplinary Board and the Review Board of their respective functions and powers;
(aa) to provide such staff and support facilities to Financial Services and Credit Panels as are necessary or desirable for the performance and exercise by the panels of their functions and powers;
(b) to advise the Minister about any changes to the corporations legislation (other than the excluded provisions) that, in ASIC’s opinion, are needed to overcome, or would assist in overcoming, any problems that ASIC has encountered in the course of performing or exercising any of its functions and powers.
(3) ASIC may, on its own initiative or when requested by the Minister, advise the Minister, and make to the Minister such recommendations as it thinks fit, about any matter connected with:
(a) a proposal to make corporations legislation, or to make amendments of the corporations legislation (other than the excluded provisions); or
(b) the operation or administration of the corporations legislation (other than the excluded provisions); or
(c) law reform in relation to the corporations legislation (other than the excluded provisions); or
(d) companies or a segment of the financial products and financial services industry; or
(e) a proposal for improving the efficiency of the financial markets.
(4) ASIC has power to do whatever is necessary for or in connection with, or reasonably incidental to, the performance of its functions.
(6) Subject to this Act, ASIC has the general administration of this Act.
(8) ASIC may, with the consent of the Minister, enter into an agreement or arrangement with a State or Territory for the performance of functions or the exercise of powers by ASIC as an agent of the State or Territory.
(9) ASIC has such functions and powers as are referred to in such an agreement or arrangement. However, ASIC is not under a duty to perform such functions or exercise such powers.
(9A) ASIC may have functions or powers conferred on it by or under a law of a State or Territory if:
(a) that law provides for, or relates to, the repeal, amendment or termination (however described) of the operation of, any of the replaced legislation within the meaning of item 22 of Schedule 8 to the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999; and
(b) the conferral of the powers or functions is in accordance with:
(i) provisions of an agreement entered into by the Commonwealth and the State or Territory, being provisions approved by the Minister for the purposes of this subsection; or
(ii) an approval given by the Minister for the purposes of this subsection.
ASIC has the functions and powers so conferred by that law. However, ASIC is not under a duty to perform such functions or exercise such powers.
(10) ASIC may, with the written consent of the Minister, enter into an agreement or arrangement with a regulatory body of a foreign country under which ASIC undertakes to assist that regulatory body to ascertain whether Australian auditors comply with audit requirements that are:
(a) imposed by or under laws of that foreign country; or
(b) adopted as professional standards in that foreign country.
(11) The Minister may, in writing, vary or revoke the Minister’s consent mentioned in subsection (10).
(12) If ASIC enters into an agreement or arrangement with a regulatory body under subsection (10), it must, as soon as practicable after entering into that agreement or arrangement, by notice published in the Gazette:
(a) set out the identifying particulars of the regulatory body; and
(b) give brief particulars of the agreement or arrangement entered into; and
(c) identify the audit requirements to which the agreement or arrangement relates.
(13) A notice published under subsection (12) is not a legislative instrument.
(14) ASIC has the following functions:
(a) to assist a regulatory body with which it has entered into an agreement or arrangement under subsection (10) to examine the policies and working practices of an Australian auditor, so as to help the regulatory body to ascertain compliance with audit requirements to which the agreement or arrangement relates;
(b) to disclose to a regulatory body with which it has entered into an agreement or arrangement under subsection (10) the information that ASIC has obtained in assisting in such an examination.
(15) In performing the function referred to in paragraph (14)(a), ASIC may examine policies and working practices of an auditor in general or in their application to particular audits or in both of those respects.
(16) ASIC is not under a duty to perform a function referred to in subsection (14) or to exercise a power in relation to such a function.
(16A) ASIC has the functions and powers of a home regulator or a host regulator for a passport fund under the Memorandum of Cooperation. However, ASIC is not under a duty to perform such functions or exercise such powers.
(17) ASIC is not subject to any directions of the Minister in relation to:
(a) entering into an agreement or arrangement under subsection (8) or (10); or
(b) performing functions or exercising powers referred to in subsection (9); or
(c) performing functions conferred under subsection (9A), (14) or (16A) or exercising any related powers.
12 Directions by Minister
(1) The Minister may, by legislative instrument, give ASIC a direction about policies it should pursue, or priorities it should follow, in performing or exercising any of its functions or powers under the corporations legislation (other than the excluded provisions).
(2) The Minister must not give a direction under subsection (1) unless he or she has:
(a) notified ASIC in writing that he or she is considering giving the direction; and
(b) given the Chairperson an adequate opportunity to discuss with the Minister the need for the proposed direction.
(3) The Minister must not give a direction under subsection (1) about a particular case.
(4) ASIC must comply with a direction under subsection (1).
12A Other functions and powers
(1) ASIC has the functions and powers that are conferred on it by or under Division 2 of Part 2 of this Act and by or under the following:
(a) the ASIC Supervisory Cost Recovery Levy Act 2017;
(b) the ASIC Supervisory Cost Recovery Levy (Collection) Act 2017;
(ba) the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2023;
(c) the Insurance Contracts Act 1984;
(e) the Life Insurance Act 1995;
(f) the Retirement Savings Accounts Act 1997;
(g) the Superannuation Industry (Supervision) Act 1993;
(i) the National Consumer Credit Protection Act 2009;
(j) the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009;
(k) the Business Names Registration Act 2011;
(l) the Business Names Registration (Transitional and Consequential Provisions) Act 2011;
(m) the Financial Accountability Regime Act 2023;
(n) the Financial Accountability Regime (Consequential Amendments) Act 2023.
(2) ASIC has the function of monitoring and promoting market integrity and consumer protection in relation to the Australian financial system.
(3) ASIC has the function of monitoring and promoting market integrity and consumer protection in relation to the payments system by:
(a) promoting the adoption of approved industry standards and codes of practice; and
(b) promoting the protection of consumer interests; and
(c) promoting community awareness of payments system issues; and
(d) promoting sound customer‑banker relationships, including through:
(i) monitoring the operation of industry standards and codes of practice; and
(ii) monitoring compliance with such standards and codes.
(4) Subsections (2) and (3) confer functions and powers to the extent to which they are not in excess of the legislative power of the Commonwealth.
(5) ASIC may:
(a) advise the Minister about any changes to a law listed in subsection (1) that ASIC thinks are needed to help overcome any problems that ASIC has encountered in the course of performing its functions or exercising any of its powers under that law; and
(b) advise the Minister and make such recommendations as it thinks fit about any matter relating to its functions in subsections (2) and (3).
(6) ASIC has power to do whatever is necessary for or in connection with, or reasonably incidental to, the performance of its functions.
12AA Cooperation with APRA
(1) The object of this section is to require ASIC to support APRA in performing and exercising APRA’s functions and powers effectively.
(2) In performing and exercising its functions and powers, ASIC must, so far as is practicable, work in cooperation with APRA.
(3) The performance or exercise of a function or power by ASIC is not invalid merely because of a failure by ASIC to comply with subsection (2).
(4) The performance or exercise of a function or power by ASIC does not give rise to an action or other proceeding for damages merely because of a failure by ASIC to comply with subsection (2).
(5) If a law (other than this section) requires ASIC to cooperate with APRA:
(a) this section does not affect the operation of that law; and
(b) that law does not affect the operation of this section.
Division 2—Unconscionable conduct and consumer protection in relation to financial services
Subdivision A—Application
12AC Division extends to some conduct outside Australia
(1) This Division extends to the engaging in conduct outside Australia by:
(a) bodies corporate incorporated or carrying on business within Australia; or
(b) Australian citizens; or
(c) persons ordinarily resident within Australia.
(2) If a claim under section 12GF or 12GFA is made in a proceeding, a person may rely at a hearing in respect of that proceeding on conduct to which a provision of this Division extends because of subsection (1) of this section only if the Minister consents in writing to the reliance.
(3) A person other than the Minister or ASIC may apply to the Court for an order under subsection 12GM(1) or (2) in a proceeding in respect of conduct to which a provision of this Division extends because of subsection (1) of this section only if the Minister consents in writing to the application.
(4) The Minister must give a consent under subsection (2) or (3) in respect of a proceeding unless, in the Minister’s opinion:
(a) the law of the country in which the conduct concerned was engaged in required or specifically authorised the engaging in of the conduct; and
(b) it is not in the national interest to give the consent.
12AD Application of Division to Commonwealth and Commonwealth authorities
(1) Subject to this section, this Division binds the Crown in right of the Commonwealth in so far as the Crown in right of the Commonwealth carries on a business, either directly or by an authority of the Commonwealth.
(3) Nothing in this Division makes the Crown in right of the Commonwealth liable to a pecuniary penalty or to be prosecuted for an offence.
(4) The protection in subsection (3) does not apply to an authority of the Commonwealth.
(5) For the purposes of this section, the following transactions do not amount to carrying on a business:
(a) a transaction involving only persons who are all acting for the Crown in right of the Commonwealth (and none of whom is an authority of the Commonwealth);
(b) a transaction involving only persons who are all acting for the same authority of the Commonwealth;
(c) a transaction involving only the Crown in right of the Commonwealth and one or more non‑commercial authorities of the Commonwealth;
(d) a transaction involving only non‑commercial authorities of the Commonwealth.
(6) Subsection (5) does not limit the things that do not amount to carrying on a business for the purposes of this section.
(7) For the purposes of this section, an authority of the Commonwealth is non‑commercial if:
(a) it is constituted by only one person; and
(b) it is neither a trading corporation nor a financial corporation.
12AE Saving of other laws and remedies
(1) Except as provided by subsection (2), Subdivision BA (sections 12BF to 12BM), Subdivision C (sections 12CA to 12CC), Subdivision D (sections 12DA to 12DN), Subdivision DA (sections 12DO to 12DZA) and Subdivision E (sections 12EA to 12ED) are not intended to exclude or limit the concurrent operation of any law of a State or Territory.
(2) If:
(a) an act or omission of a person is both an offence against section 12GB and an offence under the law of a State or Territory; and
(b) the person is convicted of either of those offences;
the person is not liable to be convicted of the other of those offences.
(3) Except as expressly provided by Subdivision BA (sections 12BF to 12BM), Subdivision C (sections 12CA to 12CC), Subdivision D (sections 12DA to 12DN), Subdivision DA (sections 12DO to 12DZA) or Subdivision E (sections 12EA to 12ED), nothing in those Subdivisions is taken to limit, restrict or otherwise affect any right or remedy a person would have had if that Subdivision had not been enacted.
(4) This Division does not affect the operation of:
(a) the law relating to restraint of trade in so far as that law is capable of operating concurrently with this Division; or
(b) the law relating to breaches of confidence;
but nothing in the law referred to in paragraph (a) or (b) affects the interpretation of this Division.
Subdivision B—Interpretation
12BA Interpretation
(1) In this Division, unless the contrary intention appears:
acquire, in relation to services, includes accept.
acquisition of services has the meaning given by section 12BD.
add‑on insurance deferral period has the meaning given by section 12DP.
add‑on insurance pre‑deferral period has the meaning given by section 12DP.
add‑on insurance product, in relation to a product or service, has the meaning given by section 12DO.
add‑on risk product has the meaning given by subsection 12DMC(2).
assert a right to payment has the meaning given by section 12BEA.
Australian Consumer Law means Schedule 2 to the Competition and Consumer Act 2010 as applied under Subdivision A of Division 2 of Part XI of that Act.
authority, in relation to a State or Territory (including an external Territory), means:
(a) a body corporate established for a purpose of the State or the Territory by or under a law of the State or Territory; or
(b) an incorporated company in which the State or the Territory, or a body corporate referred to in paragraph (a), has a controlling interest.
authority of the Commonwealth means:
(a) a body corporate established for a purpose of the Commonwealth by or under a law of the Commonwealth or a law of a Territory; or
(b) an incorporated company in which the Commonwealth, or a body corporate referred to in paragraph (a), has a controlling interest.
business includes a business not carried on for profit.
civil penalty provision has the meaning given by subsection 12GBA(6).
commission includes:
(a) any financial or other benefit in the nature of a commission; and
(b) in relation to an add‑on risk product provided to a person in connection with the person providing a warranty to another person—the amount (if any) by which the consideration for the warranty exceeds so much of the consideration for the add‑on risk product as relates to the warranty.
It may take any form of monetary consideration, or any form of non‑monetary consideration to which a monetary value can be assigned.
conduct has the meaning given by subsection (2).
consumer has the meaning given by section 12BC.
consumer contract has the meaning given by subsection 12BF(3).
contract has the meaning given by section 12BE.
covenant means a covenant (including a promise not under seal) annexed to or running with an estate or interest in land (whether at law or in equity and whether or not for the benefit of other land) and proposed covenant has a corresponding meaning.
enforcement proceeding means a proceeding instituted under Subdivision G of Division 2 of Part 2 (other than sections 12GNB, 12GNE and 12GNF).
engage in conduct has the meaning given by subsection (2).
financial corporation:
(a) means a financial corporation within the meaning of paragraph 51(xx) of the Constitution; and
(b) includes a body corporate that carries on as its sole or principal business the business of:
(i) banking (other than State banking not extending beyond the limits of the State concerned); or
(ii) insurance (other than State insurance not extending beyond the limits of the State concerned).
financial product has the meaning given by section 12BAA.
financial service has the meaning given by section 12BAB.
individual fine formula means the formula set out in subsection 93D(3).
infringement notice means an infringement notice issued under section 12GX.
Insurance Contracts Act insurance contract means a contract of insurance to which the Insurance Contracts Act 1984 applies.
long‑term lease, of a motor vehicle, means a contract for the hire of the motor vehicle for a fixed period of more than 4 months, or for an indefinite period.
misleading includes the meaning given by section 12BB.
money has the same meaning as in the A New Tax System (Goods and Services Tax) Act 1999.
motor vehicle means:
(a) any motor‑powered vehicle of a kind intended for use as land transport (other than rail transport), whether or not it is for use on a road; or
(b) any other vehicle of a kind intended to be towed by such a motor‑powered vehicle;
but does not include a vehicle (other than a vehicle for use on a road) that is of a kind intended primarily for use by persons with restricted mobility.
National Credit Code has the same meaning as in the National Consumer Credit Protection Act 2009.
non‑party means:
(a) in relation to conduct—a person who is not, or has not been, a party to an enforcement proceeding in relation to the conduct; or
(b) in relation to a term of a contract—a person who is not, or has not been, a party to an enforcement proceeding in relation to the term.
payment period for an infringement notice, has the meaning given by section 12GXC.
pecuniary penalty order has the meaning given by subsection 12GBB(4).
price includes a charge of any description.
provision, in relation to an understanding, means any matter forming part of the understanding.
registrable superannuation entity has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
relinquishment order has the meaning given by subsection 12GBCC(1).
rely on, in relation to a term of a consumer contract or small business contract, includes the following:
(a) attempt to enforce the term;
(b) attempt to exercise a right conferred, or purportedly conferred, by the term;
(c) assert the existence of a right conferred, or purportedly conferred, by the term.
re‑supply of services has the meaning given by section 12BD.
send includes deliver, and sent and sender have corresponding meanings.
services includes any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce but does not include:
(a) the supply of goods within the meaning of the Competition and Consumer Act 2010; or
(b) the performance of work under a contract of service.
small business contract has the meaning given by subsection 12BF(4).
standard form contract has a meaning affected by section 12BK.
subject to an infringement notice under Subdivision GB of Division 2 of Part 2, has the meaning given by section 12GXA.
substantiation notice means a notice under section 12GY.
substantiation notice compliance period for a substantiation notice has the meaning given by subsection 12GYB(2).
superannuation trustee service has the same meaning as in the Corporations Act.
supply:
(a) includes provide, grant or confer when used as a verb in relation to services; and
(b) has a corresponding meaning when used as a noun;
and supplied and supplier have corresponding meanings.
supply of services has the meaning given by section 12BD.
the Court or the Federal Court means the Federal Court of Australia.
trade or commerce means trade or commerce within Australia or between Australia and places outside Australia.
trading corporation means a trading corporation within the meaning of paragraph 51(xx) of the Constitution.
transparent, in relation to a term of a consumer contract or small business contract, has the meaning given by subsection 12BG(3).
unfair, in relation to a term of a consumer contract or small business contract, has the meaning given by subsection 12BG(1).
unsolicited financial services means financial services supplied to a person without any request made by the person or on the person’s behalf.
upfront price has the meaning given by subsection 12BI(2).
(2) In this Division:
(a) a reference to engaging in conduct is a reference to doing or refusing to do any act, including:
(i) making, or giving effect to a provision of, a contract or arrangement; or
(ii) arriving at, or giving effect to a provision of, an understanding; or
(iii) requiring the giving of, or giving, a covenant; and
(b) a reference to conduct, when that expression is used as a noun otherwise than as mentioned in paragraph (a), is a reference to doing or refusing to do any act, including:
(i) making, or giving effect to a provision of, a contract or arrangement; or
(ii) arriving at, or giving effect to a provision of, an understanding; or
(iii) requiring the giving of, or giving, a covenant; and
(c) a reference to refusing to do an act includes a reference to:
(i) refraining (otherwise than inadvertently) from doing that act; or
(ii) making it known that that act will not be done; and
(d) a reference to a person offering to do an act, or to do an act on a particular condition, includes a reference to the person making it known that the person will accept applications, offers or proposals for the person to do that act or to do that act on that condition, as the case may be.
12BAA Definition of financial product
General definition of financial product
(1) Subject to subsection (8), for the purposes of this Division, a financial product is a facility through which, or through the acquisition of which, a person does one or more of the following:
(a) makes a financial investment (see subsection (4));
(b) manages financial risk (see subsection (5));
(c) makes non‑cash payments (see subsection (6)).
(2) Subject to subsection (8), for the purposes of this Division, a particular facility that is of a kind through which people commonly make financial investments, manage financial risks or make non‑cash payments is a financial product even if that facility is acquired by a particular person for some other purpose.
(3) A facility does not cease to be a financial product merely because:
(a) the facility has been acquired by a person other than the person to whom it was originally issued; and
(b) that person, in acquiring the product, was not making a financial investment or managing a financial risk.
Meaning of makes a financial investment
(4) For the purposes of this section, a person (the investor) makes a financial investment if:
(a) the investor gives money or money’s worth (the contribution) to another person and any of the following apply:
(i) the other person uses the contribution to generate a financial return, or other benefit, for the investor;
(ii) the investor intends that the other person will use the contribution to generate a financial return, or other benefit, for the investor (even if no return or benefit is in fact generated);
(iii) the other person intends that the contribution will be used to generate a financial return, or other benefit, for the investor; and
(b) the investor has no day‑to‑day control over the use of the contribution to generate the return or benefit.
Note 1: Examples of actions that constitute making a financial investment under this subsection are:
(a) a person paying money to a company for the issue to the person of shares in the company (the company uses the money to generate dividends for the person and the person, as a shareholder, does not have control over the day‑to‑day affairs of the company); or
(b) a person contributing money to acquire interests in a registered scheme from the responsible entity of the scheme (the scheme uses the money to generate financial or other benefits for the person and the person, as a member of the scheme, does not have day‑to‑day control over the operation of the scheme).
Note 2: Examples of actions that do not constitute making a financial investment under this subsection are:
(a) a person purchasing real property or bullion (while the property or bullion may generate a return for the person, it is not a return generated by the use of the purchase money by another person); or
(b) a person giving money to a financial services licensee who is to use it to purchase shares for the person (while the purchase of the shares will be a financial investment made by the person, the mere act of giving the money to the licensee will not of itself constitute making a financial investment).
Meaning of manages a financial risk
(5) For the purposes of this section, a person manages financial risk if they:
(a) manage the financial consequences to them of particular circumstances happening; or
(b) avoid or limit the financial consequences of fluctuations in, or in the value of, receipts or costs (including prices and interest rates).
Note 1: Examples of actions that constitute managing a financial risk are:
(a) taking out insurance; or
(b) hedging a liability by acquiring a futures contract or entering into a currency swap.
Note 2: An example of an action that does not constitute managing a financial risk is employing a security firm (while that is a way of managing the risk that thefts will happen, it is not a way of managing the financial consequences if thefts do occur).
Meaning of makes non‑cash payments
(6) For the purposes of this section, a person makes non‑cash payments if they make payments, or cause payments to be made, otherwise than by the physical delivery of Australian currency in the form of notes and/or coins.
Note: Examples of actions that constitute making non‑cash payments are:
(a) making payments by means of a facility for direct debit of a deposit account; or
(b) making payments by means of a facility for the use of cheques; or
(c) making payments by means of a purchased payment facility within the meaning of the Payment Systems (Regulation) Act 1998, such as a smart card; or
(d) making payments by means of traveller’s cheques in Australian currency.
Specific things that are financial products (subject to subsection (8))
(7) Subject to subsection (8), the following are financial products for the purposes of this Division:
(a) a security;
(b) any of the following in relation to a managed investment scheme:
(i) an interest in the scheme;
(ii) a legal or equitable right or interest in an interest covered by subparagraph (i);
(iii) an option to acquire, by way of issue, an interest or right covered by subparagraph (i) or (ii);
(c) a derivative;
(d) a contract of insurance (see subsection (9)) other than:
(i) health insurance provided as part of a health insurance business (as defined by Division 121 of the Private Health Insurance Act 2007); or
(ii) insurance provided as part of a health‑related business (as defined by section 131‑15 of that Act) that is conducted through a health benefits fund (as defined by section 131‑10 of that Act);
(e) a life policy, or a sinking fund policy, within the meaning of the Life Insurance Act 1995, that is not a contract of insurance (see subsection (9));
(f) a beneficial interest in a superannuation fund (as defined by section 10 of the Superannuation Industry (Supervision) Act 1993);
(g) an RSA (retirement savings account) within the meaning of the Retirement Savings Accounts Act 1997;
(h) any deposit‑taking facility made available by an ADI (within the meaning of the Banking Act 1959) in the course of its banking business (within the meaning of that Act), other than an RSA (RSAs are covered by paragraph (g));
(i) a debenture, stock or bond issued or proposed to be issued by a government;
(j) a foreign exchange contract;
(k) a credit facility (within the meaning of the regulations);
(l) an Australian carbon credit unit;
(la) an eligible international emissions unit;
(m) anything declared by the regulations to be a financial product for the purposes of this subsection.
Note 1: Even though something is expressly excluded from one of these paragraphs, it may still be a financial product (subject to subsection (8)) either because:
(a) it is covered by another of these paragraphs; or
(b) it is covered by the general definition in subsection (1).
Note 2: A notified foreign passport fund is a managed investment scheme for the purposes of this Act and the Corporations Act, see subsection 5(2) of this Act and section 1213E of the Corporations Act.
Specific things that are not financial products
(8) Despite anything else in this section, the following are not financial products for the purposes of this Division:
(a) an excluded security;
(b) health insurance provided as part of a health insurance business (as defined in Division 121 of the Private Health Insurance Act 2007);
(ba) insurance provided as part of a health‑related business (as defined by section 131‑15 of that Act) that is conducted through a health benefits fund (as defined by section 131‑10 of that Act);
(c) State insurance or Northern Territory insurance, including insurance entered into by:
(i) a State or the Northern Territory; and
(ii) some other insurer;
as joint insurers;
(d) a facility:
(i) that is an approved RTGS system for the purposes of the Payment Systems and Netting Act 1998; or
(ii) for the transmission and reconciliation of non‑cash payments (see subsection (6)), and the establishment of final positions, for settlement through an approved RTGS system within the meaning of the Payment Systems and Netting Act 1998;
(e) a facility that is a designated payment system for the purposes of the Payment Systems (Regulation) Act 1998;
(f) a facility for the exchange and settlement of non‑cash payments (see subsection (6)) between providers of non‑cash payment facilities;
(g) a facility that is:
(i) a financial market; or
(ii) a clearing and settlement facility; or
(iii) a payment system operated as part of a clearing and settlement facility; or
(iv) a derivative trade repository;
(h) so much of an arrangement as is not a derivative because of paragraph 761D(3)(a) of the Corporations Act;
(i) an arrangement that is not a derivative because of paragraph 761D(3)(b) of the Corporations Act;
(j) an arrangement that is not a derivative because of subsection 761D(4) of the Corporations Act;
(k) any of the following:
(i) an interest in something that is not a managed investment scheme because of paragraph (c), (e), (f), (k), (l) or (m) of the definition of managed investment scheme in section 9 of the Corporations Act;
(ii) a legal or equitable right or interest in an interest covered by subparagraph (i);
(iii) an option to acquire, by way of issue, an interest or right covered by subparagraph (i);
(m) a deposit‑taking facility that is used for State banking;
(n) equipment or infrastructure by which something else that is a financial product is provided;
(o) a funeral benefit;
(p) a facility, interest or other thing declared by regulations made for the purposes of this subsection not to be a financial product.
(9) For the purpose of paragraphs (7)(d) and (e), contract of insurance includes:
(a) a contract that would ordinarily be regarded as a contract of insurance even if some of its provisions are not by way of insurance; and
(b) a contract that includes provisions of insurance in so far as those provisions are concerned, even if the contract would not ordinarily be regarded as a contract of insurance.
(10) To avoid doubt, a funeral expenses facility is not a funeral benefit for the purposes of this Act.
12BAB Meaning of financial service
When does a person provide a financial service?
(1) For the purposes of this Division, subject to paragraph (2)(b), a person provides a financial service if they:
(a) provide financial product advice (see subsection (5)); or
(b) deal in a financial product (see subsection (7)); or
(c) make a market for a financial product (see subsection (11)); or
(d) operate a registered scheme; or
(e) provide a custodial or depository service (see subsection (12)); or
(ea) provide a superannuation trustee service; or
(eb) provide a claims handling and settling service; or
(f) operate a financial market (see subsection (15)) or clearing and settlement facility (see subsection (17)); or
(g) provide a service (not being the operation of a derivative trade repository) that is otherwise supplied in relation to a financial product (other than an Australian carbon credit unit or an eligible international emissions unit); or
(ga) operate the business and conduct the affairs of a CCIV, and the person is the corporate director of the CCIV; or
(h) engage in conduct of a kind prescribed in regulations made for the purposes of this paragraph.
Note: Paragraph (ga) means persons other than the corporate director will not be treated as providing that financial service if they operate the business and conduct the affairs of the CCIV while:
(a) acting as an agent of the CCIV, or as an agent or employee of the corporate director; or
(b) taking steps to wind up a sub‑fund of the CCIV.
(1AA) Without limiting subsection (1), for the purposes of this Division, a financial product is a financial service.
(1A) Subject to paragraph (2)(b), the provision by a trustee company of a traditional trustee company service constitutes the provision, by the company, of a financial service for the purposes of this Division.
Note: Trustee companies may also provide other kinds of financial service mentioned in subsection (1).
(1B) The regulations may, in relation to a traditional trustee company service of a particular class, prescribe the person or persons to whom a service of that class is taken to be provided or supplied for the purposes of this Division. This subsection does not limit (and is not limited by) subsection (2).
Meaning of provides a crowd‑funding service
(1C) Subject to paragraph (2)(b), the provision by a person of a crowd‑funding service constitutes the provision, by the person, of a financial service for the purposes of this Division.
(1D) For the purposes of this Division, the persons to whom, and time when, a crowd‑funding service is provided are as specified in subsections 766F(3) and (4) of the Corporations Act 2001.
(2) The regulations may set out:
(a) the circumstances in which persons facilitating the provision of a financial service (for example, by publishing information) are taken also to provide that service; or
(b) the circumstances in which persons are taken to provide, or are taken not to provide, a financial service.
(4) For the purposes of this section, a person is not operating a registered scheme merely because:
(a) they are acting as an agent or employee of another person; or
(b) they are taking steps to wind up the scheme.
Meaning of financial product advice
(5) For the purposes of this section, financial product advice means a recommendation or a statement of opinion, or a report of either of those things, that:
(a) is intended to influence a person or persons in making a decision in relation to a particular financial product or class of financial products, or an interest in a particular financial product or class of financial products; or
(b) could reasonably be regarded as being intended to have such an influence;
but does not include anything in:
(c) a document prepared in accordance with requirements of Chapter 7 of the Corporations Act, other than a document of a kind prescribed by regulations made for the purposes of this paragraph; or
(d) any other document of a kind prescribed by regulations made for the purposes of this paragraph.
(6) Advice given by a lawyer in his or her professional capacity about matters of law, legal interpretation or the application of the law to any facts is not financial product advice.
Meaning of dealing
(7) For the purposes of this section, the following conduct constitutes dealing in a financial product:
(a) applying for or acquiring a financial product;
(b) issuing a financial product;
(c) in relation to securities or interests in managed investment schemes—underwriting the securities or interests;
(d) varying a financial product;
(e) disposing of a financial product.
Note: A notified foreign passport fund is a managed investment scheme for the purposes of this Act and the Corporations Act, see subsection 5(2) of this Act and section 1213E of the Corporations Act.
(8) Arranging for a person to engage in conduct referred to in subsection (7) is also dealing in a financial product, unless the actions concerned amount to providing financial product advice.
(9) A person is taken not to deal in a financial product if the person deals in the product on their own behalf, unless:
(a) the person is an issuer of financial products; and
(b) the dealing is in relation to one or more of those products.
(10) The regulations may prescribe conduct that is taken to be, or not to be, dealing in a financial product. Regulations made for the purposes of this subsection have effect despite anything else in this section.
Meaning of makes a market for a financial product
(11) For the purposes of this section, a person makes a market for a financial product if:
(a) either through a facility, at a place or otherwise, the person regularly states the prices at which they propose to acquire or dispose of financial products on their own behalf; and
(b) other persons have a reasonable expectation that they will be able to regularly effect transactions at the stated prices; and
(c) the actions of the person do not, or would not if they happened through a facility or at a place, constitute operating a financial market because of the effect of paragraph (16)(a).
Meaning of provide a custodial or depository service
(12) For the purposes of this section, a person (the provider) provides a custodial or depository service to another person (the client) if, under an arrangement between the provider and the client, or between the provider and another person with whom the client has an arrangement, (whether or not there are also other parties to any such arrangement), a financial product, or a beneficial interest in a financial product, is held by the provider in trust for, or on behalf of, the client or another person nominated by the client.
(14) However, the following conduct does not constitute providing a custodial or depository service:
(a) the operation of a clearing and settlement facility;
(b) the operation of a registered scheme, or the holding of the assets of a registered scheme;
(ba) the operation of a notified foreign passport fund;
(bb) the holding of the assets of a notified foreign passport fund;
(c) the operation of:
(i) a regulated superannuation fund; or
(ii) an AFCA regulated superannuation scheme; or
(iii) an approved deposit fund; or
(iv) a pooled superannuation trust;
(d) the provision of services to a related body corporate;
(da) operating as a CCIV;
(db) operating the business and conducting the affairs of a CCIV;
(dc) holding the money or property of a CCIV;
(e) any other conduct of a kind prescribed by regulations made for the purposes of this paragraph.
Note: Holding the assets of a sub‑fund of a CCIV is covered by paragraph (dc) and does not constitute providing a custodial or depository service.
Meaning of financial market
(15) For the purposes of this section, a financial market is a facility through which:
(a) offers to acquire or dispose of financial products are regularly made or accepted; or
(b) offers or invitations are regularly made to acquire or dispose of financial products that are intended to result or may reasonably be expected to result, directly or indirectly, in:
(i) the making of offers to acquire or dispose of financial products; or
(ii) the acceptance of such offers.
(16) However, the following conduct does not constitute operating a financial market for the purposes of this section:
(a) a person making or accepting offers or invitations to acquire or dispose of financial products on the person’s own behalf, or on behalf of one party to the transaction only;
(b) conducting treasury operations between related bodies corporate;
(c) conducting an auction of forfeited shares;
(d) any other conduct of a kind prescribed by regulations made for the purposes of this paragraph.
Meaning of clearing and settlement facility
(17) For the purposes of this section, a clearing and settlement facility is a facility that provides a regular mechanism for the parties to transactions relating to financial products to meet obligations to each other that:
(a) arise from entering into the transactions; and
(b) are of a kind prescribed by regulations made for the purposes of this paragraph.
(18) However, the following conduct does not constitute operating a clearing and settlement facility for the purposes of this section:
(a) an ADI (within the meaning of the Banking Act 1959) acting in the ordinary course of its banking business;
(b) a person acting on their own behalf, or on behalf of one party to a transaction only;
(c) a person who provides financial services to another person dealing with the other person’s accounts in the ordinary course of the first person’s business activities;
(d) the actions of a participant in a clearing and settlement facility who has taken on the delivery or payment obligations, in relation to a particular financial product, of another person who is a party to a transaction relating to a financial product;
(e) conducting treasury operations between related bodies corporate;
(h) operating a facility for the exchange and settlement of non‑cash payments between providers of non‑cash payment facilities;
(i) any other conduct of a kind prescribed by regulations made for the purposes of this paragraph.
12BB Misleading representations with respect to future matters
(1) If:
(a) a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act); and
(b) the person does not have reasonable grounds for making the representation;
the representation is taken, for the purposes of Subdivision D (sections 12DA to 12DN), to be misleading.
(2) For the purposes of applying subsection (1) in relation to a proceeding concerning a representation made with respect to a future matter by:
(a) a party to the proceeding; or
(b) any other person;
the party or other person is taken not to have had reasonable grounds for making the representation, unless evidence is adduced to the contrary.
(3) To avoid doubt, subsection (2) does not:
(a) have the effect that, merely because such evidence to the contrary is adduced, the person who made the representation is taken to have had reasonable grounds for making the representation; or
(b) have the effect of placing on any person an onus of proving that the person who made the representation had reasonable grounds for making the representation.
(4) Subsection (1) does not by implication limit the meaning of a reference in this Division to:
(a) a misleading representation; or
(b) a representation that is misleading in a material particular; or
(c) conduct that is misleading or is likely or liable to mislead;
and, in particular, does not imply that a representation that a person makes with respect to any future matter is not misleading merely because the person has reasonable grounds for making the representation.
12BC Consumers
(1) For the purposes of this Division, unless the contrary intention appears, a person is taken to have acquired particular financial services as a consumer if, and only if:
(a) the price of the services did not exceed the prescribed amount; or
(b) if the price of the services exceeded the prescribed amount—the services were of a kind ordinarily acquired for personal, domestic or household use or consumption; or
(c) if the services were acquired for use or consumption in connection with a small business (see subsection (2)) and the price of the services exceeded the prescribed amount—the services were of a kind ordinarily acquired for business use or consumption.
(2) For the purposes of subsection (1):
small business means a business employing less than:
(a) if the business is or includes the manufacture of goods—100 people; or
(b) otherwise—20 people.
(3) For the purposes of subsection (1):
(a) the prescribed amount is:
(i) $40,000; or
(ii) if a greater amount is prescribed for the purposes of this paragraph—that greater amount; and
(b) subject to paragraph (c), the price of services purchased by a person is taken to have been the amount paid or payable by the person for the services; and
(c) if a person purchased services together with other property or services, or with both other property and services, and a specified price was not allocated to the services in the contract under which they were purchased, the price of the services is taken to have been:
(i) the price at which, at the time of the acquisition, the person could have purchased the services from the supplier without the other property or services; or
(ii) if, at the time of the acquisition, the services were only available for purchase from the supplier together with the other property or services but, at that time, services of the kind acquired were available for purchase from another supplier without other property or services—the lowest price at which the person could, at that time, reasonably have purchased services of that kind from another supplier; or
(iii) if, at the time of the acquisition, services of the kind acquired were not available for purchase from any supplier except together with other property or services—the value of the services at that time; and
(d) if a person acquired services otherwise than by way of purchase, the price of the services is taken to have been:
(i) the price at which, at the time of the acquisition, the person could have purchased the services from the supplier; or
(ii) if, at the time of the acquisition, the services were not available for purchase from the supplier, or were available only together with other property or services, but, at that time, services of the kind acquired were available for purchase from another supplier—the lowest price at which the person could, at that time, reasonably have purchased services of that kind from another supplier; or
(iii) if services of the kind acquired were not available, at the time of the acquisition, for purchase from any supplier, or were not available except together with other property or services—the value of the services at that time; and
(e) without limiting by implication the meaning of the expression services in subsection 12BA(1), the obtaining of credit by a person in connection with the person’s acquisition of services is taken to be the acquisition by the person of a service and any amount by which the amount paid or payable by the person for the services is increased by reason of the person’s so obtaining credit is taken to be paid or payable by the person for that service.
(4) If it is alleged in a proceeding under this Division, or in any other proceeding in respect of a matter arising under this Division, that a person was a consumer in relation to particular services, it is presumed that the person was a consumer in relation to those services unless the contrary is established.
12BD Acquisition, supply and re‑supply
In this Division, unless the contrary intention appears:
(a) a reference to the supply or acquisition of services includes a reference to agreeing to supply or acquire services; and
(b) a reference to the supply or acquisition of services includes a reference to the supply or acquisition of services together with property or other services, or both; and
(c) a reference to the re‑supply of services (the original services) acquired from a person (the original supplier) includes a reference to:
(i) a supply of the original services to another person in an altered form or condition; and
(ii) a supply to another person of other services that are substantially similar to the original services and could not have been supplied if the original services had not been acquired by the person who acquired them from the original supplier.
12BE Application of Division in relation to leases and licences of land and buildings
In this Division:
(a) a reference to a contract includes a reference to a lease of, or a licence in respect of, land or a building or part of a building (despite the express references in this Division to such leases or licences); and
(b) a reference to making or entering into a contract, in relation to such a lease or licence, is a reference to granting or taking the lease or licence.
12BEA Asserting a right to payment
(1) For the purposes of this Division, a person is taken to assert a right to payment from another person if the person:
(a) makes a demand for the payment or asserts a present or prospective right to the payment; or
(b) threatens to bring any legal proceedings with a view to obtaining the payment; or
(c) places or causes to be placed the name of the other person on a list of defaulters or debtors, or threatens to do so, with a view to obtaining the payment; or
(d) invokes or causes to be invoked any other collection procedure, or threatens to do so, with a view to obtaining the payment; or
(e) sends any invoice or other document that:
(i) states the amount of the payment; or
(ii) sets out the price of unsolicited financial services; or
(iii) sets out the charge for an advertisement, for financial services, that has been published;
and does not contain a statement, to the effect that the document is not an assertion of a right to a payment, that complies with any requirements prescribed by the regulations.
(2) For the purposes of this section, an invoice or other document purporting to have been sent by or on behalf of a person is taken to have been sent by that person unless the contrary is established.
Subdivision BA—Unfair contract terms
12BF Unfair terms of consumer contracts and small business contracts
(1) A term of a consumer contract or small business contract is void if:
(a) the term is unfair; and
(b) the contract is a standard form contract; and
(c) the contract is:
(i) a financial product; or
(ii) a contract for the supply, or possible supply, of services that are financial services.
(2) The contract continues to bind the parties if it is capable of operating without the unfair term.
(2A) A person contravenes this subsection if:
(a) the person makes a contract; and
(b) the contract is a consumer contract or small business contract; and
(c) the contract is a standard form contract; and
(d) the contract is either a financial product or a contract for the supply, or possible supply, of financial services; and
(e) a term of the contract is unfair; and
(f) the person proposed the unfair term.
(2B) A person who contravenes subsection (2A) commits a separate contravention of that subsection in respect of each term that is unfair and that the person proposed.
(2C) A person contravenes this subsection if:
(a) the person applies or relies on, or purports to apply or rely on, a term of a contract; and
(b) the contract is a consumer contract or small business contract; and
(c) the contract is a standard form contract; and
(d) the contract is either a financial product or a contract for the supply, or possible supply, of financial services; and
(e) the term is unfair.
(3) A consumer contract is a contract at least one of the parties to which is an individual whose acquisition of what is supplied under the contract is wholly or predominantly an acquisition for personal, domestic or household use or consumption.
(4) A contract is a small business contract if:
(a) the upfront price payable under the contract does not exceed $5,000,000; and
(b) at least one party to the contract satisfies either or both of the following conditions:
(i) the party makes the contract in the course of carrying on a business and at a time when the party employs fewer than 100 persons;
(ii) the party’s turnover, worked out under subsection (7) for the party’s last income year (within the meaning of the Income Tax Assessment Act 1997) that ended at or before the time when the contract is made, is less than $10,000,000.
(5) For the purposes of paragraph (4)(a), in working out the upfront price payable under a contract under which credit is provided or is to be provided, disregard any interest payable under the contract.
(6) In counting for the purposes of subparagraph (4)(b)(i) the number of persons that a person employs:
(a) a casual employee is not to be counted unless employed on a regular and systematic basis; and
(b) a part‑time employee (including a part‑time casual employee counted under paragraph (a) of this subsection) is to be counted as an appropriate fraction of a full‑time equivalent.
(7) For the purposes subparagraph (4)(b)(ii), a party’s turnover for a period is the sum of the values of all supplies the party made during the period, other than the following:
(a) supplies that are input taxed;
(b) supplies that are not for consideration (and are not taxable supplies under section 72‑5 of the A New Tax System (Goods and Services Tax) Act 1999);
(c) supplies that are not made in connection with an enterprise that the party carries on;
(d) supplies that are not connected with the indirect tax zone.
(8) Expressions used in subsection (7) that are also used in the A New Tax System (Goods and Services Tax) Act 1999 have the same meaning as in that Act.
Note: This section applies to Insurance Contracts Act insurance contracts in addition to the Insurance Contracts Act 1984 (see paragraph 15(2)(d) of that Act).
12BG Meaning of unfair
(1) A term of a contract referred to in section 12BF is unfair if:
(a) it would cause a significant imbalance in the parties’ rights and obligations arising under the contract; and
(b) it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
(c) it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.
(2) In determining whether a term of a contract is unfair under subsection (1), a court may take into account such matters as it thinks relevant, but must take into account the following:
(b) the extent to which the term is transparent;
(c) the contract as a whole.
(3) A term is transparent if the term is:
(a) expressed in reasonably plain language; and
(b) legible; and
(c) presented clearly; and
(d) readily available to any party affected by the term.
(4) For the purposes of paragraph (1)(b), a term of a contract is presumed not to be reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term, unless that party proves otherwise.
12BH Examples of unfair terms
(1) Without limiting section 12BG, the following are examples of the kinds of terms of a contract referred to in section 12BF that may be unfair:
(a) a term that permits, or has the effect of permitting, one party (but not another party) to avoid or limit performance of the contract;
(b) a term that permits, or has the effect of permitting, one party (but not another party) to terminate the contract;
(c) a term that penalises, or has the effect of penalising, one party (but not another party) for a breach or termination of the contract;
(d) a term that permits, or has the effect of permitting, one party (but not another party) to vary the terms of the contract;
(e) a term that permits, or has the effect of permitting, one party (but not another party) to renew or not renew the contract;
(f) a term that permits, or has the effect of permitting, one party to vary the upfront price payable under the contract without the right of another party to terminate the contract;
(g) a term that permits, or has the effect of permitting, one party unilaterally to vary financial services to be supplied under the contract;
(h) a term that permits, or has the effect of permitting, one party unilaterally to determine whether the contract has been breached or to interpret its meaning;
(i) a term that limits, or has the effect of limiting, one party’s vicarious liability for its agents;
(j) a term that permits, or has the effect of permitting, one party to assign the contract to the detriment of another party without that other party’s consent;
(k) a term that limits, or has the effect of limiting, one party’s right to sue another party;
(l) a term that limits, or has the effect of limiting, the evidence one party can adduce in proceedings relating to the contract;
(m) a term that imposes, or has the effect of imposing, the evidential burden on one party in proceedings relating to the contract;
(n) a term of a kind, or a term that has an effect of a kind, prescribed by the regulations.
(2) Before the Governor‑General makes a regulation for the purposes of paragraph (1)(n) prescribing a kind of term, or a kind of effect that a term has, the Minister must take into consideration:
(a) the detriment that a term of that kind would cause to consumers; and
(aa) the detriment that a term of that kind would cause to persons who carry on a business and employ fewer than 100 persons; and
(b) the impact on business generally of prescribing that kind of term or effect; and
(c) the public interest.
12BI Terms that define main subject matter of consumer contracts or small business contracts etc. are unaffected
(1) Section 12BF does not apply to a term of a contract to the extent, but only to the extent, that:
(a) the term defines the main subject matter of the contract; or
(b) the term sets the upfront price payable under the contract; or
(c) the term is required, or expressly permitted, by a law of the Commonwealth or of a State or Territory; or
(d) the term is included in the contract, or is taken to be so included, by operation of a law of the Commonwealth, or of a State or Territory, that regulates the contract; or
(e) inclusion of the term has either or both of the following results:
(i) one or more other terms are included in the contract, or are taken to be so included, by operation of a law of the Commonwealth, or of a State or Territory, that regulates the contract;
(ii) such a law requires one or more other terms to be included in the contract; or
(f) if the contract is an Insurance Contracts Act insurance contract—the term is a transparent term and:
(i) is disclosed at or before the time when the contract is made; and
(ii) sets an amount of excess or deductible under the contract.
(2) The upfront price payable under a contract is the consideration that:
(a) is provided, or is to be provided, for the supply under the contract; and
(b) is disclosed at or before the time the contract is entered into;
but does not include any other consideration that is contingent on the occurrence or non‑occurrence of a particular event.
(3) To avoid doubt, if a contract is a contract under which credit is provided or is to be provided, the consideration referred to in subsection (2) of this section includes the total amount of principal that is owed under the contract.
(4) For the purposes of applying paragraph (1)(a) to an Insurance Contracts Act insurance contract, have regard to the main subject matter of the contract only to the extent that it describes what is being insured.
12BK Standard form contracts
(1) If a party to a proceeding alleges that a contract is a standard form contract, it is presumed to be a standard form contract unless another party to the proceeding proves otherwise.
(2) In determining whether a contract is a standard form contract, a court may take into account such matters as it thinks relevant, but must take into account the following:
(a) whether one of the parties has all or most of the bargaining power relating to the transaction;
(ba) whether one of the parties has made another contract, in the same or substantially similar terms, prepared by that party, and, if so, how many such contracts that party has made;
(b) whether the contract was prepared by one party before any discussion relating to the transaction occurred between the parties;
(c) whether another party was, in effect, required either to accept or reject the terms of the contract (other than the terms referred to in subsection 12BI(1)) in the form in which they were presented;
(d) whether another party was given an effective opportunity to negotiate the terms of the contract that were not the terms referred to in subsection 12BI(1);
(e) whether the terms of the contract (other than the terms referred to in subsection 12BI(1)) take into account the specific characteristics of another party or the particular transaction;
(f) any other matter prescribed by the regulations.
(3) A contract may be determined to be a standard form contract despite the existence of one or more of following:
(a) an opportunity for a party to negotiate changes, to terms of the contract, that are minor or insubstantial in effect;
(b) an opportunity for a party to select a term from a range of options determined by another party;
(c) an opportunity for a party to another contract or proposed contract to negotiate terms of the other contract or proposed contract.
12BL Contracts to which this Subdivision does not apply
(1) This Subdivision does not apply to a contract that is the constitution of a company, managed investment scheme or other kind of body.
(1A) This Subdivision does not apply to a contract of insurance:
(a) under which a person provides medical indemnity cover (within the meaning of the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003) for:
(i) a medical practitioner (within the meaning of that Act); or
(ii) a registered health professional (within the meaning of that Act) prescribed by regulations made under that Act for the purposes of a provision of Part 3 of that Act; and
(b) to which that Act applies.
(2) This Subdivision does not apply to a small business contract to which a prescribed law of the Commonwealth, a State or a Territory applies.
(3) Before the Governor‑General makes a regulation prescribing a law for the purposes of subsection (2):
(a) the Minister must be satisfied that the law provides enforceable protections for persons who carry on a business and employ fewer than 100 persons that are equivalent to the protections provided by this Subdivision together with Subdivision G; and
(b) the Minister must take into consideration:
(i) any detriment to businesses of that kind resulting from prescribing the law; and
(ii) the impact on business generally resulting from prescribing the law; and
(iii) the public interest.
Note: A notified foreign passport fund is a managed investment scheme for the purposes of this Act and the Corporations Act, see subsection 5(2) of this Act and section 1213E of the Corporations Act.
(4) This Subdivision does not apply to a contract:
(a) that establishes, contains or incorporates rules governing the operation of a payment or settlement system approved under section 9 of the Payment Systems and Netting Act 1998; or
(b) that is made in the course of, or for the purposes of, operating such a system.
12BLA Replacement life insurance contracts to which this Subdivision does not apply
(1) This Subdivision does not apply, and is taken never to have applied, to a contract made on or after 5 April 2021 that constitutes a life policy within the meaning of the Life Insurance Act 1995 and:
(a) replaces as mentioned in subsection (2) of this section:
(i) a contract that constitutes a life policy within the meaning of that Act and was made before 5 April 2021; or
(ii) a contract to which this Subdivision does not apply because of one or more previous applications of this section; or
(b) links, as mentioned in subsection (3) of this section, 2 or more contracts, each of which is a contract of a kind referred to in subparagraph (a)(i) or (ii) of this subsection; or
(c) is one of 2 or more contracts that unlink, as mentioned in subsection (4) of this section, a contract of a kind referred to in subparagraph (a)(i) or (ii) of this subsection.
Note: 5 April 2021 is the day on which Schedule 1 to the Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2019 Measures)) Act 2020 commenced.
(2) For the purposes of paragraph (1)(a), a contract (the replacement policy) replaces another contract (the previous policy) if:
(a) the replacement policy reinstates the previous policy and is issued at the request of the owner of the previous policy after the previous policy lapses; or
(b) the replacement policy is a reissue of the previous policy to correct an administrative error in the previous policy; or
(c) the replacement policy is issued, at the request of the owner of the previous policy, for one or more of the following reasons:
(i) to change the ownership of the policy;
(ii) to extend or vary, in accordance with a term of the previous policy, the cover provided under the policy;
(iii) to change the terms relating to premiums paid under the policy.
(3) For the purposes of paragraph (1)(b), a contract (the replacement policy) links 2 or more contracts (the previous policies) if the only differences between the terms and effect of the replacement policy and those of the previous policies taken together are attributable to linking the cover under the respective previous policies to form the cover under the replacement policy.
(4) For the purposes of paragraph (1)(c), 2 or more contracts (the replacement policies) unlink a contract (the previous policy) if the only differences between the terms and effect of the replacement policies taken together and those of the previous policy are attributable to unlinking elements of the cover under the previous policy to form the cover under the respective replacement policies.
12BLB Renewed life insurance contracts to which this Subdivision does not apply
(1) If a contract covered by subsection (2) or (3) is renewed, or was renewed on or after 5 April 2021, this Subdivision does not apply, and is taken never to have applied, to the contract as renewed.
Note: 5 April 2021 is the day on which Schedule 1 to the Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2019 Measures)) Act 2020 commenced.
(2) This subsection covers a contract that:
(a) constitutes a life policy within the meaning of the Life Insurance Act 1995; and
(b) was made before 5 April 2021; and
(c) either:
(i) is guaranteed renewable; or
(ii) the insurer guarantees not to cancel in response to a change in the risk.
(3) This subsection covers a contract to which this Subdivision does not apply because of one or more previous applications of this section.
12BLC This Subdivision does not apply to certain contracts connected with financial markets
(1) This Subdivision does not apply to a contract:
(a) that exists because of:
(i) section 793B of the Corporations Act (legal effect of operating rules of a licensed market); or
(ii) section 822B of that Act (legal effect of operating rules of a licensed CS facility); or
(b) that is made under, or in accordance with:
(i) the operating rules of a licensed market; or
(ii) the operating rules of a licensed CS facility.
Note: A licensed CS facility is a clearing and settlement facility whose operation is authorised by an Australian CS facility licence.
(2) This Subdivision does not apply to a contract between:
(a) the operator of a licensed market; and
(b) any of the following:
(i) an entity included in the market’s official list;
(ii) the responsible entity for a registered scheme that is so included;
(iii) the operator of a foreign passport fund that is so included;
to the extent that the contract consists of, or includes, listing rules of the licensed market.
12BM Contraventions of this Subdivision etc.
Conduct is not taken, for the purposes of this Act, to contravene this Subdivision (or this Division) merely because of subsection 12BF(1).
Subdivision C—Unconscionable conduct
12CA Unconscionable conduct within the meaning of the unwritten law of the States and Territories
(1) A person must not, in trade or commerce, engage in conduct in relation to financial services if the conduct is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories.
(2) This section does not apply to conduct that is prohibited by section 12CB.
12CB Unconscionable conduct in connection with financial services
(1) A person must not, in trade or commerce, in connection with:
(a) the supply or possible supply of financial services to a person; or
(b) the acquisition or possible acquisition of financial services from a person;
engage in conduct that is, in all the circumstances, unconscionable.
(2) This section does not apply to conduct that is engaged in only because the person engaging in the conduct:
(a) institutes legal proceedings in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition; or
(b) refers to arbitration a dispute or claim in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition.
(3) For the purpose of determining whether a person has contravened subsection (1):
(a) the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and
(b) the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section.
(4) It is the intention of the Parliament that:
(a) this section is not limited by the unwritten law of the States and Territories relating to unconscionable conduct; and
(b) this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and
(c) in considering whether conduct to which a contract relates is unconscionable, a court’s consideration of the contract may include consideration of:
(i) the terms of the contract; and
(ii) the manner in which and the extent to which the contract is carried out;
and is not limited to consideration of the circumstances relating to formation of the contract.
12CC Matters the court may have regard to for the purposes of section 12CB
(1) Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier) has contravened section 12CB in connection with the supply or possible supply of financial services to a person (the service recipient), the court may have regard to:
(a) the relative strengths of the bargaining positions of the supplier and the service recipient; and
(b) whether, as a result of conduct engaged in by the supplier, the service recipient was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and
(c) whether the service recipient was able to understand any documents relating to the supply or possible supply of the financial services; and
(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the service recipient or a person acting on behalf of the service recipient by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the financial services; and
(e) the amount for which, and the circumstances under which, the service recipient could have acquired identical or equivalent financial services from a person other than the supplier; and
(f) the extent to which the supplier’s conduct towards the service recipient was consistent with the supplier’s conduct in similar transactions between the supplier and other like service recipients; and
(g) if the supplier is a corporation—the requirements of any applicable industry code (see subsection (3)); and
(h) the requirements of any other industry code (see subsection (3)), if the service recipient acted on the reasonable belief that the supplier would comply with that code; and
(i) the extent to which the supplier unreasonably failed to disclose to the service recipient:
(i) any intended conduct of the supplier that might affect the interests of the service recipient; and
(ii) any risks to the service recipient arising from the supplier’s intended conduct (being risks that the supplier should have foreseen would not be apparent to the service recipient); and
(j) if there is a contract between the supplier and the service recipient for the supply of the financial services:
(i) the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the service recipient; and
(ii) the terms and conditions of the contract; and
(iii) the conduct of the supplier and the service recipient in complying with the terms and conditions of the contract; and
(iv) any conduct that the supplier or the service recipient engaged in, in connection with their commercial relationship, after they entered into the contract; and
(k) without limiting paragraph (j), whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the service recipient for the supply of the financial services; and
(l) the extent to which the supplier and the service recipient acted in good faith.
(2) Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the acquirer) has contravened section 12CB in connection with the acquisition or possible acquisition of financial services from a person (the supplier), the court may have regard to:
(a) the relative strengths of the bargaining positions of the acquirer and the supplier; and
(b) whether, as a result of conduct engaged in by the acquirer, the supplier was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the acquirer; and
(c) whether the supplier was able to understand any documents relating to the acquisition or possible acquisition of the financial services; and
(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the supplier or a person acting on behalf of the supplier by the acquirer or a person acting on behalf of the acquirer in relation to the acquisition or possible acquisition of the financial services; and
(e) the amount for which, and the circumstances in which, the supplier could have supplied identical or equivalent financial services to a person other than the acquirer; and
(f) the extent to which the acquirer’s conduct towards the supplier was consistent with the acquirer’s conduct in similar transactions between the acquirer and other like suppliers; and
(g) the requirements of any applicable industry code (see subsection (3)); and
(h) the requirements of any other industry code (see subsection (3)), if the supplier acted on the reasonable belief that the acquirer would comply with that code; and
(i) the extent to which the acquirer unreasonably failed to disclose to the supplier:
(i) any intended conduct of the acquirer that might affect the interests of the supplier; and
(ii) any risks to the supplier arising from the acquirer’s intended conduct (being risks that the acquirer should have foreseen would not be apparent to the supplier); and
(j) if there is a contract between the acquirer and the supplier for the acquisition of the financial services:
(i) the extent to which the acquirer was willing to negotiate the terms and conditions of the contract with the supplier; and
(ii) the terms and conditions of the contract; and
(iii) the conduct of the acquirer and the supplier in complying with the terms and conditions of the contract; and
(iv) any conduct that the acquirer or the supplier engaged in, in connection with their commercial relationship, after they entered into the contract; and
(k) without limiting paragraph (j), whether the acquirer has a contractual right to vary unilaterally a term or condition of a contract between the acquirer and the supplier for the acquisition of the financial services; and
(l) the extent to which the acquirer and the supplier acted in good faith.
(3) In this section:
applicable industry code, in relation to a corporation, has the same meaning as it has in subsection 51ACA(1) of the Competition and Consumer Act 2010.
industry code has the same meaning as it has in subsection 51ACA(1) of the Competition and Consumer Act 2010.
Subdivision D—Consumer protection
12DA Misleading or deceptive conduct
(1) A person must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or deceptive or is likely to mislead or deceive.
(1A) Conduct:
(a) that contravenes:
(i) section 670A of the Corporations Act (misleading or deceptive takeover document); or
(ii) section 728 of the Corporations Act (misleading or deceptive fundraising document); or
(iii) section 738Y of the Corporations Act (other liabilities relating to CSF offer documents); or
(b) in relation to a disclosure document or statement within the meaning of section 953A of the Corporations Act; or
(c) in relation to a disclosure document or statement within the meaning of section 1022A of the Corporations Act;
does not contravene subsection (1). For this purpose, conduct contravenes the provision even if the conduct does not constitute an offence, or does not lead to any liability, because of the availability of a defence.
(2) Nothing in sections 12DB to 12DN limits by implication the generality of subsection (1).
(3) If a person engages in conduct that:
(a) does not contravene subsection 674A(2) of the Corporations Act, but would contravene that subsection if paragraph 674A(2)(d) of the Corporations Act contained the same text as paragraph 674(2)(d) of the Corporations Act; or
(b) does not contravene subsection 675A(2) of the Corporations Act, but would contravene that subsection if paragraph 675A(2)(b) of the Corporations Act contained the same text as paragraph 675(2)(b) of the Corporations Act;
the person’s engaging in that conduct does not contravene subsection (1) of this section.
Note: The subsections mentioned in paragraphs (a) and (b) deal with continuous disclosure of information by disclosing entities.
(4) For the purposes of subsection (3), a person engages in conduct that contravenes a provision even if engaging in the conduct does not constitute an offence, or lead to a liability, because of the availability of a defence.
12DB False or misleading representations
(1) A person must not, in trade or commerce, in connection with the supply or possible supply of financial services, or in connection with the promotion by any means of the supply or use of financial services:
(a) make a false or misleading representation that services are of a particular standard, quality, value or grade; or
(b) make a false or misleading representation that a particular person has agreed to acquire services; or
(c) make a false or misleading representation that purports to be a testimonial by any person relating to services; or
(d) make a false or misleading representation concerning:
(i) a testimonial by any person; or
(ii) a representation that purports to be such a testimonial;
relating to services; or
(e) make a false or misleading representation that services have sponsorship, approval, performance characteristics, uses or benefits; or
(f) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or
(g) make a false or misleading representation with respect to the price of services; or
(h) make a false or misleading representation concerning the need for any services; or
(i) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including an implied warranty under section 12ED); or
(j) make a false or misleading representation concerning a requirement to pay for a contractual right that:
(i) is wholly or partly equivalent to any condition, warranty, guarantee, right or remedy (including an implied warranty under section 12ED); and
(ii) a person has under a law of the Commonwealth, a State or a Territory (other than an unwritten law).
Note: Failure to comply with this subsection is an offence (see section 12GB).
(1A) For the purposes of applying subsection (1) in relation to a proceeding concerning a representation of a kind referred to in paragraph (1)(c) or (d), the representation is taken to be misleading unless evidence is adduced to the contrary.
(1B) To avoid doubt, subsection (1A) does not:
(a) have the effect that, merely because such evidence to the contrary is adduced, the representation is not misleading; or
(b) have the effect of placing on any person an onus of proving that the representation is not misleading.
(2) Conduct:
(a) that contravenes:
(i) section 670A of the Corporations Act (misleading or deceptive takeover document); or
(ii) section 728 of the Corporations Act (misleading or deceptive fundraising document); or
(iii) section 738Y of the Corporations Act (other liabilities relating to CSF offer documents); or
(b) in relation to a disclosure document or statement within the meaning of section 953A of the Corporations Act; or
(c) in relation to a disclosure document or statement within the meaning of section 1022A of the Corporations Act;
does not contravene subsection (1). For this purpose, conduct contravenes the provision even if the conduct does not constitute an offence, or does not lead to any liability, because of the availability of a defence.
(3) An offence under subsection 12GB(1) relating to subsection (1) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
12DC False or misleading representations in relation to financial products that involve interests in land
(1) A person must not, in trade or commerce, in connection with the supply, or the possible supply, of a financial product that consists of, or includes, an interest in land, or in connection with the promotion by any means of a financial product that consists of, or includes, an interest in land:
(a) represent that the person has a sponsorship, approval or affiliation it does not have; or
(b) make a false or misleading representation concerning the nature of the interest in the land, the price payable for the financial product, the location of the land, the characteristics of the land, the use to which the land is capable of being put or may lawfully be put or the existence or availability of facilities associated with the land.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(1AA) Subsection (1) applies whether or not a representation is made before or after the financial product consists of, or includes, an interest in land.
(1A) An offence under subsection 12GB(1) relating to subsection (1) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2A) A person contravenes this subsection if:
(a) a person uses physical force or undue harassment or coercion; and
(b) the person uses such force, harassment or coercion in connection with the supply, or the possible supply, of a financial product mentioned in subsection (1), or the payment for such a financial product.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2B) Subsection (2A) applies whether or not a person uses physical force, undue harassment or coercion before or after the financial product consists of, or includes, an interest in land.
(2C) For the purposes of the application of the Criminal Code in relation to an offence under subsection 12GB(1), strict liability applies to paragraph (2A)(b) of this section.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2D) Nothing in this section is to be taken as implying that other provisions in this Subdivision do not apply in relation to the supply or acquisition, or the possible supply or acquisition, of a financial product mentioned in subsection (1).
(3) In this section:
interest, in relation to land, means:
(a) a legal or equitable estate or interest in the land; or
(b) a right of occupancy of the land, or of a building or part of a building erected on the land, arising by virtue of the holding of shares, or by virtue of a contract to purchase shares, in an incorporated company that owns the land or building; or
(c) a right, power or privilege over, or in connection with, the land.
12DD Cash price to be stated in certain circumstances
(1) A person must not, in trade or commerce, in connection with:
(a) the supply or possible supply of financial services; or
(b) the promotion by any means of the supply or use of financial services;
make a representation about an amount that, if paid, would constitute a part of the consideration for the supply of the services unless the person also specifies the cash price for the services.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) This section does not apply to dealings in securities (within the meaning of Chapter 6 of the Corporations Act).
(3) An offence under subsection 12GB(1) relating to subsection (1) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
12DE Offering rebates, gifts, prizes etc.
(1) A person contravenes this subsection if:
(a) the person offers any rebate, gift, prize or other free item; and
(b) the person offers the rebate, gift, prize or other free item in trade or commerce, in connection with:
(i) the supply or possible supply of financial services; or
(ii) the promotion by any means of the supply or use of financial services; or
(iii) the supply or possible supply of a financial product that consists of, or includes, an interest in land; or
(iv) the promotion by any means of a financial product that consists of, or includes, an interest in land; and
(c) when the person so offers it, the person intends not to provide it, or not to provide it as offered.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) For the purposes of the application of the Criminal Code in relation to subsection (1), paragraphs (1)(b) and (c) are taken to be circumstances in which the conduct described in paragraph (1)(a) occurs.
(2A) A person contravenes this subsection if:
(a) the person offers any rebate, gift, prize or other free item; and
(b) the person offers the rebate, gift, prize or other free item in trade or commerce, in connection with:
(i) the supply or possible supply of financial services; or
(ii) the promotion by any means of the supply or use of financial services; or
(iii) the supply or possible supply of a financial product that consists of, or includes, an interest in land; or
(iv) the promotion by any means of a financial product that consists of, or includes, an interest in land; and
(c) the person fails, within the time specified in the offer or (if no such time is specified) within a reasonable time after making the offer, to provide the rebate, gift, prize or other free item in accordance with the offer.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2B) Subsection (2A) does not apply if:
(a) the person’s failure to provide the rebate, gift, prize or other free item in accordance with the offer was due to the act or omission of another person, or to some other cause beyond the person’s control; and
(b) the person took reasonable precautions and exercised due diligence to avoid the failure.
(2C) Subsection (2A) does not apply to an offer that the person makes to another person if:
(a) the person offers to the other person a different rebate, gift, prize or other free item as a replacement; and
(b) the other person agrees to receive the different rebate, gift, prize or other free item.
(2D) For the purposes of the application of the Criminal Code in relation to subsection (2A), paragraph (2A)(b) is taken to be a circumstance in which the conduct described in paragraph (2A)(a) occurs.
(3) For the purposes of the application of the Criminal Code in relation to an offence under subsection 12GB(1), strict liability applies in relation to paragraphs (1)(b) and (2A)(b) and (c) of this section.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3A) Subparagraph (1)(b)(iii) or (2A)(b)(iii) applies whether or not an offer is made before or after the financial product consists of, or includes, an interest in land.
(4) In this section:
interest, in relation to land, has the same meaning as in subsection 12DC(3).
12DF Certain misleading conduct in relation to financial services
(1) A person must not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the characteristics, the suitability for their purpose or the quantity of any financial services.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) An offence under subsection 12GB(1) relating to subsection (1) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
12DG Bait advertising
(1) A person must not, in trade or commerce, advertise financial services for supply at a specified price, if there are reasonable grounds, of which the person is aware or ought reasonably to be aware, for believing that the person will not be able to offer for supply those services at that price:
(a) for a period that is; and
(b) in quantities that are;
reasonable having regard to the nature of the market in which the person carries on business and the nature of the advertisement.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) A person that has, in trade or commerce, advertised financial services for supply at a specified price must offer such services for supply at that price:
(a) for a period that is; and
(b) in quantities that are;
reasonable having regard to the nature of the market in which the person carries on business and the nature of the advertisement.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2A) An offence under subsection 12GB(1) relating to subsection (1) or (2) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) In a prosecution of a person under Subdivision G (sections 12GA to 12GO) in relation to a failure to offer financial services to a person (the customer) in accordance with subsection (2), it is a defence if the person establishes that:
(a) it offered to supply, or to procure an alternative supplier to supply, services of the kind advertised to the customer within a reasonable time, in a reasonable quantity and at the advertised price; or
(b) it offered to supply immediately, or to procure an alternative supplier to supply within a reasonable time, equivalent services to the customer in a reasonable quantity and at the price at which the first‑mentioned services were advertised;
and, in either case, if the offer was accepted by the customer, the person has so supplied, or procured an alternative supplier to supply, services.
Note: A defendant bears a legal burden in relation to the matters in subsection (3), see section 13.4 of the Criminal Code.
12DH Referral selling
(1) A person must not, in trade or commerce, induce a consumer to acquire financial services by representing that the consumer will, after the contract to acquire the services is made, receive a rebate, commission or other benefit in return for:
(a) giving the person the names of prospective customers; or
(b) otherwise assisting the person to supply financial services to other consumers;
if receipt of the rebate, commission or other benefit is contingent on an event occurring after that contract is made.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) An offence under subsection 12GB(1) relating to subsection (1) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
12DI Accepting payment without intending or being able to supply as ordered
(1) A person contravenes this subsection if:
(a) the person, in trade or commerce, accepts payment or other consideration for financial services; and
(b) at the time of acceptance, the person intends:
(i) not to supply the financial services; or
(ii) to supply financial services materially different from the financial services in respect of which the payment or other consideration is accepted.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) For the purposes of the application of the Criminal Code in relation to an offence under subsection 12GB(1), strict liability applies to paragraph (1)(a) of this section.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) A person contravenes this subsection if:
(a) the person, in trade or commerce, accepts payment or other consideration for financial services; and
(b) at the time of acceptance, there are reasonable grounds for believing that the person will not be able to supply the financial services within the period specified by the person or, if no period is specified, within a reasonable time.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(4) An offence under subsection 12GB(1) relating to subsection (3) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
12DJ Harassment and coercion
(1) A person contravenes this subsection if:
(a) the person uses physical force or undue harassment or coercion; and
(b) the person uses such force, harassment or coercion in connection with the supply or possible supply of financial services to a consumer, or the payment for financial services by a consumer.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) Strict liability applies to paragraph (1)(b).
Note: For strict liability, see section 6.1 of the Criminal Code.
12DK Pyramid selling of financial products
(1) A person contravenes this section if:
(a) the person is the promoter of, or (if there are more than one) one of the promoters of, or is a participant in, a trading scheme to which this section applies; and
(b) another person (the targeted person), who is a participant in that trading scheme, or has applied or been invited to become a participant in that trading scheme, makes any payment to or for the benefit of the person; and
(c) the targeted person is induced to make the payment because the prospect is held out to him or her of receiving payments or other benefits in respect of the introduction (whether by himself or herself or by another person) of other persons who become participants in that trading scheme.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) A person also contravenes this section if:
(a) the person is the promoter of, or (if there are more than one) one of the promoters of, is a participant in, or is otherwise acting in accordance with, a trading scheme to which this section applies; and
(b) the person, by holding out to another person (the targeted person) the prospect of receiving payments or other benefits in respect of the introduction (whether by the targeted person or by another person) of other persons who become participants in that trading scheme, attempts to induce the targeted person:
(i) if the targeted person is already a participant in that trading scheme, to make any payment to or for the benefit of the promoter or any of the promoters or to or for the benefit of a participant in that trading scheme; or
(ii) if the targeted person is not already a participant in that trading scheme, to become such a participant and to make a payment of a kind mentioned in subparagraph (i).
Note: Failure to comply with this subsection is an offence (see section 12GB).
(3) A person (the promoter) also contravenes this section if the promoter promotes, or takes part in the promotion of, a scheme under which:
(a) a payment is to be made by another person (the targeted person) who participates, or who has applied or been invited to participate, in the scheme to or for the benefit of the promoter or another person who takes part in the promotion of the scheme or to or for the benefit of any person other than the targeted person who participates in the scheme; and
(b) the inducement for making the payment is the holding out to the targeted person the prospect of receiving payments from other persons who may participate in the scheme.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(3A) An offence under subsection 12GB(1) relating to subsection (1), (2) or (3) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) For the purposes of subsection (1), (2) or (3):
(a) a prospect of a kind mentioned in that subsection is taken to be held out to a person whether it is held out so as to confer on him or her a legally enforceable right or not; and
(b) in determining whether an inducement or attempt to induce is made by holding out a prospect of a kind mentioned in that subsection, it is sufficient if a prospect of that kind constitutes or would constitute a substantial part of the inducement; and
(c) any reference to the making of a payment to or for the benefit of a person includes a reference to the making of a payment partly to or for the benefit of that person and partly to or for the benefit of one or more other persons.
(5) For the purposes of this section, a scheme is a trading scheme to which this section applies if the scheme includes the following elements:
(a) financial products are to be provided by the person promoting the scheme (the promoter) or, in the case of a scheme promoted by 2 or more persons acting in concert (the promoters), are to be provided by one or more of those persons; and
(b) the financial products so provided are to be supplied to or for other persons under transactions arranged or effected by persons who participate in the scheme (each of whom is in this section referred to as a participant), being persons not all of whom are promoters.
(6) For the purposes of subsection (5):
(a) a scheme is taken to include the element referred to in paragraph (5)(b) whether a participant who is not a promoter acts in relation to a transaction referred to in that paragraph in the capacity of an employee or agent of the promoter or of one of the promoters or in any other capacity; and
(b) a scheme includes any arrangements made in connection with the carrying on of a business, whether those arrangements are made or recorded wholly or partly in writing or not; and
(c) a reference to the provision of a financial product by a person includes a reference to the provision of a financial product under arrangements to which that person is a party.
12DL Unsolicited credit cards and debit cards
(1) A person must not send another person (the targeted person) a credit card or a debit card except in accordance with subsection (2).
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) A person may send the targeted person the card:
(a) in pursuance of a request in writing by the person (the liable person) who will be under a liability to the issuer of the card in respect of the use of the card; or
(b) in renewal or replacement of, or in substitution for:
(i) a card of the same kind previously sent to the targeted person in pursuance of a request in writing by the liable person to the issuer of the previous card; or
(ii) a card of the same kind previously sent to the targeted person and used for a purpose for which it was intended to be used.
Note: A defendant bears an evidential burden in relation to the matter in this subsection, see subsection 13.3(3) of the Criminal Code.
(3) Subsection (1) applies only in relation to the sending of a card by or on behalf of the issuer of the card.
(4) A person must not take any action that enables:
(a) another person who has a credit card to use the card as a debit card; or
(b) another person who has a debit card to use the card as a credit card;
except in accordance with a request in writing by the other person.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(4A) An offence under subsection 12GB(1) relating to subsection (1) or (4) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(5) In this section:
article includes a token, card or document.
credit card means an article that:
(a) is of a kind described in one or more of the following subparagraphs:
(i) an article of a kind commonly known as a credit card;
(ii) a similar article intended for use in obtaining cash, goods or services on credit;
(iii) an article of a kind that persons carrying on business commonly issue to their customers or prospective customers for use in obtaining goods or services from those persons on credit; and
(b) is part of, or provides access to, a credit facility that is a financial product;
or an article that may be used as an article referred to in paragraphs (a) and (b).
debit card means:
(a) an article intended for use by a person in obtaining access to an account that is:
(i) held by the person for the purpose of withdrawing or depositing cash or obtaining goods or services; and
(ii) a financial product; or
(b) an article that may be used as an article referred to in paragraph (a).
12DM Assertion of right to payment for unsolicited financial services etc.
(1) A person must not, in trade or commerce, assert a right to payment from another person for unsolicited financial services.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(1A) Subsection (1) does not apply if the person had reasonable cause to believe that there was a right to payment.
Note: A defendant bears an evidential burden in relation to the matter in subsection (1A), see subsection 13.3(3) of the Criminal Code.
(1AA) A person must not, in trade or commerce, send to another person an invoice or other document that:
(a) states the amount of a payment, or sets out the charge, for supplying unsolicited financial services; and
(b) does not contain a warning statement that complies with the requirements set out in the regulations.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(1AB) Subsection (1AA) does not apply if the person had reasonable cause to believe that there was a right to the payment or charge.
Note: A defendant bears an evidential burden in relation to the matter in subsection (1AB), see subsection 13.3(3) of the Criminal Code.
(1B) An offence under subsection 12GB(1) relating to subsection (1) or (1AA) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) In a proceeding against a person in respect of a contravention of this section, the burden lies on the person of proving that the person had reasonable cause to believe that there was a right to payment.
12DMA Liability of recipient for unsolicited financial services etc.
If a person, in trade or commerce, supplies unsolicited financial services to another person, the other person:
(a) is not liable to make any payment for the services or products; and
(b) is not liable for loss or damage as a result of the supply of the services or products.
12DMB Assertion of right to payment for unauthorised advertisements
(1) A person must not assert a right to payment from another person of a charge for placing, in a publication, an advertisement, for financial services, relating to:
(a) the other person; or
(b) the other person’s profession, business, trade or occupation;
unless the person knows, or has reasonable cause to believe, that the other person authorised the placing of the advertisement.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) A person must not send to another person an invoice or other document that:
(a) states the amount of a payment, or sets out the charge for placing, in a publication, an advertisement, for financial services, relating to:
(i) the other person; or
(ii) the other person’s profession, business, trade or occupation; and
(b) does not contain a warning statement that complies with the requirements set out in the regulations;
unless the person knows, or has reasonable cause to believe, that the other person authorised the placing of the advertisement.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(3) Subsections (1) and (2) do not apply to an advertisement that is placed in a publication published by a person who is:
(a) the publisher of a publication that has an audited circulation of 10,000 copies or more per week, as confirmed by the most recent audit of the publication by a body specified in the regulations; or
(b) a body corporate related to such a publisher; or
(c) the Commonwealth, a State or a Territory, or an authority of the Commonwealth, a State or a Territory; or
(d) a person specified in the regulations.
Note: A defendant bears an evidential burden in relation to the matter in subsection (3): see subsection 13.3(3) of the Criminal Code.
(4) A person:
(a) is not liable to make any payment to another person; and
(b) is entitled to recover by action in a court of competent jurisdiction against another person any payment made by the person to the other person;
in full or part satisfaction of a charge for placing, in a publication, an advertisement for financial services, unless the person has authorised the publishing of the advertisement.
(5) A person is not taken for the purposes of this section to have authorised the placing, in a publication, of an advertisement, unless:
(a) a document authorising the placing of the advertisement has been signed by the person or by another person authorised by him or her; and
(b) a copy of the document has been given to the person before the right to payment of a charge for the placing of the advertisement is asserted; and
(c) the document specifies:
(i) the name and address of the person placing the advertisement; and
(ii) particulars of the advertisement; and
(iii) the amount of the charge for the placing of the advertisement, or the basis on which the charge is, or is to be, calculated.
(6) In a proceeding against a person in relation to a contravention of this section, the person bears the onus of proving that the person knew or had reasonable cause to believe that the person against whom a right to payment was asserted had authorised the placing of the advertisement.
12DMC Caps on commissions for add‑on risk products supplied in connection with motor vehicles
Commissions not to exceed determined caps
(1) A person contravenes this subsection if:
(a) the person provides a commission to another person, or receives a commission from another person, in connection with the supply (by any person to any person) of a financial service; and
(b) the financial service is the provision of an add‑on risk product to a person (the product recipient) in connection with:
(i) the sale or long‑term lease of a motor vehicle to the product recipient; or
(ii) the provision of credit connected with the sale or long‑term lease of a motor vehicle to the product recipient; or
(iii) the provision of a warranty by the product recipient in connection with the sale or long‑term lease of a motor vehicle to another person by the product recipient; and
(c) the person acquiring the motor vehicle does so as a consumer (within the meaning of the Australian Consumer Law); and
(d) providing the add‑on risk product is covered by a determination under subsection (3); and
(e) the value of the commission exceeds the cap that applies, under that determination, to providing the add‑on risk product.
Note: For the value of the commission, see subsections (5) to (7).
Meaning of add‑on risk product
(2) An add‑on risk product is a financial product that is a facility through which, or through the acquisition of which, a person manages financial risk (within the meaning of subsection 12BAA(5)).
ASIC may determine caps
(3) ASIC may, by legislative instrument, determine a cap on the value of commissions provided in connection with an add‑on risk product of a kind specified in the instrument.
(4) Without limiting subsection (5), the determination may do either or both of the following:
(a) limit the circumstances in which provision of an add‑on risk product of that kind is covered by the determination;
(b) provide for the way in which the value of commissions is to be ascertained for the purposes of the determination.
Valuing commissions
(5) The value of a commission provided in connection with an add‑on risk product is:
(a) the value ascertained in accordance with the determination under subsection (3) that covers the provision of the add‑on risk product; or
(b) if the determination does not provide for the way in which the value is to be ascertained—the sum of:
(i) to the extent that the commission is expressed as an amount of money—that amount; and
(ii) otherwise—the market value of so much of the commission as is not expressed as an amount of money.
(6) In working out the market value of something for the purposes of subparagraph (5)(b)(ii) disregard anything that would prevent or restrict its conversion to money.
(7) If a commission is provided in connection with 2 or more add‑on risk products, apportion the value of the commission between the add‑on risk products:
(a) in accordance with the determination under subsection (3) that covers the provision of the add‑on risk products; or
(b) if the determination does not provide for such apportionment—on a reasonable basis.
Multiple commissions
(8) For the purposes of this Act, if more than one commission is provided (by one or more persons to one or more persons) in connection with the add‑on risk product, subsection (1) applies as if:
(a) one single commission is provided that comprises all of those commissions; and
(b) if those commissions are provided by more than one person—that single commission is jointly provided by all of those persons; and
(c) the value of that single commission is the sum of the values of all of those commissions.
Commissions for consumer credit insurance
(9) This section does not affect the application of section 145 of the National Credit Code to a commission paid in connection with consumer credit insurance (within the meaning of the National Credit Code) unless the insurance:
(a) is an add‑on risk product of a kind covered by a determination under subsection (3); and
(b) is provided in connection with:
(i) the sale or long‑term lease of a motor vehicle; or
(ii) the provision of credit connected with the sale or long‑term lease of a motor vehicle.
Note: In the absence of an applicable determination under subsection (3), section 145 of the National Credit Code imposes a 20% cap on commissions provided in connection with consumer credit insurance.
12DN Application of provisions of this Division to information providers
General rule
(1) Sections 12DA, 12DB, 12DC and 12DF do not apply to a publication of matter by an information provider if:
(a) in any case—the information provider made the publication in the course of carrying on a business of providing information; or
(b) if the information provider is the Australian Broadcasting Corporation, the Special Broadcasting Service Corporation or the holder of a licence granted under the Broadcasting Services Act 1992—the publication was by way of a radio or television broadcast by the information provider.
Exception—advertisements
(2) Subsection (1) does not apply to a publication of an advertisement.
Exception—information provider connected with supply of financial services
(3) Subsection (1) does not apply to a publication of matter in connection with the supply or possible supply of, or the promotion by any means of the supply or use of, financial services (the publicised financial services), if:
(a) the publicised financial services were services of a kind supplied by the information provider or, if the information provider is a body corporate, by a body corporate that is related to the information provider; or
(b) the publication was made on behalf of, or pursuant to a contract, arrangement or understanding with, a person who supplies financial services of the same kind as the publicised financial services; or
(c) the publication was made on behalf of, or pursuant to a contract, arrangement or understanding with, a body corporate that is related to a body corporate that supplies financial services of the same kind as the publicised financial services.
Exception—information provider connected with supply etc. of financial products consisting of etc. interests in land
(4) Subsection (1) does not apply to a publication of matter in connection with the supply, or the possible supply, of financial products that consist of, or include, interests in land, or the promotion by any means of the supply of financial products that consist of, or include, interests in land (the publicised financial products), if:
(a) the publicised financial products were interests of a kind supplied by the information provider or, if the information provider is a body corporate, by a body corporate that is related to the information provider; or
(b) the publication was made on behalf of, or pursuant to a contract, arrangement or understanding with, a person who supplies financial products of the same kind as the publicised financial products; or
(c) the publication was made on behalf of, or pursuant to a contract, arrangement or understanding with, a body corporate that is related to a body corporate that supplies financial products of the same kind as the publicised financial products.
(4A) Subsection (4) applies whether or not a matter is published before or after the financial product consists of, or includes, an interest in land.
Definitions
(5) In this section:
information provider means a person who carries on a business of providing information.
interest, in relation to land, has the same meaning as in subsection 12DC(3).
(6) Without limiting subsection (5), each of the following is an information provider:
(a) the holder of a licence granted under the Broadcasting Services Act 1992;
(b) a person who is the provider of a broadcasting service under a class licence under that Act;
(c) the holder of a licence continued in force by section 5(1) of the Broadcasting Services (Transitional Provisions and Consequential Amendments) Act 1992;
(d) the Australian Broadcasting Corporation;
(e) the Special Broadcasting Service Corporation.
Subdivision DA—Deferred sales for add‑on insurance products
12DO Meaning of add‑on insurance product
(1) An add‑on insurance product, in relation to another product or service (the principal product or service), is a financial product that:
(a) is offered or sold to a consumer (the customer) in connection with the customer acquiring, or entering into a commitment to acquire, the principal product or service; and
(b) is offered or sold by:
(i) the provider of the principal product or service; or
(ii) another person, in accordance with an arrangement to which the provider of the principal product or service is a party; and
(c) manages financial risk (within the meaning of section 12BAA) relating to the principal product or service; and
(d) either:
(i) is a contract of insurance; or
(ii) provides for the customer to benefit from a contract of insurance to which the provider of the financial product is a party.
(2) For the purposes of subsection (1), contract of insurance includes:
(a) a contract that would ordinarily be regarded as a contract of insurance even if some of its provisions are not by way of insurance; and
(b) a contract that includes provisions of insurance in so far as those provisions are concerned, even if the contract would not ordinarily be regarded as a contract of insurance.
(3) The regulations may provide that a customer is, for the purposes of this Subdivision, taken to have entered into a commitment to acquire a product or service of a specified class at a time specified in the regulations.
12DP Meaning of add‑on insurance deferral period and add‑on insurance pre‑deferral period
(1) If a person (the customer) who acquires, or enters into a commitment to acquire, a product or service (the principal product or service) is given the information determined under paragraph (4)(a), in the form and manner determined under paragraph (4)(b), in connection with the acquisition or proposed acquisition, then:
(a) there is an add‑on insurance deferral period in relation to the customer acquiring, or entering into a commitment to acquire, the principal product or service; and
(b) the add‑on insurance deferral period is the period beginning at the later of:
(i) the time the customer enters into the commitment (or, if the customer acquires the principal product or service without previously entering into a commitment to do so, the time the customer acquires the principal product or service); and
(ii) the time the customer is given the information;
and ending at the end of 4 days after the day on which the period begins.
(2) If the information determined under paragraph (4)(a) is not given in the form and manner determined under paragraph (4)(b) in connection with the acquisition or proposed acquisition, there is no add‑on insurance deferral period in relation to the customer acquiring, or entering into a commitment to acquire, the principal product or service.
Note: There is no obligation for a person who provides a product or service to give the information to a customer. However, if the information is not given and there is no add‑on insurance deferral period, certain conduct relating to the sale or offer of add‑on insurance products may be prohibited (see sections 12DQ to 12DR).
(3) The add‑on insurance pre‑deferral period in relation to the principal product or service is a period that:
(a) begins when the customer indicates an intention to acquire the principal product or service; and
(b) if there is an add‑on insurance deferral period in relation to the customer acquiring, or entering into a commitment to acquire, the principal product or service—ends immediately before the start of that period; and
(c) if there is no such add‑on insurance deferral period—does not end.
(4) ASIC may, by legislative instrument, determine the following:
(a) information to be given for the purposes of subsection (1);
(b) the form and manner in which the information is to be given (which may require the information to be given to a particular customer each time the customer enters into a commitment to acquire, or acquires, the products or services).
(5) Information determined under paragraph (4)(a):
(a) must include information that relates to a customer giving notice that the customer does not want to receive:
(i) offers of add‑on insurance products; or
(ii) requests or invitations for the customer to ask or apply for add‑on insurance products;
in relation to the principal product or service; and
(b) may include information relating to any other matter that ASIC thinks appropriate.
12DQ Prohibition on selling add‑on insurance products before end of add‑on insurance deferral period etc.
Contraventions by provider of principal product or service
(1) A person (the first person) contravenes this subsection if:
(a) another person (the customer) acquires, or enters into a commitment to acquire, a product or service (the principal product or service) from the first person; and
(b) the first person also sells a financial product to the customer; and
(c) the financial product is an add‑on insurance product in relation to the principal product or service.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) A person (the first person) contravenes this subsection if:
(a) another person (the customer) acquires, or enters into a commitment to acquire, a product or service (the principal product or service) from the first person; and
(b) a third person sells the customer a financial product that is an add‑on insurance product in relation to the principal product or service.
Note: Failure to comply with this subsection is an offence (see section 12GB).
Exception for sale after add‑on insurance deferral period
(3) Subsections (1) and (2) do not apply if:
(a) there is an add‑on insurance deferral period in relation to the customer acquiring, or entering into a commitment to acquire, the principal product or service; and
(b) the add‑on insurance product is sold to the customer after the end of the add‑on insurance deferral period.
Note: A defendant bears an evidential burden in relation to the matter in subsection (3): see subsection 13.3(3) of the Criminal Code.
Contravention by third party provider
(4) A person (the third party provider) contravenes this subsection if:
(a) the third party provider sells a financial product to a consumer (the customer); and
(b) the financial product is an add‑on insurance product in relation to a product or service (the principal product or service) offered or provided by another person; and
(c) either:
(i) there is no add‑on insurance deferral period in relation to the customer acquiring, or entering into a commitment to acquire, the principal product or service; or
(ii) there is such an add‑on insurance deferral period, and the third party provider sells the add‑on insurance product to the customer before the end of the period.
Note: Failure to comply with this subsection is an offence (see section 12GB).
Timing of sale
(5) For the purposes of this section, an add‑on insurance product is taken to be sold to a customer no later than the first time at which no further action from the customer is required for the sale to occur (even if the sale does not occur until a later time).
12DR Prohibition on offering add‑on insurance product during add‑on insurance deferral period
Offer by provider of principal product or service
(1) A person (the principal provider) contravenes this subsection if:
(a) another person (the customer) acquires, or enters into a commitment to acquire, a product or service (the principal product or service) from the principal provider; and
(b) the principal provider offers a financial product for issue or sale to the customer, or requests or invites the customer to ask or apply for a financial product or to purchase a financial product; and
(c) the financial product is an add‑on insurance product in relation to the principal product or service; and
(d) the offer, request or invitation is made otherwise than in writing.
Note: Failure to comply with this subsection is an offence (see section 12GB).
Exceptions for subsection (1)—offer made outside add‑on insurance deferral period
(2) Subsection (1) does not apply if the offer, request or invitation is made:
(a) during the add‑on insurance pre‑deferral period in relation to the principal product or service; or
(b) if there is an add‑on insurance deferral period in relation to the customer acquiring, or entering into a commitment to acquire, the principal product or service—after the end of the period of 6 weeks beginning on the first day of the add‑on insurance deferral period.
Note: A defendant bears an evidential burden in relation to the matter in subsection (2): see subsection 13.3(3) of the Criminal Code.
Offer by third party provider
(3) A person (the third party provider) contravenes this subsection if:
(a) another person (the customer) acquires, or enters into a commitment to acquire, a product or service (the principal product or service); and
(b) the third party provider offers a financial product for issue or sale to the customer, or requests or invites the customer to ask or apply for a financial product or to purchase a financial product; and
(c) the financial product is an add‑on insurance product in relation to the principal product or service; and
(d) the offer, request or invitation is made otherwise than in writing; and
(e) there is an add‑on insurance deferral period in relation to the customer acquiring, or entering into a commitment to acquire, the principal product or service; and
(f) the offer, request or invitation is made during the period of 6 weeks beginning on the first day of the add‑on insurance deferral period.
Note: Failure to comply with this subsection is an offence (see section 12GB).
Exception for subsections (1) and (3)—contact initiated by customer
(4) Subsections (1) and (3) do not apply if:
(a) the offer, request or invitation is made in response to contact initiated by the customer; and
(b) either:
(i) the offer, request or invitation is made after the end of the add‑on insurance deferral period; or
(ii) the offer, request or invitation relates only to the purpose for which the customer initiated the contact.
Note: A defendant bears an evidential burden in relation to the matter in subsection (4): see subsection 13.3(3) of the Criminal Code.
12DS Prohibition on offering add‑on insurance product—customer opt‑out
(1) A person (the first person) contravenes this subsection if:
(a) another person (the customer) acquires, or enters into a commitment to acquire, a product or service (the principal product or service); and
(b) the first person offers a financial product for issue or sale to the customer, or requests or invites the customer to ask or apply for a financial product or to purchase a financial product; and
(c) the financial product is an add‑on insurance product in relation to the principal product or service; and
(d) before the offer, request or invitation is made, the customer informs the first person that the customer does not want to receive such offers, requests or invitations.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) A person (the first person) contravenes this subsection if:
(a) another person (the customer) acquires, or enters into a commitment to acquire, a product or service (the principal product or service); and
(b) the first person offers a financial product for issue or sale to the customer, or requests or invites the customer to ask or apply for a financial product or to purchase a financial product; and
(c) the financial product is an add‑on insurance product in relation to the principal product or service; and
(d) before the offer, request or invitation is made, the customer informs any of the following that the customer does not want to receive such offers, requests or invitations:
(i) the person who provided the principal product or service (if that person is not the first person);
(ii) any person (other than the first person) with whom the person mentioned in subparagraph (i) has an arrangement of a kind mentioned in subparagraph 12DO(1)(b)(ii).
12DT Right of return and refund for add‑on insurance product sold in contravention of section 12DQ
(1) If a person (the first person) contravenes a subsection of section 12DQ in relation to an add‑on insurance product sold (whether by the first person or by any other person) to another person (the customer), the customer has a right of return and refund exercisable at any time during the period starting when the product was sold and ending:
(a) if, under section 1019B of the Corporations Act 2001, the customer has a right to return the product within a particular period—1 month after the end of that period; or
(b) otherwise—1 month and 14 days after the product was sold.
(2) If the add‑on insurance product is returned under subsection (1):
(a) if the product is constituted by a legal relationship between the customer and any other person—by force of this section, that relationship is terminated, with effect from the time of the return, without penalty to the customer; and
(b) by force of this section, any contract for the acquisition of the product by the customer is terminated, with effect from the time of the return, without penalty to the customer.
(3) The amount of a refund paid under subsection (1) in relation to an add‑on insurance product:
(a) must be the entire amount paid for the product; but
(b) may be reduced by any amount paid as a result of a claim under the product.
(4) This section applies in addition to any other penalties for or in relation to contraventions of section 12DQ.
12DU Exception for financial advisers
Section 12DQ does not apply in relation to the sale of an add‑on insurance product, and sections 12DR and 12DS do not apply in relation to an offer to issue or sell an add‑on insurance product, or a request or invitation to ask or apply for an add‑on insurance product, by a person if:
(a) the person sells the add‑on insurance product, or makes the offer, request or invitation, in the course of providing personal advice in circumstances where Division 2 (best interests obligations) of Part 7.7A of that Act applies; and
(b) the add‑on insurance product relates to a principal product or service that is provided by the person, and that the person recommends in the course of providing the advice.
Note: A defendant bears an evidential burden in relation to the matter in this section: see subsection 13.3(3) of the Criminal Code.
12DV Exception for product covered by product intervention order
(1) Section 12DQ does not apply in relation to the sale of an add‑on insurance product by a person if a product intervention order in force under Part 7.9A of the Corporations Act 2001:
(a) covers that sale; and
(b) provides for a period during which the product must not be sold.
Note: A defendant bears an evidential burden in relation to the matter in subsection (1): see subsection 13.3(3) of the Criminal Code.
(2) Sections 12DR and 12DS do not apply in relation to:
(a) an offer to issue or sell; or
(b) a request or invitation to ask or apply for;
an add‑on insurance product that would, if offered to a consumer, be covered by a product intervention order in force under Part 7.9A of the Corporations Act 2001 that provides for a period during which the product must not be sold to the consumer.
Note: A defendant bears an evidential burden in relation to the matter in subsection (2): see subsection 13.3(3) of the Criminal Code.
12DW Exception for comprehensive motor vehicle insurance
(1) Section 12DQ does not apply in relation to the sale of an add‑on insurance product by a person if the add‑on insurance product provides insurance cover:
(a) to an individual who:
(i) wholly or partly owns a motor vehicle; or
(ii) has the use of a motor vehicle under a lease of at least 4 months’ duration; and
(b) in respect of all of the following (whether or not the product also provides insurance cover in respect of other matters):
(i) loss of, or damage to, the motor vehicle resulting from an accident;
(ii) loss of, or damage to, property of another person resulting from an accident in which the motor vehicle is involved;
(iii) loss of, or damage to, the motor vehicle caused by fire, theft or malicious acts.
Note: A defendant bears an evidential burden in relation to the matter in subsection (1): see subsection 13.3(3) of the Criminal Code.
(2) Sections 12DR and 12DS do not apply in relation to an offer to issue or sell an add‑on insurance product described in subsection (1) of this section, or a request or invitation to ask or apply for such an add‑on insurance product.
Note: A defendant bears an evidential burden in relation to the matter in subsection (2): see subsection 13.3(3) of the Criminal Code.
(3) In this section:
motor vehicle means a motor‑powered vehicle that:
(a) is designed to travel by road; and
(b) is designed to carry passengers, or is a motorcycle; and
(c) does not have a carrying capacity that exceeds 2 tonnes.
12DX Exemption by regulations
Regulations may exempt a class of products
(1) The regulations may exempt a class of add‑on insurance products from sections 12DQ, 12DR and 12DS.
Conditions on exemptions
(2) An exemption under subsection (1) may be subject to conditions specified in the regulations.
Note: A person who contravenes a condition may commit an offence (see section 12DZA).
12DY Exemption by ASIC
(1) ASIC may, by notifiable instrument, exempt from sections 12DQ, 12DR and 12DS:
(a) an add‑on insurance product sold by a specified person; or
(b) a class of add‑on insurance products sold by a specified person.
Note: For review of a decision to refuse to make an exemption under subsection (1), or to vary or revoke such an exemption, see section 244.
(2) In considering whether to make an exemption under subsection (1), ASIC must have regard to the following:
(a) any evidence as to whether the add‑on insurance product, or the class of add‑on insurance products, has historically been good value for money;
(b) whether, without an exemption, there is a high risk of underinsurance or non‑insurance;
(c) any evidence as to whether the add‑on insurance product, or the class of add‑on insurance products, is well understood by consumers;
(d) any differences between the add‑on insurance product, or add‑on insurance products in the class, and financial products of a similar kind that are not sold as add‑on insurance products;
(e) any other matters that ASIC considers relevant.
Conditions on exemptions
(3) An exemption under subsection (1) may be subject to conditions specified in the exemption.
Note 1: A person who contravenes a condition may commit an offence (see section 12DZA).
Note 2: For review of a decision to impose or vary a condition on an exemption under subsection (1), see section 244.
12DZ Effect of exemption
(1) Section 12DQ does not apply in relation to the sale of an add‑on insurance product by a person if an exemption under subsection 12DX(1) or 12DY(1) applies to the add‑on insurance product.
Note: A defendant bears an evidential burden in relation to the matter in subsection (1): see subsection 13.3(3) of the Criminal Code.
(2) Sections 12DR and 12DS do not apply in relation to an offer to issue or sell an add‑on insurance product, or a request or invitation to ask or apply for an add‑on insurance product, if an exemption under subsection 12DX(1) or 12DY(1) applies to the add‑on insurance product.
Note: A defendant bears an evidential burden in relation to the matter in subsection (2): see subsection 13.3(3) of the Criminal Code.
Product intervention orders
(3) Subsections (1) and (2) do not apply to an add‑on insurance product if:
(a) a product intervention order is in force under Part 7.9A of the Corporations Act 2001 in relation to the product; and
(b) the product intervention order provides for a period during which the product must not be sold.
12DZA Contravention of conditions on exemption
(1) A person who:
(a) sells or offers to sell an add‑on insurance product, if an exemption under section 12DX or 12DY applies to the product; or
(b) sells a product or service, if:
(i) there is an arrangement between the person and another person that relates to the provision by the other person of add‑on insurance products in relation to that kind of product or service; and
(ii) an exemption under section 12DX or 12DY applies to any of those add‑on insurance products; or
(c) offers an add‑on insurance product for issue or sale to a consumer, or requests or invites a consumer to ask or apply for an add‑on insurance product or to purchase an add‑on insurance product, where an exemption under section 12DX or 12DY applies to the add‑on insurance product;
must not contravene a condition of the exemption.
Note: Failure to comply with this subsection is an offence (see section 12GB).
Product intervention orders
(2) Subsection (1) does not apply to an add‑on insurance product if:
(a) a product intervention order is in force under Part 7.9A of the Corporations Act 2001 in relation to the product; and
(b) the product intervention order provides for a period during which the product must not be sold.
Subdivision E—Conditions and warranties in consumer transactions
12EA Conflict of laws
If:
(a) the proper law of a contract for the supply by a person of financial services to a consumer would, but for a term that it should be the law of some other country or a term to the like effect, be the law of any part of Australia; or
(b) a contract for the supply by a person of financial services to a consumer contains a term that purports to substitute, or has the effect of substituting, provisions of the law of some other country, or of a State or Territory, for all or any of the provisions of this Subdivision (sections 12EA to 12ED);
this Subdivision applies to the contract notwithstanding that term.
12EB Application of provisions not to be excluded or modified
(1) A term of a contract (including a term that is not set out in the contract but is incorporated in the contract by another term of the contract) is void if it purports to exclude, restrict or modify or has the effect of excluding, restricting or modifying:
(a) the application of all or any of the provisions of this Subdivision (sections 12EA to 12ED); or
(b) the exercise of a right conferred by such a provision; or
(c) any liability of the person for breach of a condition or warranty implied by such a provision.
(2) A term of a contract is not taken to exclude, restrict or modify the application of a provision of this Subdivision unless the term does so expressly or is inconsistent with that provision.
12EC Limitation of liability for breach of certain conditions or warranties
(1) Subject to this section, a term of a contract for the supply by a person (the supplier) of financial services other than services of a kind ordinarily acquired for personal, domestic or household use is not void under section 12EB merely because the term limits the liability of the supplier for a breach of a condition or warranty to:
(a) the supplying of the services again; or
(b) the payment of the cost of having the services supplied again.
(2) Subsection (1) does not apply in relation to a term of a contract if the person to whom the services were supplied establishes that it is not fair or reasonable for the supplier to rely on that term of the contract.
(3) In determining for the purposes of subsection (2) whether or not reliance on a term of a contract is fair or reasonable, a court must have regard to all the circumstances of the case and, in particular, to the following matters:
(a) the strength of the bargaining positions of the supplier and the person to whom the services were supplied (the buyer) relative to each other, taking into account, among other things, the availability of equivalent services and suitable alternative sources of supply;
(b) whether the buyer received an inducement to agree to the term or, in agreeing to the term, had an opportunity to acquire the services or equivalent services from any source of supply under a contract that did not include that term;
(c) whether the buyer knew or ought reasonably to have known of the existence and extent of the term (having regard, among other things, to any custom of the trade and any previous course of dealing between the parties).
12ED Warranties in relation to the supply of financial services
(1) In every contract for the supply of financial services by a person to a consumer in the course of a business, there is an implied warranty that:
(a) the services will be rendered with due care and skill; and
(b) any materials supplied in connection with those services will be reasonably fit for the purpose for which they are supplied.
(2) If:
(a) a person supplies financial services to a consumer in the course of a business; and
(b) the consumer, expressly or by implication, makes known to the person:
(i) any particular purpose for which the services are required; or
(ii) the result that he or she desires the services to achieve;
there is an implied warranty that:
(c) the services supplied under the contract for the supply of the services; and
(d) any materials supplied in connection with those services;
will be reasonably fit for that purpose or are of such a nature and quality that they might reasonably be expected to achieve that result, except if the circumstances show that the consumer does not rely, or that it is unreasonable for him or her to rely, on the person’s skill or judgment.
(2A) If:
(a) there is a breach of an implied warranty that exists because of this section in a contract made after the commencement of this subsection; and
(b) the law of a State or Territory is the proper law of the contract;
the law of the State or Territory applies to limit or preclude liability for the breach, and recovery of that liability (if any), in the same way as it applies to limit or preclude liability, and recovery of a liability, for breach of another term of the contract.
(3) A reference in this section to financial services does not include a reference to services that are, or are to be, provided, granted or conferred under a contract of insurance.
Subdivision G—Enforcement and remedies
12GA Interpretation
In this Subdivision, unless the contrary intention appears:
(a) a reference to the Court in relation to a matter is a reference to any court having jurisdiction in the matter; and
(b) a reference to the Federal Court is a reference to the Federal Court of Australia; and
(c) a reference to a judgment is a reference to a judgment, decree or order, whether final or interlocutory.
12GB Offences against Subdivision D or DA
(1) A person commits an offence if the person:
(a) contravenes; or
(b) attempts to contravene; or
(c) is involved in a contravention of;
a provision of Subdivision D (sections 12DA to 12DN), other than section 12DA, or a provision of Subdivision DA.
Penalty: 2,000 penalty units.
(1AA) A person commits an offence if the person contravenes section 12DMC.
Penalty: 60 penalty units.
(1AB) Subsection (1AA) is an offence of strict liability.
(1A) Subsections 11.2(2) to (5) of the Criminal Code apply in relation to paragraph (1)(c) of this section, to the extent that the paragraph relates to aiding, abetting, counselling or procuring a person to contravene Subdivision D (sections 12DA to 12DN), other than section 12DA, or a provision of Subdivision DA, in the same way as they apply in relation to subsection 11.2(1) of the Criminal Code.
(1B) Subsections 11.5(2) to (5) of the Criminal Code apply in relation to paragraph (1)(c) of this section, to the extent that the paragraph relates to conspiring with others to contravene Subdivision D (sections 12DA to 12DN), other than section 12DA, or a provision of Subdivision DA, in the same way as they apply in relation to subsection 11.5(1) of the Criminal Code.
(2) If:
(a) a person is convicted of 2 or more offences against subsection (1) constituted by, or relating to, contraventions of the same provision of Subdivision D (sections 12DA to 12DN) or Subdivision DA (sections 12DO to 12DZA); and
(b) the contraventions appear to the Court to have been of the same nature or a substantially similar nature and to have occurred at or about the same time;
the Court must not, in respect of the offences, impose on the person fines that, in the aggregate, exceed the maximum fine that would be applicable in respect of one offence by that person against subsection (1) in relation to that provision.
(2A) If:
(a) a person is convicted of 2 or more offences against subsection (1AA) constituted by contraventions of section 12DMC; and
(b) the contraventions appear to the Court to have been of the same nature or a substantially similar nature and to have occurred at or about the same time;
the Court must not, in respect of the offences, impose on the person fines that, in the aggregate, exceed the maximum fine that would be applicable in respect of one offence by that person against subsection (1AA).
(2B) Subsection (2) or (2A) applies whether or not the person is also convicted of an offence or offences constituted by, or relating to, another contravention or other contraventions of the provision in question that were of a different nature or occurred at a different time.
(3) If:
(a) a person is convicted of an offence constituted by, or relating to, a contravention of a provision of Subdivision D (sections 12DA to 12DN) or Subdivision DA (sections 12DO to 12DZA); and
(b) a fine has, or fines have, previously been imposed on the person by the Court for an offence or offences constituted by, or relating to, another contravention or other contraventions of the same provision, being a contravention that, or contraventions each of which, appears to the Court to have been of the same nature as, or of a substantially similar nature to, and to have occurred at or about the same time as, the contravention referred to in paragraph (a);
the Court must not, in respect of the offence referred to in paragraph (a), impose on the person a fine that exceeds the amount (if any) by which the maximum fine applicable (under subsection (1) or (1AA)) in respect of the offence referred to in paragraph (a) is greater than the amount of the fine, or the sum of the amounts of the fines, referred to in paragraph (b). This applies whether or not a fine has, or fines have, also previously been imposed on the person for an offence or offences constituted by, or relating to, a contravention or contraventions of that provision that were of a different nature or occurred at a different time.
(4) In proceedings under this section against a person for contravening a provision of Subdivision D (sections 12DA to 12DN) or Subdivision DA (sections 12DO to 12DZA), the Court may:
(a) grant an injunction under section 12GD against the person in relation to:
(i) the conduct that constitutes, or is alleged to constitute, the contravention; or
(ii) other conduct of that kind; or
(b) make an order under section 12GLA (non‑punitive orders) in relation to the contravention; or
(c) make an order under section 12GLB (punitive orders requiring adverse publicity) in relation to the contravention.
(5) Sections 11.1, 11.2, 11.3, and 11.4 of the Criminal Code and section 11.6 of the Criminal Code to the extent that it applies in relation to those sections, do not apply in relation to an offence against subsection (1) or (1AA).
(6) A prosecution for an offence against subsection (1) or (1AA) may be commenced within 3 years after the commission of the offence.
12GBA Declaration of contravention of civil penalty provision
Application for declaration of contravention
(1) ASIC may apply to a Court for a declaration that a person has contravened a civil penalty provision.
(2) ASIC must make the application within 6 years of the alleged contravention.
Declaration of contravention
(3) The Court must make the declaration if it is satisfied that the person has contravened the provision.
(4) The declaration must specify the following:
(a) the Court that made the declaration;
(b) the civil penalty provision that was contravened;
(c) the person who contravened the provision;
(d) the conduct that constituted the contravention.
Declaration of contravention conclusive evidence
(5) The declaration is conclusive evidence of the matters referred to in subsection (4).
Meaning of civil penalty provision
(6) The following provisions are civil penalty provisions:
(aa) a provision of Subdivision BA;
(a) a provision of Subdivision C;
(b) a provision of Subdivision D (other than section 12DA);
(ba) a provision of Subdivision DA;
(c) a provision of Subdivision GC.
12GBB Pecuniary penalty orders
Application for order
(1) ASIC may apply to a Court for an order that a person, who is alleged to have contravened a civil penalty provision, pay the Commonwealth a pecuniary penalty.
(2) ASIC must make the application within 6 years of the alleged contravention.
Court may order person to pay pecuniary penalty
(3) If a declaration has been made under section 12GBA that the person has contravened the provision, the Court may order the person to pay to the Commonwealth a pecuniary penalty that the Court considers is appropriate (but not more than the amount specified in section 12GBC).
(4) An order under subsection (3) is a pecuniary penalty order.
Determining pecuniary penalty
(5) In determining the pecuniary penalty, the Court must take into account all relevant matters, including:
(a) the nature and extent of the contravention; and
(b) the nature and extent of any loss or damage suffered because of the contravention; and
(c) the circumstances in which the contravention took place; and
(d) whether the person has previously been found by a court (including a court in a foreign country) to have engaged in any similar conduct; and
(e) in the case of a contravention by the trustee of a registrable superannuation entity—the impact that the penalty under consideration would have on the beneficiaries of the entity.
12GBC Maximum pecuniary penalty
The pecuniary penalty must not be more than the pecuniary penalty applicable to the contravention of the civil penalty provision.
12GBCA Pecuniary penalty applicable
Pecuniary penalty applicable to the contravention of a civil penalty provision—by an individual
(1) The pecuniary penalty applicable to the contravention of a civil penalty provision by an individual is the greater of:
(a) 5,000 penalty units; and
(b) if the Court can determine the benefit derived and detriment avoided because of the contravention—that amount multiplied by 3.
Pecuniary penalty applicable to the contravention of a civil penalty provision—by a body corporate
(2) The pecuniary penalty applicable to the contravention of a civil penalty provision by a body corporate is the greatest of:
(a) 50,000 penalty units; and
(b) if the Court can determine the benefit derived and detriment avoided because of the contravention—that amount multiplied by 3; and
(c) either:
(i) 10% of the annual turnover of the body corporate for the 12‑month period ending at the end of the month in which the body corporate contravened, or began to contravene, the civil penalty provision; or
(ii) if the amount worked out under subparagraph (i) is greater than an amount equal to 2.5 million penalty units—2.5 million penalty units.
Contrary intention
(3) This section applies in relation to a contravention of a civil penalty provision by an individual or a body corporate unless there is a contrary intention under this Act in relation to the penalty applicable to the contravention. In that case, the penalty applicable is the penalty specified for the civil penalty provision.
12GBCB Civil enforcement of pecuniary penalty order
(1) A pecuniary penalty is a debt payable to the Commonwealth.
(2) The Commonwealth may enforce a pecuniary penalty order as if it were an order made in civil proceedings against the person to recover a debt due by the person. The debt arising from the order is taken to be a judgment debt.
12GBCC Relinquishing the benefit derived from engaging in conduct resulting in a pecuniary penalty order
Relinquishment order
(1) A Court may order a person to pay the Commonwealth an amount equal to the benefit derived and detriment avoided because of a contravention of a civil penalty provision. The order is a relinquishment order.
(2) The Court may make a relinquishment order:
(a) on its own initiative, during proceedings before the Court; or
(b) on application by ASIC, made within 6 years after the alleged contravention.
Relationship between relinquishment orders and pecuniary penalty orders
(3) To avoid doubt, the Court may make a relinquishment order in relation to the contravention of a civil penalty provision even if a pecuniary penalty order could be, or has been, made in relation to the contravention of the civil penalty provision.
Note: The relationship between relinquishment orders and proceedings for an offence are dealt with in sections 12GBCG, 12GBCH, 12GBCJ and 12GBCK.
12GBCD Civil enforcement of relinquishment order
(1) The amount payable under a relinquishment order is a debt payable to ASIC on behalf of the Commonwealth.
(2) ASIC or the Commonwealth may enforce a relinquishment order as if it were an order made in civil proceedings against the person to recover a debt due by the person. The debt arising from the order is taken to be a judgment debt.
12GBCE Meaning of benefit derived and detriment avoided because of a contravention of a civil penalty provision
The benefit derived and detriment avoided because of a contravention of a civil penalty provision is the sum of:
(a) the total value of all benefits obtained by one or more persons that are reasonably attributable to the contravention; and
(b) the total value of all detriments avoided by one or more persons that are reasonably attributable to the contravention.
12GBCF Civil evidence and procedure rules for declarations of contravention, pecuniary penalty orders and relinquishment orders
A Court must apply the rules of evidence and procedure for civil matters when hearing proceedings for a declaration of contravention, a pecuniary penalty order or a relinquishment order.
12GBCG Civil proceedings after criminal proceedings
A Court must not make a declaration of contravention, a pecuniary penalty order or a relinquishment order against a person for a contravention of a civil penalty provision if the person has been convicted of an offence constituted by conduct that is the same, or substantially the same, as the conduct constituting the contravention.
12GBCH Criminal proceedings during civil proceedings
(1) Proceedings for a declaration of contravention, a pecuniary penalty order or a relinquishment order against a person for a contravention of a civil penalty provision are stayed if:
(a) criminal proceedings are commenced or have already been commenced against the person for an offence; and
(b) the offence is constituted by conduct that is the same, or substantially the same, as the conduct alleged to constitute the contravention.
(2) The proceedings for the declaration or order (the civil proceedings) may be resumed if the person is not convicted of the offence. Otherwise:
(a) the civil proceedings are dismissed; and
(b) costs must not be awarded in relation to the civil proceedings.
12GBCJ Criminal proceedings after civil proceedings
Criminal proceedings may be commenced against a person for conduct that is the same, or substantially the same, as conduct that would constitute a contravention of a civil penalty provision regardless of whether a declaration of contravention, a pecuniary penalty order, a relinquishment order or any other order has been made against the person in relation to the contravention.
12GBCK Evidence given in civil proceedings not admissible in criminal proceedings
(1) Evidence of information given, or evidence of production of documents, by an individual is not admissible in criminal proceedings against the individual if:
(a) the individual previously gave the information or produced the documents in proceedings for a declaration of contravention, a pecuniary penalty order or a relinquishment order against the individual for an alleged contravention of a civil penalty provision (whether or not the order was made); and
(b) the conduct alleged to constitute the offence is the same, or substantially the same, as the conduct alleged to constitute the contravention.
(2) However, subsection (1) does not apply to criminal proceedings in relation to the falsity of the evidence given by the individual in the proceedings for the pecuniary penalty order.
12GBCL Attempt and involvement in contravention treated in same way as actual contravention
A person who:
(a) attempts to contravene a civil penalty provision; or
(b) is involved in a contravention of a civil penalty provision;
is taken to have contravened the provision.
12GBCM Continuing contraventions of civil penalty provisions
(1) If an act or thing is required under a civil penalty provision to be done:
(a) within a particular period; or
(b) before a particular time;
then the obligation to do that act or thing continues until the act or thing is done (even if the period has expired or the time has passed).
(2) A person who contravenes a civil penalty provision that requires an act or thing to be done:
(a) within a particular period; or
(b) before a particular time;
commits a separate contravention of that provision in respect of each day during which the contravention occurs (including the day the relevant pecuniary penalty order is made or any later day).
12GBCN State of mind
(1) In proceedings for a declaration of contravention, a pecuniary penalty order, a relinquishment order or any other order against a person for a contravention of a civil penalty provision, it is not necessary to prove:
(a) the person’s intention; or
(b) the person’s knowledge; or
(c) the person’s recklessness; or
(d) the person’s negligence; or
(e) any other state of mind of the person.
(2) Subsection (1) does not apply to the extent that the proceedings relate to attempting to contravene a civil penalty provision, or being involved in a contravention of a civil penalty provision.
(3) Subsection (1) does not affect the operation of section 12GI (which is about mistake of fact and other matters).
(3A) Despite subsection (1), in proceedings referred to in that subsection:
(a) in relation to a contravention by a person of subsection 12DQ(4), it is necessary to prove that the person was reckless as to the matters in paragraph 12DQ(4)(c); and
(b) in relation to a contravention by a person of subsection 12DR(3), it is necessary to prove that the person was reckless as to the matters in paragraphs 12DR(3)(e) and (f); and
(c) in relation to a contravention by a person of subsection 12DS(2), it is necessary to prove that the person was reckless as to the matters in paragraph 12DS(2)(d).
(3B) For the purposes of subsection (3A), a person is reckless as to a fact if:
(a) the person is aware of a substantial risk that the fact exists; and
(b) having regard to the circumstances known to the person, it is unjustifiable to take the risk.
(4) Subsection (1) does not apply to the extent that the civil penalty provision, or a provision that relates to the civil penalty provision, expressly provides otherwise.
12GBCP Exceptions etc. to civil penalty provisions—burden of proof
(1) If, in proceedings for a declaration of contravention, a pecuniary penalty order, a relinquishment order or any other order against a person for a contravention of a civil penalty provision, the person wishes to rely on any exception, exemption, excuse, qualification or justification provided by the law creating the civil penalty provision, then the person bears an evidential burden in relation to that matter.
(2) In subsection (1), evidential burden, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.
12GBD Indemnification of officers
Officers not to be indemnified
(1) A body corporate (the first body), or a body corporate related to the first body, must not indemnify a person (whether by agreement or by making a payment and whether directly or through an interposed entity) against any of the following liabilities incurred as an officer of the first body:
(a) a liability to pay an amount under:
(i) a pecuniary penalty order made under section 12GBB; or
(ii) a relinquishment order made under section 12GBCC;
(b) legal costs incurred in defending or resisting proceedings in which the person is found to have such a liability.
Penalty: 300 penalty units.
(2) For the purposes of subsection (1), the outcome of proceedings is the outcome of the proceedings and any appeal in relation to the proceedings.
(3) Subsection (1) does not authorise anything that would otherwise be unlawful.
Indemnities are void
(4) Anything that purports to indemnify a person against a liability is void to the extent that it contravenes subsection (1).
Application of this section to a person other than a body corporate
(5) If, as a result of the operation of Part 2.4 of the Criminal Code, a person other than a body corporate is:
(a) convicted of an offence (the relevant offence) against subsection (1) of this section; or
(b) convicted of an offence (the relevant offence) against section 11.4 of the Criminal Code in relation to an offence referred to in subsection (1) of this section;
the relevant offence is taken to be punishable on conviction by a fine not exceeding 30 penalty units.
12GC Enforcement and recovery of certain fines
(1) If a person on whom a fine has been imposed for an offence against section 12GB or subsection 12GN(5) defaults in payment of the fine, a Court may:
(a) exercise any power that the Court has apart from this section with respect to the enforcement and recovery of fines imposed by the Court; or
(b) make an order, on the application of the Minister or ASIC, declaring that the fine is to have effect, and may be enforced, as if it were a judgment debt under a judgment of the Court.
(2) If a person in relation to whom an order is made under subsection (1) in respect of a fine gives security for the payment of the fine, the Court must cancel the order in respect of the fine.
(3) If the Court makes an order in relation to a person in respect of a fine, the Court may, at any time before the order is executed in respect of the fine, allow the person a specified time in which to pay the fine or allow the person to pay the fine by specified instalments, and, in that case:
(a) the order must not be executed unless the person fails to pay the fine within that time or fails to pay an instalment at or before the time when it becomes payable, as the case may be; and
(b) if the person pays the fine within that time or pays all the instalments, as the case may be, the order is taken to have been discharged in respect of the fine.
(4) Subject to subsection (7), an order under subsection (1) in respect of a fine ceases to have effect:
(a) on payment of the fine; or
(b) if the fine is not paid—on full compliance with the order.
(5) The term of a sentence of imprisonment imposed by an order under a law of a State or Territory applied by section 15A of the Crimes Act 1914 in respect of a fine must be calculated at the rate of one day’s imprisonment for each $25 of the amount of the fine that is from time to time unpaid.
(6) Subject to subsection (7), if a person is required to serve periods of imprisonment under an order or orders under subsection (1) in respect of 2 or more fines, those periods of imprisonment must be served consecutively.
(7) Subject to subsection (8), if:
(a) a person would, but for this subsection, be required under an order or orders under subsection (1) in respect of 3 or more fines to serve periods of imprisonment in respect of those fines exceeding in the aggregate 3 years; and
(b) those fines were imposed (whether or not in the same proceedings) for offences constituted by contraventions that occurred within a period of 2 years, being contraventions that appear to the Court to have been of the same nature or a substantially similar nature;
the Court must, by order, declare that the order or orders are to cease to have effect in respect of those fines after the person has served an aggregate of 3 years’ imprisonment in respect of those fines.
(8) If subsection (7) would, but for this subsection, apply to a person with respect to offences committed by the person within 2 or more overlapping periods of 2 years, the Court must make an order under that subsection with respect to one only of those periods, being whichever period would give the person the maximum benefit from the application of that subsection.
(9) For the purposes of subsection (8), the Court may vary or revoke an order made under subsection (7).
(10) Paragraphs 15A(1)(b), (c) and (d) of the Crimes Act 1914 do not apply with respect to fines referred to in subsection (1).
12GCA Preference must be given to compensate persons who suffer damage as a result of contravention
(1) This section applies if a court considers that it is appropriate to:
(a) make a pecuniary penalty order against a person in relation to the contravention of a civil penalty provision; or
(b) make a relinquishment order against a person in relation to the contravention of a civil penalty provision; or
(c) impose a fine against a person in relation to a commission of an offence constituted by the same conduct as the conduct constituting a contravention mentioned in paragraph (a) or (b).
(2) In making the pecuniary penalty order or relinquishment order or imposing the fine, the court:
(a) must consider the effect that making the order or imposing the fine would have on the amount available to pay compensation to persons who might reasonably be expected to be entitled to recover compensation for loss or damage suffered as a result of the contravention; and
(b) give preference to making an appropriate amount available for compensation.
(3) If the court gives preference to making an appropriate amount available for compensation under paragraph (2)(b), the court may also make such orders as the court thinks fit for the purpose of ensuring that the amount remains available for the payment of compensation.
12GD Injunctions
(1) If, on the application of the Minister, ASIC or any other person, the Court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute:
(a) a contravention of a provision of this Division; or
(b) attempting to contravene such a provision; or
(c) aiding, abetting, counselling or procuring a person to contravene such a provision; or
(d) inducing, or attempting to induce, whether by threats, promises or otherwise, a person to contravene such a provision; or
(e) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or
(f) conspiring with others to contravene such a provision;
the Court may grant an injunction in such terms as the Court determines to be appropriate.
(2) If an application for an injunction under subsection (1) has been made, the Court may, if the Court determines it to be appropriate, grant an injunction by consent of all the parties to the proceedings, whether or not the Court is satisfied that a person has engaged, or is proposing to engage, in conduct of a kind mentioned in subsection (1).
(3) If in the opinion of the Court it is desirable to do so, the Court may grant an interim injunction pending determination of an application under subsection (1).
(4) The Court may rescind or vary an injunction granted under subsection (1) or (3).
(5) The power of the Court to grant an injunction restraining a person from engaging in conduct may be exercised:
(a) whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind; and
(b) whether or not the person has previously engaged in conduct of that kind; and
(c) whether or not there is an imminent danger of substantial damage to any person if the first‑mentioned person engages in conduct of that kind.
(6) The power of the Court to grant an injunction requiring a person to do an act or thing may be exercised:
(a) whether or not it appears to the Court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; and
(b) whether or not the person has previously refused or failed to do that act or thing; and
(c) whether or not there is an imminent danger of substantial damage to any person if the first‑mentioned person refuses or fails to do that act or thing.
(7) If the Minister or ASIC makes an application to the Court for the grant of an injunction under this section, the Court must not require the applicant or any other person, as a condition of granting an interim injunction, to give any undertakings as to damages.
(8) If, in a case to which subsection (7) does not apply:
(a) the Court would, but for this subsection, require a person to give an undertaking as to damages or costs; and
(b) the Minister gives the undertaking;
the Court must accept the undertaking by the Minister and must not require a further undertaking from any other person.
12GF Actions for damages
(1) A person who suffers loss or damage by conduct of another person that contravenes a provision of Subdivision BA (sections 12BF to 12BM), Subdivision C (sections 12CA to 12CC), Subdivision D (sections 12DA to 12DN) or Subdivision DA (sections 12DO to 12DZA) may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.
(1A) Subsection (1) has effect subject to section 12GNA.
Note: Section 12GNA may limit the amount that the person may recover for a contravention of section 12DA (Misleading or deceptive conduct) from the other person or from another person involved in the contravention.
(1B) Despite subsection (1), if:
(a) a person (the claimant) makes a claim under subsection (1) in relation to:
(i) economic loss; or
(ii) damage to property;
caused by conduct of another person (the defendant) that was done in contravention of section 12DA; and
(b) the claimant suffered the loss or damage:
(i) as a result partly of the claimant’s failure to take reasonable care; and
(ii) as a result partly of the conduct referred to in paragraph (a); and
(c) the defendant:
(i) did not intend to cause the loss or damage; and
(ii) did not fraudulently cause the loss or damage;
the damages that the claimant may recover in relation to the loss or damage are to be reduced to the extent to which the court thinks just and equitable having regard to the claimant’s share in the responsibility for the loss or damage.
Note: Subdivision GA also applies proportionate liability to a claim for damages under this section for a contravention of section 12DA.
(2) An action under subsection (1) may be commenced within 6 years after the day on which the cause of action that relates to the conduct accrued.
12GFA Recovering commissions that exceed a cap under section 12DMC
(1) If:
(a) a person provides a commission to another person in connection with the supply (by any person to any person) of a financial service; and
(b) the financial service is the provision of an add‑on risk product to another person (the consumer) in connection with:
(i) the sale or long‑term lease of a motor vehicle to the consumer; or
(ii) the provision of credit connected with the sale or long‑term lease of a motor vehicle to the consumer; and
(c) providing the commission contravenes section 12DMC;
the consumer is entitled to recover the value of the commission from the person.
Note: For the value of the commission, see subsections 12DMC(5) to (7).
(2) If:
(a) a person (the motor vehicle dealer) receives a commission in connection with the supply (by any person to any person) of a financial service; and
(b) the financial service is the provision of an add‑on risk product to the motor vehicle dealer in connection with the giving of a warranty by the motor vehicle dealer in connection with the sale or long‑term lease of a motor vehicle to another person (the consumer); and
(c) providing the commission contravenes section 12DMC;
the consumer is entitled to recover the value of the commission from the motor vehicle dealer.
Note: For the value of the commission, see subsections 12DMC(5) to (7).
(3) This section does not affect the other person’s right to recover loss or damage under section 12GF.
12GG Finding in proceedings to be evidence
(1) In:
(a) a proceeding against a person under section 12GF or 12GFA; or
(b) an application under subsection 12GM(2), 12GNB(1), 12GNE(1) or 12GNF(1) for an order against a person;
a finding of any fact by a court is prima facie evidence of that fact if the finding was made in proceedings:
(c) under section 12GBA, 12GBB, 12GBCC, 12GD, 12GLA or 12GLB; or
(d) for an offence against section 12GB;
in which that person was found to have contravened, or to have been involved in a contravention of, a provision of this Division.
(2) The finding may be proved by production of a document, under the seal of the court, from which the finding appears.
12GH Conduct by directors, employees or agents
(1) If, in a proceeding under this Subdivision in respect of conduct engaged in by a body corporate, being conduct in relation to which the Division applies, it is necessary to establish the state of mind of the body corporate, it is sufficient to show that a director, employee or agent of the body corporate, being a director, employee or agent by whom the conduct was engaged in within the scope of the person’s actual or apparent authority, had that state of mind.
(2) Any conduct engaged in on behalf of a body corporate:
(a) by a director, employee or agent of the body corporate within the scope of the person’s actual or apparent authority; or
(b) by any other person at the direction or with the consent or agreement (whether express or implied) of a director, employee or agent of the body corporate, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the director, employee or agent;
is taken, for the purposes of this Division, to have been engaged in also by the body corporate.
(3) If, in a proceeding under this Subdivision in respect of conduct engaged in by a person other than a body corporate, being conduct in relation to which a provision of this Division applies, it is necessary to establish the state of mind of the person, it is sufficient to show that an employee or agent of the person, being an employee or agent by whom the conduct was engaged in within the scope of the employee’s or agent’s actual or apparent authority, had that state of mind.
(4) Conduct engaged in on behalf of a person (the principal) other than a body corporate:
(a) by an employee or agent of the person within the scope of the actual or apparent authority of the employee or agent; or
(b) by any other person at the direction or with the consent or agreement (whether express or implied) of an employee or agent of the principal, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the employee or agent;
is taken, for the purposes of this Division, to have been engaged in also by the principal.
(5) A reference in this section to the state of mind of a person includes a reference to the knowledge, intention, opinion, belief or purpose of the person and the person’s reasons for the person’s intention, opinion, belief or purpose.
(6) Part 2.5 of the Criminal Code does not apply in relation to an offence against a provision of this Subdivision.
12GI Defences
(1) Subject to subsection (3), in a prosecution under this Subdivision in relation to a contravention of a provision of Subdivision D (sections 12DA to 12DN) or Subdivision DA (sections 12DO to 12DZA), it is a defence if the defendant establishes:
(a) that the contravention in respect of which the proceeding was instituted was due to reasonable mistake; or
(b) that the contravention in respect of which the proceeding was instituted was due to reasonable reliance on information supplied by another person; or
(c) that:
(i) the contravention in respect of which the proceeding was instituted was due to the act or default of another person, to an accident or to some other cause beyond the defendant’s control; and
(ii) the defendant took reasonable precautions and exercised due diligence to avoid the contravention.
Note: A defendant bears a legal burden in relation to the matters in subsection (1) (see section 13.4 of the Criminal Code).
(1A) Paragraph (1)(a) is to be interpreted as having the same effect in relation to a contravention of a provision of this Subdivision as section 9.2 of the Criminal Code has in relation to offences of strict liability.
(2) In paragraphs (1)(b) and (c), another person does not include a person who was:
(a) an employee or agent of the defendant; or
(b) in the case of a defendant being a body corporate (other than a CCIV), a director, employee or agent of the defendant; or
(c) in the case of a defendant being a CCIV:
(i) an agent, or the corporate director, of the defendant; or
(ii) a director, employee or agent of the corporate director of the defendant;
at the time when the contravention occurred.
(3) If a defence provided by subsection (1) involves an allegation that a contravention was due to reliance on information supplied by another person or to the act or default of another person, the defendant is not, without leave of the Court, entitled to rely on that defence unless he or she has, not later than 7 days before the day on which the hearing of the proceeding commences, served on the person by whom the proceeding was instituted a notice in writing giving such information that would identify or assist in the identification of the other person as was then in his or her possession.
(4) In a proceeding under this Subdivision in relation to a contravention of a provision of Subdivision D (sections 12DA to 12DN) or Subdivision DA (sections 12DO to 12DZA) committed by the publication of an advertisement, it is a defence if the defendant establishes that he or she is a person whose business it is to publish or arrange for the publication of advertisements and that he or she received the advertisement for publication in the ordinary course of business and did not know and had no reason to suspect that its publication would amount to a contravention of a provision of Subdivision D or DA.
Note: A defendant bears a legal burden in relation to the matters in subsection (4) (see section 13.4 of the Criminal Code).
(5) If, in proceedings under section 12GBA or 12GBB against a person other than a body corporate, it appears to the Court that the person has, or may have, engaged in conduct in contravention of a civil penalty provision but that the person acted honestly and reasonably and, having regard to all the circumstances of the case, ought fairly to be excused, the Court may relieve the person either wholly or partly from liability to pay a pecuniary penalty under that section.
12GJ Jurisdiction of courts
(1) Jurisdiction is conferred on the Federal Court in any matter:
(a) arising under this Division; or
(b) arising under Part 3 in its application in relation to an investigation of a contravention of this Division;
in respect of which a civil proceeding may be instituted under this Subdivision or under Part 3 as so applying.
(2) With respect to any matter:
(a) arising under this Division; or
(b) arising under Part 3 in its application in relation to an investigation of a contravention of this Division;
in respect of which a civil proceeding is instituted under this Subdivision or under Part 3 as so applying:
(c) the several courts of the States are invested with federal jurisdiction within the limits of their several jurisdictions, whether those limits are as to locality, subject‑matter or otherwise; and
(d) subject to the Constitution, jurisdiction is conferred on the several courts of the Territories.
(3) Nothing in subsection (2) is taken to enable an inferior court of a State or Territory to grant a remedy other than a remedy of a kind that the court is able to grant under the law of that State or Territory.
(4) The jurisdiction conferred by subsection (1) on the Federal Court is exclusive of the jurisdiction of any other court other than the jurisdiction of the several courts of the States and Territories under subsection (2) and the jurisdiction of the High Court under section 75 of the Constitution.
12GK Transfer of matters
(1) If:
(a) a civil proceeding instituted by a person is pending in the Federal Court; and
(b) a matter for determination in the proceeding arose under:
(i) this Division; or
(ii) Part 3 in its application in relation to an investigation of a contravention of this Division;
the Federal Court may, subject to subsection (2), upon the application of a party or of the Federal Court’s own motion, transfer the matter to a court of a State or Territory and may also transfer to that court any other matter for determination in the proceeding.
(2) The Federal Court must not transfer a matter to another court under subsection (1) unless the other court has power to grant the remedies sought before the Federal Court in the matter and it appears to the Federal Court that:
(a) the matter arises out of or is related to a proceeding that is pending in the other court; or
(b) it is otherwise in the interests of justice that the matter be determined by the other court.
(3) If the Federal Court transfers a matter to another court under subsection (1):
(a) further proceedings in the matter must be as directed by the other court; and
(b) the judgment of the other court in the matter is enforceable throughout Australia and the external Territories as if it were a judgment of the Federal Court.
(4) If:
(a) a proceeding is pending in a court (other than the Supreme Court) of a State or Territory; and
(b) a matter for determination in the proceeding arose under:
(i) this Division; or
(ii) Part 3 in its application in relation to an investigation of a contravention of this Division;
the court must, if directed to do so by the Federal Court, transfer to the Federal Court the matter and such other matters for determination in the proceeding, as the Federal Court decides, the determination of which would, apart from any law of a State or of the Northern Territory relating to cross‑vesting of jurisdiction, be within the jurisdiction of the Federal Court.
(5) If:
(a) a proceeding is pending in a court (other than the Supreme Court) of a State or Territory; and
(b) a matter for determination in the proceeding arose under:
(i) this Division; or
(ii) Part 3 in its application in relation to an investigation of a contravention of this Division;
the court may, subject to subsection (6), upon the application of a party or of the court’s own motion, transfer the matter to a court (other than the Supreme Court) of a State or Territory other than the State or Territory referred to in paragraph (a).
(6) The court must not transfer the matter to another court under subsection (5) unless the other court has power to grant the remedies sought in the matter and it appears to the court that:
(a) the matter arises out of or is related to a proceeding that is pending in the other court; or
(b) it is otherwise in the interests of justice that the matter be determined by the other court.
(7) If a court transfers a matter to another court under subsection (5), further proceedings in the matter must be as directed by the other court.
12GL Transfer of certain proceedings to Federal Circuit and Family Court of Australia (Division 1)
(1) If:
(a) a civil proceeding is pending in the Federal Court; and
(b) a matter for determination in the proceeding arises under this Division;
the Federal Court may, on the application of a party to the proceeding or of its own motion, transfer the proceeding to the Federal Circuit and Family Court of Australia (Division 1).
(3) Subject to subsection (4), if a proceeding is transferred to the Federal Circuit and Family Court of Australia (Division 1):
(a) the Federal Circuit and Family Court of Australia (Division 1) has jurisdiction to hear and determine the proceeding; and
(b) the Federal Circuit and Family Court of Australia (Division 1) also has jurisdiction to hear and determine matters not otherwise within its jurisdiction (whether under paragraph (a) or otherwise):
(i) that are associated with matters arising in the proceeding; or
(ii) that, apart from subsection 32(1) of the Federal Court of Australia Act 1976, the Federal Court would have had jurisdiction to hear and determine in the proceeding; and
(c) the Federal Circuit and Family Court of Australia (Division 1) may, in and in relation to the proceeding:
(i) grant such remedies; and
(ii) make orders of such kinds; and
(iii) issue, and direct the issue of, writs of such kinds;
as the Federal Court could have in and in relation to the proceeding; and
(d) remedies, orders and writs granted, made or issued by the Federal Circuit and Family Court of Australia (Division 1) in and in relation to the proceeding have effect, and may be enforced by the Federal Circuit and Family Court of Australia (Division 1), as if they had been granted, made or issued by the Federal Court; and
(e) appeals lie from judgments of the Federal Circuit and Family Court of Australia (Division 1) given in and in relation to the proceeding as if the judgments were judgments of the Federal Court constituted by a single Judge of that Court, and do not otherwise lie; and
(f) subject to paragraphs (a) to (e) (inclusive), this Division, the regulations, the Federal Court of Australia Act 1976, the Rules of Court made under that Act, and other laws of the Commonwealth, apply in and in relation to the proceeding as if:
(i) a reference to the Federal Court (other than in the expression the Court or a Judge) included a reference to the Federal Circuit and Family Court of Australia (Division 1); and
(ii) a reference to a Judge of the Federal Court (other than in the expression the Court or a Judge) included a reference to a Judge of the Federal Circuit and Family Court of Australia (Division 1); and
(iii) a reference to the expression the Court or a Judge when used in relation to the Federal Court included a reference to a Judge of the Federal Circuit and Family Court of Australia (Division 1) sitting in Chambers; and
(iv) a reference to a Registrar of the Federal Court included a reference to a Registrar of the Federal Circuit and Family Court of Australia (Division 1); and
(v) any other necessary changes were made.
(4) If any difficulty arises in the application of paragraphs (3)(c), (d) and (f) in or in relation to a particular proceeding, the Federal Circuit and Family Court of Australia (Division 1) may, on the application of a party to the proceeding or of its own motion, give such directions, and make such orders, as it considers appropriate to resolve the difficulty.
(5) An appeal does not lie from a decision of the Federal Court in relation to the transfer of a proceeding under this Division to the Federal Circuit and Family Court of Australia (Division 1).
12GLA Non‑punitive orders
(1) The Court may, on application by ASIC, make one or more of the orders mentioned in subsection (2) in relation to a person who has engaged in contravening conduct.
(2) The orders that the Court may make in relation to the person are:
(a) a community service order; and
(b) a probation order for a period of no longer than 3 years; and
(c) an order requiring the person to disclose, in the way and to the persons specified in the order, such information as is so specified, being information that the person has possession of or access to; and
(d) an order requiring the person to publish, at the person’s expense and in the way specified in the order, an advertisement in the terms specified in, or determined in accordance with, the order.
(3) This section does not limit the Court’s powers under any other provision of this Act.
(4) In this section:
community service order, in relation to a person who has engaged in contravening conduct, means an order directing the person to perform a service that:
(a) is specified in the order; and
(b) relates to the conduct;
for the benefit of the community or a section of the community.
Example: The following are examples of community service orders:
(a) an order requiring a person who has made false representations to make available a training video which explains advertising obligations under this Act; and
(b) an order requiring a person who has engaged in misleading or deceptive conduct in relation to a financial product to carry out a community awareness program to address the needs of consumers when purchasing the financial product.
contravening conduct means conduct that:
(aa) contravenes a provision of Subdivision BA (sections 12BF to 12BM); or
(a) contravenes a provision of Subdivision C (sections 12CA to 12CC); or
(b) contravenes a provision of Subdivision D (sections 12DA to 12DN); or
(ba) contravenes a provision of Subdivision DA (sections 12DO to 12DZA); or
(c) contravenes a provision of Subdivision E (sections 12EA to 12ED); or
(d) constitutes an involvement in a contravention of any of those provisions.
probation order, in relation to a person who has engaged in contravening conduct, means an order that is made by the Court for the purpose of ensuring that the person does not engage in the contravening conduct, similar conduct or related conduct during the period of the order, and includes:
(a) an order directing the person to establish a compliance program for employees or other persons involved in the person’s business, being a program designed to ensure their awareness of the responsibilities and obligations in relation to the contravening conduct, similar conduct or related conduct; and
(b) an order directing the person to establish an education and training program for employees or other persons involved in the person’s business, being a program designed to ensure their awareness of the responsibilities and obligations in relation to the contravening conduct, similar conduct or related conduct; and
(c) an order directing the person to revise the internal operations of the person’s business which lead to the person engaging in the contravening conduct.
12GLB Punitive orders requiring adverse publicity
(1) The Court may, on application by ASIC, make an adverse publicity order in relation to a person who:
(a) has been ordered to pay a pecuniary penalty under section 12GBB; or
(b) is guilty of an offence under section 12GB.
(2) In this section, an adverse publicity order, in relation to a person, means an order that:
(a) requires the person to disclose, in the way and to third parties specified in the order, such information as is so specified, being information that the person has possession of or access to; and
(b) requires the person to publish, at the person’s expense and in the way specified in the order, an advertisement in the terms specified in, or determined in accordance with, the order.
(3) This section does not limit the Court’s powers under any other provision of this Act.
12GLC ASIC may issue a public warning notice
Contraventions
(1) ASIC may issue to the public a written notice containing a warning about the conduct of a person if:
(a) ASIC has reasonable grounds to suspect that the conduct may constitute a contravention of a provision of Subdivision BA, C or D; and
(b) ASIC is satisfied that one or more other persons has suffered, or is likely to suffer, detriment as a result of the conduct; and
(c) ASIC is satisfied that it is in the public interest to issue the notice.
Substantiation notices
(2) Without limiting subsection (1), if:
(a) a person refuses to respond to a substantiation notice given to the person, or fails to respond to the notice before the end of the substantiation notice compliance period for the notice; and
(b) ASIC is satisfied that it is in the public interest to issue a notice under this subsection;
ASIC may issue to the public a written notice containing a warning that the person has refused or failed to respond to the substantiation notice within that period, and specifying the matter to which the substantiation notice related.
Notice is not a legislative instrument
(3) A notice issued under subsection (1) or (2) is not a legislative instrument.
12GLD Order disqualifying a person from managing corporations
(1) On application by ASIC, the Court may make an order disqualifying a person from managing corporations for a period that the Court considers appropriate if:
(a) the Court is satisfied that the person has committed, has attempted to commit or has been involved in a contravention of a provision of Subdivision BA, C or D (other than section 12DA); and
(b) the Court is satisfied that the disqualification is justified.
Note 1: Section 206EB of the Corporations Act 2001 provides that a person is disqualified from managing corporations if a court order is in force under this section. That Act contains various consequences for persons so disqualified.
Note 2: ASIC must keep a register of persons who have been disqualified from managing corporations (see section 1274AA of the Corporations Act 2001).
(2) In determining under subsection (1) whether the disqualification is justified, the Court may have regard to:
(a) the person’s conduct in relation to the management, business or property of any corporation; and
(b) any other matters that the Court considers appropriate.
12GM Other orders
(1) Without limiting the generality of section 12GD, if, in a proceeding instituted under, or for an offence against, this Division, the Court finds that a person who is a party to the proceeding has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in in contravention of a provision of this Division, the Court may, whether or not it grants an injunction under section 12GD or makes an order under section 12GF, 12GFA, 12GLA or 12GLB, make such order or orders as it thinks appropriate against the person who engaged in the conduct or a person who was involved in the contravention (including all or any of the orders mentioned in subsection (7) of this section) if the Court considers that the order or orders concerned will compensate the first‑mentioned person in whole or in part for the loss or damage or will prevent or reduce the loss or damage.
(2) Without limiting the generality of section 12GD or 12GNB, the Court may, on the application of:
(a) a person who has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in in contravention of a provision of this Division; or
(b) ASIC in accordance with subsection (3) on behalf of such a person or persons;
make such order or orders as the Court thinks appropriate against the person who engaged in the conduct or a person who was involved in the contravention (including all or any of the orders mentioned in subsection (7)) if the Court considers that the order or orders concerned will:
(c) compensate the person who made the application, or the person or any of the persons on whose behalf the application was made, in whole or in part for the loss or damage; or
(d) prevent or reduce the loss or damage suffered, or likely to be suffered, by such a person or persons.
(3) ASIC may only make an application under paragraph (2)(b) on behalf of one or more persons identified in the application who:
(a) have suffered, or are likely to suffer, loss or damage by the conduct of another person that was engaged in in contravention of a provision of this Division; and
(b) have consented in writing to the application being made before it is made.
(4) An application may be made under subsection (2) in relation to a contravention of this Division notwithstanding that a proceeding has not been instituted under another provision of this Part in relation to that contravention.
(5) An application under subsection (2) may be made at any time within 6 years after the day on which the cause of action that relates to the conduct accrued.
(6) For the purpose of determining whether to make an order under this section in relation to a contravention of Subdivision C (sections 12CA to 12CC), the Court may have regard to the conduct of parties to the proceeding since the contravention occurred.
(7) Without limiting the generality of subsections (1) and (2), the orders referred to in those subsections include the following:
(a) an order declaring the whole or any part of a contract made between the person who suffered, or is likely to suffer, the loss or damage and the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, or of a collateral arrangement relating to such a contract, to be void and, if the Court thinks fit, to have been void ab initio or at all times on and after a date before the date on which the order is made;
(b) an order varying such a contract or arrangement in such manner as is specified in the order and, if the Court thinks fit, declaring the contract or arrangement to have had effect as so varied on and after a date before the date on which the order is made;
(c) an order refusing to enforce any or all of the provisions of such a contract;
(d) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to refund money or return property to the person who suffered the loss or damage;
(e) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to pay to the person who suffered the loss or damage the amount of the loss or damage;
(f) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, at his or her own expense, to supply specified services to the person who suffered, or is likely to suffer, the loss or damage;
(g) an order, in relation to an instrument creating or transferring an interest in land, directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to execute an instrument that:
(i) varies, or has the effect of varying, the first‑mentioned instrument; or
(ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the first‑mentioned instrument.
(7A) Subsections (1) and (2) have effect subject to section 12GNA.
Note: Section 12GNA may limit the liability, under an order under subsection (1) or (2) of this section, of a person for his or her contravention of section 12DA (Misleading or deceptive conduct) or involvement in such a contravention.
(8) The powers conferred on the Court under this section in relation to a contract or covenant do not affect any powers that any other court may have in relation to the contract or covenant in proceedings instituted in that other court in respect of the contract or covenant.
(9) In subsection (7):
interest, in relation to land, has the same meaning as in subsection 12DC(3).
12GN Power of Court to prohibit payment or transfer of money or other property
(1) If:
(a) proceedings have been commenced against a person for an offence against section 12GB; or
(b) an application has been made under section 12GD for an injunction against a person in relation to a contravention of a provision of this Division; or
(c) an action has been commenced under subsection 12GF(1) or 12GFA(1) or (2) against a person in relation to a contravention of a provision of Subdivision BA (sections 12BF to 12BM), Subdivision D (sections 12DA to 12DN) or Subdivision DA (sections 12DO to 12DZA); or
(d) an application for an order under subsection 12GM(2) or (3) or 12GNB(1) has been or may be made against a person in relation to a contravention of a provision of this Division;
the Court may, on the application of the Minister or ASIC, make an order or orders mentioned in subsection (2) if the Court is satisfied that:
(e) it is necessary or desirable to do so for the purpose of preserving money or other property held by or on behalf of a person referred to in paragraph (a), (b), (c) or (d), as the case may be (the relevant person), if the relevant person is liable or may become liable under this Division to pay money by way of a fine, damages, compensation, refund or otherwise or to transfer, sell or refund other property; and
(f) it will not unduly prejudice the rights and interests of any other person.
(2) The orders referred to in subsection (1) are the following:
(a) an order prohibiting, either absolutely or subject to conditions, a person who is indebted to the relevant person or to an associate of the relevant person from making a payment in total or partial discharge of the debt to, or to another person at the direction or request of, the person to whom the debt is owed;
(b) an order prohibiting, either absolutely or subject to conditions, a person who is holding money or other property on behalf of the relevant person or on behalf of an associate of the relevant person from paying all or any of the money, or transferring, or otherwise parting with possession of, the other property, to, or to another person at the direction or request of, the person on whose behalf the money or other property is held;
(c) an order prohibiting, either absolutely or subject to conditions, the taking or sending by any person of money of the relevant person or of an associate of the relevant person to a place outside the State or Territory in which the money is held;
(d) an order prohibiting, either absolutely or subject to conditions, the taking, sending or transfer by any person of other property of the relevant person or of an associate of the relevant person to a place outside the State or Territory in which the other property is located;
(e) an order appointing, if the relevant person is a natural person, a receiver or trustee of the property or of part of the property of the relevant person with such powers as are specified in the order.
(3) Subject to subsection (4), an order under this section may be expressed to operate:
(a) for a period specified in the order; or
(b) until proceedings under any other provision of this Part in relation to which the order was made have been concluded.
(4) An order under this section made on an application ex parte must not be expressed to operate for a period exceeding 30 days.
(5) A person who contravenes or fails to comply with an order by the Court under this section that is applicable to the person is guilty of an offence.
Penalty: 200 penalty units.
(5A) Subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(6) Nothing in this section affects the powers that the Court has apart from this section.
(7) This section has effect subject to the Bankruptcy Act 1966.
(8) A reference in this section to a person who is an associate of a relevant person is a reference to:
(a) a person holding money or other property on behalf of the relevant person; or
(b) if the relevant person is a body corporate—a wholly owned subsidiary of the relevant person.
12GNA Limit on liability for misleading or deceptive conduct
State or Territory professional standards law limits liability
(1) A professional standards law of a State or Territory applies to limit occupational liability relating to an action for contravention of section 12DA in the same way as it limits occupational liability arising under a law of the State or Territory.
Note: Section 12DA prohibits misleading or deceptive conduct by a person in relation to financial services.
(2) However, the professional standards law applies for that purpose:
(a) only in relation to a scheme that was prescribed by the regulations at the time (the contravention time) of the contravention; and
(b) as if the scheme were in force under that law at the contravention time in the form the scheme would have been in if:
(i) the scheme had not been amended or revoked under that law since the scheme was first prescribed; and
(ii) the modifications (if any) prescribed by the regulations at the contravention time had been made to the scheme.
Which State’s or Territory’s professional standards law applies?
(3) For the purposes of working out whether a professional standards law of a particular State or Territory applies under subsection (1) in relation to a particular contravention of section 12DA, choice of law rules operate in relation to the contravention in the same way as they operate in relation to a tort.
Definitions
(4) In this section:
occupation includes profession and trade.
occupational association means a body:
(a) that represents the interests of persons who have the same occupation; and
(b) whose membership is limited principally to such persons.
occupational liability means civil liability arising directly or vicariously from anything done or omitted by a member of an occupational association in the course of his or her occupation.
professional standards law means a law providing for the limitation of occupational liability by reference to schemes for limiting that liability that were formulated and published in accordance with that law.
12GNB Orders to redress loss or damage suffered by non‑parties etc.
Orders
(1) Without limiting the generality of section 12GD, if: